____________________________________________________________
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
Reading & Bates Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 73-0642271
(State of Incorporation (I.R.S. Employer
or Organization) Identification No.)
901 Threadneedle, Suite 200
Houston, Texas 77079
(Address of Principal Executive Offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which each class is
to be so registered to be registered
Preferred Share Purchase Rights New York Stock Exchange
Pacific Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
<PAGE>
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED
On March 15, 1995, the Board of Directors of Reading &
Bates Corporation (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $.05 per share
(the "Common Shares"), of the Company. The dividend is
payable on March 31, 1995 (the "Record Date") to the
stockholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one
one-hundredth of a share of Series B Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred
Shares"), of the Company at a price of $30.50 per one
one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement dated as of March
15, 1995, as the same may be amended from time to time (the
"Rights Agreement"), between the Company and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons have acquired beneficial ownership of 10%
or more of the outstanding Common Shares (an "Acquiring
Person") or (ii) 10 business days (or such later date as may
be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of,
or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 10% or more of
the outstanding Common Shares (the earlier of such dates
being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share
certificates outstanding as of the Record Date, by such
Common Share certificate together with a copy of this
Summary of Rights.
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incor-
porating the Rights Agreement by reference. Until the Dis-
tribution 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,
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 Distri-
bution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on March 31, 2005 (the "Final
Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time
to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the
grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at
a price, or securities convertible into Preferred Shares
with a conversion price, less than the then-current market
price of the Preferred Shares or (iii) upon the distribution
to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or
dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise
of each Right are also subject to adjustment in the event of
a stock split of the Common Shares or a stock dividend on
the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a preferential quarterly dividend payment equal
to the greater of (i) $1 per share, and (ii) 100 times the
dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be
entitled to a preferential liquidation payment equal to the
greater of (i) $100 per share, and (ii) 100 times the
payment made per Common Share. Each Preferred Share will
have one vote, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 100 times the
amount received per Common Share. These rights are
protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend
and liquidation rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of
each Right should approximate the value of one Common Share.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, the Rights
Agreement provides that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which
will thereafter be void), will thereafter have the right to
receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right.
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
of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group, which will have
become void), in whole or in part, at an exchange ratio of
one Common Share, or one one-hundredth of a Preferred Share
(or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
The Rights Agreement provides that none of the
Company's directors, officers or financial advisers shall be
deemed to beneficially own any Common Shares owned by any
other director, officer or financial adviser by virtue of
such persons acting in their capacities as such, including
in connection with the formulation and publication of the
Board of Directors recommendation of its position, and
actions taken in furtherance thereof, with respect to an
acquisition proposal relating to the Company or a tender or
exchange offer for the Common Shares, including the Offer.
In the event that the Company is acquired in a merger
or other business combination transaction or 50% or more of
its consolidated assets or earning power are sold after any
person or group becomes an Acquiring Person, proper
provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right,
that number of shares of common stock of the acquiring
company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
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 integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Com-
pany, 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 such time as any person or group
of affiliated or associated persons becomes an Acquiring
Person, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time on such basis with
such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption
of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
The Rights Agreement provides that, if as of March 15,
1995 any person or group of affiliated or associated persons
beneficially own 10% or more of the outstanding Common
Shares, such person or group will not be deemed to be or to
have become an "Acquiring Person" until April 21, 1995, and
on such date will be deemed to be an "Acquiring Person" if,
but only if, as of such date, such person or group
beneficially own 10% or more of the outstanding Common
Shares; provided, however, that if such person or group
shall, subsequent to March 15, 1995, acquire any additional
Common Shares, then such person or group shall thereupon be
deemed an Acquiring Person.
The terms of the Rights Agreement may be amended by the
Board of Directors of the Company without the consent of the
holders of the Rights, including, prior to the time any
person or group becomes an Acquiring Person, an amendment to
(a) specifically exempt any person or group of affiliated or
associated persons from being or being deemed to be an
"Acquiring Person", subject to such terms and conditions as
the Company deem appropriate, (b) fix a Final Expiration
Date later than March 31, 2005 or (c) increase the Purchase
Price. From and after such time as any person or group of
affiliated or associated persons becomes an Acquiring
Person, no such amendment may adversely affect the interests
of the holders of the Rights (other than the Acquiring
Person and its affiliates and associates). In addition, if
as of the close of business on March 15, 1995 any person or
group of affiliated or associated persons beneficially owned
10% or more of the Common Shares then outstanding, the
Rights Agreement may be amended at any time prior to April
21, 1995, to exempt such person from being deemed to be or
to have become an "Acquiring Person" (but only if such
person does not acquire any additional Common Shares
subsequent to March 15, 1995), subject to such terms and
conditions as the Board of Directors of the Company deem
necessary or appropriate.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to re-
ceive dividends.
As of February 28, 1995 there were 59,711,023 Common
Shares of the Company issued and outstanding. As long as
the Rights are attached to the Common Shares, the Company
will issue one Right with each newly issued Common Share so
that all such shares will have Rights attached. The Board
of Directors of the Company has reserved for issuance upon
exercise of the Rights 1,000,000 Preferred Shares.
