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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
EDISON INTERNATIONAL
- ------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 95-4137452
- --------------------------------- ---------------------------------
(State of incorporation or (IRS Employer Identification No.)
organization)
2244 Walnut Grove Avenue
(P.O. Box 800)
Rosemead, California 91770
- --------------------------------- ---------------------------------
(Address of principal executive (Zip Code)
offices)
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
------------------- ------------------------------
Rights to Purchase Series A New York Stock Exchange
Junior Participating Pacific Stock Exchange
Cumulative Preferred Stock
Securities to be registered pursuant to Section 12(g) of the Act
None
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Item 1. Description of Registrant's Securities to be Registered
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On November 21, 1996, the Board of Directors of Edison International
(the "Company") declared a dividend of one preferred share purchase right
(a "Right") for each outstanding share of Common Stock, no par value per
share (the "Common Shares"), of the Company. The Rights will be issued to
the holders of record of Common Shares outstanding on December 3, 1996,
and with respect to Common Shares issued thereafter until the Distribution
Date (as defined below) and, in certain circumstances, with respect to
Common Shares issued after the Distribution Date. Each Right, when it
becomes exercisable as described below, will entitle the registered holder
to purchase from the Company one one-thousandth (1/1000th) of a share of
Series A Junior Participating Cumulative Preferred Stock, no par value per
share (the "Preferred Shares"), of the Company at a price of $55.00 (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 Company of California, as Rights
Agent (the "Rights Agent").
Until the earlier of (i) such time as the Company learns that a
person or group (including any affiliate or associate of such person or
group) has acquired, or has obtained the right to acquire, beneficial
ownership of more than 20% of the outstanding Common Shares (such person
or group being an "Acquiring Person"), and (ii) such date, if any, as may
be designated by the Board of Directors of the Company following the
commencement of, or first public disclosure of an intent to commence, a
tender or exchange offer for outstanding Common Shares which could result
in such person or group becoming the beneficial owner of more than 20% of
the outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced by the certificates for
Common Shares registered in the names of the holders thereof (which
certificates for Common Shares shall also be deemed to be Right
Certificates, as defined below) and not by separate Right Certificates.
Therefore, until the Distribution Date, the Rights will be transferred
with and only with the Common Shares.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business on
the Distribution Date (and to each initial record holder of certain Common
Shares originally issued after the Distribution Date), and such separate
Right Certificates alone will therefore evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire on November 21, 2006 (the "Expiration Date") unless earlier
redeemed by the Company as described below.
The number of Preferred Shares or other securities issuable upon
exercise of a Right, the Purchase Price, the Redemption Price (as defined
below) and the number of Rights associated with each outstanding Common
Share are all subject to adjustment by the Board of Directors of the
Company in the event of any change in the Common Shares or the Preferred
Shares, whether by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to
holders of Common Shares or Preferred Shares, as the case may be (other
than the distribution of Rights or regular quarterly cash dividends), or
otherwise.
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The Preferred Shares are authorized to be issued in fractions which
are an integral multiple of one one-thousandth (1/1000th) of a Preferred
Share. The Company may, but is not required to, issue fractions of shares
upon the exercise of Rights, and, in lieu of fractional shares, the
Company may issue certificates or utilize a depositary arrangement as
provided by the terms of the Preferred Shares and, in the case of
fractions other than one one-thousandth (1/1000th) of a Preferred Share or
integral multiples thereof, may make a cash payment based on the market
price of such shares.
At such time as there is an Acquiring Person, the Rights will entitle
each holder of a Right (other then such Acquiring Person or an affiliate
or associate of such Acquiring Person) of a Right to purchase, for the
Purchase Price, that number of one one-thousandths (1/1000ths) of a
Preferred Share equivalent to the number of Common Shares which at the
time of such event would have a market value of twice the Purchase Price.
If the Company is acquired in a merger or other business combination
by an Acquiring Person or an associate or affiliate of an Acquiring Person
that is a publicly traded corporation, or if 50% or more of the Company's
assets or assets representing 50% or more of the Company's revenues or
cash flow are sold, leased, exchanged or otherwise transferred (in one or
more transactions) to an Acquiring Person or an associate or affiliate of
an Acquiring Person that is a publicly traded corporation, each Right will
entitle its holder (subject to the next paragraph) to purchase, for the
Purchase Price, that number of common shares of such corporation which at
the time of the transaction would have a market value of twice the
Purchase Price. If the Company is acquired in a merger or other business
combination by an Acquiring Person or an associate or affiliate of an
Acquiring Person that is not a publicly traded entity, or if 50% or more
of the Company's assets or assets representing 50% or more of the
Company's revenues or cash flow are sold, leased, exchanged or otherwise
transferred (in one or more transactions) to an Acquiring Person or an
associate or affiliate of an Acquiring Person that is not a publicly
traded entity, each Right will entitle its holder (subject to the next
paragraph) to purchase for the Purchase Price at such holder's option, (i)
that number of shares of the surviving corporation in the transaction with
such entity (which surviving corporation could be the Company) which at
the time of the transaction would have a book value of twice the Purchase
Price, (ii) that number of shares of such entity which at the time of the
transaction would have a book value of twice the Purchase Price, or (iii)
if such entity has an affiliate which has publicly traded common shares,
that number of common shares of such affiliate which at the time of the
transaction would have a market value of twice the purchase price.
Any Rights that are, at any time, beneficially owned by an Acquiring
Person (or any affiliate or associate of an Acquiring Person) will be null
and void and nontransferable and any holder of any such Right (including
any purported transferee or subsequent holder) will be unable to exercise
or transfer any such Right.
At any time prior to the earlier of (i) such time as a Person becomes
an Acquiring Person and (ii) the Expiration Date, the Board of Directors
may redeem the Rights in whole, but not in part, at a price (in cash or
Common Shares or other securities of the Company deemed by the Board of
Directors to be at least equivalent in value) of $.001 per Right, subject
to adjustment as provided in the Rights Agreement (the "Redemption
Price"); provided, however, that, for the 120-day period after any date of
a change (resulting from a proxy or consent solicitation) in a majority of
the Board of Directors of the Company in office at the commencement of
such solicitation, the Rights may only be redeemed if (A) there are
directors then in office who were in office at the commencement of such
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solicitation and (B) the Board of Directors of the Company, with the
concurrence of a majority of such directors then in office, determines
that such redemption is, in its judgment, in the best interests of the
Company and its shareholders.
Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only
right of the holders of the Rights will be to receive the Redemption
Price.
After there is an Acquiring Person, the Board of Directors may elect
to exchange each Right (other than Rights that shall have become null and
void and nontransferable as described above) for consideration per Right
consisting of one-half of the securities that would be issuable at such
time upon the exercise of one Right pursuant to the terms of the Rights
Agreement.
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.
At any time prior to the Distribution Date, the Company may, without
the approval of any holder of the Rights, supplement or amend any
provision of the Rights Agreement (including the date on which the
Distribution Date shall occur, the time during which the Rights may be
redeemed or the terms of the Preferred Shares), except that no supplement
or amendment shall be made which reduces the Redemption Price (other than
pursuant to certain adjustments therein) or provides for an earlier
Expiration Date. Among other permitted amendments, the Board may reduce
the threshold for becoming an Acquiring Person or otherwise causing the
Distribution Date to occur from 20% to any percentage not less than (a)
the highest percentage known by the Company to be beneficially owned by
any person or group or (b) 10%. However, during the 120-day period after
any date of a change (resulting from a proxy or consent solicitation) in
a majority of the Board of Directors of the Company in office at the
commencement of such solicitation, this Rights Agreement may be
supplemented or amended only if (A) there are directors then in office who
were in office at the commencement of such solicitation and (B) the Board
of Directors of the Company, with the concurrence of a majority of such
directors then in office, determines that such supplement or amendment is,
in their judgment, in the best interests of the Company and its
shareholders.
The Rights have effects that will render difficult an acquisition of
the Company without the approval of the Company's Board of Directors. The
Rights will cause substantial dilution to a person or group that attempts
to acquire the Company without conditioning the offer on substantially all
the Rights being acquired. The Rights will not interfere with any merger
or other business combination approved by the Board of Directors of the
Company since the Board of Directors of the Company may, at its option, at
any time prior to a person becoming an Acquiring Person, redeem all, but
not less than all, of the then outstanding Rights at the Redemption Price.
A copy of the Rights Agreement is available free of charge from the
Company upon written request. This description of the Rights is qualified
in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
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Item 2. Exhibits
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4.1 Rights Agreement dated as of November 21, 1996 by and between
Edison International and Harris Trust Company of California
4.2 Certificate of Determination of Preferences dated as of November
21, 1996
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereto duly authorized.
EDISON INTERNATIONAL
By: Kenneth S. Stewart
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Kenneth S. Stewart
Assistant General Counsel
Date: November 21, 1996
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PAGE
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EXHIBIT 4.1
RIGHTS AGREEMENT
Dated as of November 21, 1996
between
EDISON INTERNATIONAL
and
HARRIS TRUST COMPANY OF CALIFORNIA,
as Rights Agent
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THIS RIGHTS AGREEMENT, dated as of November 21, 1996
(the "Rights Agreement"), is executed by and between Edison
International, a California corporation (the "Company"), and
Harris Trust Company of California, a California trust company,as
Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized
and declared a dividend of one Right (as hereinafter defined) for
each share of Common Stock, no par value per share, of the
Company (the "Common Stock") outstanding at the Close of Business
(as hereinafter defined) on December 3, 1996 (the "Record Date"),
and has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of this Rights
Agreement) with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date or the Expiration Date
(as such terms are hereinafter defined); provided however, that
Rights may be issued with respect to shares of Common Stock that
shall become outstanding after the Distribution Date and prior to
the earlier of the Redemption Date or the Expiration Date in
accordance with the provisions of Section 23. Each Right shall
initially represent the right to purchase one one-thousandth
(1/1000th) of one share of Series A Junior Participating
Cumulative Preferred Stock, no par value per share, of the
Company (the "Preferred Shares"), having the rights, preferences,
privileges, and restrictions set forth in the Certificate of
Determination attached as Exhibit A.
Accordingly, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
SECTION 1. Certain Definitions. For purposes of this
Rights Agreement, the following terms have the meanings
indicated:
"Acquiring Person" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of more than 20% of the
Common Shares then outstanding, but shall not include (a) the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any of its Subsidiaries, or any Person
holding Common Shares for or pursuant to the terms of any such
employee benefit plan or (b) any such Person who has become such
a Beneficial Owner solely because (i) of a change in the
aggregate number of Common Shares outstanding since the last date
on which such Person acquired Beneficial Ownership of any Common
Shares or (ii) (A) it acquired such Beneficial Ownership in the
good faith belief that such acquisition would not (x) cause such
Beneficial Ownership to exceed 20% of the Common Shares then
outstanding and such Person relied in good faith in computing the
percentage of its Beneficial Ownership on publicly filed reports
or documents of the Company which are inaccurate or out-of-date
or (y) otherwise cause a Distribution Date or the adjustment
provided for in Section 11(a) to occur, or (B) it otherwise
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inadvertently acquired such Beneficial Ownership.
