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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
VINTAGE PETROLEUM, INC.
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(Exact name of registrant as specified in its charter)
Delaware 73-1182669
- ---------------------------------------- ------------------------------------
(State of incorporation or organization) (I.R.S. Employer Identification No.)
4200 One Williams Center, Tulsa, Oklahoma 74172
- ----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Preferred Share Purchase Rights New York Stock Exchange
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [X]
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [_]
Securities Act registration statement file number to which this form relates:
____________ (if applicable)
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of class)
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Item 1. Description of Registrant's Securities to be Registered.
On March 16, 1999, the Board of Directors of Vintage Petroleum, Inc. (the
"Corporation") declared a dividend distribution of one preferred share purchase
right (a "Right") for each outstanding share of Common Stock, par value $.005
per share (the "Common Shares"), of the Corporation. The dividend is payable to
the stockholders of record of the Corporation on April 5, 1999 (the "Record
Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to Common Shares issued after the Distribution Date. Except as set forth below,
each Right, when it becomes exercisable, entitles the registered holder to
purchase from the Corporation one one-thousandth of a share of Series A Junior
Participating Preferred Stock, with a par value of $.01 per share, of the
Corporation (the "Preferred Shares"), at a price of $60.00 per one one-
thousandth of a Preferred Share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights Agreement, as
the same may be amended from time to time (the "Rights Agreement"), between the
Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights Agent, dated
as of March 16, 1999.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates (as
hereinafter defined) will be distributed. The Rights will separate from the
Common Shares upon the earlier to occur of (i) the first date of public
announcement of a person or group of affiliated or associated persons having
acquired beneficial ownership of 15% or more of the outstanding Common Shares
(except pursuant to a Permitted Offer, as hereinafter defined); or (ii) 10 days
(or such later date as the Board of Directors of the Corporation (the "Board")
may determine) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer, the consummation of which would result
in a person or group becoming an Acquiring Person (as hereinafter defined) (the
earlier of such dates being called the "Distribution Date"). A person or group
whose acquisition of Common Shares causes a Distribution Date pursuant to clause
(i) above is an "Acquiring Person." The first date of public announcement that
a person or group has become an Acquiring Person is the "Shares Acquisition
Date."
The Rights Agreement provides that, until the Distribution Date, 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 as of 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 Shares as of the close of business on the Distribution Date (and
to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on April 5, 2009, unless earlier redeemed or exchanged
by the Corporation as described below.
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In the event that any person or group becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
Shares at a price and on terms which a majority of certain members of the Board
determines to be adequate and in the best interests of the Corporation, its
stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise the number of Common Shares or of one one-thousandth of a share of
Preferred Shares (or, in certain circumstances, other securities of the
Corporation) having a value (immediately prior to such triggering event) equal
to two times the exercise price of the Right. Notwithstanding the foregoing,
following the occurrence of the event described above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
will be null and void.
In the event that, at any time following the Shares Acquisition Date, (i)
the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, then each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right (the "Flip-Over Right") to receive, upon
exercise, common shares of the acquiring company having a value equal to two
times the exercise price of the Right. The holder of a Right will continue to
have the Flip-Over Right whether or not such holder exercises or surrenders the
Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities 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 quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The Purchase Price and number of outstanding Rights 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
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 1,000 times the dividend declared per
Common Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1,000 per
share; thereafter, and after the holders of the Common Shares receive a
liquidation payment of $1.00 per share, the holders of the Preferred Shares and
the holders of the Common Shares will share the remaining assets in the ratio of
1,000 to 1 (as adjusted) for each Preferred Share and Common Share so held,
respectively. Each Preferred Share will have 1,000 votes, voting together with
the Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged,
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each Preferred Share will be entitled to receive 1,000 times the amount received
per Common Share. These rights are protected by customary antidilution
provisions. In the event that the amount of accrued and unpaid dividends on the
Preferred Shares is equivalent to six full quarterly dividends or more, the
holders of the Preferred Shares shall have the right, voting as a class, to
elect two directors in addition to the directors elected by the holders of the
Common Shares until all cumulative dividends on the Preferred Shares have been
paid through the last quarterly dividend payment date or until non-cumulative
dividends have been paid regularly for at least one year.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one one-
thousandths of a Preferred Share, which may, at the election of the Board, 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 earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") which redemption shall be
effective upon the action of the Board. Additionally, following the Shares
Acquisition Date, the Corporation may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price, provided that such redemption
is in connection with a merger or other business combination transaction or
series of transactions involving the Corporation in which all holders of Common
Shares are treated alike but not involving an Acquiring Person or its affiliates
or associates.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board may exchange the Rights (other than Rights owned by the
Acquiring Person, which will have become void), in whole or in part, at an
exchange ratio of one Common Share, or one one-thousandth of a Preferred Share
(or of a share of a class or series of the Corporation's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
All of the provisions of the Rights Agreement may be amended by the Board
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board only in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or, subject to certain limitations, to shorten or lengthen
any time period under the Rights Agreement.
Until a Right is exercised or exchanged, the holder thereof, as such, will
have no right to vote or receive dividends and will have no other rights as a
stockholder of the Corporation. While the distribution of the Rights will not
be taxable to stockholders of the Corporation, stockholders may, depending upon
the circumstances, recognize taxable income should the Rights become exercisable
or upon the occurrence of certain events thereafter.
The Rights Agreement between the Corporation and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the form of
Certificate of Designation of Series A Junior Participating Preferred Stock of
the Corporation, as Exhibit B the form of Right Certificate and as
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Exhibit C the Summary of Rights to Purchase Preferred Shares, is attached hereto
as an exhibit and incorporated herein by reference. The foregoing description of
the Rights is qualified by reference to such exhibit.
Item 2. Exhibits.
4.1 Rights Agreement, dated as of March 16, 1999, between Vintage
Petroleum, Inc. and ChaseMellon Shareholder Services, L.L.C., as
Rights Agent, together with the following exhibits thereto: Exhibit
A--Form of Certificate of Designation of Series A Junior Participating
Preferred Stock of Vintage Petroleum, Inc.; Exhibit B--Form of Right
Certificate; Exhibit C--Summary of Rights to Purchase Preferred Shares
of Vintage Petroleum, Inc.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Date: March 22, 1999
VINTAGE PETROLEUM, INC.
By: /s/ William C. Barnes
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William C. Barnes
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description
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4.1 Rights Agreement, dated as of March 16, 1999, between Vintage
Petroleum, Inc. and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent, together with the following exhibits
thereto: Exhibit A-- Form of Certificate of Designation of
Series A Junior Participating Preferred Stock of Vintage
Petroleum, Inc.; Exhibit B--Form of Right Certificate;
Exhibit C--Summary of Rights to Purchase Preferred Shares of
Vintage Petroleum, Inc.
<PAGE>
EXHIBIT 4.1
RIGHTS AGREEMENT
by and between
VINTAGE PETROLEUM, INC.
and
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.,
as Rights Agent
Dated as of March 16, 1999
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 1. Certain Definitions.......................................... 1
Section 2. Appointment of Rights Agent.................................. 5
Section 3. Issuance of Right Certificates............................... 5
Section 4. Form of Right Certificates................................... 7
Section 5. Countersignature and Registration............................ 8
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates................................................. 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.................................................... 10
Section 8. Cancellation and Destruction of Right Certificates........... 12
Section 9. Reservation and Availability of Capital Stock................ 12
Section 10. Preferred Shares Record Date................................. 14
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights................................ 14
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares....................................................... 22
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power............................................. 22
Section 14. Fractional Rights and Fractional Shares...................... 25
Section 15. Rights of Action............................................. 26
Section 16. Agreement of Right Holders................................... 27
Section 17. Right Certificate Holder Not Deemed a Stockholder............ 27
Section 18. Concerning the Rights Agent.................................. 28
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Section 19. Merger or Consolidation or Change of Name of Rights
Agent........................................................ 28
Section 20. Duties of Rights Agent....................................... 29
Section 21. Change of Rights Agent....................................... 31
Section 22. Issuance of New Right Certificates........................... 32
Section 23. Redemption and Termination................................... 32
Section 24. Exchange..................................................... 34
Section 25. Notice of Certain Events..................................... 35
Section 26. Notices...................................................... 36
Section 27. Supplements and Amendments................................... 36
Section 28. Determination and Actions by the Board, etc.................. 37
Section 29. Successors................................................... 37
Section 30. Benefits of this Agreement................................... 38
Section 31. Severability................................................. 38
Section 32. Governing Law................................................ 38
Section 33. Counterparts................................................. 38
Section 34. Descriptive Headings......................................... 38
Signatures................................................................. 38
Exhibit A Form of Certificate of Designation of Preferred Stock........ A-1
Exhibit B Form of Right Certificate.................................... B-1
Exhibit C Summary of Rights to Purchase Preferred Shares............... C-1
</TABLE>
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "Agreement") is made and entered into as of
March 16, 1999, by and between Vintage Petroleum, Inc., a Delaware corporation
(the "Corporation"), and ChaseMellon Shareholder Services, L.L.C., a New Jersey
limited liability company (the "Rights Agent").