A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
ITEM 2. EXHIBITS
4 Rights Agreement dated as of March 15, 1995,
including Exhibit A, "Form of Certificate of
Designations"; Exhibit B, "Form of Rights
Certificate"; Exhibit C, "Summary of Rights
to Purchase Preferred Shares".
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, thereunto duly authorized.
READING & BATES CORPORATION
Date: March 22, 1995 /s/W. K. Hillin
-------------------
By: W. K. Hillin
Senior Vice President,
General Counsel and
Secretary
EXHIBIT 4
READING & BATES CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
RIGHTS AGREEMENT
Dated as of March 15, 1995
TABLE OF CONTENTS
Section 1. Certain Definitions . . . . . . . . . .
Section 2. Appointment of Rights Agent . . . . . .
Section 3. Issue of Right Certificates . . . . . .
Section 4. Form of Right Certificates . . . . . . .
Section 5. Countersignature and Registration . . .
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . .
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights . . . . . . .
Section 8. Cancellation and Destruction of Right
Certificates . . . . . . . . . . . . .
Section 9. Availability of Preferred Shares . . . .
Section 10. Preferred Shares Record Date . . . . . .
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number
of Rights . . . . . . . . . . . . . .
Section 12. Certificate of Adjusted Purchase Priceor
Number of Shares . . . . . . . . . . .
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power .
Section 14. Fractional Rights and Fractional Shares
Section 15. Rights of Action . . . . . . . . . . . .
Section 16. Agreement of Right Holders . . . . . . .
Section 17. Right Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . .
Section 18. Concerning the Rights Agent . . . . . .
Section 19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . .
Section 20. Duties of Rights Agent . . . . . . . . .
Section 21. Change of Rights Agent . . . . . . . . .
Section 22. Issuance of New Right Certificates . . .
Section 23. Redemption . . . . . . . . . . . . . . .
Section 24. Exchange . . . . . . . . . . . . . . . .
Section 25. Notice of Certain Events . . . . . . . .
Section 26. Notices . . . . . . . . . . . . . . . .
Section 27. Supplements and Amendments . . . . . . .
Section 28. Successors . . . . . . . . . . . . . . .
Section 29. Benefits of this Agreement . . . . . . .
Section 30. Severability . . . . . . . . . . . . . .
Section 31. Governing Law . . . . . . . . . . . . .
Section 32. Counterparts . . . . . . . . . . . . . .
Section 33. Descriptive Headings . . . . . . . . . .
Section 34. Administration. . . . . . . . . . . . .
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred
Shares
Agreement, dated as of March 15,1995 ("Agreement"),
between Reading & Bates Corporation, a Delaware corporation
(the "Company"), and American Stock Transfer & Trust
Company, a New York corporation, as Rights Agent (the
"Rights Agent").
The Board of Directors of the Company has
authorized and declared a dividend of one preferred share
purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company outstanding at the Close
of Business on March 31, 1995 (the "Record Date"), each Right
representing the right to purchase one one-hundredth (subject
to adjustment) 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 (subject to adjustment) with respect to each
CommonShare that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemp-
tion Date and the Final Expiration Date (as such terms are
hereinafter defined), or thereafter pursuant to conversion of
shares of Class A (Cumulative Convertible) Capital Stock or
$1.625 Convertible Preferred Stock of the Company.
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 (as
such term is hereinafter defined) who or which, together with
all Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 10% or more of the Com-
mon Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of
any such plan. Notwithstanding the foregoing: (i) no Person
shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reduc-
ing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such
Person to 10% or more of the Common Shares of the Company
then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 10% or more of the Common
Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person", unless upon the
consummation of such acquisition of beneficial ownership by
such Person such Person is not the Beneficial Ownerof 10% or
more of the Common Shares of the Company then outstanding;
(ii) any Person who, as of the Close of Business onMarch 15,
1995, is the Beneficial Owner of 10% or more of the Common
Shares of the Company outstanding at such time shall not be
deemed to be or to have become an "Acquiring Person" until
April 21, 1995, and on April 21, 1995 shall be deemed to an
"Acquiring Person" if, but only if, as of the Close of
Business on April 21, 1995, such Person is the Beneficial
Owner of 10% or more of the Common Shares of the Company then
outstanding, provided that if such Person shall, subsequent
to the Close of Business on March 15, 1995, become the
Beneficial Owner of any additional Common Shares of the
Company, then such Person shall thereupon be deemed to be an
"Acquiring Person", unless upon the consummation of such
acquisition of beneficial ownership by such Person such
Person is not the Beneficial Owner of 10% or more of the
Common Shares of the Company then outstanding; and (iii) if
the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring
Person", as defined pursuant to the foregoing provisions of
this paragraph (a), became such inadvertently (including,
without limitation, because (x) such Person was unaware that
it beneficially owned a percentage of the Common Shares of
the Company that would otherwise cause such Person to be an
"Acquiring Person"or (y) such Person was aware of the extent
of its beneficial ownership of Common Shares of the Company
but had no actual knowledge of the consequences of such
beneficial ownership under this Agreement) and without any
intention of changing or influencing control of the Company,
and if such Person as promptly as practicable divested or
divests itself of beneficial ownership of a sufficient number
of Common Shares of the Company so that such Person would no
longer be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be or to have become an "Acquiring
Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the rules and regulations promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any
securities:
(i) which such Person or any of such Person's Af-
filiates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary
agreements with and between underwriters and selling
group members with respect to a bona fide public offer-
ing of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Af-
filiates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or
understanding; provided further, however, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, ar-
rangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of
Beneficial Owner to the contrary, the phrase "then
outstanding," when used with reference to a Person's
beneficial ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to
own beneficially hereunder.