Notwithstanding clause (b) of the prior sentence, if any Person
that is not an Acquiring Person due to such clause (b) does not
reduce its percentage of Beneficial Ownership of Common Shares to
20% or less by the Close of Business on the fifth Business Day
after notice from the Company (the date of notice being the first
day) that such Person's Beneficial Ownership of Common Shares so
exceeds 20%, such Person shall, at the end of such five Business
Day period, become an Acquiring Person (and such clause (b) shall
no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good
faith" or "inadvertently" shall be conclusively determined by the
Board of Directors of the Company, acting by a vote of those
directors of the Company whose approval would be required to
redeem the Rights under Section 24.
"Affiliate" and "Associate" when used with reference to
any Person, shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Rights
Agreement.
A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", and shall be deemed to
have "Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to "beneficially own"
within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act, as in effect on the date
of this Rights 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 (written or oral) or upon the exercise of
conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise, provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own or to have Beneficial
Ownership of, 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 thereunder,
or (B) the right to vote pursuant to any agreement,
arrangement or understanding (written or oral), provided,
however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own or to have Beneficial
Ownership of, any security if (1) the agreement, arrangement
or understanding (written or oral) to vote such security
arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent
solicitation made pursuant to and in accordance with, the
applicable rules and regulations under the Exchange Act and
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(2) the beneficial ownership of such security is not also
then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has
anyagreement, arrangement or understanding (written or
oral), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause
(ii)(B)(1) of this definition) or disposing of any
securities of the Company.
Notwithstanding the foregoing, nothing contained in this
definition shall cause a Person ordinarily engaged in business as
an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own", or to have "Beneficial Ownership" of, any
securities acquired in a bona fide firm commitment underwriting
pursuant to an underwriting agreement with the Company.
"Book Value", when used with reference to Common Shares
issued by any Person, shall mean the amount of equity of such
Person applicable to each Common Share, determined (i) in
accordance with generally accepted accounting principles in
effect on the date as of which such Book Value is to be
determined, (ii) using all the consolidated assets and all the
consolidated liabilities of such Person on the date as of which
such Book Value is to be determined, except that no value shall
be included in such assets for goodwill arising from consummation
of a business combination, and (iii) after giving effect to (A)
the exercise of all rights, actions and warrants to purchase such
Common Shares (other than the Rights), and the conversion of all
securities convertible into such Common Shares, at an exercise or
conversion price, per Common Share, which is less than such Book
Value before giving effect to such exercise or conversion
(whether or not exercisability or convertibility is conditioned
upon occurrence of a future event), (B) all dividends and other
distributions on the capital stock of such Person declared prior
to the date as of which such Book Value is to be determined and
to be paid or made after such date, and (C) any other agreement,
arrangement or understanding (written or oral), or transaction or
other action prior to the date as of which such Book Value is to
be determined which would have the effect of thereafter reducing
such Book Value.
"Business Combination" shall have the meaning set forth
in Section 11(c)(I).
"Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which
banking institutions in the State of California are authorized or
obligated by law or executive order to close.
"Certificate of Determination" shall mean the
Certificate of Determination of Series A Junior Participating
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Cumulative Preferred Stock setting forth the rights, preferences,
privileges, and restrictions of such series of Preferred Stock of
the Company, a copy of which is attached as Exhibit A.
"Close of Business" on any given date shall mean 5:00
p.m., Pacific time (Standard or Daylight Savings, as generally in
effect at the time), on such date; provided, however, that, if
such date is not a Business Day, "Close of Business" shall mean
5:00 p.m., Pacific time (Standard or Daylight Savings, as
generally in effect at the time), on the next succeeding Business
Day.
"Common Shares", when used with reference to the
Company prior to a Business Combination, shall mean the shares of
Common Stock of the Company or any other shares of capital stock
of the Company into which the Common Stock shall be reclassified
or changed. "Common Shares", when used with reference to any
Person (other than the Company prior to a Business Combination)
shall mean shares of capital stock of such Person (if such Person
is a corporation) of any class or series, or units of equity
interests in such Person (if such Person is not a corporation) of
any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount
of dividends or income payable or distributable on such class or
series or the amount of assets distributable on such class or
series upon any voluntary or involuntary liquidation, dissolution
or winding up of such Person and do not provide that such class
or series is subject to redemption at the option of such Person,
or any shares of capital stock or units of equity interests into
which the foregoing shall be reclassified or changed; provided,
however, that, if at any time there shall be more than one such
class or series of capital stock or equity interests of such
Person, "Common Shares" of such Person shall include all such
classes and series substantially in the proportion of the total
number of shares or other units of each such class or series
outstanding at such time.
"Common Stock" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the
heading of this Rights Agreement; provided, however, that, if
there is a Business Combination, "Company" shall have the meaning
set forth in Section 11(c)(III).
"Control", when used with respect to any Person, shall
mean the power to direct the management and policies of such
Person, directly or indirectly, by or through stock ownership,
agency or otherwise, or pursuant to or in connection with an
agreement, arrangement or understanding (written or oral) with
one or more other Persons by or through stock ownership, agency
or otherwise; and the terms "controlling" and "controlled" shall
have meanings correlative to the foregoing.
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"Distribution Date" shall have the meaning set forth in
Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as in effect on the date in question, unless otherwise
specifically provided.
"Exchange Consideration" shall have the meaning set
forth in Section 11(b)(I).
"Expiration Date" shall have the meaning set forth in
Section 7(a).
"Major Part", when used with reference to the assets of
the Company and its Subsidiaries as of any date, shall mean
assets (i) having a fair market value aggregating 50% or more of
the total fair market value of all the assets of the Company and
its Subsidiaries (taken as a whole) as of the date in question
(ii) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company
and its Subsidiaries (taken as a whole) as would be shown on a
consolidated or combined balance sheet of the Company and its
Subsidiaries as of the date in question, prepared in accordance
with generally accepted accounting principles then in effect, or
(iii) accounting for 50% or more of the total amount of earnings
before interest, taxes, depreciation and amortization, or of
revenues, of the Company and its Subsidiaries (taken as a whole)
as would be shown on, or derived from, a consolidated or combined
statement of income of the Company and its Subsidiaries for the
period of 12 months ending on the last day of the Company's
monthly accounting period next preceding the date in question,
prepared in accordance with generally accepted accounting
principles then in effect.
"Market Value" when used with reference to Common
Shares on any date, shall be deemed to be the average of the
daily closing prices, per share, of such Common Shares for the
period which is the shorter of (1) 30 consecutive Trading Days
immediately prior to the date in question or (2) the number of
consecutive Trading Days beginning on the Trading Day immediately
after the date of the first public announcement of the event
requiring a determination of the Market Value and ending on the
Trading Day immediately prior to the record date of such event;
provided, however, that, in the event that the Market Value of
such Common Shares is to be determined in whole or in part during
a period following the announcement by the issuer of such
CommonShares of any action of the type described in Section 12(a)
that would require an adjustment thereunder, then and in each
such case the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on
the market price of such Common Shares. The closing price for
each Trading Day shall be the closing price quoted on the
composite tape for securities listed on the New York Stock
Exchange, or, if such securities are not quoted on such composite
tape or if such securities are not listed on such exchange, on
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the principal United States securities exchange registered
underthe Exchange Act (or any recognized foreign stock exchange)
on which such securities are listed, or, if such securities are
not listed on any such exchange, the average of the closing bid
and asked quotations with respect to a share of such securities
on the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then
in use, or if no such quotations are available, the average of
the closing bid and asked prices as furnished by a professional
market maker making a market in such securities selected by the
Board of Directors of the Company. If on any such Trading Day no
market maker is making a market in such securities, the closing
price of such securities on such Trading Day shall be deemed to
be the fair value of such securities as determined in good faith
by the Board of Directors of the Company (whose determination
shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent, the holders of Rights and
all other Persons); provided, however, that for the purpose of
determining the closing price of the Preferred Shares for any
Trading day on which there is no such market maker for the
Preferred Shares the closing price on such Trading Day shall be
deemed to be the Formula Number (as defined in the Certificate of
Determination) times the closing price of the Common Shares of
the Company on such Trading Day.
"Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
"Preferred Shares" shall have the meaning set forth in
the introductory paragraph of this Rights Agreement. Any
reference in this Rights Agreement to Preferred Shares shall be
deemed to include any authorized fraction of a Preferred Share,
unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a
Business Combination; provided, however, that, if such Surviving
Person is a direct or indirect Subsidiary of any other Person,
"Principal Party" shall mean the Person which is the ultimate
parent of such Surviving Person and which is not itself a
Subsidiary of another Person. In the event ultimate control of
such Surviving Person is shared by two or more Persons,
"Principal Party" shall mean that Person that is immediately
controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean
$55.00, as such amount may from time to time be adjusted as
provided herein, and shall be payable in lawful money of the
United States of America. All references herein to the Purchase
Price shall mean the Purchase Price as in effect at the time in
question.
"Record Date" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
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"Redemption Date" shall have the meaning set forth in
Section 24(a).
"Redemption Price" with respect to each right shall
mean $.001, as such amount may from time to time be adjusted in
accordance with Section 12. All references herein to the
Redemption Price shall mean the Redemption Price as in effect at
the time in question.
"Registered Common Shares" shall mean Common Shares
which are, as of the date of consummation of a Business
Combination, and have continuously been for the 12 months
immediately preceding such date, registered under Section 12 of
the Exchange Act.
"Right Certificate" shall mean a certificate evidencing
a right in substantially the form attached as Exhibit B.
"Rights" shall mean the rights to purchase Preferred
Shares (or other securities) as provided in this Rights
Agreement.
"Securities Act" shall mean the Securities Act of 1933,
as in effect on the date in question, unless otherwise
specifically provided.
"Subsidiary" shall mean a Person, at least a majority
of the total outstanding voting power (being the power under
ordinary circumstances, and not merely upon the happening of a
contingency, to vote in the election of directors of such Person,
if such Person is a corporation, or to participate in the
management and control of such Person, if such Person is not a
corporation) of which is owned, directly or indirectly, by
another Person or by one or more other Subsidiaries of such other
Person or by such other Person and one or more other Subsidiaries
of such other Person.
"Surviving Person" shall mean (1) the Person which is
the continuing or surviving Person in a consolidation or merger
specified in Section 11(c)(I)(i) or 11(c)(I)(ii) or (2) the
Person to which the Major Part of the assets of the Company and
its Subsidiaries is sold, leased, exchanged or otherwise
transferred or disposed of in a transaction specified in Section
11(c)(I)(iii); provided, however, that, if the Major Part of the
assets of the Company and its Subsidiaries is sold, leased,
exchanged or otherwise transferred or disposed of in one or more
related transactions specified in Section 11(c)(I)(iii) to more
than one Person, the "Surviving Person" in such case shall mean
the Person that acquired assets of the Company and/or its
Subsidiaries with the greatest fair market value in such
transaction or transactions.
"Trading Day" shall mean a day on which the principal
national securities exchange (or principal recognized foreign
stock exchange, as the case may be) on which any securities or
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Rights, as the case may be, are listed or admitted to trading is
open for the transaction of business or, if the securities or
Rights in question are not listed or admitted to trading on any
national securities exchange (or recognized foreign stock
exchange, as the case may be), a Business Day.
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 one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used
herein to refer, collectively, to the Rights Agent together with
any such co-Rights Agents). In the event the Company appoints
one or more co-Rights Agent, the respective duties of the Rights
Agent and any co-Rights Agents shall be as the Company shall
determine.
SECTION 3. Issue of Rights and Right Certificates.
