FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
OREGON STEEL MILLS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-0506370
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(State of incorporation (I.R.S. Employer
or organization) Identification Number)
1000 SW Broadway,
PO Box 5368, Portland, OR 97205
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(Address of principal executive offices) (Zip Code)
Securities Act registration statement file number to which this form
relates:
Securities to be registered pursuant to Section 12(b) of the Act:
Rights to Participating Preferred Stock New York Stock Exchange
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(Title of Each Class to be Registered) (Name of Each Exchange on
which Class is to be Registered)
If this Form relates to the registration of a class of debt securities
and is effective pursuant to General Instruction A.(c), check the following box.
[ ]
If this Form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant to
General Instruction A.(d), check the following box. [ ]
Securities 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.
On December 23, 1999, the Board of Directors of Oregon Steel Mills,
Inc. (the "Corporation") declared a dividend distribution of one preferred stock
purchase right (a "Right") for each outstanding share of Common Stock, $0.01 par
value per share (the "Common Stock"), of the Corporation held by stockholders of
record on January 12, 2000 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Corporation one one-thousandth (1/1000)
of a share of preferred stock of the Corporation, designated as Participating
Preferred Stock (the "Preferred Stock") at a price of $42.00 per one
one-thousandth (1/1000) of a share (the "Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement"), dated as of December 23, 1999, between the Corporation and
ChaseMellon Shareholder Services, LLC, as Rights Agent (the "Rights Agent").
The Rights Agreement provides that Common Shares that become
outstanding after the Record Date will also be entitled to one Right per Common
Share. The Rights are in all respects governed by and subject to the terms of
the Rights Agreement, as it may be amended, and which is attached (including all
Exhibits) to this registration statement and incorporated herein by reference. A
summary description of the Rights is set forth in Exhibit A to the Rights
Agreement, which description is qualified by reference to the Rights Agreement.
Item 2. Exhibits.
Exhibit Number Exhibit
1 Rights Agreement dated as of December 23, 1999
between Oregon Steel Mills, Inc. and ChaseMellon
Shareholder Services, LLC as Rights Agent.
2 Summary of Rights to Purchase Participating
Preferred Stock, included in Exhibit A to the
Rights Agreement.
3 Form of Rights Certificate and Election to
Purchase, included in Exhibit B to the Rights
Agreement.
4 Form of Certificate of Designations of
Participating Preferred Stock, included in
Exhibit C to the Rights Agreement.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned, thereto duly authorized.
OREGON STEEL MILLS, INC.
(Registrant)
Date: December 28, 1999 By: /s/ L. Ray Adams
--------------------------------------
L. Ray Adams
Vice President of Finance
and Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Exhibit
1 Rights Agreement dated as of December 23, 1999
between Oregon Steel Mills, Inc. and ChaseMellon
Shareholder Services, LLC as Rights Agent.
2 Summary of Rights to Purchase Participating
Preferred Stock, included in Exhibit A to the
Rights Agreement.
3 Form of Rights Certificate and Election to
Purchase, included in Exhibit B to the Rights
Agreement.
4 Form of Certificate of Designations of
Participating Preferred Stock, included in
Exhibit C to the Rights Agreement.
RIGHTS AGREEMENT
by and between
OREGON STEEL MILLS, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, LLC
as Rights Agent
Dated as of
December 23, 1999
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TABLE OF CONTENTS
SECTION 1. CERTAIN DEFINITIONS........................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT................................6
SECTION 3. ISSUANCE OF RIGHTS CERTIFICATES............................6
SECTION 4. FORM OF RIGHTS CERTIFICATES................................9
SECTION 5. COUNTERSIGNATURE AND REGISTRATION..........................9
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHTS CERTIFICATES..............................10
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION
DATE OF RIGHTS.............................................11
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES........13
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF
PREFERRED STOCK............................................13
SECTION 10. PREFERRED STOCK RECORD DATE................................14
SECTION 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES...........14
SECTION 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR
NUMBER OF SHARES...........................................20
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER....................................20
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES....................23
SECTION 15. RIGHTS OF ACTION...........................................24
SECTION 16. AGREEMENT OF RIGHTS HOLDERS................................24
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.........25
SECTION 18. CONCERNING THE RIGHTS AGENT................................25
SECTION 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF,
THE RIGHTS AGENT...........................................26
SECTION 20. DUTIES OF RIGHTS AGENT.....................................27
SECTION 21. CHANGE OF RIGHTS AGENT.....................................29
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES........................30
SECTION 23. REDEMPTION BY ACTION OF THE BOARD OF DIRECTORS.............30
SECTION 24. REDEMPTION BY ACTION OF THE STOCKHOLDERS...................31
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SECTION 25. NOTICE OF PROPOSED ACTIONS.................................34
SECTION 26. NOTICES....................................................35
SECTION 27. SUPPLEMENTS AND AMENDMENTS.................................35
SECTION 28. EXCHANGE...................................................36
SECTION 29. SUCCESSORS.................................................37
SECTION 30. BENEFITS OF THIS RIGHTS AGREEMENT..........................37
SECTION 31. DELAWARE CONTRACT..........................................37
SECTION 32. COUNTERPARTS...............................................37
SECTION 33. DESCRIPTIVE HEADINGS.......................................38
SECTION 34. SEVERABILITY...............................................38
SECTION 35. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC.............................................38
ii
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RIGHTS AGREEMENT
Rights Agreement, dated as of December 23, 1999, between Oregon Steel
Mills, Inc., a Delaware corporation (the "Corporation"), and ChaseMellon
Shareholder Services, LLC, a New Jersey limited liability company (the "Rights
Agent").
W I T N E S S E T H:
WHEREAS, on December 23, 1999, the Board of Directors of the
Corporation authorized the issuance of, and declared a dividend payable in, one
right (a "Right") for each share of Common Stock, $0.01 par value per share, of
the Corporation outstanding as of the close of business on January 12, 2000 (the
"Record Date"), each such Right representing the right to purchase one
one-thousandth of a share of Participating Preferred Stock of the Corporation
(the "Preferred Stock") having the rights and preferences set forth in the
Certificate of Designations attached as Exhibit C, authorized by the Board of
Directors on December 23, 1999, upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, the Board of Directors of the Corporation further authorized
the issuance of one Right (subject to adjustment) with respect to each share of
Common Stock which may be issued between the Record Date and the earlier to
occur of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties agree as follows:
Section 1. Certain Definitions.