The Board of Directors of the Corporation has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Corporation outstanding at the Close of Business
(as hereinafter defined) on April 5, 1999 (the "Record Date"), each Right
representing the right to purchase one one-thousandth of a Preferred Share (as
hereinafter defined), upon the terms and subject to the conditions herein set
forth, and has further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to Common Shares 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 this Agreement.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the then outstanding Common Shares (other than as a
result of a Permitted Offer) or was such a Beneficial Owner at any time
after the date hereof, whether or not such Person continues to be the
Beneficial Owner of 15% or more of the then outstanding Common Shares.
Notwithstanding the foregoing, (i) the term "Acquiring Person" shall not
include (A) the Corporation, (B) any Subsidiary of the Corporation, (C) any
employee benefit plan of the Corporation or of any Subsidiary of the
Corporation, (D) any Person or entity organized, appointed or established
by the Corporation for or pursuant to the terms of any such plan, or (E)
any Grandfathered Stockholder; and (ii) no Person shall be deemed to be an
"Acquiring Person" either (A) as a result of the acquisition of Common
Shares by the Corporation which, by reducing the number of Common Shares
outstanding, increases the proportional number of shares beneficially owned
by such Person together with all Affiliates and Associates of such Person
(except that if (1) a Person would become an Acquiring Person (but for the
operation of this subclause A) as a result of the acquisition of Common
Shares by the Corporation, and (2) after such share acquisition by the
Corporation, such Person, or an Affiliate or Associate of such Person,
becomes the Beneficial Owner of any additional Common Shares (other than
pursuant to a dividend or distribution paid or made by the Corporation on
the outstanding Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), then such Person shall be deemed an Acquiring
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Person), or (B) if (1) within eight days after such Person would otherwise
have become an Acquiring Person (but for the operation of this subclause
B), such Person notifies the Board that such Person did so inadvertently
and (2) within two days after such notification, such Person is the
Beneficial Owner of less than 15% of the outstanding Common Shares.
(b) "Act" shall mean the Securities Act of 1933, as amended and as
in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or only upon the
occurrence of certain events or after the passage of time or both)
pursuant to any agreement, arrangement or understanding (whether or
not in writing), or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, 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 (whether such right is exercisable immediately or only
upon the occurrence of certain events or after the passage of time or
both) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
any security under this clause B as a result of an agreement,
arrangement or understanding to vote such security, if such agreement,
arrangement or understanding (1) arises solely from a revocable proxy
or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations 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
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(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding, whether or not in writing
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), relating to the acquisition, holding, voting (except to
the extent contemplated by the proviso to Section 1(d)(ii)(B) hereof)
or disposing of any securities of the Corporation.
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 Corporation, 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.
(e) "Board" shall mean the Board of Directors of the Corporation.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, U.S. federal holiday, or a day on which banking institutions in the
State of New York or New Jersey are authorized or obligated by law or
executive order to close.
(g) "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 "Close of Business" shall mean 5:00 P.M., New York City time,
on the next succeeding Business Day.
(h) "Common Shares" shall mean the shares of Common Stock, par
value $.005 per share, of the Corporation or, in the event of a
subdivision, combination or consolidation with respect to such shares of
Common Stock, the shares of Common Stock resulting from such subdivision,
combination or consolidation, except that, when used with reference to any
Person other than the Corporation, "Common Shares" 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.
(i) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended and as in effect on the date of this Agreement.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
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(l) "Grandfathered Stockholder" shall mean at any time Charles C.
Stephenson, Jr. and any of his Affiliates or Associates, including without
limitation Stephenson Equity, Co.
(m) "Interested Stockholder" shall mean any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or any other Person in which
any such Acquiring Person, Affiliate or Associate has an interest which
represents in excess of 5% of the total combined economic or voting power
of such other Person, or any other Person acting directly or indirectly on
behalf of or in concert with any such Acquiring Person, Affiliate or
Associate.
(n) "Permitted Offer" shall mean a tender or exchange offer which
is for all outstanding Common Shares at a price and on terms determined,
prior to the purchase of shares under such tender or exchange offer, by at
least a majority of the members of the Board who are not Acquiring Persons
or Affiliates, Associates, nominees or representatives of an Acquiring
Person, to be adequate (taking into account all factors that such Directors
deem relevant, including without limitation prices that could reasonably be
achieved if the Corporation or its assets were sold on an orderly basis
designed to realize maximum value) and otherwise in the best interests of
the Corporation and its stockholders (other than the Person or any
Affiliate or Associate thereof on whose basis the offer is being made)
taking into account all factors that such Directors may deem relevant.
(o) "Person" shall mean any individual, firm, partnership,
corporation, limited liability company, trust, association, joint venture
or other entity, and shall include any successor (by merger or otherwise)
of such entity.
(p) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, with a par value of $.01 per share, of the
Corporation having the relative rights, preferences and limitations set
forth in the Form of Certificate of Designation attached to this Agreement
as Exhibit A.
(q) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(r) "Redemption Date" shall have the meaning set forth in Section
7(a) hereof.
(s) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(t) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(u) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
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(v) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the
Corporation or an Acquiring Person that an Acquiring Person has become
such; provided, that, if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a)(ii) hereof, then no Shares
Acquisition Date shall be deemed to have occurred.
(w) "Subsidiary" of any Person shall mean any corporation or other
Person of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
(x) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(y) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation in accordance with
the terms and conditions hereof. The Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable, in which case the respective
duties of the Rights Agent and any co-Rights Agent shall be as the Corporation
shall determine; provided, however, no such appointment or allocation of duties
shall change or increase the Rights Agent's duties, liabilities or obligations.
The Rights Agent shall have no duty to supervise, and in no event shall be
liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Shares Acquisition Date or (ii)
the Close of Business on the tenth day (or such later date as may be
determined by action of the Board) after the date of the commencement by
any Person (other than the Corporation, any Subsidiary of the Corporation,
any employee benefit plan of the Corporation or of any Subsidiary of the
Corporation or any Person or entity organized, appointed or established by
the Corporation 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 Corporation, any Subsidiary of the Corporation, any employee benefit
plan of the Corporation or of any Subsidiary of the Corporation or any
Person or entity organized, appointed or established by the Corporation for
or pursuant to the terms of any such plan) to commence (which intention to
commence remains in effect for five Business Days after such announcement),
a tender or exchange offer the consummation of which would result in any
Person becoming an Acquiring Person (including, in the case of both clause
(i) and (ii), 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," (1) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the
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names of the holders thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates, and (2) the
right to receive Right Certificates will be transferable only in connection
with the transfer of the underlying Common Shares (including without
limitation a transfer to the Corporation); provided, however, that, if a
tender offer is terminated prior to the occurrence of a Distribution Date,
then no Distribution Date shall occur as a result of such tender offer.
Upon the occurrence of a Distribution Date, the Corporation shall promptly
notify the Rights Agent and request a stockholder list from the
Corporation's transfer agent. As soon as practicable after the Rights Agent
receives such notice and list, the Corporation will prepare and execute,
the Rights Agent will countersign, and the Corporation will send or cause
to be sent by first-class mail, postage-prepaid, 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 Corporation, a Right
Certificate, substantially in the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held. As of
and after the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class mail, postage-prepaid, 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 Corporation. With
respect to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with a
copy of the Summary of Rights attached thereto. Until the Distribution
Date (or the earlier of the Redemption Date or 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 such Common Shares.
(c) Rights shall be issued in respect of all Common Shares
outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date. 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 Corporation (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 or upon the exercise,
conversion or exchange of other securities issued by the Corporation prior
to the Distribution Date, and (ii) may, in any other case, if deemed
necessary or appropriate by the Board, 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 (x) the Corporation shall be advised
by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Corporation or
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the Person to whom such Right Certificate would be issued or (y)
appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
(d) Certificates for Common Shares which become outstanding
(including without limitation reacquired Common Shares referred to in the
last sentence of this paragraph (d)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date, shall be deemed also to be certificates for Rights, and
shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Vintage
Petroleum, Inc. and ChaseMellon Shareholder Services, L.L.C., dated as
of March 16, 1999 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of Vintage Petroleum, Inc. 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, may be redeemed or exchanged or may
expire. Vintage Petroleum, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. As set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and certain related
Persons, whether currently held by or on behalf of such Person or by
any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Corporation 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 and retired so that the Corporation shall not be entitled
to exercise any Rights associated with such Common Shares which are no
longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate (which
do not affect the duties or responsibilities of the Rights Agent) and as
are
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not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of
one one-thousandths of a Preferred Share as shall be set forth therein at
the price per one one-thousandth of a Preferred Share set forth therein, as
specified in Section 7(b) hereof (the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and void pursuant
to Section 7(e) of this Agreement and any Right Certificate issued pursuant
to Section 6 or 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby are null and void.
Provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Right Certificate.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either manually or
by facsimile signature, shall have affixed thereto the Corporation's seal
or a facsimile thereof, and shall be attested by the Secretary or an
Assistant Secretary of the Corporation, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Corporation who shall have signed any of the Right
Certificates shall cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance and delivery by the
Corporation, such Right Certificates may nevertheless be countersigned by
the Rights Agent and issued and delivered by the Corporation with the same
force and effect as though the Person who signed such Right Certificates
had not ceased to be such officer of the Corporation; and any Right
Certificate may be signed on behalf of the Corporation by any Person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Corporation to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such Person was
not such an officer.
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(b) Following the Distribution Date and receipt by the Rights Agent
of the notice and list of record holders of Rights referred to in Section
3(a) hereof, the Rights Agent will keep or cause to be kept, at its office
designated pursuant to Section 26 hereof as the appropriate place for
surrender of Right Certificates upon exercise, transfer or exchange, books
for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of
the Right Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the certificate number and the date of each
of the Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 4(b), 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 or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of one one-thousandth of a Preferred Share (or, following a
Triggering Event, other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any 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
office of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Corporation shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate
until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Corporation or the Rights Agent shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections
4(b), 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 Corporation 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. The
Rights Agent may delay the processing of such transaction until it receives
evidence that all applicable taxes and governmental charges have been paid.
(b) Upon receipt by the Corporation and the Rights Agent of
evidence 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 satisfactory to them, and, at the Corporation's
request, reimbursement to the Corporation and the Rights Agent of all
reason able expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the
Corporation will make and deliver a new Right
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Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered holder in lieu of, the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, 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 and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment (in lawful money of the United
States of America by certified check or bank draft payable to the order of
the Corporation) of the aggregate Purchase Price for the total number of
one one-thousandths of a Preferred Share (or other securities, as the case
may be) as to which such surrendered Rights are exercised, and an amount
equal to any applicable transfer tax, at or prior to the earliest of (i)
the Close of Business on April 5, 2009 (the "Final Expiration Date"), (ii)
the time at which the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date"), or (iii) the time at which the Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $60.00, shall
be subject to adjustment from time to time as provided in the next sentence
and in Sections 11 and 13(a) hereof and shall be payable in accordance with
paragraph (c) of this Section 7. 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 Corporation 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, each Common Share outstanding following
such subdivision, combination or consolidation shall continue to have a
Right associated therewith and the Purchase Price following any such event
shall be proportionately adjusted to equal the result obtained by
multiplying the Purchase Price immediately prior to such event by a
fraction the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of Common Shares outstanding
immediately following the occurrence of such event. The adjustment
provided for in the preceding sentence shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment of the Purchase Price for the Preferred
Shares (or other securities, as the case may be) to be purchased and an
amount equal to any applicable transfer tax or governmental charge required
to be paid by the holder of such Right Certificate in accordance with
Section 6
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hereof by certified check, cashier's check or money order payable to the
order of the Corporation, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates
for the number of Preferred Shares to be purchased (and the Corporation
hereby irrevocably authorizes its transfer agent to comply with all such
requests), or (B) if the Corporation, in its sole discretion, shall have
elected to deposit the Preferred Shares issuable upon exercise of the
Rights hereunder into a depositary, requisition from the depositary agent
of depositary receipts representing such number of one one-thousandths of a
Preferred Share as are 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 Corporation will direct
the depositary agent to comply with such requests; (ii) when appropriate,
requisition from the Corporation the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof; (iii)
after receipt of such certificates 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 thereof, deliver such cash
to or upon the order of the registered holder of such Right Certificate. In
the event that the Corporation is obligated to issue other securities
(including Common Shares) of the Corporation pursuant to Section 11(a)
hereof, the Corporation will make all arrangements necessary so that such
other securities are available for distribution by the Rights Agent, if and
when necessary to comply with this Agreement.
In addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii) hereof, the Rights Agent shall return such
Right Certificate to the registered holder thereof after imprinting,
stamping or otherwise indicating thereon that the rights represented by
such Right Certificate no longer include the rights provided by Section
11(a)(ii) hereof and, if less than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on the Right
Certificate the number of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii) hereof.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Sections 6 and 14 hereof, or the Rights Agent shall place an
appropriate notation on the Right Certificate with respect to those Rights
exercised.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Affiliate or Associate thereof) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring
Person (or of any Affiliate or Associate thereof) who becomes a transferee
prior to or concurrently with the
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Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has a continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board has determined is part of an agreement, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section
7(e), shall become null and void without any further action and no holder
of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The
Corporation shall notify the Rights Agent when this Section 7(e) applies
and shall use all reasonable efforts to insure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but neither the
Corporation nor the Rights Agent shall have any liability to any holder of
Right Certificates or other Person as a result of the Corporation's failure
to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or any transferee of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported transfer pursuant to Section 6 hereof or
exercise as set forth in this Section 7, unless such registered holder (i)
shall have properly completed and signed the certificate contained in the
form of assignment or election to purchase, as the case may be, set forth
on the reverse side of the Right Certificate surrendered for such transfer
or exercise, as the case may be, (ii) shall not have indicated an
affirmative response to clause 1 or 2 thereof, and (iii) shall have
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the
Corporation or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, 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 Corporation shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Corporation, or shall, at the
written request of the Corporation, destroy such cancelled Right Certificates,
and in such case shall deliver a certificate of destruction thereof to the
Corporation.
Section 9. Reservation and Availability of Capital Stock.
(a) The Corporation covenants and agrees that (i) at all times
prior to the occurrence of a Section 11(a)(ii) Event, it will cause to be
reserved and kept available out of
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its authorized and unissued Preferred Shares, or any authorized and issued
Preferred Shares held in its treasury, the number of Preferred Shares that
will be sufficient to permit the exercise in full of all outstanding
Rights, and (ii) after the occurrence of a Section 11(a)(ii) Event, it
will, to the extent reasonably practicable, so reserve and keep available a
sufficient number of Common Shares (and/or other securities) which may be
required to permit the exercise in full of the Rights pursuant to this
Agreement.
(b) So long as the Preferred Shares (and, after the occurrence of a
Section 11(a)(ii) Event, Common Shares or any other securities) issuable
upon the exercise of the Rights may be listed on any stock exchange, the
Corporation shall use its best efforts to cause, from and after such time
as the Rights become exercisable, all securities reserved for such issuance
to be listed on such exchange upon official notice of issuance upon such
exercise.
(c) The Corporation covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (or Common
Shares and/or other securities, as the case may be) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such
shares or other securities (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and non-assessable
shares or securities.
(d) The Corporation further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any Preferred Shares (or Common Shares and/or
other securities, as the case may be) upon the exercise of Rights. The
Corporation 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 the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares and/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 to issue or to deliver any certificates or depositary
receipts for Preferred Shares (or Common Shares and/or other securities, as
the case may be) upon the exercise of any Rights, until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to
the Corporation's satisfaction that no such tax is due.