(a) One Right shall be associated with each Common
Share outstanding on the Record Date, each additional Common
Share that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date or the
Expiration Date and each additional Common Share with which
Rights are issued after the Distribution Date but prior to the
earlier of the Redemption Date or the Expiration Date as provided
in Section 23; provided, however, that if the number of
outstanding Rights are combined into a smaller number of
outstanding Rights pursuant to Section 12(a), the appropriate
fractional Right determined pursuant to such Section shall
thereafter be associated with each such Common Share.
(b) Until the earlier of (i) such time as the Company
learns that a Person has become an Acquiring Person or (ii) the
Close of Business on such date, if any, as may be designated by
the Board of Directors of the Company following the commencement
of, or first public disclosure of an intent to commence, a tender
or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any of its Subsidiaries, or any Person holding
Common Shares for or pursuant to the terms of any such employee
benefit plan) for outstanding Common Shares, if upon consummation
of such tender or exchange offer such Person could be the
Beneficial Owner of more than 20% of the outstanding Common
Shares (the Close of Business on the earlier of such dates being
the "Distribution Date"), (x) the Rights will be evidenced by the
certificates for Common Shares registered in the names of the
holders thereof and not by separate Right Certificates and (y)
the Rights, including the right to receive Right Certificates,
will be transferable only in connection with the transfer of
Common Shares. As soon as practicable after receiving notice
from the Company of the Distribution Date the Rights Agent will
send, by first-class, postage-prepaid mail, to each record holder
of Common Shares as of the Distribution Date, at the address of
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such holder shown on the records of the Company, a Right
Certificate evidencing (subject to Section 7(e)) one whole Right
for each Common Share (or for the number of Common Shares with
which one whole Right is then associated if the number of Rights
per Common Share held by such record holder has been adjusted in
accordance with the proviso in Section 3(a)). If the number of
Rights associated with each Common Shares has been adjusted in
accordance with the proviso in Section 3(a), at the time of
distribution of the Right Certificates the Company may make any
necessary and appropriate rounding adjustments so that Right
Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Right in
accordance with Section 15(a). As of and after the Distribution
Date, the Rights will be evidenced solely by such Right
Certificates.
(c) With respect to any certificate for Common Shares,
until the earliest of the Distribution Date, the Redemption Date
or the Expiration Date, the Rights associated with the Common
Shares represented by any such certificate shall be evidenced by
such certificate alone, the registered holders of the Common
Shares shall also be the registered holders of the associated
Rights and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with
the Common Shares represented thereby.
(d) Certificates issued for Common Shares after the
Record Date (including without limitation, upon transfer or
exchange of outstanding Common Shares), but prior to the earliest
of the Distribution Date, the Redemption Date or the Expiration
Date, may have printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
dated as of November 21, 1996, as it may be amended from
time to time (the "Rights Agreement"), between Edison
International (the "Company") and Harris Trust Company of
California, as Rights Agent (the "Rights Agent"), the terms
of which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by
this certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Rights
beneficially owned by Acquiring Persons or their Affiliates
or Associates (as such terms are defined in the Rights
Agreement) and by any subsequent holder of such Rights are
null and void and nontransferable.
Notwithstanding this paragraph (d), the omission of a legend
shall not affect the enforceability of any part of this Rights
Agreement or the rights of any holder of Rights.
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SECTION 4. Form of Right Certificates. The Right
Certificates (and the form of election to purchase and form of
assignment to be printed on the reverse side thereof) shall be in
substantially the form set forth as Exhibit B and may have such
marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Rights Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the rights may from time to time be listed, or to conform
to usage. Subject to the provisions of Sections 7, 11 and 23,
the Right Certificates, whenever issued, shall be dated as of the
Distribution Date, and on their face shall entitle the holders
thereof to purchase such number of Preferred Shares as shall be
set forth therein for the Purchase Price set forth therein,
subject to adjustment from time to time as herein provided.
SECTION 5. Execution, Countersignature and
Registration.
(a) The Right Certificates shall be executed on behalf
of the Company by the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the
Treasurer or a Vice President (whether or not preceded by any
additional title) 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, an
Assistant Secretary or a Vice President (whether or not preceded
by any additional title, provided that such Vice President shall
not have also executed the Right Certificates) of the Company,
either manually or by facsimile signature. The Right
Certificates shall be manually countersigned or by facsimile by
the Rights Agent and shall not be valid or obligatory 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 an officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Right Certificates may nevertheless be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such an
officer of the Company; and any Right Certificate may be signed
on behalf of the Company by any person who, at the actual date of
execution of such Right Certificate, shall be a proper officer of
the Company to sign such Right Certificate, although at the date
of execution of this Rights Agreement any such person was not
such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of
Rights evidenced by each of the Right Certificates, the
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certificate number of each of the Right Certificates and the date
of each of the Right Certificates.
SECTION 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates; Uncertificated Rights.
(a) Subject to the provisions of Sections 7(e) and 15,
at any time after the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or the
Expiration Date, any Right Certificate or Right Certificates may
be transferred, split-up, combined or exchanged for another Right
Certificate or Right Certificates representing, in the aggregate,
the same number of Rights as the Right Certificate or Right
Certificates surrendered then represented. Any registered holder
desiring to transfer, split-up, combine or exchange any Right
Certificate 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; provided, however,
that neither the Rights Agent nor the Company shall be obligated
to take any action whatsoever with respect to the transfer of any
Rights Certificate surrendered for transfer until the registered
holder shall have completed and signed the certification
contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Sections 7(e) and 15, 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 valid Right Certificate, and in
case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make a new Right Certificate of like
tenor and deliver such new Right Certificate to the Rights Agent
for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the
Company and the Rights Agent, as directed by the Company, may
amend this Rights Agreement to provide for uncertificated Rights
in addition to or in place of Rights evidenced by Right
Certificates.
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SECTION 7. Exercise of Rights; Expiration Date of
Rights.
(a) Subject to Section 7(e) and except as otherwise
provided herein (including Section 11), each Right shall entitle
the registered holder thereof, upon exercise thereof as provided
herein, to purchase for the Purchase Price, at any time after the
Distribution Date and at or prior to the earlier of (i) the Close
of Business on the 10th anniversary of the date of this Rights
Agreement (the Close of Business on such date being the
"Expiration Date"), or (ii) the Redemption Date, one
one-thousandth (1/1000th) of a Preferred Share, subject to
adjustment from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided in Section 7(e) or elsewhere herein) in whole or in part
at any time after the Distribution Date, upon surrender of the
Right Certificate with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together with payment of
the Purchase Price for each one one-thousandth (1/1000th) of a
Preferred Share as to which the Rights are exercised at or prior
to the earlier of (i) the Expiration Date or (ii) the Redemption
Date.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased together with an amount equal to
any applicable transfer tax, in lawful money of the United States
of America, in cash or by certified check or money order payable
to the order of the Company, the Rights Agent shall thereupon
(i) either (A) promptly requisition from any transfer agent of
the Preferred Shares (or make available if the Rights Agent is
the transfer agent) certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or
(B) if the Company shall have elected to deposit the Preferred
Shares with a depositary agent under a depositary arrangement,
promptly requisition from the depositary agent depositary
receipts representing the number of one one-thousandths
(1/1000ths) of a Preferred Share to be purchased (in which case
certificates for the Preferred Shares to be represented by such
depositary receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary
agent to comply with all such requests, (ii) when appropriate,
promptly requisition from the Company, the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with
Section 15, (iii) promptly after receipt of such certificates or
depositary receipts cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate
registered in such name or names as may be designated any such
holder and (iv) when appropriate, after receipt promptly deliver
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such cash to or upon the order of the registered holder of such
Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise fewer than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement
to the contrary, any Rights that are at any time beneficially
owned by an Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall be null and void and nontransferable, and
any holder of any such Right (including any purported transferee
or subsequent holder) shall not have any right to exercise or
transfer any such Right.
(f) Notwithstanding anything in this Rights Agreement
to the contrary, neither the Rights Agent nor the Company shall
be obligated to undertake any action with respect to a registered
holder of any Right Certificates 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.
(g) The Company may temporarily suspend, for a period
of time not to exceed 90 calendar days after the Distribution
Date the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act, on an
appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such
registration statement to become effective; provided, however,
that no such suspension shall remain effective after, and the
Rights shall without any further action by the Company or any
other Person become exercisable immediately upon, the
effectiveness of such registration statement. Upon any such
suspension, the Company shall notify the Rights Agent and issue a
public announcement stating that the exercisability of the Rights
has been temporarily suspended and shall issue a further public
announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision herein to the contrary,
the Rights shall not be exercisable in any jurisdiction if the
requisite qualification under the blue sky or securities laws of
such jurisdiction shall not have been obtained or the exercise of
the Rights shall not be permitted in such jurisdiction under
applicable law.
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SECTION 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered or presented
for the purpose of exercise, transfer, split-up, combination or
exchange shall, and any Right Certificate representing rights
that have become null and void and nontransferable pursuant to
Section 7(e) surrendered or presented for any purpose shall, if
surrendered or presented to the Company or to any of its agents,
be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered or presented to the Rights Agent, shall
be canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by 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 Right Certificate purchased or acquired by the
Company. 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.
SECTION 9. Reservation and Availability of Preferred
Shares.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued Preferred Shares or any authorized and issued Preferred
Shares held in its treasury, free from preemptive rights or any
right of first refusal, a number of Preferred Shares sufficient
to permit the exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient
Preferred Shares issued but not outstanding or authorized but
unissued to permit the exercise or exchange of Rights in
accordance with Section 11, the Company covenants and agrees that
it will take all such action as may be necessary to authorize
additional Preferred Shares for issuance upon the exercise or
exchange of Rights pursuant to Section 11; provided, however,
that if the Company is unable to cause the authorization of
additional Preferred Shares, then the Company shall, or in lieu
of seeking any such authorization, the Company may, to the extent
necessary and permitted by applicable law and any agreements or
instruments in effect prior to the Distribution Date to which it
is a party, (A) upon surrender of a Right, pay cash equal to the
Purchase Price in lieu of issuing Preferred Shares and requiring
payment therefor, (B) upon due exercise of a Right and payment of
the Purchase Price for each Preferred Share as to which such
Right is exercised, issue equity and/or debt securities having a
value equal to the value of the Preferred Shares which otherwise
would have been issuable pursuant to Section 11, which value
shall be determined by a nationally recognized investment banking
firm selected by the Board or (C) upon due exercise of a Right
and payment of the Purchase Price for each Preferred Share as to
which such Right is exercised distribute a combination of
Preferred Shares, cash and/or other equity and/or debt securities
having an aggregate value equal to the value of the Preferred
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Shares which otherwise would have been issuable pursuant to
Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board. To the
extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution
Date to which it is party) prevent the Company from paying the
full amount payable in accordance with the foregoing sentence,
the Company shall pay to holders of the Rights as to which such
payments are being made all amounts which are not then restricted
on a pro rata basis as such payments become permissible under
such legal or contractual restrictions until such payments have
been paid in full.
(c) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Preferred
Shares delivered upon exercise or exchange of Rights shall at the
time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price) be duly and validly
authorized and issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the
exercise or exchange of Rights are to be listed on any national
securities exchange, the Company covenants and agrees to use its
best efforts to cause, from and after such time as the Rights
become exercisable or exchangeable, all Preferred Shares reserved
for such issuance to be listed on such securities exchange upon
official notice of issuance upon such exercise or exchange.