For purposes of this Rights Agreement, the following terms shall have
the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, is the Beneficial Owner of
15% or more of the Voting Stock of the Corporation then outstanding (other than
as a result of a Permitted Offer) or was such a Beneficial Owner at any time
after the date hereof, regardless of whether such Person continues to maintain
such Beneficial Ownership; provided, that, an Acquiring Person shall not include
(i) an Exempt Person or (ii) any Person, together with all Affiliates and
Associates of such Person, who or which would be an Acquiring Person solely by
reason of (A) being the Beneficial Owner of shares of Voting Stock of the
Corporation, the Beneficial Ownership of which was acquired by such Person (or
its predecessor through merger, consolidation, amalgamation or other similar
legal succession) pursuant to any action or transaction or series of related
actions or transactions approved by the Board of Directors before such Person
otherwise became an Acquiring Person or (B) a reduction in the number of
outstanding shares of Voting Stock of the Corporation pursuant to a transaction
or a series of related transactions approved by the Board of Directors of the
Corporation; provided, further, that in the event such Person described in this
clause (ii) does not become an Acquiring Person by reason of Section 1(a)(ii)(A)
or (B), such Person nonetheless shall become an Acquiring Person in the event
such Person thereafter acquires Beneficial Ownership of an additional 1% or more
of the Voting Stock of the Corporation then outstanding, unless the acquisition
of such additional Voting Stock
1 - RIGHTS AGREEMENT
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would not result in such Person becoming an Acquiring Person by reason of
Section 1(a)(ii)(A) or (B). Notwithstanding the foregoing, if within eight days
after such Person would otherwise have become an acquiring person (but for the
operation of this sentence) such Person notifies the Board of Directors of the
Corporation that such Person who would otherwise be an "Acquiring Person" as
defined pursuant to the foregoing provisions of this paragraph (a) has become
such inadvertently, and such Person, within two days after such notification
divests a sufficient number of shares of Common Stock so that such Person would
no longer be an "Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed an
"Acquiring Person" for purposes of this Rights Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended ("Exchange Act"), as in effect on the date of this Rights
Agreement.
(c) "Associate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act. "Associate"
of a Person shall also include (i) with respect to a corporation, any officer or
director thereof or of any Subsidiary thereof, or any Beneficial Owner of 10% or
more of any class of equity security thereof, (ii) with respect to an
association, joint venture or other unincorporated organization, any officer or
director thereof or of a Subsidiary thereof or any Beneficial Owner of 10% or
more ownership interest therein, (iii) with respect to a partnership, any
general partner thereof or any limited partner thereof who is, directly or
indirectly, the Beneficial Owner of a 10% or greater ownership interest therein,
(iv) with respect to a limited liability company, any officer, director or
manager thereof or of a Subsidiary thereof or any member thereof who is,
directly or indirectly, the Beneficial Owner of a 10% or greater ownership
interest therein, (v) with respect to a business trust, any officer or trustee
thereof or of any Subsidiary thereof, (vi) with respect to any other trust or an
estate, any trustee, executor or similar fiduciary or any Person who has a 10%
or greater interest as a beneficiary in the income from or principal of such
trust or estate, (vii) with respect to a natural person, any relative or spouse
of such person, or any relative of such spouse, who has the same home as such
person, and (viii) any Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities (and correlative terms shall have correlative
meanings):
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Regulations 13D and 13G thereunder, in each case
as in effect on the date hereof; or
(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 or the fulfillment of a condition
or both) pursuant to any agreement, arrangement or understanding (whether or not
in writing), or upon the exercise of conversion rights, exchange rights, other
rights (other than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own," securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange
or (B) the right to vote, alone or in concert with others, pursuant to any
2 - RIGHTS AGREEMENT
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agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
consent given in response to a proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations under the Exchange
Act and (2) is not at that time reportable by such Person on a Schedule 13D
report under the Exchange Act (or any comparable or successor report), other
than by reference to a proxy or consent solicitation being conducted by such
Person; or
(iii) which are Beneficially Owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except as described in
the proviso in Section 1(d)(ii)(B)) or disposing of any securities of the
Corporation; provided, however, that for purposes of determining Beneficial
Ownership of securities under this Rights Agreement, officers and directors of
the Corporation solely by reason of their status as such shall not constitute a
group (notwithstanding that they may be Associates of one another or may be
deemed to constitute a group for purposes of Section 13(d) of the Exchange Act)
and shall not be deemed to own shares owned by another officer or director of
the Corporation.
Notwithstanding anything in this paragraph (d) to the contrary, a
Person engaged in the business of underwriting securities shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own," any securities acquired in
good faith in a firm commitment underwriting, until the expiration of forty days
after the date of such acquisition.
(e) "Book-Entry" shall mean an uncertificated book-entry for the
Corporation's Common Stock.
(f) "Business Day" shall mean any day other than a Saturday, Sunday,
U.S. Federal Holiday, or day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 p.m., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., New York City time, on the next succeeding
Business Day.
(h) "Common Stock," when used with reference to the Corporation, shall
mean the common stock, presently $0.01 par value, of the Corporation. "Common
Stock," when used with reference to any Person other than the Corporation which
shall be organized in corporate form, shall mean the capital stock or other
equity security with the greatest voting power of such Person or, if such other
Person is a subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person. "Common Stock," when used with reference to
any Person other than the Corporation which shall not be organized in corporate
form, shall mean units of beneficial interest which shall represent the right to
participate in profits, losses, deductions and credits of such Person and which
shall be entitled to exercise the greatest voting power of such Person.
3 - RIGHTS AGREEMENT
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(i) "Competing Offer" shall have the meaning set forth in Section
24(c).
(j) "Corporation" shall have the meaning set forth in the first
sentence of this Rights Agreement.
(k) "Distribution Date" shall have the meaning set forth in Section
3(b).
(l) "Exchange Act" shall have the meaning set forth in Section 1(b).
(m) "Exchange Ratio" shall have the meaning set forth in Section 28(a).
(n) "Exempt Person" shall mean (i) the Corporation, (ii) any Subsidiary
of the Corporation, (iii) any employee benefit plan or employee stock plan of
the Corporation or a Subsidiary of the Corporation, (iv) any Subsidiary of the
Corporation or any trust or other entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such plan, or (v) any
Person, who or which, together with all Affiliates and Associates, becomes the
Beneficial Owner of 15% or more of the Voting Stock of the Corporation then
outstanding as a result of the acquisition of such Voting Stock directly from
the Corporation.
(o) "Exercise Price" shall have the meaning set forth in Sections 4 and
7(b).
