FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
NISOURCE INC.
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(Exact name of registrant as specified in its charter)
Indiana 35-1719974
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(State of incorporation (I.R.S. Employer
or organization) Identification No.)
801 E. 86th Avenue, Merrillville, Indiana 46410
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(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective
pursuant to General Instruction A.(c), check the following box. [X]
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective
pursuant to General Instruction A.(d), check the following box. [_]
Securities Act registration statement file number to which this
form relates: _______ (if applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Preferred Share Purchase Right New York, Chicago and Pacific
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Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of class)
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(Title of class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On February 17, 2000, the Board of Directors of NiSource Inc.
(the "Company") declared a dividend distribution of one Right for each
outstanding Common Share, without par value, of the Company (the
"Common Shares") to the shareholders of record on March 12, 2000 (the
"Record Date"). Each Right, when exercisable, initially entitles the
registered holder to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Shares, without par
value, of the Company (the "Preferred Shares") at a price of $60 per
one one-hundredth of a share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and
Harris Trust and Savings Bank, as Rights Agent (the "Rights Agent").
The Rights will replace the preferred share purchase rights which were
initially distributed to the Company's shareholders by a dividend in
1990 and which expire by their own terms on March 12, 2000.
Initially, the Rights are not exercisable. The Rights become
exercisable upon the earlier to occur of (i) the tenth business day
after a public announcement that a person or group of affiliated or
associated persons acquired, or obtained the right to acquire,
beneficial ownership of Common Shares or other securities of the
Company representing 25% or more of the voting power of all securities
of the Company then outstanding generally entitled to vote for the
election of directors ("Voting Power") (such person or group being
called an "Acquiring Person" and such date of first public
announcement being called the "Share Acquisition Date"), or (ii) the
tenth business day (or such later date as the Board of Directors may
determine) after the commencement of, or announcement of an intention
to make, a tender offer or exchange offer which would result in any
person or group of affiliated or associated persons becoming an
Acquiring Person (the earlier of such dates being called the
"Distribution Date").
Until the Distribution Date (or earlier redemption or expiration
of the Rights), (i) the Rights will be evidenced by the Common Share
certificates and will be transferred only with the Common Share
certificates, (ii) new Common Share certificates issued after the
Record Date upon transfer or new issuance of the Company's Common
Shares will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any of the
Company's Common Share certificates outstanding as of the Record Date
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 Company's Common Shares as of the close of business on the
Distribution Date and, thereafter, such separate Right Certificates
alone will evidence the Rights.
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The Rights are not exercisable until the Distribution Date. The
Rights will expire on March 12, 2010, unless earlier redeemed or
exchanged by the Company or rendered unexercisable as described below.
The Preferred Shares are a series of preferred shares that rank
junior to any other series of preferred shares of the Company (unless
the terms of such series provide otherwise). Each Preferred Share
will be entitled to a minimum preferential quarterly dividend payment
of $26 per share but will be entitled to an aggregate dividend of 100
times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $6,000 per share but will
be entitled to an aggregate payment of 100 times any liquidation
payment made per Common Share. Each Preferred Share will have 100
votes, voting together with the Common Shares. Finally, in the event
of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights are
protected by customary antidilution provisions. Preferred Shares
purchasable upon exercise of the Rights will not be redeemable. The
dividend, liquidation and voting rights of the Preferred Shares are
designed so that the value of one one-hundredth of a Preferred Share
purchaseable upon exercise of each Right should approximate the value
of one Common Share.
If any person becomes the beneficial owner of Common Shares or
other securities of the Company representing 25% or more of the Voting
Power (i.e., becomes an Acquiring Person), each holder of a Right,
other than Rights beneficially owned by any Acquiring Person on or
after the Distribution Date (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, unless the event causing the 25% beneficial ownership
threshold to be crossed is a tender offer or exchange offer for all
outstanding Common Shares, at a price and on terms determined by the
Board of Directors of the Company, after receiving advice from one or
more investment banking firms, to be fair to shareholders and
otherwise in the best interests of the Company and its shareholders (a
"Qualified Offer").
If, on or after the Share Acquisition Date, the Company is
acquired in a merger or other business combination in which the
Company is not the survivor or in which the Company is the survivor
but the Common Shares are changed into or exchanged for securities of
another entity, cash or other property, or 50% or more of the assets
or earning power of the Company and its subsidiaries is sold, proper
provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person on or after the
Distribution Date (which will thereafter be void), will thereafter
have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of common shares of
the acquiring company which at the time of such transaction would have
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a market value of two times the exercise price of the Right.
Notwithstanding the foregoing, the Rights will not be exercisable as
set forth in this paragraph in the event any such merger or other
business combination is consummated with an Acquiring Person which
acquired its shares pursuant to a Qualified Offer, provided that the
price per Common Share offered in the merger or other business
combination is not less than the price paid in the Qualified Offer and
the form of consideration offered in the merger or other business
combination is the same as that paid in the Qualified Offer.
At any time after the Rights become exercisable for Common Shares
(or common shares of the acquiring company), the Board of Directors of
the Company may exchange the unexercised Rights (other than Rights
beneficially owned on or after the Distribution Date by an Acquiring
Person that 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 shares
having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
The Purchase Price payable, and the number of one one-hundredths
of a Preferred Share 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 share dividend on, or a
subdivision, combination or reclassification of the Preferred Shares,
(ii) upon the grant to holders of Preferred Shares of certain rights,
options or warrants to subscribe for Preferred Shares or convertible
securities at less than the current market price of the Preferred
Shares or (iii) upon the distribution to holders of Preferred Shares
of evidences of indebtedness or assets (excluding (a) a regular
periodic cash dividend out of earnings or retained earnings, (b) a
special cash dividend out of earnings or retained earnings, or (c) a
dividend payable in Preferred Shares) or of subscription rights,
options 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 share split of the
Common Shares or a share dividend on the Common Shares payable in
Common Shares or certain other changes affecting the number of Common
Shares occurring, in any such case, prior to the Distribution Date.
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 Rights or shares will
be issued (other than fractions that are integral multiples of one
one-hundredth of a Preferred Share, which may, at the Company's
election, be evidenced by depositary receipts) and, in lieu thereof, a
cash payment will be made based on the market price of the Rights or
the shares on the last trading date prior to, respectively, the date
on which the fractional Right would have otherwise been issuable or
the date of exercise.
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At any time prior to the close of business on the tenth business
day following the Share Acquisition Date, the Board of Directors of
the Company may, at its option, redeem the Rights in whole but not in
part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon the authorization of the redemption of the Rights by
the Board of Directors of the Company, the Rights will terminate and
the only right of the holders of Rights will be to receive the
Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without
limitation, the right to vote or to receive dividends.