(e) 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 Right Certificates or of any Preferred
Shares or Common Shares or other securities upon the exercise or
exchange of the Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect
of any transfer or delivery of Right Certificates to a Person
other than, or in respect of the issuance or delivery of
certificates for the Preferred Shares or Common Shares or other
securities, as the case may be, in a name other than, that of the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or exchange or to issue or deliver any
certificates for Preferred Shares or Common Shares or other
securities, as the case may be, upon the exercise or exchange of
any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person
in whose name any certificate for Preferred Shares or Common
Shares or other securities is issued upon the exercise or
exchange of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares or Common
Shares or other securities, as the case may be, represented
thereby on, and such certificate shall be dated, the date upon
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which the Right Certificate evidencing such rights was duly
surrendered and payment of any Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the transfer
books of the Company for the Preferred Shares or Common Shares or
other securities, as the case may be, are closed, such Person
shall be deemed to have become the record holder of such
Preferred Shares or Common Shares or other securities, as the
case may be, on, and such certificate shall be dated, the next
succeeding Business Day on which the transfer books of the
Company for the Preferred Shares or Common Shares or other
securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights; Business Combinations.
(a) Upon a Person becoming an Acquiring Person, proper
provision shall be made so that each holder of a Right, except as
provided in Section 7(e), shall thereafter have a right to
receive, upon exercise thereof for the Purchase Price in
accordance with the terms of this Rights Agreement, such number
of one one-thousandths (1/1000ths) of a Preferred Share as shall
equal the result obtained by multiplying the Purchase Price by a
fraction, the numerator of which is the number of one
one-thousandths (1/1000ths) of a Preferred Share for which a
Right is then exercisable and the denominator of which is 50% of
the Market Value of the Common Shares on the date on which a
Person becomes an Acquiring Person. As soon as practicable after
a Person becomes an Acquiring Person (provided the Company shall
not have elected to make the exchange permitted by Section
11(b)(I) for all outstanding Rights), the Company covenants and
agrees to use its best efforts to:
(I) prepare and file a registration statement under
the Securities Act, on an appropriate form, with respect to
the Preferred Shares purchasable upon exercise of the
Rights;
(II) cause such registration statement to become
effective as soon as practicable after such filing;
(III) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration
Date; and
(IV) qualify or register the Preferred Shares
purchasable upon exercise of the Rights under the blue sky
or securities laws of such jurisdictions as may be necessary
or appropriate.
(b)(I) The Board of Directors of the Company may, at
its option, at any time after a Person becomes an Acquiring
Person, cause the Company to mandatorily exchange all or part of
the then outstanding and exercisable Rights (which shall not
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include Rights that shall have become null and void and
nontransferable pursuant to the provisions of Section 7(e)) for
consideration per Right consisting of one-half of the securities
that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(a) or, if applicable, Section
9(b) (the consideration issuable per Right pursuant to this
Section 11(b)(I) being the "Exchange Consideration"). The Board
of Directors of the Company may, at its option, cause the Company
to issue, in substitution for Preferred Shares, Common Shares in
an amount per Preferred Share equal to the Formula Number (as
defined in the Certificate of Determination) if there are
sufficient Common Shares issued but not outstanding or authorized
but unissued. If the Board of Directors of the Company elects to
cause the Company to exchange all the Rights for Exchange
Consideration pursuant to this Section 11(b)(I) prior to the
physical distribution of the Rights Certificates, the Company may
distribute the Exchange Consideration in lieu of distributing
Right Certificates, in which case for purposes of this Rights
Agreement holders of Rights shall be deemed to have
simultaneously received and surrendered for exchange Right
Certificates on the date of such distribution.
(II) Any action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section
11(b)(I) shall be irrevocable and, immediately upon the taking of
such action and without any further action and without any
notice, the right to exercise any such Right pursuant to Section
11(a) shall terminate and the only right thereafter of a holder
of such Right shall be to receive the Exchange Consideration in
exchange for each such Right held by such holder or, if the
Exchange Consideration shall not have been paid or issued, to
exercise any such Right pursuant to Section 11(c)(I). The
Company shall promptly notify the Rights Agent and 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 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 Rights for the Exchange
Consideration 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 shall have become null and
void and nontransferable pursuant to the provisions of Section
7(e)) held by each holder of Rights.
(c)(I) In the event that, following a Distribution
Date, directly or indirectly, any transactions specified in the
following clause (i), (ii) or (iii) of this Section 11(c)(I)
(each such transaction being a "Business Combination") shall be
consummated:
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(i) the Company shall consolidate with, or merge
with and into, any Acquiring Person or any Affiliate or
Associate of an Acquiring Person;
(ii) any Acquiring Person or any Affiliate or
Associate of an Acquiring Person shall merge with and into
the Company and, in connection with such merger, all or part
of the Common Shares shall be changed into or exchanged for
capital stock or other securities of the Company or of any
Acquiring Person or Affiliate or Associate of an Acquiring
Person or cash or any other property; or
(iii) the Company shall sell, lease, exchange or
otherwise transfer or dispose of (or one or more of its
Subsidiaries shall sell, lease, exchange or otherwise
transfer or dispose of), in one or more transactions, the
Major Part of the assets of the Company and its Subsidiaries
(taken as a whole) to any Acquiring Person or any Affiliate
or Associate of an Acquiring Person, then, in each such
case, proper provision shall be made so that each holder of
a Right, except as provided in Section 7(e), shall
thereafter have the right to receive, upon the exercise
thereof for the Purchase Price in accordance with the terms
of this Rights Agreement, the securities specified below
(or, at such holder's option, the securities specified in
Section 11(a)):
(A) If the Principal Party in such Business
Combination has Registered Common Shares outstanding, each
Right shall thereafter represent the right to receive, upon
the exercise thereof for the Purchase Price in accordance
with the terms of this Rights Agreement, such number of
Registered Common Shares of such Principal Party, free and
clear of all liens, encumbrances or other adverse claims, as
shall have an aggregate Market Value equal to the result
obtained by multiplying the Purchase Price by two;
(B) If the Principal Party involved in such Business
Combination does not have Registered Common Shares
outstanding, each Right shall thereafter represent the right
to receive, upon the exercise thereof for the Purchase Price
in accordance with the terms of this Rights Agreement, at
the election of the holder of such Right at the time of the
exercise thereof, any of:
(1) such number of Common Shares of the Surviving
Person in such Business Combination as shall have an
aggregate Book Value immediately after giving effect to
such Business Combination equal to the result obtained
by multiplying the Purchase Price by two;
(2) such number of Common Shares of the Principal
Party in such Business Combination (if the Principal
Party is not also the Surviving Person in such Business
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Combination) as shall have an aggregate Book Value
immediately after giving effect to such Business
Combination equal to the result obtained by multiplying
the Purchase Price by two; or
(3) if the Principal Party in such Business
Combination is an Affiliate of one or more Persons
which has Registered Common Shares outstanding, such
number of Registered Common Shares of whichever of such
Affiliates of the Principal Party has Registered Common
Shares with the greatest aggregate Market Value on the
date of consummation of such Business Combination as
shall have an aggregate Market Value on the date of
such Business Combination equal to the result obtained
by multiplying the Purchase Price by two.
(II) The Company shall not consummate any Business
Combination unless each issuer of Common Shares for which Rights
may be exercised, as set forth in this Section 11(c), shall have
sufficient authorized Common Shares that have not been issued or
reserved for issuance (and which shall, when issued upon exercise
thereof in accordance with this Rights Agreement, be validly
issued, fully paid and nonassessable and free of preemptive
rights, rights of first refusal or any other restrictions or
limitations on the transfer of ownership thereof) to permit the
exercise in full of the Rights in accordance with this Section
11(c) and unless prior thereto:
(i) a registration statement under the Securities
Act on an appropriate form, with respect to the Rights and
the Common Shares of such issuer purchasable upon exercise
of the Rights, shall be effective under the Securities Act;
and
(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights
Agent a supplemental agreement providing for the
assumption by such issuer of the obligations set
forth in this Section 11(c) (including the
obligation of such issuer to issue Common Shares
upon the exercise of Rights in accordance with the
terms set forth in Sections 11(c)(I) and
11(c)(III)) and further providing that such
issuer, at its own expense, will use its best
efforts to:
(1) cause a registration statement under the
Securities Act on an appropriate form, with
respect to the Rights and the Common Shares of
such issuer purchasable upon exercise of the
Rights, to remain effective (with a prospectus
at all times meeting the requirements of the
Securities Act) until the Expiration Date;
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(2) qualify or register the Rights and the
Common Shares of such issuer purchasable upon
exercise of the Rights under the blue sky or
securities laws of such jurisdictions as may be
necessary or appropriate; and
(3) list the Rights and the Common Shares of
such issuer purchasable upon exercise of the
Rights on each national securities exchange on
which the Common Shares were listed prior to the
consummation of the Business Combination or, if
the Common Shares were not listed on a national
securities exchange prior to the consummation of
the Business Combination, on a national
securities exchange;
(B) furnished to the Rights Agent a written
opinion of independent counsel stating that such
supplemental agreement is a valid, binding and
enforceable agreement of such issuer; and
(C) filed with the Rights Agent a
certificate of a nationally recognized firm of
independent accountants setting forth the number
of Common Shares of such issuer which may be
purchased upon the exercise of each Right after
the consummation of such Business Combination.
The Rights Agent shall have no duty to require the
Company or the issuer to fulfill any of their duties set forth in
this Section 11(c)(II), including but not limited to the
execution and delivery to the Rights Agent of a supplemental
agreement.
(III) After consummation of any Business Combination
and subject to the provisions of Section 11(c)(II), (i) each
issuer of Common Shares for which Rights may be exercised as set
forth in this Section 11(c) shall be liable for, and shall
assume, by virtue of such Business Combination, all the
obligations and duties of the Company pursuant to this Rights
Agreement, (ii) the term "Company" shall thereafter be deemed to
refer to such issuer, (iii) each such issuer shall take such
steps in connection with such consummation as may be necessary to
assure that the provisions hereof (including the provisions of
Sections 11(a) and 11(c)) shall thereafter be applicable, as
nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights, and
(iv) the number of Common Shares of each such issuer thereafter
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 of Sections 11 and 12
and the provisions of Section 7, 9 and 10 with respect to the
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Preferred Shares shall apply, as nearly as reasonably may be, on
like terms to any such Common Shares.
SECTION 12. Certain Adjustments.
(a) To preserve the actual or potential economic value
of the Rights, if at any time after the date of this Rights
Agreement there shall be any change in the Common Shares or the
Preferred Shares, whether by reason of stock dividends, stock
splits, recapitalizations, mergers, consolidations, combinations
or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any
distribution or issuance of cash, assets, evidences of
indebtedness or subscription rights, options or warrants to
holders of Common Shares or Preferred Shares, as the case may be
(other than distribution of the Rights or regular quarterly cash
dividends) or otherwise, then, in each such event the Board of
Directors of the Company shall make such appropriate adjustments
in the number of Preferred Shares (or the number and kind of
other securities) issuable upon exercise of each Right, the
Purchase Price and Redemption Price in effect at such time and
the number of Rights outstanding at such time (including the
number of Rights or fractional Rights associated with each Common
Share) such that following such adjustment such event shall not
have had the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Preferred
Shares, thereafter the number of such securities 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 of Sections 11 and 12 and the
provisions of Sections 7, 9 and 10 with respect to the Preferred
Shares shall apply, as nearly as reasonably may be, on like terms
to any such other securities.