(p) "Expiration Date" shall have the meaning set forth in Section 7(a).
(q) "Fair Market Value" of any property shall mean the fair market
value of such property as determined in accordance with Section 11(b).
(r) "First Offer" shall have the meaning set forth in Section 24(c).
(s) "Invalidation Time" shall have the meaning set forth in Section
7(e).
(t) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System or any successor thereto or other comparable
quotation system.
(u) "NYSE" shall mean the New York Stock Exchange.
(v) "Offer Date" shall have the meaning set forth in Section 24(a).
(w) "Offeror" shall have the meaning set forth in Section 24(c).
(x) "Other Offer" shall have the meaning set forth in Section 24(b).
(y) "Permitted Offer" shall mean a tender or exchange offer which is
for all outstanding shares of Common Stock at a price and on terms determined
prior to the purchase of shares under such tender or exchange offer by at least
a majority of the members of the Board of Directors who are not officers of the
Corporation and who are not Acquiring Persons or Affiliates, Associates,
nominees or representatives of an Acquiring Person to be adequate (taking into
account all factors that such Directors deem relevant including, without
limitation, prices that could reasonably be achieved if the Corporation or its
assets were sold on an orderly basis designed to realize maximum value) and
otherwise in the best interests of the Corporation and its
4 - RIGHTS AGREEMENT
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stockholders (other than the Person or any Affiliate or Associate thereof on
whose basis the offer is being made) taking into account all factors that such
directors may deem relevant.
(z) "Person" shall mean any individual, firm, partnership, corporation,
limited liability company, trust, association or other entity, joint venture and
shall include any successor of such entity.
(aa) "Preferred Stock" shall have the meaning set forth in the first
Recital.
(bb) "Principal Party" shall have the meaning set forth in Section
13(b).
(cc) "Qualifying Offer" shall have the meaning set forth in Section
24(c).
(dd) "Record Date" shall have the meaning set forth in the first
Recital.
(ee) "Redemption Price" shall have the meaning set forth in Section
23(a).
(ff) "Resolution" shall have the meaning set forth in Section 24 (c).
(gg) "Right" shall have the meaning set forth in the First Recital.
(hh) "Rights Agent" shall have the meaning set forth in the first
sentence of this Rights Agreement.
(ii) "Rights Agreement" shall have the meaning set forth in the first
sentence of this Rights Agreement.
(jj) "Rights Certificate" shall have the meaning set forth in Section
3(d).
(kk) "Securities Act" shall have the meaning set forth in Section 7(c).
(ll) "Special Meeting" shall have the meaning set forth in Section
24(a).
(mm) "Stock Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Corporation or an Acquiring Person that an
Acquiring Person has become such (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) or such earlier date as a majority of the Board of Directors shall
become aware of the existence of an Acquiring Person; provided that if a Person
is determined not to have become an Acquiring Person pursuant to the last
sentence of Section 1(a), then no Stock Acquisition Date shall be deemed to have
occurred.
(nn) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having voting power
sufficient to elect a majority of the Board of Directors or other persons
performing similar functions are Beneficially Owned, directly or indirectly, by
such Person or by any corporation or other entity that is otherwise controlled
by such Person.
(oo) "Summary of Rights" shall have the meaning set forth in Section
3(a).
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(pp) "Trading Day" shall have the meaning set forth in Section 11(b).
(qq) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or regulatory
authority in respect of any transfer of any security, instrument or right,
including Rights, shares of Common Stock and shares of Preferred Stock.
(rr) "Voting Stock" shall mean (i) the Common Stock of the Corporation
and (ii) any other shares of capital stock of the Corporation entitled to vote
generally in the election of directors or entitled to vote together with the
Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation, dissolution or
winding up. For purposes of this Rights Agreement, Voting Stock shall include
securities of the type referred to in clauses (i) and (ii) above that trade on a
"when issued" basis on a national securities exchange or on the NASDAQ. For
purposes of this Rights Agreement, a stated percentage of the Voting Stock shall
mean a number of shares of the Voting Stock as shall equal in voting power that
stated percentage of the total voting power of the then outstanding shares of
Voting Stock in the election of a majority of the Board of Directors or in
respect of any merger, consolidation, sale of all or substantially all of the
Corporation's assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board of Directors of the
Corporation for purposes of applying the definitions contained in this Section 1
shall be made by the Board of Directors in its good faith judgment, and such
determination shall be binding on the Rights Agent and the holders of the
Rights.
Section 2. Appointment of Rights Agent.
The Corporation appoints the Rights Agent to act as agent for the
Corporation in accordance with the terms and conditions hereof, and the Rights
Agent accepts such appointment. The Corporation may from time to time appoint
such co-rights agents as it may deem necessary or desirable. The Rights Agent
shall have no duty to supervise, and in no event shall be liable for, the acts
of omissions of any such co-rights agent.
Section 3. Issuance of Rights Certificates.
(a) On the Record Date (or as soon as practicable thereafter), the
Corporation shall send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit A (the "Summary of Rights"), by first class mail,
postage prepaid, to each record holder of the Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Corporation.