The Board of Directors of the Company may amend the Rights
Agreement. After the Distribution Date, however, the Board of
Directors of the Company may amend the Rights Agreement only to cure
any ambiguity, to cure any defective or inconsistent provisions, to
make changes which do not adversely affect the interest of the holders
of the Rights (other than an Acquiring Person) or to shorten or
lengthen any time period under the Rights Agreement including the
period for redemption; provided that no amendment to adjust the time
period governing redemption may be made at any time when the Rights
are not redeemable. In addition, no supplement or amendment may be
made which changes the Redemption Price or the number of one one-
hundredths of a Preferred Share for which a Right is exercisable.
The Rights Agreement is filed herewith as Exhibit 4.1 and is
incorporated herein by reference. The foregoing summary description of
the Rights does not purport to be complete and is qualified in its
entirety by reference to the full text of the Rights Agreement.
ITEM 2. EXHIBITS
The following exhibit is filed as a part of this Registration
Statement.
4.1 Rights Agreement, dated as of February 17, 2000, between
NiSource Inc. and Harris Trust and Savings Bank, as Rights
Agent.
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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 hereunto duly
authorized.
NISOURCE INC.
(Registrant)
Dated: February 24, 2000 By: /s/ Stephen P. Adik
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Name: Stephen P. Adik
Title: Senior Executive
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
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4.1 Rights Agreement, dated as of February 17, 2000,
between NiSource Inc. and Harris Trust and Savings
Bank, as Rights Agent.
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EXHIBIT 4.1
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NISOURCE INC.
and
HARRIS TRUST AND SAVINGS BANK
Rights Agent
Rights Agreement
Dated as of February 17, 2000
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TABLE OF CONTENTS
Page
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SECTION 1. CERTAIN DEFINITIONS . . . . . . . . . . 1
SECTION 2. APPOINTMENT OF RIGHTS AGENT . . . . . . 4
SECTION 3. ISSUE OF RIGHT CERTIFICATES . . . . . . 5
SECTION 4. FORM OF RIGHT CERTIFICATE . . . . . . . 6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION . . . 7
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND
EXCHANGE OF RIGHT CERTIFICATE,
MUTILATED, DESTROYED, LOST OR STOLEN
RIGHT CERTIFICATES . . . . . . . . . . . 7
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS. . . . . . . 8
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES . . . . . . . . . . . . . . 10
SECTION 9. RESERVATION AND AVAILABILITY OF
PREFERRED SHARES . . . . . . . . . . . . 11
SECTION 10. PREFERRED SHARE RECORD DATE . . . . . . 12
Section 11. ADJUSTMENT OF PURCHASE PRICE; NUMBER OF
SHARES OR NUMBER OF RIGHTS . . . . . . . 12
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE
OR NUMBER OF SHARES . . . . . . . . . . 21
SECTION 13. CONSOLIDATION, MERGER OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER . . 21
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 24
SECTION 15. RIGHTS OF ACTION . . . . . . . . . . . . 26
SECTION 16. AGREEMENT OF RIGHT HOLDERS . . . . . . . 26
SECTION 17 RIGHT CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER . . . . . . . . . . . . . . 27
SECTION 18. CONCERNING THE RIGHTS AGENT . . . . . . 27
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SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF
NAME OF RIGHTS AGENT . . . . . . . . . . 28
SECTION 20. TERMS AND CONDITIONS TO DUTIES OF RIGHTS
AGENT . . . . . . . . . . . . . . . . . 28
SECTION 21. CHANGE OF RIGHTS AGENT . . . . . . . . . 31
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES . . . 32
SECTION 23. REDEMPTION. . . . . . . . . . . . . . . 32
SECTION 24. EXCHANGE . . . . . . . . . . . . . . . . 33
SECTION 25. NOTICE OF CERTAIN EVENTS . . . . . . . . 34
SECTION 26. NOTICES . . . . . . . . . . . . . . . . 35
SECTION 27. SUPPLEMENTS AND AMENDMENTS . . . . . . . 36
SECTION 28. SUCCESSORS . . . . . . . . . . . . . . . 36
SECTION 29. BENEFITS OF THIS AGREEMENT . . . . . . . 36
SECTION 30. GOVERNING LAW . . . . . . . . . . . . . 36
SECTION 31. COUNTERPARTS . . . . . . . . . . . . . . 37
SECTION 32. DESCRIPTIVE HEADINGS . . . . . . . . . . 37
SECTION 33. SEVERABILITY . . . . . . . . . . . . . . 37
SECTION 34. DETERMINATIONS AND ACTIONS BY THE BOARD
OF DIRECTORS. etc . . . . . . . . . . . 37
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RIGHTS AGREEMENT
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This Agreement, dated as of February 17, 2000, between
NiSource Inc., an Indiana corporation (the "Company"), and Harris
Trust and Savings Bank, an Illinois banking corporation (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend distribution (the "Distribution")
of one Preferred Share Purchase Right for each Common Share, without
par value, of the Company outstanding at the close of business on
March 12, 2000 (the "Record Date") and has authorized the issuance of
one Preferred Share Purchase Right (as such number may hereafter be
adjusted pursuant to the provisions of this Agreement) in respect of
each Common Share of the Company issued (whether originally issued or
delivered from the Company's treasury) between such date and the
earlier of the Distribution Date or the Expiration Date (as such terms
are hereinafter defined), each Preferred Share Purchase Right
initially representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined) upon the terms and subject to
the conditions hereinafter set forth (individually a Right and
collectively the Rights);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, is or becomes the Beneficial
Owner (as such term is hereinafter defined) of a Substantial Block (as
such term is hereinafter defined), but shall not include the Company,
any subsidiary of or other Person controlled by the Company, any
employee benefit plan of the Company or of any subsidiary of the
Company or any Person appointed as trustee by the Company or such
subsidiary pursuant to the terms of any such plan in that Person's
capacity as trustee. Notwithstanding the foregoing, no Person shall
become an Acquiring Person solely as a result of an acquisition of
Common Shares and/or other securities by the Company which, by
reducing the number of outstanding Common Shares and/or other
securities, causes the Common Shares and/or other securities of the
Company beneficially owned by such Person to constitute a Substantial
Block; PROVIDED, HOWEVER, that if after such acquisitions by the
Company, such Person becomes the Beneficial Owner of any additional
Common Shares and/or other securities of the Company and is the
Beneficial Owner of a Substantial Block, then such Person shall be
deemed to be an Acquiring Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 (the "Exchange
Act"), as in effect on the date of this Agreement, but shall not
include the Company, any subsidiary of or other Person controlled by
the Company, any employee benefit plan of the Company or of any
subsidiary of the Company or any Person appointed as trustee by the
Company or such subsidiary pursuant to the terms of any such plan in
that Person's capacity as trustee.