(c) All Rights originally issued by the Company
subsequent to any adjustment made to the amount of Preferred
Shares or other securities relating to a Right shall evidence the
right to purchase, for the Purchase Price, the adjusted number
and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(d) Irrespective of any adjustment or change in the
Purchase Price or the number of Preferred Shares or number or
kind of other securities issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued
may continue to express the terms which were expressed in the
initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to
Section 12(a) requires that an adjustment be made effective as of
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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/or other securities, if any, issuable upon
such exercise over and above the Preferred Shares and/or other
securities, if any, issuable before giving effect 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 securities upon
the occurrence of the event requiring such adjustment.
SECTION 13. Certificate of Adjustment. Whenever an
adjustment is made as provided in Section 11 or 12, 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 Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder
of a Right Certificate (or, prior to the Distribution Date, of
the Common Shares) in accordance with Section 25. The Rights
Agent shall be fully protected in relying on any such certificate
and on any adjustment therein contained and shall not be
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 14. Additional Covenants.
(a) Notwithstanding any other provision of this Rights
Agreement, no adjustment to the number of Preferred Shares (or
fractions of a share) or other securities for which a Right is
exercisable or the number of Rights outstanding or associated
with each Common Share or any similar or other 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 and 12, unless the
terms of this Rights Agreement are amended so as to preserve such
benefits.
(b) The Company covenants and agrees that, after the
Distribution Date, except as permitted by Section 26, it will not
take (or permit any Subsidiary of the Company to take) any action
if at the time such action is taken it is intended or reasonably
foreseeable that such action will reduce or otherwise limit the
benefits the holders of the Rights would have had absent such
action, including, without limitation, the benefits under
Sections 11 and 12. Any action taken by the Company during any
period after any Person becomes an Acquiring Person but prior to
the Distribution Date shall be null and void unless such action
could be taken under this Section 14(b) from and after the
Distribution Date. The Company shall not consummate any Business
Combination if any issuer of Common Shares for which Rights may
be exercised after such Business Combination in accordance with
Section 11(c) shall have taken any action that reduces or
otherwise limits the benefits the holders of the Rights would
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<PAGE>
have had absent such action, including, without limitation, the
benefits under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares.
(a) The Company may, but shall not be required to,
issue fractions of Rights or distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Right. For
purposes of this Section 15(a), the current market value of a
whole Right shall be the closing price of the Rights (as
determined pursuant to the second and third sentences of the
definition of Market Value contained in Section 1) for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company may, but shall not be required to,
issue fractions of Preferred Shares upon exercise of the Rights
or distribute certificates which evidence fractional Preferred
Shares. In lieu of fractional Preferred Shares, the Company may
elect to (i) utilize a depositary arrangement as provided by the
terms of the Preferred Shares or (ii) in the case of a fraction
of a Preferred Share (other than one one-thousandth (1/1000th) of
a Preferred Share or any integral multiple thereof), pay to the
registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Preferred Share,
if any are outstanding and publicly traded (or the Formula Number
times the current market value of one Common Share if the
Preferred Shares are not outstanding and publicly traded). For
purposes of this Section 15(b), the current market value of a
Preferred Share (or Common Share) shall be the closing price of a
Preferred Share (or Common Share) (as determined pursuant to the
second and third sentences of the definition of Market Value
contained in Section 1) for the Trading Day immediately prior to
the date of such exercise. If, as a result of an adjustment made
pursuant to Section 12(a), the holder of any Right thereafter
exercised shall become entitled to receive any securities other
than Preferred Shares, the provisions of this Section 15(b) shall
apply, as nearly as reasonably may be, on like terms to such
other securities.
(c) The Company may, but shall not be required to,
issue fractions of Common Shares upon exchange of Rights pursuant
to Section 11(b), or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common
Shares, the Company may pay to the registered holders of the
Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the
same fraction of the current Market Value of one Common Share as
of the date on which a Person became an Acquiring Person.
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<PAGE>
(d) The holder of Rights by the acceptance of the
Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right except
as provided in this Section 15.
SECTION 16. Rights of Action.
(a) All rights of action in respect of this Rights
Agreement 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 Rights Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Rights Agreement and shall be entitled to
specific performance of the obligations of any Person under, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to
enforce the provisions of this Rights Agreement shall be entitled
to recover from the Company the reasonable costs and expenses,
including attorneys' fees, incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right
Certificates.
(a) Prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares.
(b) After the Distribution Date, the Right
Certificates will be transferable, subject to Section 7(e), 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 a Right Certificate (or, prior to
the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary.
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<PAGE>
SECTION 18. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall
be entitled to vote or receive dividends or be deemed, for any
purpose, the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable on
the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company,
including, without limitation, any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders, or to receive dividends or other
distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have
been exercised in accordance with the provisions hereof.
SECTION 19. 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 Rights
Agreement and the exercise and performance of its duties
hereunder.
(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 Rights Agreement in reliance upon any
Right Certificate or certificate for the Common Shares or for
other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged by the
proper Person or Persons.
SECTION 20. Merger or Consolidation or Change of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 22. In case, at the time such successor Rights Agent
shall succeed to the agency created by this Rights Agreement, any
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<PAGE>
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 Rights 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 Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights
Agentundertakes the duties and obligations imposed by this Rights
Agreement upon the following terms and conditions (and no implied
duties or obligations shall be read into this Agreement against
the Rights Agent), by all of which the Company and the holders of
Right Certificates (or, prior to the Distribution Date, of the
Common Shares), by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from
acting, it may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights
Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Rights Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without limitation,
the identity of any Acquiring Person and the determination of the
current market price of any security) be proved or established by
the Company prior to taking, refraining from taking or
sufferingany action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, a Vice President (whether
or not preceded by any additional title), the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the
provisions of this Rights Agreement in reliance upon such
certificate.
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<PAGE>
(c) The Rights Agent shall be liable hereunder only
for its own negligence or wilful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
inthis Rights Agreement or in the Right Certificates (except as
toits 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 Rights
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 Rights Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions
of Section 11 or 12 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 be responsible for any change in the exercisability of
the Rights, including the Rights becoming void under Section 7(e)
hereof (except with respect to the exercise of Rights evidenced
by Right Certificates after actual notice of any such change; nor
shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any Preferred Shares or Common Shares to be issued pursuant to
this Rights Agreement or any Right Certificate or as to whether
any Preferred Shares or Common Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from any one of the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating
Officer, a Vice President (whether or not preceded by any
additional title), the Secretary or the Treasurer of the Company,
in connection with its duties and it shall not be liable for
anyaction taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
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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 the
Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct provided reasonable care was
exercised in the selection and continued employment thereof.
(j) The Company agrees to indemnify and to hold the
Rights Agent harmless against any loss, liability, damage or
expense (including reasonable fees and expenses of legal counsel)
which the Rights Agent may incur resulting from its actions as
Rights Agent pursuant to this Rights Agreement; provided,
however, that the Rights Agent shall not be indemnified or held
harmless with respect to any such loss, liability, damage or
expense incurred by the Rights Agent as a result of, or arising
out of, its own negligence or wilful misconduct. The Company
shall be entitled to participate at its own expense in the
defense of any such action, proceeding, suit or claim, and, if
the Company so elects, the Company shall assume the defense of
any such action, proceeding, suit or claim. In the event that
the Company assumes such defense, the Company shall not
thereafter be liable for the fees and expenses of any additional
counsel retained by the Rights Agent, so long as the Company
shall retain counsel satisfactory to the Rights Agent, in the
exercise of its reasonable judgment, to defend such action,
proceeding, suit or claim. The Rights Agent agrees not to settle
any litigation in connection with any action, proceeding, suit or
claim with respect to which it may seek indemnification from the
Company without the prior written consent of the Company. The
indemnity provided for herein shall survive the expiration of the
Rights and the termination of this Agreement. The costs and
expenses incurred in enforcing this right of indemnification
shall be paid by the Company.
SECTION 22. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Rights Agreement upon 30 days' notice in
writing mailed to the Company and to each transfer agent of the
Common Shares and the Preferred Shares by registered or certified
mail, and to the holders of the Right Certificates (or, prior to
the Distribution Date, of the Common Shares) by first-class mail.
The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and the Preferred Shares by
registered or certified mail, and to the holders of the Right
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Certificates (or, prior to the Distribution Date, of the Common
Shares) by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (or, prior to the Distribution Date, of the
Common Shares) (who shall, with such notice, submit his Right
Certificate or, prior to the Distribution Date, the certificate
representing his Common Shares, for inspection by the Company),
then the registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares) may apply to any
court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by
the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the
State of New York or California (or of any other state of the
United States so long as such corporation is authorized to
conduct a stock transfer or corporate trust business in the State
of New York or California), in good standing, having a principal
office in the State of New York or California, which is
authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or
examination by Federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus of a least $100,000,000; provided that the principal
transfer agent for the Common Shares shall in any event be
qualified to be the Rights Agent. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares and the
Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates (or, prior to the
Distribution Date, of the Common Shares). Failure to give any
notice provided for in this Section 22, 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 23. Issuance of Additional Rights and Right
Certificates. Notwithstanding any of the provisions of this
Rights 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
Directorsto reflect any adjustment or change made in accordance
with the provisions of this Rights Agreement. In addition, in
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connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the earlier of the Redemption
Date and the Expiration Date, the Company (a) shall, with respect
to Common Shares so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, pursuant
to a dividend reinvestment plan or stock purchase plan related
thereto, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Right
Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Right Certificate would be
issued, and (ii) no such Right Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
SECTION 24. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date,
order the redemption of all, but not fewer than all, of the
thenoutstanding Rights at the Redemption Price (the date of such
redemption being the "Redemption Date"), and the Company, at its
option, may pay the Redemption Price either in cash or Common
Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion,
to be at least equivalent in value to the Redemption Price;
provided, however, that, in addition to any other limitations
contained herein on the right to redeem outstanding Rights
(including the occurrence of any event or the expiration of any
period after which the Rights may no longer be redeemed), for the
120-day period after any date of a change (resulting from a proxy
or consent solicitation) in a majority of the Board of Directors
of the Company in office at the commencement of such
solicitation, the Rights may only be redeemed if (A) there are
directors then in office who were in office at the commencement
of such solicitation and (B) the Board of Directors of the
Company, with the concurrence of a majority of such directors
then in office, determines that such redemption is, in their
judgment, in the best interests of the Company and its
stockholders.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 Business Days after the action of
the Board of Directors of the Company ordering the redemption of
the Rights, the Company shall give notice of such redemption to
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the Rights Agent, certifying that said redemption is proper and
pursuant to the terms of Section 24, and to the holders of the
then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares.
Each such notice of redemption will state the method by which
payment of the Redemption Price will be made. The notice, if
mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of
Rights receives such notice. In any case, failure to give such
notice by mail, or any defect in the notice, to any particular
holder of Rights shall not affect the sufficiency of the notice
to other holders of Rights.