(e) The Corporation shall use its best efforts to (i) file, as soon
as practicable following the Shares Acquisition Date (or, if required by
law, at such earlier time following the Distribution Date as so required),
a registration statement under the Act, with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act and the rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii) hereof. The
Corporation will also
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take such action as may be appropriate under the blue sky laws of the
various states. The Corporation may temporarily suspend, for a period of
time not to exceed 90 days after the date set forth in clause (i) of this
Section 9(e), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon any
such suspension, the Corporation shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer
in effect. Notwithstanding any such provision of this Agreement to the
contrary, the Rights shall not be exercisable for securities in any
jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, such exercise therefor shall not be permitted under
applicable law, or a registration statement in respect of such securities
shall not have been declared effective.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes and other governmental charges) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the transfer books of the Corporation relating to the Preferred
Shares (or Common Shares and/or other securities, as the case may be) are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the applicable transfer books are open.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Corporation 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 into a greater number of 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 without limitation
any such reclassification in connection with a consolidation or merger
in which the Corporation is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect immediately prior to 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
(except as otherwise provided herein, including without limitation
Section 7(e) hereof) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to
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such date, 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 applicable transfer books of the Corporation
were open, such holder would have been entitled to receive upon such
exercise 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
Corporation issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person, alone or together with its
Affiliates and Associates, shall, at any time after the date of this
Agreement, become an Acquiring Person, then proper provision shall be
made so that each holder of a Right shall (except as provided below
and in Section 7(e) hereof), for a period of 60 days after the later
of the occurrence of any such event or the effective date of an
appropriate registration statement under the Act pursuant to Section 9
hereof, have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price, in accordance with the terms
of this Agreement, in lieu of Preferred Shares, such number of duly
authorized, validly issued, fully paid and non-assessable Common
Shares (or, in the discretion of the Board, one one-thousandths of a
Preferred Share) as shall equal the result obtained by (A) multiplying
the then current Purchase Price by the then number of one one-
thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and dividing that product by (B) 50% of the then current per
share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) on the date of such first occurrence (such
number of shares being referred to as the "Adjustment Shares");
provided, however, that, if the transaction that would otherwise give
rise to the foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13 hereof shall
apply and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued (and unreserved) Common
Shares to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof and the Rights become so exercisable (and the
Board has determined to make the Rights exercisable into fractions of
a Preferred Share), notwithstanding any other provision of this
Agreement, to the extent necessary and permitted by applicable law,
each Right shall thereafter represent the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, (A) a number of (or fractions of) Common
Shares (up to the maximum number of Common Shares which may
permissibly be issued) and (B) one-one-thousandths of a Preferred
Share or a
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number of, or fractions of other equity securities of the Corporation
(or, in the discretion of the Board, debt) which the Board has
determined to have the same aggregate current market value (determined
pursuant to Sections 11(d)(i) and (ii) hereof, to the extent
applicable) as one Common Share (such number of, or fractions of,
Preferred Shares or other equity securities or debt of the Corporation
being referred to as a "capital stock equivalent"), equal in the
aggregate to the number of Adjustment Shares; provided, however, if
sufficient Common Shares and/or capital stock equivalents are
unavailable, then the Corporation shall, to the extent permitted by
applicable law, take all such action as may be necessary to authorize
additional Common Shares or capital stock equivalents for issuance
upon exercise of the Rights, including the calling of a meeting of
stockholders; and provided, further, that, if the Corporation is
unable to cause sufficient Common Shares and/or capital stock
equivalents to be available for issuance upon exercise in full of the
Rights, then each Right shall thereafter represent the right to
receive the Adjusted Number of Shares upon exercise at the Adjusted
Purchase Price (as such terms are hereinafter defined). As used
herein, the term "Adjusted Number of Shares" shall mean that number of
(or fractions of) Common Shares (and/or capital stock equivalents)
equal to the product of (X) the number of Adjustment Shares and (Y) a
fraction, the numerator of which is the number of Common Shares
(and/or capital stock equivalents) available for issuance upon
exercise of the Rights and the denominator of which is the aggregate
number of Adjustment Shares otherwise issuable upon exercise in full
of all Rights (assuming there were a sufficient number of Common
Shares available) (such fraction being referred to as the "Proration
Factor"). The "Adjusted Purchase Price" shall mean the product of the
Purchase Price and the Proration Factor. The Board may, but shall not
be required to, establish procedures to allocate the right to receive
Common Shares and capital stock equivalents upon exercise of the
Rights among holders of Rights.
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the 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 or exercisable for 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
determined pursuant to 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 by 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
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purchase at such current per share 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 Corporation issuable upon exercise of one
Right. In case such subscription price may be paid by delivery of
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. Preferred Shares
owned by or held for the account of the Corporation 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 Corporation 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 consolidation or merger in
which the Corporation is the continuing or surviving corporation) of
evidences of indebtedness, equity securities other than Preferred Shares or
assets (other than a regular periodic cash dividend or a dividend payable
in Preferred Shares) or subscription rights, options or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price (as determined pursuant to Section 11(d) hereof) of the Preferred
Shares on such record date, less the fair market value (as determined in
good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes) of the portion of the assets, equity securities or evidences of
indebtedness so to be distributed or of such subscription rights, options
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 Corporation 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, 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 immediately prior to and not including
such date; provided, however, that, in the event the current per share
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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 such shares or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to
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 by The Nasdaq Stock Market ("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. If on any such date no
such market maker is making a market in the Security, the fair value
of the Security on such date as determined in good faith by the Board
shall be used. 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 of this Agreement), multiplied by
1,000. If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "current per share market price"
of the Preferred Shares shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
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(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section
11(e), are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest 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 mandates
such adjustment or (ii) the Final Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive, upon exercise of such Right, any shares
of capital stock of the Corporation other than Preferred Shares, thereafter
the number of 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 Sections 11(a) through (c) hereof, inclusive,
and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Corporation subsequent to
any adjustment made hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-thousandths of a Preferred
Share and other capital stock of the Corporation purchasable from time to
time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) The Corporation may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights, in lieu
of any adjustment in the number of one one-thousandths 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-thousandths 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 Corporation shall make a public
announcement (and shall promptly deliver a copy of such announcement to the
Rights Agent) of its election to adjust the number of Rights, indicating
the record date for the adjustment and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the 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(h), the Corporation shall, as promptly as practicable, cause to be
distributed to
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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 Corporation, 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 Corporation, 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 may, at the option of the Corporation, reflect the adjusted
Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(i) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths 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-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number
of one one-thousandths of a Preferred Share, Common Shares or other
securities issuable upon exercise of the Rights, the Corporation shall take
any corporate action which may, in the opinion of its counsel, be necessary
in order that the Corporation may validly and legally issue such number of
fully paid and non-assessable one one-thousandths of a Preferred Share,
Common Shares or other securities at such adjusted Purchase Price.
(k) 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 Corporation may elect (and shall provide the Rights
Agent with notice of such election) to defer, until the occurrence of such
event, the issuance to the holder of any Right exercised after such record
date of the Preferred Shares, Common Shares or other securities of the
Corporation, if any, issuable upon such exercise over and above the
Preferred Shares, Common Shares or other securities of the Corporation, if
any, issuable upon exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(l) Anything in this Section 11 to the contrary notwithstanding,
the Corporation 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 Preferred Shares at less
than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which
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by their terms are convertible into or exchangeable for Preferred Shares,
(iv) stock dividends, or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Corporation to
holders of its Preferred Shares shall not be taxable to such stockholders.
(m) The Corporation covenants and agrees that it will not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Corporation in a transaction which does not
violate Section 11(n) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Corporation in a transaction which does not
violate Section 11(n) hereof), or (iii) sell or otherwise transfer (or
permit any Subsidiary of the Corporation to sell or otherwise transfer), in
one transaction or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Corporation and/or any of its Subsidiaries in one
or more transactions each of which does not violate Section 11(n) hereof),
if (x) at the time of or immediately after such consolidation, merger, sale
or transfer there are any charter or by-law provisions or any rights,
warrants or other instruments or securities outstanding or agreements in
effect or other actions taken, which would materially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, or (y) prior
to, simultaneously with or immediately after such consolidation, merger,
sale or transfer, the stockholders of the Person who constitutes, or would
constitute, the Principal Party (for purposes of Section 13(a) hereof)
shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates. The Corporation shall not
consummate any such consolidation, merger, sale or transfer unless prior
thereto the Corporation and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 11(m).
(n) The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, 24 or 27
hereof, take (or permit any of its Subsidiaries to take) any action the
purpose of which is to, or if at the time such action is taken it is
reasonably foreseeable that the effect of such action would be to,
materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) The exercise of Rights under Section 11(a)(ii) hereof shall
only result in the loss of rights under said Section 11(a)(ii) to the
extent so exercised and shall not otherwise affect the rights represented
by the Rights under this Agreement, including the rights represented by
Section 13 hereof.