(b) Until the Close of Business on the day which is the earlier of (i)
the tenth day after the Stock Acquisition Date or such earlier or later date
(not beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may from time to time fix by resolution adopted prior to the
Distribution Date that otherwise would have occurred or (ii) the tenth Business
Day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or the first
public announcement of the intent of any Person
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(other than an Exempt Person) to commence (which intention to commence remains
in effect for five Business Days after such announcement), a tender or exchange
offer upon the successful consummation of which such Person, together with its
Affiliates and Associates, would be the Beneficial Owner of 15% or more of the
then outstanding shares of Voting Stock of the Corporation (irrespective of
whether any shares are actually purchased pursuant to any such offer) (the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights shall be evidenced by the Book-Entries representing, or certificates
for, Common Stock registered in the name of the holders of Common Stock
(together with, in the case of Book-Entries representing, or the certificates
for, Common Stock outstanding as of the Record Date, the Summary of Rights) and
not by separate Book-Entries or Rights Certificates and the record holders of
the Common Stock represented by such Book-Entries or certificates shall be the
record holders of the Rights represented thereby and (y) each Right shall be
transferable only simultaneously and together with the transfer of a share of
Common Stock, including a transfer to the Corporation (subject to adjustment as
hereinafter provided); provided, however, that if a tender or exchange offer is
terminated or, if, notwithstanding the announcement by any Person (other than an
Exempt Person) of the intent to commence a tender or exchange offer as described
in (ii) above, no such tender or exchange offer is in fact commenced prior to
the occurrence of a Distribution Date, then no Distribution Date shall occur as
a result of such tender or exchange offer or such announcement of the intent to
commence a tender offer. Until the Distribution Date (or, if earlier, the
Expiration Date), transfer on the Corporation's registration system of any
Common Stock represented by a Book-Entry or the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for transfer of the
Right or Rights associated with the Common Stock evidenced thereby, whether or
not accompanied by a copy of the Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date and, in certain circumstances provided
in Section 22, may be issued in respect of shares of Common Stock that become
outstanding after the Distribution Date. Certificates for Common Stock
(including, without limitation, certificates issued upon original issuance,
dispensation from the Corporation's treasury or transfer or exchange of Common
Stock) that become outstanding after the Record Date but prior to the earliest
of the Distribution Date or the Expiration Date (or, in certain circumstances as
provided in Section 22, after the Distribution Date) shall have impressed,
printed, written or stamped thereon or otherwise affixed thereto the following
legend:
This certificate also evidences and entitles the holder hereof
to the same number of Rights (subject to adjustment) as the
number of shares of Common Stock represented by this
certificate, such Rights being on the terms provided under the
Rights Agreement between Oregon Steel Mill, Inc. (the
"Corporation") and ChaseMellon Shareholder Services, LLC (the
"Rights Agent"), dated as of December 23, 1999, as it may be
amended from time to time (the "Rights Agreement"), the terms
of which are incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Corporation. Under certain circumstances, as set forth in the
Rights Agreement, such Rights shall be evidenced by separate
certificates and shall no longer be evidenced by this
certificate. The Corporation shall mail to the registered
holder of this certificate a copy
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of the Rights Agreement without charge within five days after
receipt of a written request therefor. UNDER CERTAIN
CIRCUMSTANCES AS PROVIDED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED
TO ANY PERSON.
With respect to the certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the shares of Common Stock represented
thereby. In the event that the Corporation purchases or acquires any shares of
Common Stock after the Record Date but prior to the Distribution Date, any
Rights associated with such shares of Common Stock shall be deemed cancelled and
retired so that the Corporation shall not be entitled to exercise any Rights
associated with the shares of Common Stock which are no longer outstanding.
(d) As soon as practicable after the Distribution Date, the Corporation
will prepare and execute, the Rights Agent will countersign, and the Corporation
will send or cause to be sent (and the Rights Agent will, if requested and
provided with all necessary information, send), by first class mail, postage
prepaid, to each record holder of the Common Stock as of the Close of Business
on the Distribution Date, as shown by the records of the Corporation, at the
address of such holder shown on such records, a certificate in the form provided
by Section 4 (a "Rights Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so held. As of and
after the Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates and may be transferred by the transfer of the Rights Certificate as
permitted hereby, separately and apart from any transfer of one or more shares
of Common Stock.
(e) In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date,
the Corporation (i) shall, with respect to shares of Common Stock so issued or
sold (x) pursuant to the exercise of stock options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of other securities
issued by the Corporation prior to the Distribution Date and (ii) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Corporation, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided that no such Rights
Certificate shall be issued if, and to the extent that, (A) the Corporation
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Corporation or the Person to whom
such Rights Certificate would be issued and (B) appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
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Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
shares, certificate and assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as may be required to comply
with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Common Stock or the Rights
may from time to time be listed or as the Corporation may deem appropriate to
conform to usage or otherwise and as are not inconsistent with the provisions of
this Rights Agreement and which do not affect the duties or responsibilities of
the Rights Agent. Subject to the provisions of Section 22, Rights Certificates
evidencing Rights whenever issued, (i) shall be dated as of the date of issuance
of the Rights they represent and (ii) subject to adjustment from time to time as
provided herein, on their face shall entitle the holders thereof to purchase
such number of shares (including fractional shares which are integral multiples
of one one-thousandth of a share of Preferred Stock as shall be set forth
therein at the price payable upon exercise of a Right provided by Section 7(b)
as the same may from time to time be adjusted as provided herein (the "Exercise
Price").
(b) Notwithstanding any other provision of this Rights Agreement, any
Rights Certificate that represents Rights Beneficially Owned by an Acquiring
Person or any Affiliate or Associate thereof or any other Person whose Rights
shall become null and void pursuant to Section 7(e) shall have impressed on,
printed on, written on or otherwise affixed to it (if the Corporation or the
Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate or a nominee of any of the foregoing) the following
legend:
The Beneficial Owner of the Rights represented by this Rights
Certificate is an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person. Accordingly, this Rights
Certificate and the Rights represented hereby shall become
null and void in the circumstances specified in Section 7(e)
of the Rights Agreement.
The provisions of Section 7(e) shall be operative whether or not the foregoing
legend is set forth on any Rights Certificate.
Section 5. Countersignature and Registration.
(a) Each Rights Certificate shall be executed on behalf of the
Corporation by its Chairman of the Board, any President or any Vice President,
either manually or by facsimile signature, and have affixed thereto the
Corporation's seal or a facsimile thereof which shall be attested to by the
Secretary or an Assistant Secretary of the Corporation, either manually or by
facsimile signature. Each Rights Certificate shall be countersigned by the
Rights Agent either manually or by facsimile signature and shall not be valid
for any purpose unless so countersigned. In case any officer of the Corporation
who shall have signed any Rights Certificate shall cease to be such officer of
the Corporation before countersignature by the Rights Agent and issuance and
delivery of the certificate by the Corporation, such Rights Certificate,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be
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<PAGE>
such officer of the Corporation. Any Rights Certificate may be signed on behalf
of the Corporation by any person who, on the date of the execution of such
Rights Certificate, shall be a proper officer of the Corporation to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
all necessary information, the Rights Agent will keep or cause to be kept, at
its office designated as the appropriate place for the surrender of Rights
Certificates upon exercise or transfer, and in such other locations as may be
required by law, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights evidenced on
its face by each of the Rights Certificates and the date of each of the Rights
Certificates and any Rights Certificates that have a legend printed thereon
pursuant to Section 4(b).
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14, at any
time after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Rights Certificate, may be (i)
transferred or (ii) split up, combined or exchanged for one or more other Rights
Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Rights Certificate shall surrender the Rights
Certificate at the office of the Rights Agent designated for the surrender of
Rights Certificates with the form of certificate and assignment on the reverse
side thereof duly endorsed (or, enclosed with such Rights Certificate, a written
instrument of transfer in a form satisfactory to the Corporation and the Rights
Agent), duly and properly executed by the registered holder thereof or his
attorney duly authorized in writing, and with such signature duly guaranteed.