Notwithstanding the foregoing, none of the
Company's directors, officers or financial advisers shall be
deemed to be the Beneficial Owner of, or to beneficially own,
any Common Shares of the Company owned by any other director,
officer or financial adviser of the Company by virtue of such
persons acting in their capacities as such, including,
without limitation, in connection with any formulation and
publication of the Board of Director's recommendation of a
position, and any actions taken in furtherance thereof, with
respect to any acquisition proposal relating to the Company,
any tender or exchange offer for the Common Shares of the
Company, or any solicitation of proxies with respect to the
Common Shares of the Company.
(d) "Business Day" shall mean any day other than a
Saturday, a Sunday, or a day on which banking institutions in
New York are authorized or obligated by law or executive
order to close.
(e) "Close of Business" on any given date shall
mean 5:00 P.M., New York time, on such date; provided,
however, that if such date is not a Business Day it shall
mean 5:00 P.M., New York time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to
the Company shall mean the shares of common stock, par value
$.05 per share, of the Company. "Common Shares" when used
with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(i) "Person" shall mean any individual,
partnership, firm, corporation or other entity, and shall
include any successor (by merger or otherwise) of such
entity.
(j) "Preferred Shares" shall mean shares of Series
B Junior Participating Preferred Stock, par value $1.00 per
share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designations attached to
this Agreement as Exhibit A.
(k) "Purchase Price" shall have the meaning set
forth in Section 7(b) hereof.
(l) "Redemption Date" shall have the meaning set
forth in Section 7(a) hereof.
(m) "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 Section 13(d) of the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become
such.
(n) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates. (a) Until
the earlier of (i) the tenth day after the Shares Acquisition
Date or (ii) the tenth Business Day (or such later date as
may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms
of any such plan) of, or of the first public announcement of
the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any
such plan) to commence, a tender or exchange offer the
consummation of which would result in any Personbecoming the
Beneficial Owner of Common Shares aggregating 10% or more of
the then outstanding Common Shares (including any such date
which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being
herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of Sec-
tion 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof and not by
separate Right Certificates, and (y) the right to receive
Right Certificates will be transferable only in connection
with the transfer of Common Shares. As soon as practicable
after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and the Rights Agent will, if
requested, send) by first-class, insured, postage-prepaid
mail, to each record holder of Common Shares as of the Close
of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Right
Certificate,in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right (subject to
adjustment) for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preferred Shares, in substantially the
form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date,
at the address of such holder shown on the records of the
Company. With respect to 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. 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, shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation,reacquired Common
Shares referred to in the last sentence of this paragraph
(c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expira-
tion Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights Agree-
ment between Reading & Bates Corporation and American
Stock Transfer & Trust Company, dated as of March 15,
1995, as the same may be amended from time to time, (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 Reading &
Bates Corporation. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. Reading & Bates
Corporation will mail to the holder of this certificate
a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement,
Rights owned by any Person who is or becomes an
Acquiring Person (as defined in the Rights Agreement)
and certain transferees thereof 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 Company purchases
or acquires any Common Shares after the Record Date but prior
to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights as-
sociated with the Common Shares which are no longer outstand-
ing.
Section 4. Form of Right Certificates. The Right
Certificates(and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit B hereto
and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regula-
tion made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions
of Section 22 hereof, the Right Certificates shall entitle
the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth
therein at the Purchase Price, but the number of such one
one-hundredths of a Preferred Share and the Purchase Price
shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The
Right Certificates shall be executed on behalf of the Company
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 Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the
Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such
Right Certificates,nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper of-
ficer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books
for registration and transfer of the Right Certificates is-
sued hereunder. Such books shall show the names and ad-
dresses of the respective holders of the Right Certificates,
the number of Rights evidenced on its face by each of the
Right Certificates 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. Subject to the provisions of Sec-
tion 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Busi-
ness on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have
becomevoid pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be
transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one
one-hundredths of a Preferred Share as the Right Certificate
or Right Certificates surrendered then entitled such holder
to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up, combined
or exchanged at the principal office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to
the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Right
Certificates.
Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon sur-
render to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
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) The registered holder of any
Right Certificate may, subject to the second paragraph of
Section 11(a)(ii), exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent
at the principal office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the Close of Business on March
31, 2005 (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
such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth
of a Preferred Share purchasable pursuant to the exercise of
a Right shall initially be $30.50, and shall be subject to
adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below (the
"Purchase Price").