(p) Unless the Corporation shall have exercised its election as
provided in Section 11(h) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(b) or (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-thousandths of a Preferred Share (calculated
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<PAGE>
to the nearest one-millionth) obtained by (i) multiplying (A) the number of
one one-thousandths of a share for which a Right was exercisable
immediately prior to this adjustment by (B) 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.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Corporation shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief, reasonably detailed statement of the facts,
computations and methodology giving rise to such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares and the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing 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 and shall have no duty
with respect to and shall not be deemed to have knowledge of such adjustment
unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, on or following the Shares Acquisition Date,
directly or indirectly, (x) the Corporation shall consolidate with, or
merge with and into, any Person (and the Corporation shall not be the
continuing or surviving corporation of such consolidation or merger), (y)
the Corporation shall consolidate with, or merge with, any Person, and the
Corporation shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction described
in clause (x) or (y) above, a merger or consolidation which would result in
all of the securities generally entitled to vote in the election of
directors ("voting securities") of the Corporation outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or
by being converted into securities of the surviving entity) all of the
voting securities of the Corporation or such surviving entity outstanding
immediately after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or consolidation),
or (z) the Corporation shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any Person (other than the Corporation
or any Subsidiary of the Corporation in one or more transactions each of
which does not violate Section 11(n) hereof), then, and in each such case
(except as provided in Section 13(d) hereof), proper provision shall be
made so that (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price, in accordance
with the terms of this Agreement and in lieu of Preferred Shares, such
number of duly authorized, validly issued, fully paid, non-assessable and
freely tradeable Common Shares of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights
22
<PAGE>
of call or first refusal or other adverse claims, as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number
of one one-thousandths of a Preferred Share for which a Right is then
exercisable (without taking into account any adjustment previously made
pursuant to Section 11(a)(ii) hereof) and dividing that product by (B) 50%
of the then current per share market price of the Common Shares of such
Principal Party (determined pursuant to Section 11(d)(i) hereof) on the
date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section
13 Event, all the obligations and duties of the Corporation pursuant to
this Agreement; (iii) the term "Corporation" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; and (iv) such
Principal Party shall take such steps (including without limitation the
authorization and reservation of a sufficient number of its Common Shares
to permit exercise of all outstanding Rights in accordance with this
Section 13(a)) in connection with the consummation of any such transaction
as may be necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to the Common
Shares of such Principal Party thereafter deliverable upon the exercise of
the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a) hereof, the Person that
is the issuer of any securities into which Common Shares of the
Corporation are converted in such merger or consolidation, and if no
securities are so issued, the Person that survives or results from
such merger or consolidation; and
(ii) in the case of any transaction described in clause (z)
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 of the foregoing cases, (A) if the
Common Shares of such Person are not at such time and have not been
continuously over the preceding 12 month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which are
and have been so registered, "Principal Party" shall refer to such
other Person; (B) 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; and (C) in case such
Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (A)
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and (B) above shall apply to each of the chains of ownership having an
interest in such joint venture as if such party were a "Subsidiary" of
both or all of such joint venturers and the Principal Parties in each
such chain shall bear the obligations set forth in this Section 13 in
the same ratio as their direct or indirect interests in such Person
bear to the total of such interests.
(c) The Corporation shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of its authorized Common Shares which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Corporation
and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in
Sections 13(a) and (b) hereof and further providing that, as soon as
practicable after the date of any consolidation, merger, sale or transfer
mentioned in Section 13(a) hereof, the Principal Party, at its own expense,
shall:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
blue sky or securities laws of such jurisdictions as may be necessary
or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. The rights under
this Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the contrary,
this Section 13 shall not be applicable to a transaction described in
clauses (x) and (y) of Section 13(a) hereof if: (i) such transaction is
consummated with a Person or Persons who acquired Common Shares pursuant to
a Permitted Offer (or a wholly owned Subsidiary of any such Person or
Persons); (ii) the price per Common Share offered in such transaction is
not less than the price per Common Share paid to all holders of Common
Shares whose shares were purchased pursuant to such Permitted Offer; and
(iii) the form of consideration offered in
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such transaction is the same as the form of consideration paid pursuant to
such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Right Certificates, with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board. 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
shall be used.
(b) The Corporation shall not be required to issue fractions of
Preferred Shares (other than fractions which are one one-thousandth or
integral multiples of one one-thousandth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are one one-
thousandth or integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one one-
thousandth of a Preferred Share may, at the election of the Corporation, be
evidenced by depositary receipts, pursuant to an appropriate agreement
between the Corporation and a depositary selected by it; provided, that
such agreement shall provide that the holders of such depositary receipts
shall have the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not
one one-thousandth or integral multiples of one one-thousandth of a
Preferred Share, the Corporation shall pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same
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fraction of the current market value of one one-thousandth of a Preferred
Share. For the purposes of this Section 14(b), the current market value of
one one-thousandth of a Preferred Share shall be one one-thousandth of the
closing price of a Preferred Share (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 hereof giving rise to the right to receive Common
Shares, capital stock equivalents (other than Preferred Shares) or other
securities upon the exercise of a Right, the Corporation shall not be
required to issue fractions of shares or units of such Common Shares,
capital stock equivalents or other securities upon exercise of the Rights
or to distribute certificates which evidence fractions of such Common
Shares, capital stock equivalents or other securities. In lieu of
fractional shares or units of such Common Shares, capital stock equivalents
or other securities, the Corporation may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of
a share or unit of such Common Shares, capital stock equivalents or other
securities. For purposes of this Section 14(c), the current market value
shall be determined in the manner set forth in Section 11(d) hereof for the
Trading Day immediately prior to the date of such exercise and, if such
capital stock equivalent is not traded, each such capital stock equivalent
shall have the value of one one-thousandth of a Preferred Share.
(d) The holder of a Right, by the acceptance of the Right,
expressly waives his right to receive any fractional Rights or any
fractional share upon exercise of a Right (except as permitted by this
Section 14).
Section 15. Rights of Action. All rights of action in respect of this
Agreement (except 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 Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate (or, prior to the
Distribution Date, such Common Shares) in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
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Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right as follows:
(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 are
transferable only on the registry books of the Rights Agent if surrendered
at the office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate form fully executed.
(c) Subject to Sections 6 and 7(f) hereof, the Corporation 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 owner ship or
writing on the Right Certificate or the associated Common Shares
certificate made by anyone other than the Corporation or the Rights Agent)
for all purposes whatsoever, and neither the Corporation nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall be
affected by any notice to the contrary.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in 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, judgment or ruling (whether interlocutory or final) issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Corporation must use its best efforts to have any
such order, decree, judgment or ruling lifted or otherwise overturned as
soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder of any Right Certificate, as such, shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Corporation which may at any time be issuable upon the
exercise or exchange 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 Corporation or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or other distributions or to exercise any preemptive or
subscription rights, or otherwise, until the Right or
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Rights evidenced by such Right Certificate shall have been exercised or
exchanged in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by the Rights Agent hereunder and,
from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the preparation,
delivery, amendment, administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Corporation also
agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost or expense, incurred without gross negligence, bad faith
or willful misconduct on the part of the Rights Agent, for any action
taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement or the exercise or
performance of its duties hereunder, including, without limitation the
reasonable costs and expenses of defending against any claim of liability
in the premises. The indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and shall
incur no liability for, or in respect of, any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Agreement or the exercise or performance of its duties hereunder in
reliance upon any Right Certificate or certificate for Common Shares or for
other securities of the Corporation, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, instruction,
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 Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
stock transfer or all or substantially all of the shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 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 a predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time
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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 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, and only the duties and obligations, expressly imposed
by this Agreement (and no implied duties and obligations) upon the following
terms and conditions, by all of which the Corporation and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation), and the advice or opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent with respect to, and the Rights Agent shall incur no liability
for or in respect of, any action taken, suffered or omitted by it in good
faith and in accordance with such advice or opinion.
(b) Whenever, in the performance of its duties under this
Agreement, the Rights Agent shall deem it necessary or desirable that any
fact or matter (including without limitation the identity of an Acquiring
Person and the determination of the current market price of any Security)
be proved or established by the Corporation prior to the Rights Agent's
taking, suffering or omitting to take 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 Corporation and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the Rights Agent
with respect to, and the Rights Agent shall incur no liability for or in
respect of, any action taken, suffered or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct. In no case will the
Rights Agent be liable for special, indirect, punitive, incidental or
consequential loss or damages of any kind whatsoever (including without
limitation lost profits), even if the Rights Agent has been advised of the
possibility of such damages.
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(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 on such Right Certificates)
or be required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Corporation only.
(e) The Rights Agent shall not be under any liability or
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 Corporation of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including
without limitation the Rights becoming null and void pursuant to Section
7(e) hereof) or any adjustment required under the provisions of Section 3,
11, 13, 23 or 24 hereof or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
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 issued, be duly authorized, validly issued, fully paid
and non-assessable.
(f) The Corporation agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the
Corporation, and to apply to such officers for advice or instructions in
connection with its duties, and shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Corporation may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the
Rights Agent under this Rights Agreement and the date on or after which
such action shall be taken or such omission shall be effective. The Rights
Agent shall not be liable for any action taken or omitted to be taken by
the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any officer of the
Corporation actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking
any such action (or the effective date in the case of an omission), the
Rights Agent shall have
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received written instruction in response to such application specifying the
action to be taken, suffered or omitted.
(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 Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or
lend money to the Corporation or otherwise act as fully and freely as
though it were not the Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Corporation or for any other Person.