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates directly or indirectly has
"beneficial ownership," as determined pursuant to Rule 13d-
3 and Rule 13d-5 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this
Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing and other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed, pursuant to this clause (ii), to be the Beneficial
Owner of, or to beneficially own, (I) securities tendered
pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (II) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Section
11(a)(ii) Event or a Section 13(a) Event, or (III)
securities issuable upon exercise of Rights from and after
the occurrence of a Section 11(a)(ii) Event or a Section
13(a) Event but only if such Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a)
or Section 22 hereof ("Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made
with respect to any Original Rights; or (B) the right
(whether sole or shared) to vote or dispose of pursuant to
any agreement, arrangement or understanding (whether or not
in writing); PROVIDED, HOWEVER, that a Person shall not be
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deemed the Beneficial Owner of, or to beneficially own, any
security under this clause (B) pursuant to an agreement,
arrangement or understanding to vote such security that (1)
arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and
the rules and regulations thereunder and (2) is not also
then required to be reported as beneficially owned on a
Schedule 13D under the Exchange Act (or any comparable or
successor statement or report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing and
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 pursuant to a revocable
proxy as described in clause (B) of subparagraph (ii) of
this paragraph (d)) or disposing of any securities of the
Company.
Notwithstanding the foregoing, nothing in this Section 1(d) shall
cause a Person engaged in business as an underwriter of securities to
be the Beneficial Owner of, or to beneficially own, any securities
acquired through such Person s participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date
of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a legal holiday for banking institutions in the
State of Illinois.
(f) "Close of business" on any given date shall mean 5:00
P.M., Chicago time, on such date; PROVIDED, HOWEVER, that if such date
is not a Business Day it shall mean 5:00 P.M., Chicago time, on the
next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company
shall mean the Common Shares, without par value, of the Company.
"Common Shares" when used with reference to any Person other than the
Company shall mean the capital shares with the greatest aggregate
voting power (or the equity securities or other equity interests
having power to control or direct the management) of such Person or,
if such Person is a subsidiary of or controlled by another Person, the
Person which ultimately controls such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
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(i) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(j) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(k) "Original Shares" shall have the meaning set forth in
Section 11 (a)(ii) hereof.
(l) "Person" shall mean any individual, firm, corporation,
partnership, trust, syndicate or other entity, and shall include any
successor (by merger or otherwise) of such entity.
(m) "Preferred Shares" shall mean the Series A Junior
Participating Preferred Shares, without par value, of the Company
having the rights and preferences set forth in the Amended and
Restated Articles of Incorporation of the Company.
(n) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
(o) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(p) "Section 13 Event" shall mean any event described in
clause (i), (ii) or (iii) of Section 13(a) hereof.
(q) "Share Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(r) "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.
(s) "Substantial Block" shall mean a number of Common
Shares of the Company and/or a number of shares or amount of other
securities of the Company which in the aggregate represents 25% or
more of the Voting Power.
(t) "Voting Power" shall mean the voting power of all
securities of the Company then outstanding generally entitled to vote
for the election of directors of the Company.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company
hereby appoints the Rights Agent to act as agent for-the Company in
accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or desirable.
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SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth business day after
the Share 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 commencement of, or first public announcement of the intent of any
Person (other than the Company or any of its subsidiaries or any
employee benefit plan of the Company or of any subsidiary of the
Company or any Person appointed as trustee by the Company or such
subsidiary pursuant to the terms of any such plan in such Person's
capacity as trustee) to commence, a tender or exchange offer which
would result in such Person becoming an Acquiring Person (the earlier
of such days, including any such day which is after the date of this
Agreement and prior to the Record Date, being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced by the
certificates for the Common Shares of the Company registered in the
names of the holders of the Common Shares (which certificates for
Common Shares shall be deemed also to be Right Certificates) and not
by separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer
of Common Shares. As soon as practicable after the Distribution Date,
the Rights Agent will send, by first-class, insured, postage prepaid
mail, at the expense of the Company, to each record holder of the
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 A hereto,
evidencing one Right for each Common Share so held. As of and after
the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) With respect to certificates for the Common Shares
outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Shares
registered in the names of the holders of the Common Shares. Until the
Distribution Date (or earlier Expiration Date), the surrender for
transfer of any of the certificates for the Common Shares outstanding
on the Record Date shall also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
(c) Rights shall be issued in respect of all Common Shares
which become outstanding after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date or, in certain
circumstances provided in Section 22 hereof, after the Distribution
Date. Certificates issued after the Record Date representing such
shares shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between NiSource Inc. and Harris Trust and Savings Bank
dated as of February 17, 2000 (the "Rights Agreement"), the
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terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive
offices of NiSource Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by
this certificate. NiSource Inc. will mail to the holder of
this certificate a copy of the Rights Agreement without
charge promptly upon receipt of a written request therefor.
Under certain circumstances, Rights beneficially owned by
any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether then held by or on behalf of
such Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing legend,
until the earlier of the Distribution Date or the Expiration Date, the
Rights associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
SECTION 4. FORM OF RIGHT CERTIFICATE.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse
thereof) shall be substantially the same as Exhibit A hereto and may
have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange 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, whenever issued, shall be
dated as of the Record Date, and on their face shall entitle the
holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the Purchase Price
(as defined in Section 7(b)), but the number of such one
one-hundredths of a share and the Purchase Price shall be subject to
adjustments as provided herein.
(b) Any Right Certificate that represents Rights
beneficially owned by an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, or any transferee of an Acquiring
Person or any Associate or Affiliate of an Acquiring Person under the
circumstances set forth in Section 7(e), and any Right Certificate
issued upon transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
- 6 -
The Rights represented by this Certificate are or were
beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in Section 7(e) of the Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of
the Company by the Chairman, the President or any Vice President of
the Company, either manually or by facsimile signature, and have
affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates
shall be countersigned by the Rights Agent manually or by facsimile
and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned
by the Rights Agent, issued and delivered 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 officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at one of its offices in Chicago, Illinois,
books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and the date
of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATE, MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Section 14 hereof, at any
time after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any Right
Certificate or Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or, following the occurrence of
an event set forth in Section 11(a)(ii) or Section 13(a), Common
Shares and/or other securities) as the Right Certificate or Right
- 7 -
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange
any Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged 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.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them (if requested by the Company), and reimbursement
to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the 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 owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date,
upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office of the Rights Agent in Chicago,
Illinois, 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 close of business on the earliest of (i)
March 12, 2010 (the "Final Expiration Date"), (ii) the date on which
the Rights are redeemed pursuant to Section 23, (iii) consummation of
a transaction pursuant to Section 13(g) (such earliest date being
herein referred to as the "Expiration Date") or (iv) the time at which
such Rights are exchanged pursuant to Section 24.