Any registered holder desiring to split up, combine or exchange any Rights
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate to be split up, combined or exchanged
at the office of the Rights Agent. Thereupon, the Rights Agent shall countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Corporation may require
payment of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Rights
Certificates. The Rights Agent shall have no duty or obligation under this
Section unless and until it has received confirmation from the Corporation that
all such taxes and/or charges have been paid.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14, upon
receipt by the Corporation and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Corporation,
reimbursement to the Corporation and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Corporation shall issue and deliver a
new Rights Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
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Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Section 7(e) and 23(a)). Except as otherwise provided herein, the Rights may be
exercised, in whole or in part, at any time commencing with the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase and certificate on the reverse side thereof duly and properly executed
(with signatures duly guaranteed), to the Rights Agent at the office of the
Rights Agent, together with payment of the Exercise Price for each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
Close of Business on the earlier of (i) December 22, 2009 (or if the
Distribution Date shall have occurred before December 22, 2009, at the Close of
Business on the 90th day following the Distribution Date) or (ii) the date on
which the Rights are redeemed as provided in Section 23 (such earlier date being
herein referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $42.00 for each one
one-thousandth of a share of Preferred Stock issued pursuant to the exercise of
a Right. The Exercise Price and the number of shares of Preferred Stock or other
securities to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11 and 13. The Exercise
Price shall be payable in lawful money of the United States of America, in
accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Rights
Certificate representing exercisable Rights with the form of election to
purchase duly and properly executed, accompanied by payment by certified check,
cashier's check, bank draft or money order payable to the Corporation or the
Rights Agent of the Exercise Price for the shares to be purchased and an amount
equal to any applicable Transfer Tax required to be paid by the holder of the
Rights Certificate in accordance with Section 9(e), the Rights Agent shall
thereupon promptly (i) requisition from any registrar or transfer agent (as may
be appropriate) of the Preferred Stock of the Corporation one or more
certificates representing the number of shares of Preferred Stock to be so
purchased, and the Corporation authorizes and directs such registrar or transfer
agent (as may be appropriate) to comply with all such requests, (ii) as provided
in Section 14(b), at the election of the Corporation, cause depositary receipts
to be issued in lieu of fractional shares of Preferred Stock, (iii) if the
election provided for in the immediately preceding clause (ii) has not been
made, requisition from the Corporation the amount of cash to be paid in lieu of
the issuance of fractional shares in accordance with Section 14(b), (iv) after
receipt of such Preferred Stock certificates and, if applicable, depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder and (v) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Rights
Certificate; provided, however, that in the case of a purchase of securities,
other than Preferred Stock, pursuant to Section 13, the Rights Agent shall
promptly take the appropriate actions corresponding in such case to that
referred to in the foregoing clauses (i) through (v) of this Section 7(c).
Notwithstanding the foregoing provisions of this Section 7(c), the Corporation
may suspend the issuance of shares of Preferred Stock upon exercise of a Right
for a reasonable period, not in excess of 120 days, during which the Corporation
seeks to register under the Securities Act of 1933, as amended (the "Securities
Act"), and any applicable securities law of any other jurisdiction, the shares
of
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<PAGE>
Preferred Stock to be issued pursuant to the Rights; provided, however, that
nothing contained in this Section 7(c) shall relieve the Corporation of its
obligations under Section 9(c).
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Rights Certificate or his
assignee, subject to the provisions of Section 14.
(e) Notwithstanding any provision of this Rights Agreement to the
contrary, from and after the time (the "Invalidation Time") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the Invalidation Time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Invalidation Time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 7(e), and
subsequent transferees of the Persons referred to in either clause (y) or (z)
above, shall be null and void without any further action and any holder of such
Rights shall thereafter have no rights whatsoever with respect to such Rights
under any provision of this Rights Agreement. No Rights Certificate shall be
issued pursuant to Section 3 that represents Rights Beneficially Owned by an
Acquiring Person or any other Person whose Rights would be null and void
pursuant to the provisions of this Section 7(e) or any Associate, Affiliate or
nominee thereof; no Rights Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person or any other Person whose Rights
would be null and void pursuant to the provisions of this Section 7(e) or any
Associate, Affiliate or nominee thereof; and any Rights Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would be null
and void pursuant to the provisions of this Section 7(e) shall be canceled. The
Corporation shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) are complied with, but shall have no liability to any holder
of a Rights Certificate or any other Person as a result of the Corporation's
failure to make any determination with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated to undertake any
action with respect to a registered holder of any Rights Certificate 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 following
the form of election to purchase set forth on the reverse side of the Rights
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 or a Person referred to in clause (y) or (z) of
Section 7(e) and such other information as the Corporation or the Rights Agent
shall reasonably request.
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<PAGE>
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Corporation or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall
be canceled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights Agreement.
The Corporation shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall cancel and retire, any Rights Certificate
purchased or acquired by the Corporation otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Rights Certificates to the
Corporation, or shall, at the written request of the Corporation, destroy such
canceled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Corporation.
Section 9. Reservation and Availability of Shares of Preferred Stock.
(a) The Corporation covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock or out of authorized and issued shares of Preferred Stock held
in its treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding Rights. The
Corporation shall take such action as may be required for it to comply with the
foregoing sentence of this Section 9(a).
(b) The Corporation shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares of Preferred Stock issued
or reserved for issuance in accordance with this Rights Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation on NASDAQ or any successor thereto or other comparable
quotation system.
(c) The Corporation covenants and agrees that it will take all such
actions as may be necessary to insure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates, for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Corporation shall use its best efforts to (i) file, as soon as
practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act, with respect
to the shares of Preferred Stock purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for Preferred Stock, or (B) the
Expiration Date. The Corporation may temporarily suspend with prompt notice to
the Rights Agent, for a period of time not to exceed 120 days, the issuance of
shares of Preferred Stock upon exercise of a Right in order to prepare and file
a registration statement under the Securities Act and permit it to
13 - RIGHTS AGREEMENT
<PAGE>
become effective. The Corporation will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Rights Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.