(c) Upon receipt of a Right Certificate represent-
ing exercisable Rights, with the form of election to purchase
duly executed, accompanied by payment of the Purchase Price
for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by
certified check, cashier's check or money order payable to
the order of the Company, 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 Company hereby irrevocably
authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent
depositary receipts representing interests in such number of
one one-hundredths 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 Company
hereby directs the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company
the amount of cash to be paid in lieu of issuance of
fractional 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, deliver such cash to or
upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise 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 such holder's duly authorized assigns,
subject to the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the
purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company
shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire,
any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preferred Shares. The
Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and
unissued Preferred Shares or any 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 in accordance with Section 7. The Company covenants
and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of
the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of
the issuance or delivery of the Right Certificates or of any
Preferred Shares upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which
may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or
delivery of certificates or depositary receipts for the
Preferred Shares 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 upon the exercise of
any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is
due.
Section 10. Preferred Shares Record Date. Each
Person in whose name any certificate for Preferred Shares is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price(and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the Preferred Shares transfer books of the
Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares transfer books of the Company
are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights. The Purchase Price,
the number of Preferred Shares or other securities covered by
each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend
on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of
Preferred Sharesor (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Shares
transfer books of the Company were open, such holder would
have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right
be less than the aggregate par value ofthe shares of capital
stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the
event any Person becomes an Acquiring Person (the first
occurrence of such event being referred to hereinafter as the
"Flip-In Event"), then: (A) the Purchase Price shall be
adjusted to be the Purchase Price in effect immediately prior
to the Flip-In Event multiplied by the number of one one-
hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such Flip-In Event, whether
or not such Right was then exercisable, and (B) each holder
of a Right, except as otherwise provided in this Section
11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter
have the right to receive, upon exercise thereof at a price
equal to the Purchase Price (as so adjusted), in accordance
with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares as shall equal the
result obtained by dividing the Purchase Price (as so
adjusted) by 50% of the current per share market price of the
Common Shares (determined pursuant to Section 11(d) hereof)
on the date of such Flip-In Event, provided, however, that
the Purchase Price (as so adjusted) and the number of Common
Shares so receivable upon exercise of a Right shall,
following the Flip-In Event, be subject to further adjustment
as appropriate in accordance with Section 11(f) hereof. From
and after the Flip-In Event, the Company shall not take any
action (except as permitted under Sections 24 and 27 hereof)
which would eliminate or diminishthe benefits intended to be
afforded by the Rights.
Notwithstanding anything in this Agreement to the
contrary, however, from and after the Flip-In Event, any
Rights that are beneficially owned by (x) any Acquiring
Person (or any Affiliate or Associate of any Acquiring
Person), (y) a transferee of any Acquiring Person (or any
such Affiliate or Associate) who becomes a transferee after
the Flip-In Event or (z) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who became a transferee
prior to or concurrently with the Flip-In Event pursuant to
either (I)a transfer from the Acquiring Person to holders of
its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding
the transferred Rights or (II) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has the purpose or effect
of avoiding the provisions of this paragraph, and subsequent
transferees of such Persons, shall be void without any
further action and any holder of such Rights shall thereafter
have no rights whatsoever with respect to such Rights under
any provision of this Agreement. Without limitation to the
foregoing, (x) no Right Certificate shall be issued pursuant
to Section 3 that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to the
precedingsentence or any Associate or Affiliate thereof, (y)
no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate, and (z) any Right
Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or
authorized but unissued to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii),
the Company shall take all such action as may be necessary to
authorize additional Common Shares for issuance upon exercise
of the Rights. In the event the Company shall, after good
faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the
Company shall substitute, for each Common Share that would
otherwise be issuable upon exercise of a Right, a number of
Preferred Shares or fraction thereof such that the current
per share market price of one Preferred Share multiplied by
such number or fraction is equal to the current per share
market price of one Common Share as of the date of issuance
of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all hold-
ers of Preferred Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security convert-
ible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the
Preferred Shares (as defined in Section 11(d)) 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 conver-
sion price of the convertible securities so to be offered)
would purchase at such current market price and the denomina-
tor of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed;
and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of the
Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preferred
Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the then current per share market price of the Preferred
Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a state-
ment filed with the Rights Agent) of the portion of the as-
sets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares;
provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not
so made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per
share market price of the Security is determined during a
period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible
into 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 National
Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on
any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market
in the Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the
Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares
shall be determined in accordance with the method set forth
in Section 11(d)(i). 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 cur-
rent per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair
value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent.
(e) 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
requires such adjustment or (ii) the date of the expiration
of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares,
thereafter the Purchase Price and the number of such other
shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in
Section 11(a), (b), (c), (e), (h), (i) and (m) hereof, as
applicable, and the provisions of Sections 7, 9, 10, 13 and
14 with respect to the Preferred Shares shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-hundredths of
a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjust-
ment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment
of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price
and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjust-
ment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or
any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the
public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidenc-
ing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
ifrequired by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of
the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one
one-hundredth ofthe then par value, if any, of the Preferred
Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable
Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made ef-
fective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event
the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock
or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in ef-
fect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other ap-
propriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision
of the Preferred Shares, issuance wholly for cash of any
Preferred Shares at less than the current market price, issu-
ance wholly for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in
Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) In the event that at any time after the date
of this Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the Common
Shares payable in Common Sharesor (ii) effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Com-
mon Shares)into a greater or lesser number of Common Shares,
then in any such case (A) the number of one one-hundredths of
a Preferred Share purchasable after such event upon proper
exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchas-
able immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after
such event, and (B) each Common Share outstanding immediately
after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding im-
mediately prior to such event had issued with respect to it.