SECTION 25. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of a Right Certificate (or, prior to the Distribution
Date, of the Common Shares) 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:
Edison International
2244 Walnut Grove Avenue
Rosemead, California 91770
Attention: General Counsel
Subject to the provisions of Section 22, any notice or demand
authorized by this Rights Agreement to be given or made by the
Company or by the holder of a Right Certificate (or, prior to the
Distribution Date, of the Common Shares) to or on the Rights
Agent shall be deemed given upon receipt at the following address
(until another address is filed in writing with the Company):
Harris Trust Company of California
601 S. Figueroa Street
Los Angeles, California 90017
Attention: Corporate Trust Department
Notices or demands authorized by this Rights Agreement to be
given or made by the Company or the Rights Agent to any holder of
a Right Certificate (or, prior to the Distribution Date, of the
Common Shares) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares.
SECTION 26. Supplements and Amendments. At any time
prior to the Distribution Date and subject to the last sentence
of this Section 26, the Company may, and the Rights Agent shall
if the Company so directs, supplement or amend any provision of
this Rights Agreement without the approval of any holder of the
Rights. Without limiting the foregoing, the Company may, at
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anytime prior to the Distribution Date and subject to the last
sentence of this Section 26, without the approval of any holder
of the Rights, change the time during which the Rights may be
redeemed pursuant to Section 24, change any provision of the
Certificate of Determination, and/or lower the threshold set
forth in the definition of Acquiring Person in Section 1 and the
threshold set forth in Section 3(b) to not less than the greater
of (i) any percentage greater than the largest percentage of the
Common Shares then outstanding known by the Company to be
beneficially owned by an Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any of its Subsidiaries, or any Person holding
Common Shares for or pursuant to the terms of any such employee
benefit plan) and (ii) 10%. From and after the Distribution Date
and subject to applicable law, the Company may, and the Rights
Agent shall if the Company so directs, amend this Rights
Agreement without the approval of any holders of Right
Certificates (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be
defectiveor inconsistent with any other provision of this Rights
Agreement or (ii) to make any other provisions in regard to
matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person) or the rights or duties of the Rights Agent. Any
supplement or amendment adopted during any period after any
Person has become an Acquiring Person but prior to the
Distribution Date shall be null and void unless such supplement
or amendment could have been adopted under the prior sentence
from and after the Distribution Date. Any supplement or
amendment to this Rights Agreement duly approved by the Company
that does not amend Sections 19, 20, 21 or 22 in a manner adverse
to the Rights Agent shall become effective immediately upon
execution by the Company, whether or not also executed by the
Rights Agent. Notwithstanding anything contained in this Rights
Agreement to the contrary, during the 120-day period after any
date of a change (resulting from a proxy or consent solicitation)
in a majority of the Board of Directors of the Company in office
at the commencement of such solicitation, this Rights Agreement
may be supplemented or amended only if (A) there are directors
then in office who were in office at the commencement of such
solicitation and (B) the Board of Directors of the Company, with
the concurrence of a majority of such directors then in office,
determines that such supplement or amendment is, in their
judgment, in the best interests of the Company and its
stockholders and, after the Distribution Date, the holders of the
Right Certificates. In addition, notwithstanding anything to the
contrary contained in this Rights Agreement, no supplement or
amendment to this Rights Agreement shall be made which (a)
reduces the Redemption Price (except as required by Section
12(a)) or (b) provides for an earlier Expiration Date. The
Rights Agent shall have no duty to inquire into any amendment or
supplement made pursuant to this Section and shall be fully
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protected in following the Company's direction to execute the
amendment.
SECTION 27. Successors. All the covenants and
provisions of this Rights 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 28. Benefits of Rights Agreement;
Determinations and Actions by the Board of Directors, etc..
(a) Nothing in this Rights Agreement shall be
construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, of the Common Shares) any
legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, of the Common Shares).
(b) Except as explicitly otherwise provided in this
Rights Agreement, the Board of Directors of the Company shall
have the exclusive power and authority to administer this Rights
Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the
administration of this Rights Agreement, including, without
limitation, the right and power to (i) interpret the provisions
of this Rights Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights
Agreement (including, without limitation, a determination to
redeem or not redeem the Rights or to amend this Rights Agreement
and a determination of whether there is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall
be deemed to be in derogation of the obligation of the Board of
Directors of the Company to exercise its fiduciary duty. Without
limiting the foregoing, nothing contained herein shall be
construed to suggest or imply that the Board of Directors shall
not be entitled to reject any tender offer, or to recommend that
holders of Common Shares reject any tender offer, or to take any
other action (including, without limitation, the commencement,
prosecution, defense or settlement of any litigation and the
submission of additional or alternative offers or other
proposals) with respect to any tender offer that the Board of
Directors believes is necessary or appropriate in the exercise of
such fiduciary duty.
SECTION 29. Severability. If any term, provision,
covenant or restriction of this Rights Agreement is held by a
court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Rights Agreement shall remain
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in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 30. Governing Law. This Rights Agreement and
each Right Certificate issued hereunder shall be deemed to be a
contract made under the law of the State of California and for
all purposes shall be governed by and construed in accordance
with the law of such State applicable to contracts to be made and
performed entirely within such State.
SECTION 31. Counterparts; Effectiveness. This Rights
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. This Rights Agreement shall be
effective as of the Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive
headings of the several Sections of this Rights Agreement are
inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions of this Rights
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed as of the day and year first
above written.
EDISON INTERNATIONAL
By _____________________________
Alan J. Fohrer
Executive Vice President and
Chief Financial Officer
HARRIS TRUST COMPANY OF CALIFORNIA,
as Rights Agent,
By _____________________________
Neil Rosso
Assistant Vice President
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<PAGE>
Exhibits to Rights Agreement.
PAGE
<PAGE>
EXHIBIT A
CERTIFICATE OF DETERMINATION OF THE RIGHTS,
PREFERENCES, PRIVILEGES, AND
RESTRICTIONS OF SERIES A JUNIOR
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
EDISON INTERNATIONAL
Pursuant to Section 401(a) of the General Corporation
Law of the State of California, the undersigned, being the
Executive Vice President and Chief Financial Officer and the
Secretary, respectively, of Edison International (the
"Corporation"), a California corporation, DO HEREBY CERTIFY:
That, pursuant to the authority conferred upon the
Board of Directors of the Corporation by Article Fourth of the
Restated Articles of Incorporation of the Corporation (the
"Articles of Incorporation"), the Board of Directors of the
Corporation on November 21, 1996, adopted the following
resolution creating a series of Preferred Stock designated as
Series A Junior Participating Cumulative Preferred Stock, no
shares of which series has been issued:
"RESOLVED, that, pursuant to the authority vested
in the Board of Directors of the Corporation in
accordance with the provisions of the Restated Articles
of Incorporation of the Corporation, a series of
Preferred Stock of the Corporation is hereby created
and that the number of shares of such series, and the
rights, preferences, privileges, and restrictions
thereof are as follows:
SECTION 1. Designation and Number of Shares. The
shares of such series shall be designated as "Series A Junior
Participating Cumulative Preferred Stock" (the "Series A
Preferred Stock"), no par value per share. The number of shares
initially constituting the Series A Preferred Stock shall be
3,000,000; provided, however, that, if more than a total of
3,000,000 shares of Series A Preferred Stock shall be issuable
upon the exercise of Rights (the "Rights") issued pursuant to the
Rights Agreement dated as of November 21, 1996, between the
Corporation and Harris Trust Company of California, a California
trust company, as Rights Agent (the "Rights Agreement"), the
Board of Directors of the Corporation, pursuant to Section 401 of
the General Corporation Law of the State of California, shall
direct by resolution or resolutions that a certificate be
properly filed providing for the total number of shares of Series
A Preferred Stock authorized to be issued to be increased (to the
extent that the Articles of Incorporation then permits) to the
largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of such Rights.
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SECTION 2. Dividends or Distributions. (a) Subject
to the prior and superior rights of the holders of shares of any
other series of Preferred Stock or other class of capital stock
of the Corporation ranking prior and superior to the shares of
Series A Preferred Stock with respect to dividends, the holders
of shares of the Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out
of the assets of the Corporation legally available therefor,
(1) quarterly dividends payable in cash on the last day of each
fiscal quarter in each year, or such other dates as the Board of
Directors of the Corporation shall approve (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or a fraction of a share of Series A
Preferred Stock, in the amount of $.01 per whole share (rounded
to the nearest cent) less the amount of all cash dividends
declared on the Series A Preferred Stock pursuant to the
following clause (2) since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock (the total of
which shall not, in any event, be less than zero) and
(2) dividends payable in cash on the payment date for each cash
dividend declared on the Common Stock in an amount per whole
share (rounded to the nearest cent) equal to the Formula Number
(as hereinafter defined) then in effect times the cash dividends
then to be paid on each share of Common Stock. In addition, if
the Corporation shall pay any dividend or make any distribution
on the Common Stock payable in assets, securities or other forms
of noncash consideration (other than dividends or distributions
solely in shares of Common stock), then, in each such case, the
Corporation shall simultaneously pay or make on each outstanding
whole share of Series A Preferred Stock a dividend or
distribution in like kind equal to the Formula Number then in
effect times such dividend or distribution on each share of the
Common Stock. As used herein, the "Formula Number" shall be
1,000; provided, however, that, if at any time after December 3,
1996, the Corporation shall (i) declare or pay any dividend on
the Common Stock payable in shares of Common Stock or make any
distribution on the Common Stock in shares of Common Stock,
(ii) subdivide (by a stock split or otherwise) the outstanding
shares of Common Stock into a larger number of shares of Common
Stock or (iii) combine (by a reverse stock split or otherwise)
the outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then in each such event the Formula
Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a
fraction, the numerator of which is the number of shares of
Common Stock that are outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event (and
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<PAGE>
rounding the result to the nearest whole number); and provided
further, that, if at any time after December 3, 1996, 1996, the
Corporation shall issue any shares of its capital stock in a
merger, reclassification, or change of the outstanding shares of
Common Stock, then in each such event the Formula Number shall be
appropriately adjusted to reflect such merger, reclassification
or change so that each share of Preferred Stock continues to be
the economic equivalent of a Formula Number of shares of Common
Stock prior to such merger, reclassification or change.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
Section 2(a) immediately prior to or at the same time it declares
a dividend or distribution on the Common Stock (other than a
dividend or distribution solely in shares of Common Stock);
provided, however, that, in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock)
shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $.01
per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date. The
Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
a dividend or distribution declared thereon, which record date
shall be the same as the record date for any corresponding
dividend or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from and after
the Quarterly Dividend Payment Date next preceding the date of
original issue of such shares of Series A Preferred Stock;
provided, however, that dividends on such shares which are
originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
a quarterly dividend and on or prior to the next succeeding
Quarterly Dividend Payment Date shall begin to accrue and be
cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of Series A
Preferred Stock which are originally issued prior to the record
date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend on the
first Quarterly Dividend Payment Date shall be calculated as if
cumulative from and after the last day of the fiscal quarter next
preceding the date of original issuance of such shares. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
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<PAGE>
(d) So long as any shares of the Series A Preferred
Stock are outstanding, no dividends or other distributions shall
be declared, paid or distributed, or set aside for payment or
distribution, on the Common Stock unless, in each case, the
dividend required by this Section 2 to be declared on the Series
A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred
Stock shall not be entitled to receive any dividends or other
distributions except as provided herein.
SECTION 3. Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be
entitled to a number of votes equal to the Formula Number then in
effect, for each share of Series A Preferred Stock held of record
on each matter on which holders of the Common Stock or
stockholders generally are entitled to vote, multiplied by the
maximum number of votes per share which any holder of the Common
Stock or stockholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote
a greater number of shares is satisfied).