(e) The Corporation covenants and agrees that it will pay when due and
payable any and all Transfer Taxes which may be payable in respect of the
issuance or delivery of the Rights Certificates or of any shares of Preferred
Stock issued or delivered upon the exercise of Rights. The Corporation shall
not, however, be required to pay any Transfer Tax which may be payable in
respect of any transfer or delivery of a Rights Certificate to a Person other
than, or the issuance or delivery of certificates for Preferred Stock upon
exercise of Rights in a name other than that of, the registered holder of the
Rights Certificate, and the Corporation shall not be required to or issue or
deliver a Rights Certificate or certificate for Preferred Stock to a Person
other than such registered holder until any such Transfer Tax shall have been
paid (any such Transfer Tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Corporation's satisfaction that no such Transfer Tax is due.
Section 10. Preferred Stock Record Date.
Each Person in whose name any certificate for shares of Preferred Stock
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Stock represented thereby on, and
such certificate shall be dated as of, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price (and any applicable Transfer Taxes) was made; provided, however,
that, if the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Corporation are closed, such Person shall
be deemed to have become the record holder of such shares on, and such
certificate shall be dated as of, the next succeeding Business Day on which the
Preferred Stock transfer books of the Corporation are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate, as
such, shall not be entitled to any rights of a stockholder of the Corporation
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Corporation, except as provided
herein.
Section 11. Adjustment of Exercise Price or Number of Shares.
The Exercise Price and the number of shares of Preferred Stock which
may be purchased upon exercise of a Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Corporation shall at any time after the date
of this Rights Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding shares of Preferred Stock, (C)
combine the outstanding shares of Preferred Stock into a
smaller number of shares of Preferred Stock or (D) issue any
shares of its capital stock in a
14 - RIGHTS AGREEMENT
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reclassification of the shares of Preferred Stock (including
any such reclassification in connection with a consolidation
or merger in which the Corporation is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e), the Exercise Price in effect
at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time
shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when
the Preferred Stock transfer books of the Corporation were
open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares
of capital stock of the Corporation issuable upon exercise of
one Right. If an event occurs which would require an
adjustment under both Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 27 of this Rights Agreement, in the
event a Distribution Date occurs, then, subject to the last
sentence of Section 23(a) and except as otherwise provided in
this Section 11, each holder of a Right, except as provided in
Section 7(e), shall thereafter have the right to receive upon
exercise of such Right in accordance with the terms of this
Rights Agreement and payment of the Exercise Price, the
greater of (1) the number of one one-thousandths of a share of
Preferred Stock for which such Right was exercisable
immediately prior to the first occurrence of the event
described in this Section 11(a)(ii) or (2) such number of one
one-thousandths of a share of Preferred Stock as shall equal
the result obtained by dividing the Exercise Price by 50% of
the Fair Market Value of one one-thousandth of a share of
Preferred Stock (determined pursuant to Section 11(b)) on the
date of such first occurrence; provided, however, that if the
transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13,
then only the provisions of Section 13 shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the Corporation does not have
available sufficient authorized but unissued Preferred Stock
to permit the adjustments required pursuant to the foregoing
subparagraph (i) or the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the
Corporation shall take all such actions as may be necessary to
authorize and reserve for issuance such number of additional
shares of Preferred Stock as may from time to time be required
to be issued upon the exercise in full of all Rights from time
to time outstanding and, if necessary, shall use its best
efforts to obtain stockholder approval thereof. In lieu of
issuing shares of Preferred Stock in accordance with the
foregoing subparagraphs (i) and (ii), the Corporation may, if
the Board of Directors determines that such action is
necessary or appropriate and not contrary
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<PAGE>
to the interests of holders of Rights, elect to issue or pay,
upon the exercise of the Rights, (A) cash, (B) other equity
securities of the Corporation, (C) debt securities of the
Corporation, (D) other assets or (E) any combination of the
foregoing, in each case, having an aggregate Fair Market Value
equal to the Fair Market Value of the shares of Preferred
Stock which otherwise would have been issuable pursuant to
Section 11(a)(ii), which Fair Market Value shall be determined
by an investment banking firm selected by the Board of
Directors. For purposes of the preceding sentence, the Fair
Market Value of the Preferred Stock shall be as determined
pursuant to Section 11(b). Subject to Section 23, any such
election by the Board of Directors of the Corporation must be
made and publicly announced within thirty (30) days after the
date on which the event described in Section 11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market Value"
of any share of Preferred Stock, Common Stock or any other stock or any Right or
other security or any other property on any date shall be determined as provided
in this Section 11(b). In the case of a publicly-traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the 30 consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the Fair Market Value per share of any share of
Common Stock is determined during a period which includes any date that is
within 30 Trading Days after (i) the ex-dividend date for a dividend or
distribution on such stock payable in shares of Common Stock or securities
convertible into shares of Common Stock, or (ii) the effective date of any
subdivision, split, combination, consolidation, reverse stock split or
reclassification of such stock, then, and in each such case, the Fair Market
Value shall be appropriately adjusted by the Board of Directors of the
Corporation to take into account ex-dividend or post-effective date trading. The
closing price for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way (in either case, as reported in the applicable transaction
reporting system with respect to securities listed or admitted to trading on the
NYSE), or, if the securities are not listed or admitted to trading on the NYSE,
as reported in the applicable transaction reporting system with respect to
securities listed on the principal national securities exchange on which such
security is listed or admitted to trading; or, if not listed or admitted to
trading on any national securities exchange, the last quoted price (or, if not
so quoted, the average of the high bid and low asked prices) in the
over-the-counter market, as reported by NASDAQ or such other system then in use;
or, if no bids for such security are quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in such security selected by the Board of Directors
of the Corporation. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business or, if such security
is not listed or admitted to trading on any national securities exchange, a
Business Day. If a security is not publicly held or not so listed or traded,
"Fair Market Value" shall mean the fair value per share of stock or per other
unit of such other security, as determined by an independent investment banking
firm experienced in the valuation of securities selected in good faith by the
Board of Directors of the Corporation, or, if no such investment banking firm
is, in the good faith judgment of the Board of Directors, available to make such
determination, in good faith by the Board of Directors of the Corporation;
provided, however, that for purposes of making the adjustment provided for by
Section 11(a)(ii), the Fair
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Market Value of a share of Preferred Stock shall not be less than 100% of the
product of the Fair Market Value of a share of Common Stock multiplied by the
higher of the then Dividend Multiple or Vote Multiple applicable to the
Preferred Stock (as defined in the provisions of the Certificate of Designations
relating to the Preferred Stock) and shall not exceed 105% of the product of the
then Fair Market Value of a share of Common Stock multiplied by the higher of
the then Dividend Multiple or Vote Multiple applicable to the Preferred Stock.