(b) The purchase price for each one one-hundredth of a
Preferred Share (the "Purchase Price") pursuant to the exercise of a
Right shall initially be $60, shall be subject to adjustment from time
to time as provided in Section 11 and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares
- 8 -
to be purchased, and an amount equal to any applicable transfer tax in
cash, or by certified check or bank draft payable to the order of the
Company, the Rights specified in the election shall be exercised, and
the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the
Rights Agent is the transfer agent) certificates for the number of
whole Preferred Shares to be purchased (and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests) or (B) if the Company shall have elected to deposit the
total number of Preferred Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary
agent for the Preferred Shares depositary receipts representing such
number of one one-hundredths of a Preferred Share as are to be
purchased (and the Company hereby irrevocably authorizes its
depositary agent to comply with all such requests), in which case
certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent,
(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, (iii) promptly after receipt of such certificates, cause
the same to be delivered to or upon the order of the registered holder
of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. The payment of the Purchase Price
may be made (x) in cash or by certified bank check or bank draft
payable to the order of the Company, or (y) at the Company's option,
by delivery of a certificate or certificates (with appropriate share
powers executed in blank attached thereto) evidencing a number of
Common Shares equal to the then Purchase Price divided by the closing
price (as determined pursuant to Section 11(d) hereof) per Common
Share on the Trading Day immediately preceding the date of such
exercise. In the event that the Company is obligated to issue other
securities (including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14.
(e) Notwithstanding the foregoing, upon the occurrence of a
Section 11(a)(ii) Event or a Section 13(a) Event, any Rights that are
or were on or after the Distribution Date beneficially owned by (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
- 9 -
such, or (iii) a transferee of an Acquiring Person (or such Associate
or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person (or such Associate or Affiliate) or to any Person with whom the
Acquiring Person (or such Associate or Affiliate) has any agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which is part of a plan,
arrangement or understanding (whether or not in writing) which has as
a primary purpose or effect avoidance of this Section 7(e), shall
become void and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement.
The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) are complied with, but shall have no
liability to any holder of Right Certificate or to any other Person as
a result of its failure to make any determinations with respect to any
Acquiring Person or any of their respective Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, the Rights shall not be effectively exercised and neither
the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7, unless such
registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request.
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 canceled form, or, if
surrendered to the Rights Agent, shall be canceled 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 canceled
Right Certificates to the Company, or shall at the written request of
the Company, destroy such canceled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the
Company.
- 10 -
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED
SHARES.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available, and not reserved for other purposes,
out of its authorized and unissued Preferred Shares or its authorized
and issued Preferred Shares held in its treasury (and, following the
occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, out
of its authorized and unissued Common Shares and/or other securities
or out of its authorized and issued Common Shares and/or other
securities held in its treasury), the number of Preferred Shares (and,
following the occurrence of a Section 11(a)(ii) Event or a Section
13(a) Event, Common Shares and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) If and so long as the Preferred Shares (or depositary
receipts therefor) (and, following the occurrence of a Section
11(a)(ii) Event or a Section 13(a) Event, Common Shares and/or other
securities) issuable upon the exercise of Rights may be listed on any
national securities exchange, the Company shall use its best efforts
to cause, from and after the Distribution Date, all shares reserved
for such issuance (or depositary receipts therefor) to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all Preferred Shares
(and, following the occurrence ora Section 11(a)(ii) Event or a
Section 13(a) Event, Common Shares and/or other securities) delivered
upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) 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 (and,
following the occurrence of a Section 11 (a)(ii) Event or a Section
13(a) Event, Common Shares and/or other securities) 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 involved
in the transfer or delivery of Right Certificates or the issuance or
delivery of certificates or depositary receipts for 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
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 satisfaction that no such tax is due.
- 11 -
(e) The Company shall use its best efforts (i) to file, as
soon as practicable following the first occurrence of a Section
11(a)(ii) Event for which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance
with Section 11(a)(ii) or (iii), or as soon as is required by law
following the Distribution Date, as the case may be, a registration
statement under the Securities Act of 1933 (the "Act"), with respect
to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) to cause such registration statement to become
effective as soon as practicable after such filing, and (iii) to cause
such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the Expiration Date. The Company shall use its
best efforts to take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of the first
sentence of this paragraph, the exercisability of the Rights in order
to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction unless the requisite qualification in
such jurisdiction shall have been obtained.
SECTION 10. PREFERRED SHARE 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 in
accordance with Section 7; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Preferred Share
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 Share 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 shareholder of
the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE; NUMBER OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number of shares
- 12 -
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 or pay a dividend on the
Preferred Shares payable in Preferred Shares, (B) effect a
subdivision, combination or consolidation of the Preferred Shares (by
reclassification or otherwise than by payment of dividends in
Preferred Shares) into a greater or lesser number of Preferred Shares
or (C) effect a reclassification or recapitalization of the Preferred
Shares into another class of capital shares (including any such
reclassification or recapitalization 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, reclassification or recapitalization, and the number and
kind of capital shares 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 capital
shares, other securities and/or property which, if such Right had been
exercised immediately prior to such date and at a time when the
Preferred Share 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, reclassification or
recapitalization. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event any Person shall, at any time after
the date of this Agreement, become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13 hereof, or is an acquisition of
Common Shares pursuant to a tender offer or exchange offer by such
Person that (1) is for all outstanding Common Shares and (2) is at a
price and on terms determined by the Board of Directors, after
receiving advice from one or more investment banking firms, to be (I)
at a price which is fair to shareholders (taking into account all
factors which such members of the Board deem relevant including,
without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to
realize maximum value) and (II) otherwise in the best interests of the
Company and its shareholders, then proper provision shall be made so
that each holder of a Right, except as provided below, shall
thereafter have a right to receive, upon exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement, such
number of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
- 13 -
then number of one one-hundredths of a Preferred Share for which a
Right is then exercisable and dividing that product by (y) 50% of the
current market price per Common Share of the Company (determined
pursuant to Section 11(d)) on the date of such occurrence (such number
of shares issuable upon exercise of all outstanding Rights being
herein referred to as the "Adjustment Shares"); PROVIDED, HOWEVER,
that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii);
PROVIDED FURTHER that, if the Common Shares of the Company have been
reclassified or recapitalized in a transaction described in Section
11(a)(i) or converted or otherwise changed in any manner from the
capital shares of the Company that were Common Shares of the Company
on the date of this Agreement (such Common Shares prior to any such
reclassification, recapitalization, conversion or other change being
referred to as the "Original Shares"), then each holder of a Right
thereafter shall have a right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, at the election of the holder, either the number of Common
Shares of the Company determined pursuant to clauses (x) and (y) above
or such number of capital shares, other securities and/or property
into which the Original Shares were reclassified, recapitalized,
converted or changed, adjusted to reflect changes in the market price
of such capital shares or other securities and in the fair market
value of such property since the date of such reclassification,
recapitalization, conversion or other change, as determined by a
nationally recognized investment banking firm selected by the Board of
Directors of the Company, so that the holder of any Right exercised
thereafter shall be entitled to receive the aggregate number and kind
of capital shares, other securities and/or property (adjusted for
changes in market price and fair market value) which, if such Section
11(a)(ii) Event (and the related adjustment of the number of Common
Shares to be received upon exercise of a Right) had occurred prior to
the date of such reclassification, recapitalization, conversion or
other change and such Right as so adjusted had been exercised
immediately prior to such date and at a time when the transfer books
of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such
reclassification, recapitalization, conversion or change.