(b) Except as otherwise provided herein or by
applicable law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock shall vote together as
one class for the election of directors of the Corporation and on
all other matters submitted to a vote of stockholders of the
Corporation.
(c) If, at the time of any annual meeting of
stockholders for the election of directors, the equivalent of six
quarterly dividends (whether or not consecutive) payable on any
share or shares of Series A Preferred Stock are in default, the
number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting
together with the holders of Common Stock for the election of
other directors of the Corporation, the holders of record of the
Series A Preferred Stock, voting separately as a class to the
exclusion of the holders of Common Stock, shall be entitled at
said meeting of stockholders (and at each subsequent annual
meeting of stockholders), unless all dividends in arrears have
been paid or declared and set apart for payment prior thereto, to
vote for the election of two directors of the Corporation, the
holders of any Series A Preferred Stock being entitled to cast a
number of votes per share of Series A Preferred Stock equal to
the Formula Number. Until the default in payments of all
dividends which permitted the election of said directors shall
cease to exist, any director who shall have been so elected
pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote
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<PAGE>
of the holders of the shares of Series A Preferred Stock at the
time entitled to cast a majority of the votes entitled to be cast
for the election of any such director at a special meeting of
such holders called for that purpose, and any vacancy thereby
created may be filled by the vote of such holders. If and when
such default shall cease to exist, the holders of the Series A
Preferred stock shall be divested of the foregoing special voting
rights, subject to revesting in the event of each and every
subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of
office of all persons who may have been elected directors
pursuant to said special voting rights shall forthwith terminate,
and the number of directors constituting the Board of Directors
shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights
granted to the holders of the Series A Preferred Stock in this
Section 3.
(d) Except as provided herein, in Section 11 or by
applicable law, holders of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for authorizing or taking any
corporate action.
SECTION 4. Certain Restrictions. (a) Whenever
quarterly dividends or other dividends or distributions payable
on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock; provided that
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<PAGE>
the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock;
or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. Liquidation Rights. Upon the liquidation,
dissolution or winding up of the Corporation, whether voluntary
or involuntary, no distribution shall be made (1) to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to the
accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, plus an amount
equal to the greater of (x) $.01 per whole share or (y) an
aggregate amount per share equal to the Formula Number then in
effect times the aggregate amount to be distributed per share to
holders of Common Stock or (2) to the holders of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and
all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
SECTION 6. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the
then outstanding shares of Series A Preferred Stock shall at the
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same time be similarly exchanged or changed into an amount per
share equal to the Formula Number then in effect times the
aggregate amount of stock, securities, cash or any other property
(payable in kind), as the case may be, into which or for which
each share of Common Stock is exchanged or changed. In the event
both this Section 6 and Section 2 appear to apply to a
transaction, this Section 6 will control.
SECTION 7. No Redemption; No Sinking Fund. (a) The
shares of Series A Preferred Stock shall not be subject to
redemption by the Corporation or at the option of any holder of
Series A Preferred Stock provided, however, that the Corporation
may purchase or otherwise acquire outstanding shares of Series A
Preferred Stock in the open market or by offer to any holder or
holders of shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not
be subject to or entitled to the operation of a retirement or
sinking fund.
SECTION 8. Ranking. The Series A Preferred Stock
shall rank junior to all other series of Preferred Stock of the
Corporation, unless the Board of Directors shall specifically
determine otherwise in fixing the rights, preferences,
privileges, and restrictions of the shares of another series of
Preferred Stock of the Corporation.
SECTION 9. Fractional Shares. The Series A Preferred
Stock shall be issuable upon exercise of the Rights issued
pursuant to the Rights Agreement in whole shares or in any
fraction of a share that is one one-thousandth (1/1000th) of a
share or any integral multiple of such fraction which shall
entitle the holder, in proportion to such holder's fractional
shares, to receive dividends, exercise voting rights, participate
in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share
or a fraction of a share of Series A Preferred Stock, may elect
(1) to make a cash payment as provided in the Rights Agreement
for fractions of a share other than one one-thousandth (1/1000th)
of a share or any integral multiple thereof or (2) to issue
depositary receipts evidencing such authorized fraction of a
share of Series A Preferred Stock pursuant to an appropriate
agreement between the Corporation and a depositary selected by
the Corporation; 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
holders of the Series A Preferred Stock.
SECTION 10. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
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canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued
shares of Preferred Stock, without designation as to series until
such shares are once more designated as part of a particular
series by the Board of Directors pursuant to the provisions of
Article Fourth of the Articles of Incorporation.
SECTION 11. Amendment. None of the rights,
preferences, privileges, and restrictions of the Series A
Preferred Stock as provided herein or in the Articles of
Incorporation shall be amended in any manner which would alter or
change the rights, preferences, privileges, or restrictions of
the holders of Series A Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least
66-2/3% of the outstanding shares of Series A Preferred Stock,
voting as a separate class; provided, however, that no such
amendment approved by the holders of at least 66-2/3% of the
outstanding shares of Series A Preferred Stock shall be deemed to
apply to the rights, preferences, privileges, or restrictions of
any holder of shares of Series A Preferred Stock originally
issued upon exercise of the Rights after the time of such
approval without the approval of such holder.
Each of the undersigned declares under penalty of
perjury that the matters contained in the foregoing certificate
are true of their own knowledge. Executed in the City of
Rosemead, California, on the 21st day of November, 1996.
Alan J. Fohrer
---------------------------
Alan J. Fohrer
Executive Vice President and
Chief Financial Officer
Beverly P. Ryder
---------------------------
Beverly P. Ryder
Corporate Secretary
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EXHIBIT B
Form of Right Certificate
Certificate No.
______________ Rights
NOT EXERCISABLE AFTER NOVEMBER 21, 2006, OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER
RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID AND
NONTRANSFERABLE.
Right Certificate
EDISON INTERNATIONAL
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 November 21, 1996 (the "Rights Agreement"),
between Edison International, a California corporation (the
"Company"), and Harris Trust Company of California, a California
trust company, as Rights Agent (the "Rights Agent"), unless the
Rights evidenced hereby shall have been previously redeemed by
the Company, to purchase from the Company at any time after the
Distribution Date (as defined in the Rights Agreement) and prior
to 5:00 p.m., Pacific time, on the 10th anniversary of the date
of the Rights Agreement (the "Expiration Date"), at the principal
office of the Rights Agent, or its successors as Rights Agent, in
the City of Los Angeles, one one-thousandth (1/1000th) of a fully
paid, nonassessable share of Series A Junior Participating
Cumulative Preferred Stock, no par value per share, of the
Company (the "Preferred Shares"), at a purchase price per one
one-thousandth (1/1000th) of a share equal to $55.00 (the
"Purchase Price") payable in cash, upon presentation and
surrender of this Right Certificate with the Form of Election to
Purchase duly executed.
The Purchase Price and the number and kind of shares
which may be purchased upon exercise of each Right evidenced by
this Right Certificate, as set forth above, are the Purchase
Price and the number and kind of shares which may be so purchased
as of December 3, 1996. As provided in the Rights Agreement, the
Purchase Price and the number and kind of shares which may be
purchased upon the exercise of each Right evidenced by this Right
page 1
<PAGE>
Certificate are subject to modification and adjustment upon the
happening of certain events.
If the Rights evidenced by this Right Certificate are
at any time beneficially owned by an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement), such Rights shall be null and
void and nontransferable and the holder of any such Right
(including any purported transferee or subsequent holder) shall
not have any right to exercise or transfer any such Right.
This Right Certificate is subject to all the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof, and reference to the Rights
Agreement 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 and are also
available from the Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer or
corporate trust office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number and kind of shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate may be redeemed by the
Company at its option at a redemption price (in cash or shares of
Common Stock or other securities of the Company deemed by the
Board of Directors to be at least equivalent in value) of $.001
per Right (which amount shall be subject to adjustment as
provided in the Rights Agreement) at any time prior to the
earlier of (i) such time as a Person becomes an Acquiring Person
and (ii) the Expiration Date; provided, however, that, for the
120-day period after any date of a change (resulting from a proxy
or consent solicitation) in a majority of the Board of Directors
of the Company in office at the commencement of such
solicitation, the Rights may only be redeemed if (A) there are
directors then in office who were in office at the commencement
of such solicitation and (B) the Board of Directors of the
Company, with the concurrence of a majority of such directors
then in office, determines that such redemption is, in its
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<PAGE>
judgment, in the best interests of the Company and its
stockholders.
The Company may, but shall not be required to, issue
fractions of Preferred Shares or distribute certificates which
evidence fractions of Preferred Shares upon the exercise of any
Right or Rights evidenced hereby. In lieu of issuing fractional
shares, the Company may elect to make a cash payment as provided
in the Rights Agreement for fractions of a share other than one
one-thousandth (1/1000th) of a share or any integral multiple
thereof or to issue certificates or utilize a depositary
arrangement as provided in the terms of the Rights Agreement and
the Preferred Shares.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of the Preferred Shares or of any other securities of the
Company which may at any time be issuable on the exercise hereof,
nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company, including, without
limitation, any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or other distributions or subscription rights,
or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in accordance
with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of:
EDISON INTERNATIONAL
By ______________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
Countersigned:
HARRIS TRUST COMPANY OF CALIFORNIA,
as Rights Agent
By _________________________
Authorized Officer
page 4
<PAGE>
Reverse Side of Right Certificate
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
____________ Rights represented by this Right Certificate to
purchase the Preferred Shares (or other shares) issuable upon the
exercise of such Rights and requests that certificates for such
shares be issued in the name of:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate for
the balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Dated:______________, ____
________________________________
Signature
Signature Guaranteed:
page 5
<PAGE>
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[__] are
[__] are not
being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned
[__] did
[__] did not
acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person or an Affiliate
or Associate of any such Acquiring Person.