In the case of property other than securities, the "Fair Market Value" thereof
shall be determined in good faith by the Board of Directors of the Corporation
based upon such appraisals or valuation reports of such independent experts as
the Board of Directors of the Corporation shall in good faith determine to be
appropriate in accordance with good business practices and the interests of the
holders of Rights. Any such determination of Fair Market Value shall be
described in a statement filed with the Rights Agent and shall be binding upon
the Rights Agent and conclusive for all purposes.
(c) Anything in this Section 11 to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Exercise Price; provided
that any adjustments of the Exercise Price which, by reason of this Section
11(c) are not required to be made, shall be carried forward and taken into
account with respect to any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-thousandth of a share, as the case may be.
(d) Irrespective of any adjustment or change in the Exercise Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Exercise Price and the number of shares to be issued upon
exercise of the Rights as in the initial Rights Certificates issued hereunder
but, nevertheless, shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment reducing
the purchase price per whole share of Preferred Stock upon exercise of the
Rights below the then par value, if any, of the shares of Preferred Stock, the
Corporation shall use its best efforts to take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of such Preferred
Stock at such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary notwithstanding, in the
event of any reclassification of stock of the Corporation or any
recapitalization, reorganization or partial liquidation of the Corporation or
similar transaction, the Corporation shall be entitled to make such further
adjustments in the number of shares of Preferred Stock which may be acquired
upon exercise of the Rights, and such adjustments in the Exercise Price
therefor, in addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the Corporation
shall determine to be necessary or appropriate in order for the holders of the
Rights in such event to be treated equitably and in accordance with the purpose
and intent of this Rights Agreement or in order that any such event shall not,
but for such adjustment, in the opinion of counsel to the Corporation, result in
the stockholders of the Corporation being subject to any United States federal
income tax liability by reason thereof.
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<PAGE>
(g) In the event the Corporation shall at any time after the Record
Date make any distribution on the shares of Common Stock of the Corporation,
whether by way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Corporation or otherwise, in cash
or any debt security, debt instrument, real or personal property or any other
property (other than any shares of Common Stock or other capital stock of the
Corporation and other than any right or warrant to acquire any such shares,
including any debt security convertible into or exchangeable for any such share,
at less than the Fair Market Value of such shares) and the amount of such cash
dividend or the Fair Market Value of such debt security, debt instrument or
property exceeds 150% of the aggregate amount of the cash dividends declared or
paid on the Common Stock of the Corporation in the 15-month period immediately
preceding such distribution, then and in each such event, unless such
distribution is part of or is made in connection with a transaction to which
Section 11(a)(ii) or Section 13 applies, the Exercise Price shall be reduced by
an amount equal to the cash or the Fair Market Value of such distribution, as
the case may be, per share of Common Stock of the Corporation. For purposes
hereof, the Fair Market Value of any property distributed to the holders of
shares of Common Stock of the Corporation shall be the Fair Market Value of such
property as determined by an independent investment banking firm experienced in
the valuation of securities or the other property so distributed, as the case
may be, selected by the Board of Directors of the Corporation, or, if no such
investment banking firm is in the judgment of the Board of Directors available
to make such determination, by the Board of Directors of the Corporation, whose
determination shall be final and binding on the Corporation, the Rights Agent
and the holders of Rights.
(h) All Rights originally issued by the Corporation subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of shares of a Preferred
Share purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(i) The Corporation may elect on or after the date of any adjustment of
the Exercise Price to adjust the number of Rights, in lieu of any adjustment in
the number of shares of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of shares of Preferred Stock for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Exercise Price in effect immediately prior to adjustment of the
Exercise Price by the Exercise Price in effect immediately after adjustment of
the Exercise Price. The Corporation shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made,
with prompt notice thereof to the Rights Agent. This record date may be the date
on which the Exercise Price is adjusted or any day thereafter, but, if the
Rights Certificates have been issued, shall be at least ten (10) days later than
the date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Corporation shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Corporation, shall cause to be distributed to such holders of
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record in substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if required
by the Corporation, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights Certificates so to
be distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for a
specified event, the Corporation may elect to defer, with prompt notice to the
Rights Agent, until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the shares of Preferred Stock, shares
of Common Stock or other securities of the Corporation, if any, issuable upon
such exercise over and above the shares of Preferred Stock, shares of Common
Stock or other securities of the Corporation, if any, issuable upon exercise on
the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(k) The Corporation covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Corporation in a transaction which does not violate Section
11(l) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Corporation in a transaction which does not violate Section 11(l)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Corporation and/or any of its Subsidiaries in one or
more transactions each of which does not violate Section 11(l) hereof), if (x)
at the time of or immediately after such consolidation, merger, sale or transfer
there are any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or other actions
taken, which would materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates. The Corporation
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Corporation and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(k).
(l) The Corporation covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 28 hereof, take
(or permit any Subsidiary to take) any action the purpose of which is to, or if
at the time such action is taken it is reasonably foreseeable that the effect of
such action is to, materially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(m) The exercise of Rights under Section 11(a)(ii) shall only result in
the loss of rights under Section 11(a)(ii) to the extent so exercised and shall
not otherwise affect the rights
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represented by the Rights under this Rights Agreement, including the rights
represented by Section 13.
Section 12. Certification of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11, 13 or 23(c),
the Corporation shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts and computations giving rise to
such adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance with
Section 26. Notwithstanding the foregoing sentence, the failure of the
Corporation to make such certification or give such notice shall not affect the
validity of or the force or effect of the requirement for such adjustment. Any
adjustment to be made pursuant to Section 11, 13 or 23(c) of this Rights
Agreement shall be effective as of the date of the event giving rise to such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall have no duty with
respect to and shall not be deemed to have knowledge of any adjustment unless
and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, at any time after the time that any Person
becomes an Acquiring Person, (x) the Corporation shall, directly or indirectly,
consolidate with, or merge with and into, any other Person or Persons (other
than an Exempt Person or Persons) and the Corporation shall not be the surviving
or continuing corporation of such consolidation or merger, or (y) any Person or
Persons (other than an Exempt Person) shall, directly or indirectly, consolidate
with, or merge with and into, the Corporation, and the Corporation shall be the
continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (other than an Exempt Person) or of the
Corporation or cash or any other property, or (z) the Corporation or one or more
of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer to
any other Person or any Affiliate or Associate of such Person, in one or more
transactions, or the Corporation or one or more of its Subsidiaries shall sell
or otherwise transfer to any Persons in one or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Corporation and its Subsidiaries (taken as a whole), then, on the first
occurrence of any such event, proper provision shall be made so that (i) each
holder of record of a Right, except as provided in Section 7(e), shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Exercise Price in accordance with the terms of this Rights Agreement and in
lieu of shares of Preferred Stock, such number of shares of validly issued,
fully paid, non-assessable and freely tradable Common Stock of the Principal
Party (as defined herein), not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall equal the result obtained by
dividing the Exercise Price by 50% of the Fair Market Value of the Common Stock
of the Principal Party on the date of the consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Corporation pursuant to this
Rights Agreement; (iii) the term "Corporation" for all purposes of this Rights
Agreement shall thereafter be deemed to refer to such Principal Party; (iv) such
Principal Party shall take
20 - RIGHTS AGREEMENT
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such steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock in accordance with the provisions of
Section 9 applicable to the reservation of Preferred Stock) in connection with
such consummation as may be necessary to insure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Exercise Price,
such cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had it, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property; and (v) the provisions of
Section 11(a)(ii) shall be of no effect following the occurrence of any event
described in clause (x), (y) or (z) above of this Section 13(a).