(iii) In the event that there shall not be sufficient
authorized but unissued Common Shares and authorized and issued Common
Shares held in the treasury and not reserved for other purposes 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; PROVIDED, HOWEVER, that if the Company is
unable to, or for any reason does not promptly, cause the
authorization of a sufficient number of additional Common Shares,
then, in the event the Rights become exercisable as provided in
Section 7(a), the Company, with respect to each Right and to the
- 14 -
extent necessary under and permitted by applicable law and any
agreements or instruments in effect on the Share Acquisition Date to
which it is a party, shall make adequate provision to substitute for
that number of the Adjustment Shares as to which additional Common
Shares have not been authorized for issuance: (A) an amount in cash
equal to the excess of (1) the product of (x) the number of Adjustment
Shares, multiplied by (y) the current market price (determined
pursuant to Section 11(d)) per Common Share on the date on which the
Section 11(a)(ii) Event occurs (such product being hereinafter
referred to as the Current Value), over (2) the Purchase Price, in
lieu of issuing Common Shares and requiring payment therefor, (B) debt
or equity securities (other than Common Shares) having a value equal
to the Current Value, where the value of such securities shall be
determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company, and requiring the payment of
the Purchase Price, (C) a number of preferred shares equal to the
number of Adjustment Shares where a nationally recognized investment
banking firm selected by the Board of Directors of the Company shall
have determined such shares to have the same value as the Common
Shares (a common share equivalent), and requiring the payment of the
Purchase Price, or (D) any combination of cash, property, common share
equivalents and/or other securities having the requisite value
pursuant to Section 11 as determined by a nationally recognized
investment banking firm selected by the Board of Directors of the
Company and requiring the payment of all or any requisite portion of
the Purchase Price; PROVIDED FURTHER, HOWEVER, that if the Company
shall not have made adequate provision to deliver value pursuant to
clauses (A), (B), (C) or (D) of the first proviso to the first
sentence of this Section 11(a)(iii) within 60 days following the date
of the occurrence of the Section 11(a)(ii) Event, then the Company
shall be obligated to deliver cash in accordance with clause (A)
above. To the extent that the Company determines that some action need
be taken pursuant to clauses (A), (B), (C) or (D) of the first proviso
to the first sentence of this Section 11(a)(iii), the Company may
suspend the exercisability of the Rights for a period of up to 60 days
following the date of the occurrence of the Section 11(a)(ii) Event,
in order to decide the appropriate form of distribution to be made
pursuant to such first proviso and to determine the value thereof. In
the event of' any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended.
(b) In case a record date is fixed by the Company or
otherwise established for the issuance of rights, options or warrants
to all holders of Preferred Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe
for or purchase Preferred Shares or shares having the same rights,
privileges and preferences as the Preferred Shares (preferred share
equivalents) (or securities convertible into Preferred Shares or
preferred share equivalents) at a price per Preferred Share or
preferred share equivalent (or having a conversion price per share, if
a security convertible into Preferred Shares or preferred share
- 15 -
equivalents) less than the current market price (as defined in Section
11(d)) per Preferred Share 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, of which the numerator shall be the number of Preferred
Shares outstanding on such record date plus the number of Preferred
Shares and/or preferred share equivalents which the aggregate offering
price of the total number of Preferred Shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such current market price and of
which the denominator shall be the number of Preferred Shares
outstanding on such record date plus the number of additional
Preferred Shares and/or preferred share equivalents to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible). In case such subscription
price may be paid in a consideration part or all of which shall be in
a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent. 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 or established; 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 or established.
(c) In case a record date is fixed by the Company or
otherwise established for the making of a distribution to all holders
of 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 (i) a regular periodic cash dividend out of
earnings or retained earnings, (ii) a special cash dividend out of
earnings or retained earnings, or (iii) a dividend payable in
Preferred Shares) or subscription rights, options or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to
be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by
a fraction, of which the numerator shall be the current market price
(as defined in Section 11(d)) per Preferred Share on such record date,
less the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the assets
or evidences of indebtedness so to be distributed or of such
subscription rights, options or warrants applicable to one Preferred
Share and of which the denominator shall be such current market price
per Preferred Share. Such adjustment shall be made successively
whenever such a record date is fixed or established; 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 or established.
- 16 -
(d) (i) For the purpose of any computation hereunder, the
current market price per Common Share on any date shall be deemed to
be the average of the daily closing prices per Common Share for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; PROVIDED, HOWEVER, that in the event
that the current market price per Common Share is determined during a
period following the announcement by the issuer of the Common Shares
of (A) a dividend or distribution on the Common Shares payable in
Common Shares or securities convertible into Common Shares or (B) any
subdivision, combination or reclassification of the Common Shares, and
prior to the expiration of 30 consecutive Trading Days after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, as the case may
be, then, and in each such case, the current market price shall be
appropriately adjusted to reflect the current market price per common
share equivalent. 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 Common Shares 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 Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the- counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System (NASDAQ) or such
other system then in use, or, if on any such date the Common Shares
are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker
making a market in the Common Shares selected by the Board of
Directors of the Company, except that, if on any such date no market
maker is making a market in the Common Shares, the fair value of such
shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the Common Shares are listed or admitted to trading is open for
the transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, a Business
Day. If the Common Shares are not publicly held or not so listed or
traded, "current market price" per Common Share shall mean the fair
value per share as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement
filed with the Rights Agent.