The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is
effected.
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares. Whenever an adjustment is made as
provided in Section 11 or 13 hereof, the Company shall
promptly(a) prepare a certificate setting forth such adjust-
ment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Shares or the Preferred Shares
a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power. In the event, directly
or indirectly, at any time after the Flip-In Event (a) the
Company shall consolidate with, or merge with and into, any
Person, (b) any Person shall consolidate with the Company,or
merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or
any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall
sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken
as a whole)to any other Person other than the Company or one
or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each
holder of a Right (other than Rights which have become void
pursuant to Section 11(a)(ii) hereof) shall thereafter have
the right to receive, upon the exercise thereof at the
Purchase Price (as theretofore adjusted in accordance with
Section 11(a)(ii) hereof), in accordance with the terms of
this Agreement and in lieu of Preferred Shares or Common
Shares of the Company, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable
Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation), not
subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall equal the result obtained
by (A) dividing the Purchase Price (as theretofore adjusted
in accordance with Section 11(a)(ii) hereof) by (B) 50% of
the then current per share market price of the Common Shares
of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation,
merger, sale or transfer; provided, however, that the
Purchase Price (as theretofore adjusted in accordance with
Section 11(a)(ii) hereof) and the number of Common Shares of
such other Person so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in
accordance with Section 11(f) hereof to reflect any events
occurring in respect of the Common Shares of such other
Person after the occurrence of such consolidation, merger,
sale or transfer; (ii) the issuer of such Common Shares shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to
such issuer; and (iv) such issuer shall take such steps
(including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the
exercise ofthe Rights. The Company shall not consummate any
such consolidation, merger, sale or transfer unless prior
thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction
of the kind referred to in this Section 13 if at the time of
such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements
which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits
intended to be afforded by the Rights.
Section 14. Fractional Rights and Fractional
Shares. (a) The Company 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 admit-
ted 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 organiza-
tion, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company.
If on any such date no such market maker is making a market
in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share)
upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than frac-
tions which are integral multiples of one one-hundredth of a
Preferred Share). Interests in fractions of Preferred Shares
in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders
of such depositary receipts shall have all 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 integral multiples of one one-hundredth of a
Preferred Share, the Company 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 fraction of the current market value of one Preferred
Share. For the purposes of this Section 14(b), the current
market value of a Preferred Share shall be the closing price
of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives such holder's right to receive any
fractional Rights or any fractional shares upon exercise of a
Right (except as provided above).
Section 15. Rights of Action. All rights of ac-
tion in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the Distribu-
tion 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 such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder's right to exercise
the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every
holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
the 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 principal office of
the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the Person in whose name 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 nota-
tions of ownership or writing on the Right Certificates or
the associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or
to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The
Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and,
from time to time, ondemand of the Rights Agent, its reason-
able expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agree-
ment and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, li-
ability, or expense, incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any
claim of liability in the premises.
The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered
or omitted by it in connection with, its administration of
this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise
upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent. Any corporation into which the Rights
Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any corpora-
tion succeeding to the stock transfer or corporate trust pow-
ers 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 suc-
cessor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of
the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered,
the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Agreement.
Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authoriza-
tion and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same,
but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due execu-
tion hereof by the Rights Agent) or in respect of the valid-
ity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability
of the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof)
provided for in this Agreement, or the ascertaining of the
existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such
change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares
or any 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 validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or perform-
ing 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 Secretary or the Treasurer
of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not
be liable for any action taken or suffered by it in good
faith in accordance with instructions of any such officer or
for any delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, direc-
tor, officer or employee of the Rights Agent may buy,sell or
deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which
the Companymay be interested, or contract with or lend money
to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights
Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer
agent of the Common Shares or Preferred Shares by registered
or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent
of the Common Shares or Preferred Shares by registered or
certified mail, and to the 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
Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such
notice, submit such holder's Right Certificate for inspection
by the Company), 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 Company or by such a
court, shall be a corporation organized and doing business
under the laws of the United States or of any state of the
United States, in good standing, which is authorized under
such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by
federal or state authorities and which has at the time of its
appointment as Rights Agent a combined capital and surplus of
at least $50 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, actor deed necessary for the purpose. Not later
than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Shares or
Preferred Shares,and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to
give any notice provided for in this Section 21, however, or
any defect therein, shall not affect the legality or validity
of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option,
issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Direc-
tors of the Company may, at its option, at any time prior to
the Flip-In Event, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to
as the "Redemption Price"). The redemption of the Rights by
the Board of Directors may be made effective at such time,on
such basis and with such conditions as the Board of Directors
in its sole discretion may establish.
(b) Immediately upon the effectiveness of the
redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any
notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; 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 the effectiveness of the redemption of the Rights,
the Company 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.