(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 Corporation or any
other Person resulting from any such act, default, neglect or misconduct,
absent gross negligence, bad faith or willful misconduct in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Corporation.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Corporation and to each transfer
agent of the Common Shares or Preferred Shares by registered or certified mail,
and, following the Distribution Date, to the holders of the Right Certificates
by first-class mail. The Corporation 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,
following the Distribution Date, to holders of the Right Certificates by first-
class mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Corporation shall appoint a successor to the
Rights Agent. If the Corporation 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
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or incapacitated Rights Agent or by the holder of a Right Certificate (who
shall, with such notice, submit his Right Certificate for inspection by the
Corporation), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Corporation or by such a
court, shall be (a) a Person organized and doing business under the laws of the
United States or the laws of any state of the United States or the District of
Columbia, in good standing, having an office in the State of New York, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000, or (b) an Affiliate of a Person described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; however, 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 Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and, following the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption and Termination.
(a) (i) The Board may, at its option, redeem all but not less than
all the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted 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"), at any time prior to the earlier of (A) the
occurrence of a Section 11(a)(ii) Event, or (B) the Final Expiration
Date. The Corporation may, at its option, pay the Redemption Price
either in Common Shares (based on the "current per share market
price," as defined in Section 11(d) hereof, of the Common Shares at
the time of redemption) or cash; provided, that if the Corporation
elects to pay the Redemption Price in Common Shares, the Corporation
shall not be required to issue any fractional Common Shares and the
number of Common Shares issuable to each holder of Rights shall be
rounded down to the next whole share.
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(ii) In addition, the Board may, at its option, at any time
following the occurrence of a Section 11(a)(ii) Event and the
expiration of any period during which the holder of Rights may
exercise the rights under Section 11(a)(ii) but prior to any Section
13 Event, redeem all but not less than all of the then outstanding
Rights at the Redemption Price (A) in connection with any merger,
consolidation or sale or other transfer (in one transaction or in a
series of related transactions) of assets or earning power aggregating
50% or more of the earning power of the Corporation and its
Subsidiaries (taken as a whole) in which all holders of Common Shares
are treated alike and not involving (other than as a holder of Common
Shares being treated like all other such holders) an Interested
Stockholder, or (B)(1) if and for so long as the Acquiring Person is
not thereafter the Beneficial Owner of 10% or more of the Common
Shares, and (2) at the time of redemption no other Persons are
Acquiring Persons.
(b) In the case of a redemption permitted under Section 23(a)(i)
hereof, immediately upon the date for redemption set forth (or determined
in the manner specified) in a resolution of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. In the case of a redemption permitted only under Section
23(a)(ii) hereof, evidence of which shall have been filed with the Rights
Agent, the right to exercise the Rights will terminate and represent only
the right to receive the Redemption Price upon the later of 10 Business
Days following the giving of such notice or the expiration of any period
during which the rights under Section 11(a)(ii) may be exercised. The
Corporation shall promptly give public notice of any such redemption to the
Rights Agent and the holders of the Rights in the manner set forth in
Section 26 hereof; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such date for redemption set forth in a
resolution of the Board ordering the redemption of the Rights, the
Corporation shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Corporation 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.
(c) The Corporation may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights in accordance with this
Agreement and (ii) mailing payment of the Redemption
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Price to the registered holders of the Rights at their last addresses as
they appear on the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the
Common Shares, and, upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the
Corporation.
Section 24. Exchange.
(a) The Board may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become
null and void pursuant to the provisions of Section 7(e) or 11(a)(ii)
hereof) for Common Shares of the Corporation 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 shall not be empowered to effect
such exchange at any time after any Person (other than the Corporation, any
Subsidiary of the Corporation, any employee benefit plan of the Corporation
or any such Subsidiary, any Person organized, appointed or established by
the Corporation for or pursuant to the terms of any such plan or any
trustee, administrator or fiduciary of such a plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to Section 24(a) hereof and without any further action
and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of the holders of such Rights shall be to
receive that number of Common Shares equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Corporation
shall promptly give public notice and notice to the Rights Agent 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
Corporation shall promptly mail a notice of any such exchange to the Rights
Agent and to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Shares for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) or 11(a)(ii) hereof) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Corporation, at
its option, may substitute Preferred Shares (or equivalent preferred
shares, as such term is defined in Section 11(b) hereof) for some or all of
the Common Shares exchangeable for Rights, at the initial rate of one one-
thousandth of a Preferred Share (or equivalent preferred share) for each
Common Share, as appropriately adjusted to reflect adjustments in the
voting rights of the
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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
dividend, liquidation and voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares or
Preferred Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Corporation shall take all such action as may be necessary
to authorize additional Common Shares or Preferred Shares for issuance upon
exchange of the Rights.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall, at any time after the Distribution
Date, propose (i) to pay any dividend payable in 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 regularly 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 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 or combination of
outstanding Preferred Shares), (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Corporation
in a transaction which does not violate Section 11(n) hereof), or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer) in one or more transactions, of 50% or
more of the assets or earning power of the Corporation and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Corporation and/or any of its Subsidiaries in one or more transactions each
of which does not violate Section 11(n) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Corporation, then, in each
such case, the Corporation shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such
proposed action and shall file a certificate with the Rights Agent to that
effect, which shall specify the record date for the purposes of such
dividend, distribution or offering 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 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 20 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 20 days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares, whichever
shall be the earlier. The failure to give notice required by this Section
25 or any defect therein shall not affect the legality or validity of the
action taken by the Corporation or the vote upon any such action.
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(b) Notwithstanding anything in this Agreement to the contrary, prior
to the Distribution Date, a public filing by the Corporation with the
Securities and Exchange Commission shall constitute sufficient notice to
the holders of securities of the Corporation, including without limitation
the Rights, for purposes of this Agreement and no other notice need be
given to such holders.
(c) In case of a Section 11(a)(ii) Event, then (i) the Corporation
shall, as soon as practicable thereafter, give to each holder of a Right
Certificate, 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, and (ii) all references in Section 25(a) hereof to Preferred Shares
shall be deemed thereafter to refer also to Common Shares and/or, if
appropriate, other securities of the Corporation.
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 Corporation shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed as follows (or to such other address or
addresses as the Corporation shall specify in writing to the Rights Agent):
Vintage Petroleum, Inc.
4200 One Williams Center
Tulsa, Oklahoma 74172
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation 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 as follows (or to such
other address or addresses as the Rights Agent shall specify in writing to the
Corporation):
ChaseMellon Shareholder Services, L.L.C.
450 West 33rd Street, 15th Floor
New York, New York 10001
Attention: Jared Fassler
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Corporation.
Section 27. Supplements and Amendments. Prior to the Distribution Date,
the Corporation and the Rights Agent shall, if the Corporation so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Shares. From
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and after the Distribution Date, the Corporation and the Rights Agent shall, if
the Corporation so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates in order (a) to cure any
ambiguity, (b) to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein, (c) to shorten or
lengthen any time period hereunder, or (d) to change or supplement the
provisions hereof in any manner which the Corporation may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Right Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person); provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (c) of this sentence,
(i) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable, or (ii) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Corporation 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 that
such supplement or amendment does not adversely affect the rights or obligations
of the Rights Agent 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 Common Shares.
Section 28. Determination and Actions by the Board, etc. The Board
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or the
Corporation, or as may be necessary or advisable in the administration of this
Agreement, including without limitation the right and power to (a) interpret the
provisions of this Agreement, and (b) make all determinations deemed necessary
or advisable for the administration of this Agreement (including without
limitation a determination to redeem or exchange or not to redeem or exchange
the Rights or to amend this Agreement and whether any proposed amendment
adversely affects the interests of the holders of Right Certificates). For all
purposes of this Agreement, any calculation of the number of Common Shares or
other securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith (the Rights Agent
may assume the Board acted in good faith), shall (x) be final, conclusive and
binding on the Corporation, the Rights Agent, the holders of the Right
Certificates and all other Persons, and (y) not subject the Board to any
liability to the holders of the Right Certificates.
Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
37
<PAGE>
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Corporation, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 31. 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 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State; except that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the law of the State of New York
applicable to contracts made and to be performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts, each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience of reference only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers, all as of the day and
year first above written.
VINTAGE PETROLEUM, INC.
By: /s/ William C. Barnes
----------------------------------
Name: William C. Barnes
Title: Executive Vice President
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Jared Fassler
----------------------------------
Name: Jared Fassler
Title: Assistant Vice President
38
<PAGE>
Exhibit A
Form of
Certificate of Designation
of
Series A Junior Participating Preferred Stock
of
Vintage Petroleum, Inc.