(ii) For the purpose of any computation hereunder, the
current market price per Preferred Share on any date shall be
determined in the same manner as set forth for the Common Shares in
Section 11(d)(i). If the current per share market price of the
- 17 -
Preferred Shares cannot be determined in such manner, the current per
share market price of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common Shares
(appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof), multiplied by
100. If either the Common Shares or the Preferred Shares are not
publicly held or listed or traded as contemplated by Section 11(d)(i),
current market price per Common Share or Preferred Share shall mean
the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; PROVIDED, HOWEVER, that any adjustments which
by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any capital shares of the Company other
than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in
this Section 11 and the provisions of Sections 7, 9, 10 and 13 with
respect to the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(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 Section 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 shares (calculated to the nearest
ten-thousandth) obtained by (i) multiplying (A) the number of shares
covered by a Right immediately prior to this adjustment by (B) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the
- 18 -
Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-hundredths of
a Preferred Share purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to
the nearest 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. Such 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, the record date shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to
be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-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 share which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par
value per share, 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
- 19 -
the Company may validly and legally issue fully paid and nonassessable
Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the holder of any Right
exercised after such record date the Preferred Shares and other
capital shares or securities of the Company, if any, issuable upon
such exercise over and above the Preferred Shares and other capital
shares or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED HOWEVER, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such
holder s right to receive such additional shares 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, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for
Preferred Shares, share dividends or issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made by
the Company to holders of its Preferred Shares shall not be taxable to
such shareholders.
(n) Notwithstanding any other provision of this Agreement,
no adjustment to the Purchase Price, the number of one one-hundredths
of a Preferred Share for which a Right is exercisable or the number of
Rights outstanding (except as permitted by Section 23 hereof) or any
similar adjustment shall be made or be effective if such adjustment
would have the effect of reducing or limiting the benefits the holders
of the Rights would have had absent such adjustment, including,
without limitation, the benefits under Section 11(a)(ii) and Section
13, unless the terms of this Agreement are amended so as to preserve
such benefits.
(o) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (i) the number of one one-hundredths of
a Preferred Share purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one
one-hundredths of a Preferred Share so purchasable immediately prior
- 20 -
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 (ii) each Common Share outstanding
immediately after such event shall have issued with respect to it that
number of Rights which each Common Share outstanding immediately prior
to such event had issued with respect to it. The adjustments provided
for in this Section 11(o) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(p) The Company covenants and agrees that, following the
Distribution Date, except as permitted by Section 23 or Section 27
hereof, it will not, directly or indirectly, take any action the
purpose or effect of which is to eliminate or otherwise diminish the
benefits intended to be afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in
Section 11 or 13, the Company shall (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the 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 26. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment contained therein and
shall not be obligated or responsible for calculating any adjustment
nor shall it be deemed to have knowledge of such adjustment unless and
until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, on or after the Share Acquisition
Date, directly or indirectly, (i) the Company shall consolidate with,
or merge with and into, any other Person, and the Company shall not be
the continuing or surviving corporation, (ii) any Person shall
consolidate with the Company, or merge with and into the Company, and
the Company shall be the continuing or surviving corporation and, in
connection therewith, all or part of the Common Shares of the Company
shall be changed into or exchanged for shares or other securities of
any other Person or cash or any other property, or (iii) the Company
shall sell or otherwise transfer (or one or more of its subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets
or earning power aggregating more than 50% of the assets or earning
power of the Company and its subsidiaries (taken as a whole) to any
other Person or Persons, then, and in each such case, proper provision
shall be made so that (A) each holder of a Right shall thereafter have
the right to receive, upon the exercise thereof at a price equal to
the then-current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right is then exercisable,
- 21 -
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable
Common Shares of the Principal Party (as hereinafter defined), free
and clear of any liens, encumbrances and adverse claims and not
subject to any rights of call, purchase or first refusal, as shall be
equal to the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product
by (y) 50% of the current market price (determined pursuant to Section
11(d)) per Common Share of the Principal Party on the date or
consummation of such consolidation, merger, sale or transfer; (B) such
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (C)
the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following
the first occurrence of an event set forth in Section 13(a) hereof;
and (D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common
Shares in accordance with Section 9) 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 its Common Shares or cash, property or other securities
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean (i) in the case of any
transaction described in (i) or (ii) of the first sentence of Section
13(a), the Person that is the issuer of any securities into which
Common Shares of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is
the other party to such merger or consolidation; and (ii) in the case
of any transaction described in (iii) of the first sentence in Section
13(a), the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such transaction
or transactions; PROVIDED, HOWEVER, that in any such case, (1) if the
Common Shares of such Person are not at such time and have not been
continuously over the preceding twelve month period registered under
Section 12 of the Exchange Act ("Registered Common Shares") or such
Person is not a corporation, and such Person is directly or indirectly
controlled by another Person which has Registered Common Shares
outstanding, "Principal Party" shall refer to such other Person; (2)
if the Common Shares of such Person are not Registered Common Shares
or such Person is not a corporation, and such Person is directly or
indirectly controlled by another Person which does not have Registered
Common Shares outstanding, "Principal Party" shall refer to the
controlling Person of such first-mentioned Person; (3) if the Common
Shares of such Person are not Registered Common Shares or such Person
is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and one or more of such
controlling Persons have Registered Common Shares outstanding,
"Principal Party" shall refer to whichever of such controlling Persons
- 22 -
is the issuer of the Registered Common Shares having the greatest
aggregate market value; and (4) if the Common Shares of such Person
are not Registered Common Shares or such Person is not a corporation,
and such Person is directly or indirectly controlled by more than one
Person, and none of such controlling Persons have Registered Common
Shares outstanding, "Principal Party" shall refer to whichever
controlling Person is the corporation having the greatest shareholders
equity or, if no such controlling Person is a corporation, shall refer
to whichever controlling Person has the greatest net assets.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such Principal Party shall have executed and delivered to
the Rights Agent a legally valid, binding and enforceable supplemental
agreement in compliance with the provisions set forth in Section 13(a)
and (b), and if applicable Section 13(d), and further providing that,
as soon as practicable after the date of any consolidation, merger or
sale of assets mentioned in this Section 13, such issuer will (i)
prepare and file a registration statement under the Act, with respect
to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and (ii) will deliver to holders of the Rights
historical financial statements for such issuer and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) Notwithstanding anything in Section 13(b) and (c) to
the contrary, if the Principal Party as determined pursuant to
paragraph (b) above is not a corporation or does not have Common
Shares, proper provision shall be made so that such Principal Party
shall create or otherwise make available for purposes of the exercise
of the Rights in accordance with the terms of this Agreement, cash or
a type or types of securities having a fair market value (as
determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company) equal to at least the value
of the Common Shares which each holder of a Right would have been
entitled to receive if such Principal Party had been a corporation or
had Common Shares.