Section 24. Exchange. (a) The Board of Directors
of the Company may, at its option, at any time after the
Flip-In Event, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange
ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after
any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then
outstanding. The exchange of the Rights by the Board of
Directors of the Company may be made effective at such time,
on such basis and with such conditions as the Board of
Directors of the Company in its sole discretion may
establish.
(b) Immediately upon the effectiveness of the
action of the Board of Directors of the Company ordering the
exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be
to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the 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 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be suf-
ficient Common Shares issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the
Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary
to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number
or fraction is equal to the current per share market price of
one Common Share as of the date of issuance of such Preferred
Shares or fraction thereof.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates
which evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be
issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the
purposes of this paragraph (d), the current market value of a
whole Common Share shall be the closing price of a Common
Share (as determined pursuant to the second sentence of Sec-
tion 11(d)(i) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case
the Company shall propose (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 regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred
Shares rightsor 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 of outstand-
ing Preferred Shares), (iv) to effect any consolidation or
merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the
Company, or(vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by reclas-
sification or otherwise than by payment of dividends in Com-
mon Shares), then, in each such case, the Company shall give
to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place andthe date of participation therein by the holders of
the Common Shares and/or Preferred Shares, if any such date
is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10
days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case
of any such other action, at least 10 days prior to the date
of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares
and/or Preferred Shares, whichever shall be the earlier.
(b) From and after the Flip-In Event, the Company
shall as soon as practicable 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.
Section 26. Notices. Notices or demands
authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or
on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as fol-
lows:
Reading & Bates Corporation
901 Threadneedle, Suite 200
Houston, Texas 77079
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by
the Company or by the holder of any Right Certificate to or
on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until
another addressis filed in writing with the Company) as fol-
lows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Herb Lemmer
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to the holder of
any Right Certificate shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown onthe registry
books of the Company.
Section 27. Supplements and Amendments. The
Company may from time to time and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement
without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the Company
may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company
and the Rights Agent; provided, however, that from and after
the Flip-In Event, this Agreement shall not be amended in any
manner which would adversely affect the interests of the
holders of Rights (other than any Acquiring Person and its
Affiliates and Associates). If as of the Close of Business
on March 15, 1995, any Person is the Beneficial Owner of 10%
or moreof the Common Shares of the Company then outstanding,
this Agreement may be amended at any time prior to April 21,
1995, to exempt such Person from being deemed to be an
Acquiring Person (but only if such Person does not become the
Beneficial Owner of any additional Common Shares of the
Company subsequent to the Close of Business on March 15,
1995), subject to such terms and conditions as the Board of
Directors of the Company deem necessary or appropriate.
Without limiting the foregoing, the Company may at any time
prior to such time as any Person becomes an Acquiring Person
amend this Agreement to (a) specifically exempt any Person
from being or being deemed to be an Acquiring Person, subject
to such terms and conditions as the Company deems
appropriate, (b) fix a Final Expiration Date later than the
date set forth in Section 7 hereof or (c) increase the
Purchase Price.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing
in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the
Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provi-
sions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be af-
fected, impaired or invalidated.
Section 31. Governing Law. This Agreement 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 ac-
cordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an
original,and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
Section 34. Administration. The Board of
Directors of the Company shall have the exclusive power and
authority to administer and interpret the provisions of this
Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or the
Company or as may be necessary or advisable in the
administration of this Agreement. All such actions,
calculations, determinations and interpretations which are
done or made by the Board of Directors of the Company in good
faith shall be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other
parties and shall not subject the Board of Directors of the
Company to any liability to the holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day
and year first above written.
READING & BATES CORPORATION
Attest:
By W. K. Hillin By Paul B. Loyd, Jr.
-------------------- --------------------
Title: Secretary Title: Chairman & Chief
Executive Officer
Attest: AMERICAN STOCK TRANSFER
& TRUST COMPANY
By Joseph Wolf By Herbert J. Lemmer
-------------------- --------------------
Title:Vice President Title: Vice President
<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
READING & BATES CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
____________________________________
Reading & Bates Corporation, a corporation
organized and existing under the General Corporation Law of
the State of Delaware (hereinafter called the"Corporation"),
hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by
Section 151 of the General Corporation Law at a meeting duly
called and held on March 15, 1995:
RESOLVED, that pursuant to the authority granted to
and vested in the Board of Directors of this Corporation
(hereinafter called the "Board of Directors" or the "Board")
in accordance with the provisions of the Restated Certificate
of Incorporation of the Corporation (hereinafter called the
"Certificate of Incorporation"), the Board of Directors
hereby creates a series of Preferred Stock, par value $1.00
per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number ofshares, and fixes
the relative rights, preferences, and limitations thereof as
follows:
Series B Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of
this series shall be designated as "Series B Junior
Participating Preferred Stock" (the "Series B Preferred
Stock") and the number of shares constituting the Series B
Preferred Stock shall be One Million (1,000,000). Such
number of shares may be increased or decreased by resolution
of the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series B Preferred Stock to a
number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the
conversion of any outstanding securities issued by the
Corporation convertible into Series B Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any
shares of Class A (Cumulative Convertible) Capital
Stock, no par value, and the holders of any shares of
any series of Preferred Stock (or any other stock)
ranking prior and superior to the Series B Preferred
Stock with respect to dividends, the holders of shares
of Series B Preferred Stock, in preference to the
holders of Common Stock, par value $.05 per share (the
"Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June,
September and December in each year (each such date
being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a
share or fraction of a share of Series B Preferred
Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1 or (b) subject to
the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the im-
mediately 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 B Preferred Stock. In the event
the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock
(by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of
Series B 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 frac-
tion, 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 B Preferred Stock as provided
in paragraph (A) of this Section immediately after it
declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1 per share on the Series B
Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumula-
tive on outstanding shares of Series B Preferred Stock
from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the
date of issue of such shares, or unless the date of is-
sue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders
of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends
paid on the shares of Series B 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 B 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. The holders of shares
of Series B Preferred Stock shall have the following voting
rights:
(A) Each share of Series B Preferred Stock shall
entitle the holder thereof to one vote on all matters
submitted to a vote of the stockholders of the
Corporation.