(Pursuant to Section 151 of the General
Corporation Law of the State of Delaware)
Vintage Petroleum, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), in accordance with the provisions of Section 103 thereof, DOES
HEREBY CERTIFY:
That, pursuant to the authority granted to and 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 (the "Certificate
of Incorporation"), the following resolution was duly adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corporation Law of the State of Delaware at a meeting duly called and held on
March 16, 1999:
RESOLVED, that, pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (hereinafter called the "Board of
Directors") in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, with a par value of $.01 per share, of the Corporation and hereby
states the designation and number of shares, and fixes the relative rights,
preferences and limitations thereof (in addition to the provisions set
forth in the Certificate of Incorporation which are applicable to the
Preferred Stock of all classes and series) as follows:
Series A Junior Participating Preferred Stock
Section 1. Designation, Par Value and Amount. The shares of such
series shall be designated as "Series A Junior Participating Preferred Stock"
(hereinafter referred to as "Series A Preferred Stock"), the shares of such
series shall be with par value of $.01 per share, and the number of shares
constituting such series shall be 80,000; provided, however, that, if more than
a total of 80,000 shares of Series A Preferred Stock shall be issuable upon the
exercise of Rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of March 16, 1999, between the Corporation and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (as amended from time to time) (the "Rights
Agreement"), the Board of Directors, pursuant to Section 151 of the General
Corporation Law of the State of Delaware, shall direct by resolution or
resolutions that a certificate be properly executed, acknowledged and filed
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
A-1
<PAGE>
permits) to the largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of the Rights. Such number of shares of the
Series A Preferred Stock may be increased or decreased by resolution of the
Board of Directors; provided, that no decrease shall reduce the number of shares
of Series A Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares issuable upon exercise or conversion of
outstanding rights, options or other securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of
shares of any class or series of stock of the Corporation ranking junior to
the Series A Preferred Stock in respect thereof, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the first business day of January, April, July and October of each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $10.00 or (b) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share amount of all
cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions (other than a
dividend payable in shares of Common Stock, par value $.005 per share, of
the Corporation (the "Common Stock") or a subdivision of the outstanding
shares of Common Stock, by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time after the
record date for the initial distribution of the Rights pursuant to the
Rights Agreement (the "Rights Declaration Date") (i) declare or pay any
dividend on the Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then, in each such case, the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock); provided, that,
A-2
<PAGE>
in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date (or, with respect
to the first Quarterly Dividend Payment Date, the period between the first
issuance of any share or fraction of a share of Series A Preferred Stock
and such first Quarterly Dividend Payment Date), a dividend of $10.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Preferred
Stock, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue and be cumulative from the date of issue
of such shares, or unless the date of issue is a date 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 before such Quarterly
Dividend Payment Date, in which case dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment
of 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.
Section 3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Except as provided in paragraph (C) of this Section 3 and subject
to the provision for adjustment hereinafter set forth, each share of Series
A Preferred Stock shall entitle the holder thereof to 1,000 votes on all
matters submitted to a vote of the stockholders of the Corporation. In the
event the Corporation shall, at any time after the Rights Declaration Date
(i) declare or pay any dividend on the Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
A-3
<PAGE>
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) (i) If, on the date used to determine stockholders of record
for any meeting of stockholders for the election of directors, a default in
preference dividends (as defined in subparagraph (v) below) on the Series A
Preferred Stock shall exist, the holders of the Series A Preferred Stock
shall have the right, voting as a class as described in subparagraph (ii)
below, to elect two directors (in addition to the directors elected by
holders of Common Stock). Such right may be exercised (a) at any meeting of
stockholders for the election of directors or (b) at a meeting of the
holders of shares of Voting Preferred Stock (as hereinafter defined),
called for the purpose in accordance with the By-laws of the Corporation,
until all such cumulative dividends (referred to above) shall have been
paid in full or until non-cumulative dividends have been paid regularly for
at least one year.
(ii) The right of the holders of Series A Preferred Stock to
elect two directors, as described above, shall be exercised as a class
concurrently with the rights of holders of any other series of Preferred
Stock upon which voting rights to elect such directors have been conferred
and are then exercisable. The Series A Preferred Stock and any additional
series of Preferred Stock which the Corporation may issue and which may
provide for the right to vote with the foregoing series of Preferred Stock
are collectively referred to herein as "Voting Preferred Stock."
(iii) Each director elected by the holders of shares of Voting
Preferred Stock shall be referred to herein as a "Preferred Director." A
Preferred Director so elected shall continue to serve as such director for
a term of one year, except that upon any termination of the right of all of
such holders to vote as a class for Preferred Directors, the term of office
of the Preferred Directors shall terminate. Any Preferred Director may be
removed by, and shall not be removed except by, the vote of the holders of
record of a majority of the outstanding shares of Voting Preferred Stock
then entitled to vote for the election of directors, present (in person or
by proxy) and voting together as a single class (a) at a meeting of the
stockholders, or (b) at a meeting of the holders of shares of such Voting
Preferred Stock, called for the purpose in accordance with the By-laws of
the Corporation, or (c) by written consent signed by the holders of a
majority of the then outstanding shares of Voting Preferred Stock then
entitled to vote for the election of directors, taken together as a single
class.
(iv) So long as a default in any preference dividends on the
Series A Preferred Stock shall exist or the holders of any other series of
Voting Preferred Stock shall be entitled to elect Preferred Directors, (a)
any vacancy in the office of a Preferred Director may be filled (except as
provided in the following clause (b)) by an instrument in writing signed by
the remaining Preferred Director and filed with the Corporation and (b) in
the case of the removal of any Preferred Director, the vacancy may be
filled by the vote or written
A-4
<PAGE>
consent of the holders of a majority of the outstanding shares of Voting
Preferred Stock then entitled to vote for the election of directors,
present (in person or by proxy) and voting together as a single class, at
such time as the removal shall be effected. Each director appointed as
aforesaid by the remaining Preferred Director shall be deemed, for all
purposes hereof, to be a Preferred Director. Whenever (x) no default in
preference dividends on the Series A Preferred Stock shall exist and (y)
the holders of other series of Voting Preferred Stock shall no longer be
entitled to elect such Preferred Directors, then the number of directors
constituting the Board of Directors of the Corporation shall be reduced by
two.
(v) For purposes hereof, a "default in preference dividends"
on the Series A Preferred Stock shall be deemed to have occurred whenever
the amount of cumulative and unpaid dividends on the Series A Preferred
Stock shall be equivalent to six full quarterly dividends or more (whether
or not consecutive), and, having so occurred, such default shall be deemed
to exist thereafter until, but only until, all cumulative dividends on all
shares of the Series A Preferred Stock then outstanding shall have been
paid through the last Quarterly Dividend Payment Date or until, but only
until, non-cumulative dividends have been paid regularly for at least one
year.
(D) Except as set forth herein (or as otherwise required by
applicable law), holders of Series A Preferred Stock shall have no general
or special voting rights and their consent shall not be required for 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 above 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, or make any other distributions,
on 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 value any
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; provided, that
the Corporation may at any time redeem, purchase
A-5
<PAGE>
or otherwise acquire shares of any such junior 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) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or 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 in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, in any other Certificate of Designations creating
a series of Preferred Stock or as otherwise required or permitted by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Subject to the prior and superior rights of holders of any shares
of any series of Preferred Stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to rights upon liquidation,
dissolution or winding up (voluntary or otherwise), upon any liquidation,
dissolution or winding up of the Corporation (voluntary or otherwise), no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received $1,000 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A Preferred Stock unless, prior thereto,
the holders of shares of Common Stock shall have received an amount per
share (the "Capital Adjustment") equal to the quotient obtained by dividing
(i) the Series A Liquidation Preference by (ii) 1,000 (as appropriately
adjusted as set forth in paragraph (C) of this Section 6) (such number in
clause (ii) being hereinafter
A-6
<PAGE>
referred to as the "Adjustment Number"). Following the payment of the full
amount of the Series A Liquidation Preference and the Capital Adjustment in
respect of all outstanding shares of Series A Preferred Stock and Common
Stock, respectively, holders of Series A Preferred Stock and holders of
Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to
1 with respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if
any, which rank on a parity with the Series A Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of Series A
Preferred Stock and the holders of such parity shares in proportion to
their respective liquidation preferences. In the event, however, that
there are not sufficient assets available to permit payment in full of the
Capital Adjustment, then such remaining assets shall be distributed ratably
to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on the Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Combination, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case the shares of Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on the Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
A-7
<PAGE>
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank junior to
all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. At any time that any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority or more
of the outstanding shares of Series A Preferred Stock, voting separately as a
class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, to receive dividends, to
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf
of the Corporation by a duly authorized officer this _____ day of March, 1999.
VINTAGE PETROLEUM, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
A-8
<PAGE>
Exhibit B
Form of Right Certificate
Certificate
No. R- ____ Rights
NOT EXERCISABLE AFTER THE EARLIER OF APRIL 5, 2009, AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED AS SET FORTH IN THE RIGHTS
AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF
SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, ARE NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY ARE NULL
AND VOID.]/*/
Right Certificate
VINTAGE PETROLEUM, INC.