(e) The Company covenants and agrees that, following the
Distribution Date, it shall not consummate any of the transactions
described in clauses (i), (ii) and (iii) of the first sentence of
Section 13(a) if at the time of or after such consummation there would
be any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or any
other action taken which would diminish or eliminate the benefits
intended to be afforded by the Rights, unless prior thereto the
Principal Party shall have amended or repealed such charter or by-law
provisions, instruments or securities, agreements or actions or
- 23 -
otherwise protected the holders of the Rights from such diminution or
elimination of benefits, and the Company and the Principal Party shall
have executed and delivered to the Rights Agent a legally valid,
binding and enforceable supplemental agreement providing for such
amendment, repeal or other protection.
(f) The provisions of this Section 13 shall similarly apply
to successive mergers, consolidations, sales or other transfers. In
the event that any transaction set forth in Section 13 occurs at any
time after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in this Section 13.
(g) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraph (i) and (ii) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired
Common Shares pursuant to a tender offer or exchange offer for all
outstanding Common Shares of the type excepted from the provisions of
Section 11(a)(ii) hereof by the terms of that Section (or a wholly
owned subsidiary of any such Person or Persons), (ii) the price per
Common Share offered in such transaction is not less than the price
per Common Share paid to all holders of Common Shares whose shares
were purchased pursuant to such tender offer or exchange offer, and
(iii) the form of consideration being offered to the remaining holders
of Common Shares pursuant to such transaction is the same as the form
of consideration paid pursuant to such tender offer or exchange offer.
Upon consummation of any such transaction contemplated by this Section
13(g), all Rights hereunder shall expire.
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
admitted to trading or, if the Rights are not listed or admitted to
- 24 -
trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company, except
that, 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 upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares, other than
fractions of Preferred Shares that are integral multiples of one one-
hundredth of a Preferred Share and certificates evidencing such
fractional shares. 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 agent
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 (other than
fractional Preferred Shares that are integral multiples of one one-
hundredth of a share), the Company may pay to the registered holders
of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a Preferred Share. For
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 Section 11(d)(ii)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Section 11(a)(ii) Event
or a Section 13(a) Event, the Company or the Principal Party, as the
case may be, shall not be required to issue fractions of Common Shares
upon exercise of the Rights or to distribute certificates which
evidence fractional Common shares. In lieu of fractional Common
Shares, the Company or the Principal Party, as the case may be, may
pay to the registered holders of Right Certificates at the time such
Right Certificates are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of a Common
Share. For purposes of this Section 14(c), the current market value of
a Common Share shall be the closing price of a Common Share (as
determined pursuant to Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise.
(d) Each holder of a Right or Rights by the acceptance of
the Rights expressly waives his right to receive any fractional Rights
- 25 -
or any fractional shares upon exercise of a Right or Rights except as
provided in Section 14(b) and (c).
SECTION 15. RIGHTS OF ACTION. All rights of action in
respect of this Agreement, excepting the rights of action given to the
Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and
any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Shares), may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the
Rights evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to 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 close of business on the Distribution
Date, the Rights will be transferable only in connection with the
transfer of Common Shares;
(b) after the close of business on the Distribution Date,
the Rights will be transferable only by transfer of the Right
Certificates, which 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;
(c) the Company and the Rights Agent may deem and treat the
person in whose name each Right Certificate (or, prior to the
Distribution Date, the associated Common Share certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the associated Common Share certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
- 26 -
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of the
obligation.
SECTION 17 RIGHT CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of 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 shareholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided
in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises. The costs
and expenses of enforcing this right of indemnification shall also be
paid by the Company. The indemnification provided for hereunder shall
survive the expiration of the Rights and termination of this
Agreement.
(b) The Rights Agent may conclusively rely upon and 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 Preferred 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
- 27 -
by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor, Rights Agent
shall be a party, or any corporation succeeding to the corporate trust
business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any
of the parties hereto; PROVIDED, HOWEVER, that such corporation would
be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of
the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either
in the name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have
the full force provided in the Right Certificates and in this
Agreement.
SECTION 20. TERMS AND CONDITIONS TO DUTIES OF RIGHTS
AGENT. The Rights Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and conditions, and no
implied duties or obligations shall be read into this agreement
- 28 -
against the Rights Agent, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts, or refrains from acting,
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 authorization to the Rights Agent for 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 omitting any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by the Chairman, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or omitted by it in good faith
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature
thereof) or be required to verify the same, but all such statements
and recitals are and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent)
or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition contained in
this Agreement or in any Right Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Sections 11 or 13 or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice of any
such adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation
of any Preferred Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares will, when
issued, be validly authorized and issued, fully paid and
nonassessable.
- 29 -
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept determinations, interpretations and instructions with respect
to the performance of its duties hereunder from the Chairman, the
President or any Vice President or the Secretary or any Assistant
Secretary or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with
determinations, interpretations and instructions of any such officer.
Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or
after the date specified in such application (which date shall not be
less than ten Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to
such application.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents.
(j) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the case
may be, has not been completed, the Rights Agent, subject to the
provisions of Section 11(a)(ii), shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
- 30 -
(k) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(l) The Rights Agent shall not be required to take notice
or be deemed to have any notice of any fact, event or determination
(including, without limitation, any dates or events defined in this
Agreement or the designation of any Person as an Acquiring Person,
Affiliate or Associate) under this Agreement unless and until the
Rights Agent shall be specifically notified in writing by the Company
of such fact, event or determination.
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 by
registered or certified mail, and, at the expense of the Company, to
the holders of the Right Certificates by first-class mail (at the
expense of the Company). 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 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 or shall repeatedly fail or
refuse to act, 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 or repeated
failure or refusal to act by the Rights Agent or by the holder of a
Right Certificate (who shall, without notice, submit his 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) a corporation organized and doing business under the laws
of the United States or of the States of Illinois or Indiana (or of
any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the States of
Illinois or Indiana), in good standing, having a principal office in
the States of Illinois or Indiana which is authorized under such laws
to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000 or (b) an Affiliate of any corporation described in
the foregoing clause (a). 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, and the predecessor Rights Agent shall
- 31 -
deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares, 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 per share and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement. In addition,
in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to the Expiration Date pursuant to the
exercise, conversion or exchange of share options, warrants, rights or
convertible securities of the Company that are outstanding prior to
the Distribution Date, the Company shall issue Rights with respect to
all such Common Shares so issued or sold (and shall issue Right
Certificates representing such Rights); PROVIDED, HOWEVER, that (i) no
such Right Certificates shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Right Certificates would be issued,
and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
SECTION 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of business
on the tenth business day after the Share Acquisition Date (which date
may be extended pursuant to Section 27 hereof) or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired.