(B) Except as otherwise provided herein, in any
other Certificate of Designations creating a series of
Preferred Stock or any similar stock, in the Certificate
of Incorporation of the Corporation or by law, the
holders of shares of Series B Preferred Stock and the
holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights
shall vote together as one class on all matters submit-
ted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series B Preferred Stock
shall have no special voting rights and their consent
shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series B
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of
Series B 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 B
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 B Preferred Stock, except dividends paid
ratably on the Series B Preferred Stock and all
such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to
which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B
Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking
junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series B
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire
for consideration any shares of Series B Preferred
Stock, or any shares of stock ranking on a parity
with the Series B Preferred Stock, except in ac-
cordance 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 B 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 condi-
tions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders
of shares of stock ranking junior (upon liquidation,
dissolution or winding up) to the Series B Preferred Stock
unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an
amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date
of such payment, provided that the holders of shares of
Series B Preferred Stock shall be entitled to receive an ag-
gregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the ag-
gregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of
stock ranking on a parity (upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
distributions made ratably on the Series B Preferred Stock
and all such parity stock in proportion to the total amounts
to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up. In the event
the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause
(1) 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.
Section 7. Consolidation, Merger, etc. In case
the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Com-
mon Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case each share of Series B Preferred Stock shall at the same
time be similarly exchanged or changed into an amount per
share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount of stock,
securities,cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the
Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of
shares of Series B 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 im-
mediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. No Redemption. The shares of Series B
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series B Preferred Stock
shall rank, with respect to the payment of dividends and the
distribution of assets, junior to all other series of
Preferred Stock and junior to all Class A (Cumulative
Convertible) Capital Stock, no par value.
Section 10. Amendment. The Certificate of
Incorporation of the Corporation shall not be amended in any
manner which would materially alter or change the powers,
preferences or special rights of the Series B Preferred Stock
so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding
shares of Series B Preferred Stock, voting together as a
single class.
IN WITNESS WHEREOF, this Certificate of Designa-
tions is executed on behalf of the Corporation by its
Chairman of the Board this 15th day of March, 1995.
READING & BATES CORPORATION
______________________________
Chairman of the Board
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER MARCH 31, 2005 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUB-
JECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS OWNED BY ANY
PERSON WHO IS OR BECOMES AN ACQUIRING PERSON (AS
DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF MAY BECOME NULL AND VOID.
Right Certificate
READING & BATES CORPORATION
This certifies that _________________, or regis-
tered 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 15, 1995, as the same
may be amended from time to time (the "Rights Agreement"),
between Reading & Bates Corporation, a Delaware corporation
(the "Company"), and American Stock Transfer & Trust Company
(the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., New York time,
on March 31, 2005 at the principal office of the Rights
Agent, or at the office of its successor as Rights Agent, one
one-hundredth of a fully paid non-assessable share of Series
B Junior Participating Preferred Stock, par value $1.00 per
share (the "Preferred Shares"), of the Company, at a purchase
price of $30.50 per one one-hundredth of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths 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 March 31, 1995, based on
the Preferred Shares as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the
number of one one-hundredths of a Preferred Share 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.
This Right Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorpo-
rated herein by referenceand made a part hereof and to which
Rights Agreement reference is hereby made for a full descrip-
tion of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Com-
pany and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive
offices of the Company and the above-mentioned offices of the
Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate
or Right Certificates of like tenor and date evidencing
Rights entitlingthe holder to purchase a like aggregate num-
ber of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have en-
titled 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 exer-
cised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate (i) may be redeemed
by the Company at a redemption price of $.01 per Right or
(ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value
$.05 per share.
No fractional Preferred Shares will be issued upon
the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the elec-
tion of the Company, 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 en-
titled to vote or receive dividends or be deemed for any pur-
pose the holder of the Preferred Shares or of any other secu-
rities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised 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 Company and its corporate seal. Dated as of
_________________, ____.
ATTEST: READING & BATES CORPORATION
__________________________ By__________________________
Countersigned:
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By__________________________________
Authorized Signature
<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)
____________________________________________________________
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _________________, ____
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., a com-
mercial bank savings association, credit union or trust
company having an office or correspondent in the United
States or other eligible guarantor institution which is a
participant in a signature guarantee medallion program.
_ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
__________________________________
Signature
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: READING & BATES CORPORATION
The undersigned hereby irrevocably elects to
exercise _________________ Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon
the exercise of such Rights and requests that certificates
for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
_____________________________________________________________
(Please print name and address)
_____________________________________________________________
If such number of Rights shall not be all the Rights evi-
denced 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
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a com-
mercial bank, savings association, credit union or trust
company having an office or correspondent in the United
States or other eligible guarantor institution which is a
participant in a signature guarantee medallion program.
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
__________________________________
Signature
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _
NOTICE
The signature in the Form of Assignment or Form of
Election to Purchase, as the case maybe, 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 Company and the
Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person
or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and such Assignment or Election to Purchase
will not be honored.
<PAGE>
Exhibit C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS OWNED BY ANY PERSON WHO IS
OR BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF MAY
BECOME NULL AND VOID.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On March 15, 1995, the Board of Directors of Reading & Bates
Corporation (the "Company") declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of common stock,
par value $.05 per share (the "Common Shares"), of the Company.
The dividend is payable on March 31, 1995 (the "Record Date")
to the stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth of a
share of Series B Junior Participating Preferred Stock, par value $1.00
per share (the "Preferred Shares"), of the Company at a price of $30.50
per one one-hundredth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement dated as of March 15, 1995, as the same may
be amended from time to time (the "Rights Agreement"), between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
have acquired beneficial ownership of 10% or more of the outstanding
Common Shares (an "Acquiring Person") or (ii) 10 business days (or such
later date as may be determined by action of the Board of Directors prior
to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
10% or more of the outstanding Common Shares (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate together with a copy of
this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date
(or earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common
Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of this Summary of Rights, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares
as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on March 31, 2005 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as described
below.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders
of the Preferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares at a price, or securities convertible into
Preferred Shares with a conversion price, less than the then-current
market price of the Preferred Shares or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of sub-
scription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right
are also subject to adjustment in the event of a stock split of the
Common Shares or a stock dividend on the Common Shares payable in Common
Shares or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a
preferential quarterly dividend payment equal to the greater of (i) $1
per share, and (ii) 100 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will be
entitled to a preferential liquidation payment equal to the greater of
(i) $100 per share, and (ii) 100 times the payment made per Common Share.
Each Preferred Share will have one vote, voting together with the Common
Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 100 times the amount received per Common
Share. These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend and
liquidation rights, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, the Rights Agreement
provides that each holder of a Right, other than Rights beneficially
owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of Common
Shares having a market value of two times the exercise price of the
Right. 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 of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group,
which will have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preferred Share (or of a
share of a class or series of the Company's preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment).
The Rights Agreement provides that none of the Company's
directors, officers or financial advisers shall be deemed to beneficially
own any Common Shares owned by any other director, officer or financial
adviser by virtue of such persons acting in their capacities as such,
including in connection with the formulation and publication of the Board
of Directors recommendation of its position, and actions taken in
furtherance thereof, with respect to an acquisition proposal relating to
the Company or a tender or exchange offer for the Common Shares,
including the Offer.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after any person or group becomes an
Acquiring Person, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of
the Right.
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 integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.
At any time prior to such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, the Board
of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time on such basis
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Rights Agreement provides that, if as of March 15, 1995 any
person or group of affiliated or associated persons beneficially own 10%
or more of the outstanding Common Shares, such person or group will not
be deemed to be or to have become an "Acquiring Person" until April 21,
1995, and on such date will be deemed to be an "Acquiring Person" if, but
only if, as of such date, such person or group beneficially own 10% or
more of the outstanding Common Shares; provided, however, that if such
person or group shall, subsequent to March 15, 1995, acquire any
additional Common Shares, then such person or group shall thereupon be
deemed an Acquiring Person.
The terms of the Rights Agreement may be amended by the Board
of Directors of the Company without the consent of the holders of the
Rights, including, prior to the time any person or group becomes an
Acquiring Person, an amendment to (a) specifically exempt any person or
group of affiliated or associated persons from being or being deemed to
be an "Acquiring Person", subject to such terms and conditions as the
Company deem appropriate, (b) fix a Final Expiration Date later than
March 31, 2005 or (c) increase the Purchase Price. From and after such
time as any person or group of affiliated or associated persons becomes
an Acquiring Person, no such amendment may adversely affect the interests
of the holders of the Rights (other than the Acquiring Person and its
affiliates and associates). In addition, if as of the close of business
on March 15, 1995 any person or group of affiliated or associated persons
beneficially owned 10% or more of the Common Shares then outstanding, the
Rights Agreement may be amended at any time prior to April 21, 1995, to
exempt such person from being deemed to be or to have become an
"Acquiring Person" (but only if such person does not acquire any
additional Common Shares subsequent to March 15, 1995), subject to such
terms and conditions as the Board of Directors of the Company deem
necessary or appropriate.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated March 16, 1995. A copy of the Rights
Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