This Right Certificate 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 March 16, 1999, between Vintage Petroleum,
Inc., a Delaware corporation (the "Corporation"), and ChaseMellon Shareholder
Services, L.L.C. (the "Rights Agent"), as the same may be amended from time to
time (the "Rights Agreement"), to purchase from the Corporation at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on April 5, 2009, at the office of
the Rights Agent designated for such purpose, or at the office of its successor
as Rights Agent, one one-thousandth of a fully paid, non-assessable share of
Series A Junior Participating Preferred Stock, with a par value of $.01 per
share (the "Preferred Shares"), of the Corporation, at a purchase price of
$60.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
payable in lawful money of the United States of America, upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
- --------------------
/*/ If applicable, insert this portion of the legend and delete the preceding
sentence.
B-1
<PAGE>
The number of Rights evidenced by this Right Certificate (and the number of
one one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of April 5, 1999, based on the Preferred Shares as
constituted at such date and may have been or in the future be adjusted as a
result of the occurrence of certain events, as more fully provided in the Rights
Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of an Acquiring Person or any such Associate or Affiliate who becomes
a transferee after the Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of an Acquiring
Person or any such Associate or Affiliate who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such, such Rights shall become
null and void and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number of
one one-thousandth of a Preferred Share or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Corporation and the office of the Rights Agent designated for such purpose.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares or other securities as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Corporation at a redemption price of
$.01 per Right (subject to adjustment as provided in the Rights Agreement)
payable either in cash or the Corporation's
B-2
<PAGE>
Common Shares, par value $.005 per share, or (ii) may be exchanged in whole or
in part for Common Shares or Preferred Shares.
No fractional Preferred Shares or Common Shares will be issued upon the
exercise or exchange of any Right or Rights evidenced hereby (other than
fractions of Preferred Shares which are one one-thousandth or integral multiples
of one one-thousandth of a Preferred Share, which may, at the election of the
Corporation, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Corporation which may at any time be issuable on the
exercise or exchange 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 Corporation or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised or exchanged as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal. Dated as of ______________, ____.
ATTEST: VINTAGE PETROLEUM, INC.
By:
- ---------------------------------- -------------------------------------
Name: Name:
Title: Title:
Countersigned:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., as Rights Agent
By:
-------------------------------
Authorized Signatory
Name:
Title:
B-3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________ hereby sells, assigns and
transfers unto__________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
__________ Rights represented by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint _____________________ Attorney, to transfer said Rights on the books of
the within-named Corporation, with full power of substitution.
Dated:
--------------------------
----------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.
- --------------------------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies, by checking the appropriate boxes and
signing below, that:
(1) The Rights evidenced by this Right Certificate _____ are _____ are not
being sold, assigned or transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate thereof (as such terms
are defined in the Right Agreement); and
(2) After due inquiry and to the best knowledge of the undersigned, the
undersigned _____ did _____ did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
Dated:
---------------------------- ---------------------------------------
Signature
B-4
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder
if such holder desires to exercise Rights
represented by the Right Certificate.)
To VINTAGE PETROLEUM, INC.:
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Right Certificate to purchase the Preferred Shares, Common
Shares or other securities issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares, Common Shares or other
securities be issued in the name of and delivered to:
Please insert social security
or other identifying number_____________________________________________________
________________________________________________________________________________
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this 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
B-5
<PAGE>
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer or
other eligible institution participating in a recognized signature guarantee
medallion program.
- --------------------------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies, by checking the appropriate boxes and
signing below, that:
(1) The Rights evidenced by this Right Certificate _____ are _____ are not
being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement); and
(2) After due inquiry and to the best knowledge of the undersigned, the
undersigned _____ did _____ did not acquire the Rights evidenced by this
Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
Dated:
---------------------------- ----------------------------------------
Signature
NOTICE
The signature on the foregoing Forms of Assignment and Election to Purchase
and certificates must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Corporation 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>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES OF
VINTAGE PETROLEUM, INC.
On March 16, 1999, the Board of Directors of Vintage Petroleum, Inc. (the
"Corporation") declared a dividend distribution of one preferred share purchase
right (a "Right") for each outstanding share of Common Stock, par value $.005
per share (the "Common Shares"), of the Corporation. The dividend is payable to
the stockholders of record of the Corporation on April 5, 1999 (the "Record
Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to Common Shares issued after the Distribution Date. Except as set forth below,
each Right, when it becomes exercisable, entitles the registered holder to
purchase from the Corporation one one-thousandth of a share of Series A Junior
Participating Preferred Stock, with a par value of $.01 per share, of the
Corporation (the "Preferred Shares") at a price of $60.00 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement, as the
same may be amended from time to time (the "Rights Agreement"), between the
Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights Agent, dated
as of March 16, 1999.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earlier
to occur of (i) the first date of public announcement of a person or group of
affiliated or associated persons having acquired beneficial ownership of 15% or
more of the outstanding Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 days (or such later date as the Board of
Directors of the Corporation (the "Board") may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the earlier of such dates
being called the "Distribution Date"). A person or group whose acquisition of
Common Shares causes a Distribution Date pursuant to clause (i) above is an
"Acquiring Person." The first date of public announcement that a person or
group has become an Acquiring Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, 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 as of 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
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<PAGE>
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
to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on April 5, 2009, unless earlier redeemed or exchanged
by the Corporation as described below.
In the event that any person or group becomes an Acquiring Person (except
pursuant to a tender or exchange offer which is for all outstanding Common
Shares at a price and on terms which a majority of certain members of the Board
determines to be adequate and in the best interests of the Corporation, its
stockholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise the number of Common Shares or of one one thousandths of a share of
Preferred Shares (or, in certain circumstances, other securities of the
Corporation) having a value (immediately prior to such triggering event) equal
to two times the exercise price of the Right. Notwithstanding the foregoing,
following the occurrence of the event described above, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
will be null and void.
In the event that, at any time following the Shares Acquisition Date, (i)
the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, then each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right (the "Flip-Over Right") to receive, upon
exercise, common shares of the acquiring company having a value equal to two
times the exercise price of the Right. The holder of a Right will continue to
have the Flip-Over Right whether or not such holder exercises or surrenders the
Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities 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 quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
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<PAGE>
The Purchase Price and number of outstanding Rights 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
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 1,000 times the dividend declared per
Common Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1,000 per
share; thereafter, and after the holders of the Common Shares receive a
liquidation payment of $1.00 per share, the holders of the Preferred Shares and
the holders of the Common Shares will share the remaining assets in the ratio of
1,000 to 1 (as adjusted) for each Preferred Share and Common Share so held,
respectively. Each Preferred Share will have 1,000 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 1,000 times the amount received per Common Share. These
rights are protected by customary antidilution provisions. In the event that the
amount of accrued and unpaid dividends on the Preferred Shares is equivalent to
six full quarterly dividends or more, the holders of the Preferred Shares shall
have the right, voting as a class, to elect two directors in addition to the
directors elected by the holders of the Common Shares until all cumulative
dividends on the Preferred Shares have been paid through the last quarterly
dividend payment date or until non-cumulative dividends have been paid regularly
for at least one year.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one one-
thousandth of a Preferred Share, which may, at the election of the Board, 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 earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") which redemption shall be
effective upon the action of the Board. Additionally, following the Shares
Acquisition Date, the Corporation may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price, provided that such redemption
is in connection with a merger or other business combination transaction or
series of transactions involving the Corporation in which all holders of Common
Shares are treated alike but not involving an Acquiring Person or its affiliates
or associates.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
Common Shares, the Board may exchange the Rights (other than Rights owned by the
Acquiring Person, which will have
C-3
<PAGE>
become void), in whole or in part, at an exchange ratio of one Common Share, or
one one-thousandth of a Preferred Share (or of a share of a class or series of
the Corporation's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
All of the provisions of the Rights Agreement may be amended by the Board
prior to the Distribution Date. After the Distribution Date, the provisions of
the Rights Agreement may be amended by the Board only in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or, subject to certain limitations, to shorten or lengthen
any time period under the Rights Agreement.
Until a Right is exercised or exchanged, the holder thereof, as such, will
have no right to vote or receive dividends and will have no other rights as a
stockholder of the Corporation. While the distribution of the Rights will not
be taxable to stockholders of the Corporation, stockholders may, depending upon
the circumstances, recognize taxable income should the Rights become exercisable
or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Corporation's Registration Statement on
Form 8-A dated March ___, 1999. A copy of the Rights Agreement is available
free of charge from the Corporation. 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.
C-4