- 32 -
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, and without any
further action and without any notice, the Rights will terminate and
the only rights thereafter of the holders of Rights shall be to
receive the Redemption Price. Within ten business days after the
action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the
holders of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Such notice of
redemption shall state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set
forth in this Section 23, and other than in connection with the
repurchase of Common Shares prior to the Distribution Date.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time after the occurrence of a Section 11(a)(ii) Event
or a Section 13(a) 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 7(e) hereof) for
Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive 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
- 33 -
become void pursuant to the provisions of Section 7(e) hereof) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Shares (or preferred
share equivalents, as such term is defined in Section 11(b) hereof)
for Common Shares exchangeable for Rights, at the initial rate of one
one-hundredth of a Preferred Share (or preferred share equivalent) for
each Common Share, as appropriately adjusted to reflect adjustments in
the voting rights of the Preferred Shares so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the
same voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common
Shares or Preferred Shares issued but not outstanding or authorized
but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares or
Preferred Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractional
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 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 subsection (e), the
current market value of a whole Common Share shall be the closing
price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS. In case the
Company shall propose (a) to pay any dividend payable in shares 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 periodic cash dividend out of earnings or retained earning or
other than a special cash dividend out of earnings or retained
earnings), or (b) to offer to the holders of its Preferred Share
rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of any class or any other securities,
rights or options, or (c) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), or (d) 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 more than 50%
of the assets or earning power of the Company and its subsidiaries
(taken as a whole) to, any other Person or Persons, or (e) to effect
the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right, in
accordance with Section 26, a notice of such proposed action, which
- 34 -
shall specify the record date for the purposes of such shares
dividend, distribution of rights, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of 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 (a) or (b) above at least twenty 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 twenty days prior to the date of the taking of such
proposed action at the date of participation therein by the holders of
Preferred Shares, whichever shall be the earlier.
In case of the occurrence of a Section 11(a)(ii) Event Or a
Section 13(a) Event,
then the Company or the Principal Party, as the case may be, shall as
soon as practicable thereafter give to each holder of a Right, in
accordance with Section 26, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or Section 13(a) hereof, as
the case may be.
SECTION 26. NOTICES. Notices or demands authorized by
this Agreement to begiven or made by the Rights Agent or by the holder
of any Right Certificate to or on the Company shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as
follows:
NiSource Inc.
801 E. 86th Avenue
Merrillville, Indiana 46410
Attention: Chairman
with copy to the Secretary at the same address. Subject to the
provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first- class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as
follows:
Harris Trust and Savings Bank
111 West Monroe Street
Chicago, Illinois 60690
Attention: Corporate Agencies Administrative
Division
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,
- 35 -
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without
the approval of any holders of certificates representing Common Shares
and Rights. From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company 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 (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with
any other provisions herein, (iii) to shorten or lengthen any time
period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); PROVIDED, HOWEVER,
that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, a time period relating to
when the Rights may be redeemed at any time when the Rights are not
redeemable. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment shall be made which changes the Redemption
Price or the number of one one-hundredths of a Preferred Share for
which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.
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 parson or corporation
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. 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 Indiana and for all purposes shall be
- 36 -
governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such
state.
SECTION 31. 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 32. 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 33. SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement shall be held by a court of
competent jurisdiction or other authority to be invalid, void, illegal
or unenforceable, the validity or enforceability of the remainder of
the terms, provisions, covenants and restrictions shall not be
affected thereby, provided, however, that notwithstanding anything in
this Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid, void,
illegal or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section
23 hereof shall be reinstated, if theretofore expired, or extended so
as not to expire until the close of business on the fifteenth business
day following the date of such determination by the Board of
Directors.
SECTION 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS. etc. For all purposes of this Agreement, any calculation of
the number of Common Shares outstanding at any particular time,
including for purposes of determining the particular percentage of
such outstanding Common Shares of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause
(y) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights
- 37 -
and all other parties, and (y) not subject the Board to any liability
to the holders of the Rights.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to
be hereunto affixed and attested, all as of the day and year first
above written.
Attest: NISOURCE INC.
By: /s/ Mark D. Wyckoff By: /s/ Stephen P. Adik
---------------------------- ---------------------------------
Mark D. Wyckoff Stephen P. Adik
Assistant Secretary Senior Executive Vice President
and Chief Financial Officer
Attest: HARRIS TRUST AND SAVINGS BANK
By: /s/ Donald Koslow By: /s/ Tod Shafer
---------------------------- ----------------------------------
Donald Koslow Tod Shafer
Vice President Vice President
- 38 -
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER MARCH 12, 2010 OR EARLIER IF CONSUMMATION
OF A TRANSACTION PURSUANT TO SECTION 13(g) OF THE RIGHTS
AGREEMENT OCCURS OR IF NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON. THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.]
<*>
Right Certificate
NISOURCE INC.
This certifies that _______________, or registered assigns,
is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of February__, 2000
(the "Rights Agreement") between NiSource Inc., an Indiana corporation
(the "Company"), and Harris Trust and Savings Bank, an Illinois
banking corporation (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in
the Rights Agreement) when the rights are exercisable pursuant to the
Rights Agreement and prior to 5:00 P.M. (Chicago time) on March 12,
2010 at the principal office of the Rights Agent, or its successors as
Rights Agent, in Chicago, Illinois one one-hundredth of a fully paid
non-assessable share of the Series A Junior Participating Preferred
Shares, without par value ("Preferred Shares"), of the Company, at a
purchase price of $60 per one one-hundredth of a 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 share which may be purchased upon exercise thereof)
set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of March 12, 2000, based on the Preferred
Shares of the Company 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 or other
securities or property which may be purchased upon the exercise of the
<*>The portion of the legend in brackets shall be inserted only if
applicable.
A-1
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 incorporated herein by reference
and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office 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 entitling the
holder to purchase a like aggregate number of one one-hundredths of a
Preferred Share or other securities or property as the Rights
evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at
its option at a redemption price of $.01 per Right.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
that are integral multiples of one one-hundredth of a Preferred Share,
which may, at the election 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 entitled to
vote or receive dividends or be deemed for any purpose the holder of
Preferred Shares or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or, to receive
notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
A-2
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of __________ 20__.
ATTEST: NISOURCE INC.
_____________________________ By_________________________________
Secretary Title:
Countersigned:
___________________________________
By ________________________________
Authorized Signature
A-3
[Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right 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: _________________, 20__
__________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
A-4
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To NiSource Inc.:
The undersigned hereby irrevocably elects to exercise
______________________ Rights represented by this Right Certificate to
purchase the Preferred Shares or other securities or property issuable
upon the exercise of such Rights and requests that certificates for
such shares be issued in the name of:
Please insert social security
or other identifying number
______________________________________________________________________
(Please print name and address)
______________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining
of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
______________________________________________________________________
(Please print name and address)
______________________________________________________________________
Dated: _______________, 20__
_____________________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
A-5