Dated: __________________, ____ _______________________
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to
Purchase 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.
page 6
<PAGE>
Table of Contents
Page
Section 1. Certain Definitions . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . 8
Section 3. Issue of Rights and Right Certificates . . 8
Section 4. Form of Right Certificates . . . . . . . . 10
Section 5. Execution, Countersignature and
Registration . . . . . . . . . . . . . . . 10
Section 6. Transfer, Split-Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates;
Uncertificated Rights . . . . . . . . . . . 11
Section 7. Exercise of Rights; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . 12
Section 8. Cancellation and Destruction of Right
Certificates . . . . . . . . . . . . . . . . 14
Section 9. Reservation and Availability of Preferred
Shares . . . . . . . . . . . . . . . . . . . 14
Section 10. Preferred Shares Record Date . . . . . . . . 15
Section 11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights;
Business Combinations. . . . . . . . . . . . 16
Section 12. Certain Adjustments . . . . . . . . . . . . 21
Section 13. Certificate of Adjustment . . . . . . . . . 22
Section 14. Additional Covenants . . . . . . . . . . . . 22
Section 15. Fractional Rights and Fractional Shares . . 23
Section 16. Rights of Action . . . . . . . . . . . . . . 24
Section 17. Transfer and Ownership of Rights and Right
Certificates . . . . . . . . . . . . . . . . 24
Section 18. Right Certificate Holder Not Deemed a
Stockholder . . . . . . . . . . . . . . . . 25
Section 19. Concerning the Rights Agent . . . . . . . . 25
PAGE
<PAGE>
Page
Section 20. Merger or Consolidation or Change of Rights
Agent . . . . . . . . . . . . . . . . . . . 25
Section 21. Duties of Rights Agent . . . . . . . . . . . 26
Section 22. Change of Rights Agent . . . . . . . . . . . 28
Section 23. Issuance of Additional Rights and Right
Certificates . . . . . . . . . . . . . . . . 29
Section 24. Redemption and Termination . . . . . . . . . 30
Section 25. Notices . . . . . . . . . . . . . . . . . . 31
Section 26. Supplements and Amendments . . . . . . . . . 31
Section 27. Successors . . . . . . . . . . . . . . . . . 33
Section 28. Benefits of Rights Agreement; Determinations
and Actions by the Board of Directors,
etc. . . . . . . . . . . . . . . . . . . . . 33
Section 29. Severability . . . . . . . . . . . . . . . . 34
Section 30. Governing Law . . . . . . . . . . . . . . . 34
Section 31. Counterparts; Effectiveness . . . . . . . . 34
Section 32. Descriptive Headings . . . . . . . . . . . . 34
Signatures . . . . . . . . . . . . . . . . . . . . . . . . 34
Exhibit A - Certificate of the Rights, Preferences,
Privileges, and Restrictions of Series A Junior
Participating Cumulative Preferred Stock of Edison
International
Exhibit B - Form of Right Certificate
<PAGE>
PAGE
<PAGE>
EXHIBIT 4.2
CERTIFICATE OF DETERMINATION OF THE RIGHTS,
PREFERENCES, PRIVILEGES, AND
RESTRICTIONS OF SERIES A JUNIOR
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
EDISON INTERNATIONAL
Pursuant to Section 401(a) of the General Corporation Law of the
State of California, the undersigned, being the Executive Vice President
and Chief Financial Officer and the Secretary, respectively, of Edison
International (the "Corporation"), a California corporation, DO HEREBY
CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors of the Corporation by Article Fourth of the Restated Articles of
Incorporation of the Corporation (the "Articles of Incorporation"), the
Board of Directors of the Corporation on November 21, 1996, adopted the
following resolution creating a series of Preferred Stock designated as
Series A Junior Participating Cumulative Preferred Stock, no shares of
which series has been issued:
"RESOLVED, that, pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Restated Articles of Incorporation of the Corporation, a series of
Preferred Stock of the Corporation is hereby created and that the number
of shares of such series, and the rights, preferences, privileges, and
restrictions thereof are as follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series A Junior Participating Cumulative
Preferred Stock" (the "Series A Preferred Stock"), no par value per share.
The number of shares initially constituting the Series A Preferred Stock
shall be 3,000,000; provided, however, that, if more than a total of
3,000,000 shares of Series A Preferred Stock shall be issuable upon the
exercise of Rights (the "Rights") issued pursuant to the Rights Agreement
dated as of November 21, 1996, between the Corporation and Harris Trust
Company of California, a California trust company, as Rights Agent (the
"Rights Agreement"), the Board of Directors of the Corporation, pursuant
to Section 401 of the General Corporation Law of the State of California,
shall direct by resolution or resolutions that a certificate be properly
filed providing for the total number of shares of Series A Preferred Stock
authorized to be issued to be increased (to the extent that the Articles
of Incorporation then permits) to the largest number of whole shares
(rounded up to the nearest whole number) issuable upon exercise of such
Rights.
SECTION 2. Dividends or Distributions.
(a) Subject to the prior and superior rights of the holders of
shares of any other series of Preferred Stock or other class of capital
stock of the Corporation ranking prior and superior to the shares of
Series A Preferred Stock with respect to dividends, the holders of shares
of the Series A Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors, out of the assets of the
Corporation legally available therefor, (1) quarterly dividends payable in
cash on the last day of each fiscal quarter in each year, or such other
dates as the Board of Directors of the Corporation shall approve (each
such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or a fraction of a share of Series A Preferred
Stock, in the amount of $.01 per whole share (rounded to the nearest cent)
less the amount of all cash dividends declared on the Series A Preferred
Stock pursuant to the following clause (2) since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly
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<PAGE>
Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series A Preferred Stock (the total of which shall not, in
any event, be less than zero) and (2) dividends payable in cash on the
payment date for each cash dividend declared on the Common Stock in an
amount per whole share (rounded to the nearest cent) equal to the Formula
Number (as hereinafter defined) then in effect times the cash dividends
then to be paid on each share of Common Stock. In addition, if the
Corporation shall pay any dividend or make any distribution on the Common
Stock payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely in shares of
Common stock), then, in each such case, the Corporation shall
simultaneously pay or make on each outstanding whole share of Series A
Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be
1,000; provided, however, that, if at any time after December 3, 1996, the
Corporation shall (i) declare or pay any dividend on the Common Stock
payable in shares of Common Stock or make any distribution on the Common
Stock in shares of Common Stock, (ii) subdivide (by a stock split or
otherwise) the outstanding shares of Common Stock into a larger number of
shares of Common Stock or (iii) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then in each such event the Formula Number shall
be adjusted to a number determined by multiplying the Formula Number in
effect immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such
event (and rounding the result to the nearest whole number); and provided
further, that, if at any time after December 3, 1996, the Corporation
shall issue any shares of its capital stock in a merger, reclassification,
or change of the outstanding shares of Common Stock, then in each such
event the Formula Number shall be appropriately adjusted to reflect such
merger, reclassification or change so that each share of Preferred Stock
continues to be the economic equivalent of a Formula Number of shares of
Common Stock prior to such merger, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common
Stock); provided, however, that, in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock) shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $.01 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a dividend or distribution declared thereon, which record date
shall be the same as the record date for any corresponding dividend or
distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from and after the
Quarterly Dividend Payment Date next preceding the date of original issue
of such shares of Series A Preferred Stock; provided, however, that
dividends on such shares which are originally issued after the record date
for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and on or prior to the next
succeeding Quarterly Dividend Payment Date shall begin to accrue and be
cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of Series A Preferred
Stock which are originally issued prior to the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend on the first Quarterly Dividend Payment Date
shall be calculated as if cumulative from and after the last day of the
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<PAGE>
fiscal quarter next preceding the date of original issuance of such
shares. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid
or distributed, or set aside for payment or distribution, on the Common
Stock unless, in each case, the dividend required by this Section 2 to be
declared on the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock shall not
be entitled to receive any dividends or other distributions except as
provided herein.
SECTION 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share
of Series A Preferred Stock held of record on each matter on which holders
of the Common Stock or stockholders generally are entitled to vote,
multiplied by the maximum number of votes per share which any holder of
the Common Stock or stockholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of
directors of the Corporation and on all other matters submitted to a vote
of stockholders of the Corporation.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series A Preferred
Stock are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series A
Preferred Stock, voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said meeting of stockholders
(and at each subsequent annual meeting of stockholders), unless all
dividends in arrears have been paid or declared and set apart for payment
prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Preferred Stock being entitled to
cast a number of votes per share of Series A Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends which
permitted the election of said directors shall cease to exist, any
director who shall have been so elected pursuant to the next preceding
sentence may be removed at any time, either with or without cause, only by
the affirmative vote of the holders of the shares of Series A Preferred
Stock at the time entitled to cast a majority of the votes entitled to be
cast for the election of any such director at a special meeting of such
holders called for that purpose, and any vacancy thereby created may be
filled by the vote of such holders. If and when such default shall cease
to exist, the holders of the Series A Preferred stock shall be divested of
the foregoing special voting rights, subject to revesting in the event of
each and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special
voting rights shall forthwith terminate, and the number of directors
constituting the Board of Directors shall be reduced by two. The voting
rights granted by this Section 3(c) shall be in addition to any other
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<PAGE>
voting rights granted to the holders of the Series A Preferred Stock in
this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
authorizing or taking any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly dividends
or other dividends or distributions payable on the Series A Preferred
Stock as provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared,
on shares of Series A Preferred Stock outstanding shall have been paid in
full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock; provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of
the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(a) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received an amount equal to
the accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, plus an amount equal to the greater
of (x) $.01 per whole share or (y) an aggregate amount per share equal to
the Formula Number then in effect times the aggregate amount to be
distributed per share to holders of Common Stock or (2) to the holders of
page 4
<PAGE>
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
distributions made ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or
winding up.
SECTION 6. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash or any other property, then
in any such case the then outstanding shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount
per share equal to the Formula Number then in effect times the aggregate
amount of stock, securities, cash or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
exchanged or changed. In the event both this Section 6 and Section 2
appear to apply to a transaction, this Section 6 will control.
SECTION 7. No Redemption; No Sinking Fund.
(a) The shares of Series A Preferred Stock shall not be subject to
redemption by the Corporation or at the option of any holder of Series A
Preferred Stock provided, however, that the Corporation may purchase or
otherwise acquire outstanding shares of Series A Preferred Stock in the
open market or by offer to any holder or holders of shares of Series A
Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to
or entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series A Preferred Stock shall rank junior
to all other series of Preferred Stock of the Corporation, unless the
Board of Directors shall specifically determine otherwise in fixing the
rights, preferences, privileges, and restrictions of the shares of another
series of Preferred Stock of the Corporation.
SECTION 9. Fractional Shares. The Series A Preferred Stock shall
be issuable upon exercise of the Rights issued pursuant to the Rights
Agreement in whole shares or in any fraction of a share that is one one-
thousandth (1/1000th) of a share or any integral multiple of such fraction
which shall entitle the holder, in proportion to such holder's fractional
shares, to receive dividends, exercise voting rights, participate in
distributions and to have the benefit of all other rights of holders of
Series A Preferred Stock. In lieu of fractional shares, the Corporation,
prior to the first issuance of a share or a fraction of a share of Series
A Preferred Stock, may elect (1) to make a cash payment as provided in the
Rights Agreement for fractions of a share other than one one-thousandth
(1/1000th) of a share or any integral multiple thereof or (2) to issue
depositary receipts evidencing such authorized fraction of a share of
Series A Preferred Stock pursuant to an appropriate agreement between the
Corporation and a depositary selected by the Corporation; 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 holders of the Series A Preferred Stock.
SECTION 10. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of Preferred Stock, without designation as to series
until such shares are once more designated as part of a particular series
by the Board of Directors pursuant to the provisions of Article Fourth of
the Articles of Incorporation.
SECTION 11. Amendment. None of the rights, preferences,
privileges, and restrictions of the Series A Preferred Stock as provided
page 5
<PAGE>
herein or in the Articles of Incorporation shall be amended in any manner
which would alter or change the rights, preferences, privileges, or
restrictions of the holders of Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least 66-
2/3% of the outstanding shares of Series A Preferred Stock, voting as a
separate class; provided, however, that no such amendment approved by the
holders of at least 66-2/3% of the outstanding shares of Series A
Preferred Stock shall be deemed to apply to the rights, preferences,
privileges, or restrictions of any holder of shares of Series A Preferred
Stock originally issued upon exercise of the Rights after the time of such
approval without the approval of such holder."
Each of the undersigned declares under penalty of perjury that the
matters contained in the foregoing certificate are true of their own
knowledge. Executed in the City of Rosemead, California, on the 21st day
of November, 1996.
Alan J. Fohrer
----------------------------
Alan J. Fohrer
Executive Vice President and
Chief Financial Officer
Beverly P. Ryder
----------------------------
Beverly P. Ryder
Corporate Secretary
<page 6>