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a): (A) the Person that is the
issuer of the securities into which shares of Common Stock of
the Corporation are changed or otherwise exchanged or
converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer of the Common Stock of
which has the greatest market value or (B) if no securities
are so issued, (x) the Person that is the other party to the
merger or consolidation and that survives such merger or
consolidation, or, if there is more than one such Person, the
Person the Common Stock of which has the greatest market value
or (y) if the Person that is the other party to the merger or
consolidation does not survive the merger or consolidation,
the Person that does survive the merger or consolidation
(including the Corporation if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or,
if each Person that is a party to such transaction or
transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be
determined, whichever of such Persons as is the issuer of
Common Stock having the greatest market value of shares
outstanding; provided, however, that in any such case, if the
Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person
the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or if
such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of
21 - RIGHTS AGREEMENT
<PAGE>
all of which are and have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is
the issuer of the Common Stock having the greatest market
value of shares outstanding.
(c) The Corporation shall not consummate any consolidation, merger or
sale or transfer of assets or earning power referred to in Section 13(a) unless
the Principal Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in accordance with this Section 13 and unless
prior thereto the Corporation and the Principal Party involved therein shall
have executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Rights Agreement in
accordance with Section 13(a) and that all rights of first refusal or preemptive
rights in respect of the issuance of shares of Common Stock of the Principal
Party upon exercise of outstanding Rights have been waived and that such
transaction shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as practicable after the
date of any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a), the Principal Party at its own expense will:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration
statement to become effective as soon as practicable after
such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act)
until the date of expiration of the Rights, and similarly
comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or to meet the
eligibility requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or
any successor form) under the Exchange Act.
In the event that any of the transactions described in Section 13(a)
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii), the Rights which have not theretofore been exercised shall,
subject to the provisions of Section 7(e), thereafter be exercisable in the
manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-Laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b)) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at
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less than such then Fair Market Value (other than to holders of Rights pursuant
to this Section 13) or (ii) providing for any special tax or similar payment in
connection with the issuance to any holder of a Right of Common Stock of such
Principal Party pursuant to the provisions of this Section 13, then, in such
event, the Corporation shall not consummate any such transaction unless prior
thereto the Corporation and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
(e) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if: (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a Permitted Offer (or a
wholly owned Subsidiary of any such Person or Persons); (ii) the price per share
of Common Stock offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares or Common Stock whose shares were
purchased pursuant to such Permitted Offer; and (iii) the form of consideration
offered in such transaction is the same as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of Rights
or to distribute Rights Certificates which evidence fractional Rights (i.e.,
Rights to acquire less than one one-thousandth of a share of Preferred Stock),
unless such fractional Rights result from a transaction referred to in Section
11(a)(i). If the Corporation shall determine not to issue such fractional
Rights, then, in lieu of such fractional Rights, there shall be paid to the
holders of record of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the Fair Market Value of a whole Right.
(b) The Corporation shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one one-thousandth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Corporation may, at its election,
issue depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Corporation and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all of the rights, privileges and preferences to which they
would be entitled as owners of the Preferred Stock. With respect to fractional
shares that are not integral multiples of one one-thousandth of a share, if the
Corporation does not issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the Fair Market Value of a share of Preferred Stock.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 giving rise to the right to receive shares of Common
Stock, capital stock equivalents (other than
23 - RIGHTS AGREEMENT
<PAGE>
shares of Preferred Stock) or other securities upon the exercise of a Right, the
Corporation shall not be required to issue fractions of shares or units of such
shares of Common Stock, capital stock equivalents or other securities upon
exercise of the Rights or to distribute certificates which evidence fractions of
such shares of Common Stock, capital stock equivalents or other securities. In
lieu of fractional shares or units of such shares of Common Stock, capital stock
equivalents or other securities, the Corporation may pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Fair Market Value
of a share or unit of such shares of Common Stock, capital stock equivalents or
other securities.
(d) The holder of a Right by the acceptance of a Right expressly waives
his right to receive any fractional Right or any fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-thousandth
of a share) upon exercise of a Right.
Section 15. Rights of Action.
All rights of action in respect of this Rights Agreement, except the
rights of action expressly given to the Rights Agent under this Rights
Agreement, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights 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 will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this Rights
Agreement.
Section 16. Agreement of Rights Holders.
Each holder of a Right, by accepting the same, consents and agrees with
the Corporation and the Rights Agent and with every other holder of a Right
that:
(a) Prior to the Distribution Date, the Rights shall be evidenced by
the Book-Entries representing, or the certificates for, Common Stock registered
in the name of the holders of Common Stock (together, as applicable, with the
Summary of Rights), which Book-Entries representing, or the certificates for,
Common Stock shall also constitute certificates for Rights, and not by separate
Rights Certificates, and each Right shall be transferable only simultaneously
and together with the transfer of shares of Common Stock.
(b) After the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer.
24 - RIGHTS AGREEMENT
<PAGE>
(c) The Corporation and the Rights Agent may deem and treat the Person
in whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Book-Entry representing, or certificate for, Common Stock) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Corporation or the Rights Agent) for all purposes whatsoever, and
neither the Corporation nor the Rights Agent shall be affected by any notice to
the contrary.
(d) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Rights
Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Corporation must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
(e) Rights Beneficially Owned by certain persons will under certain
circumstances set forth in this Rights Agreement become null and void pursuant
to Section 7(e).
(f) This Rights Agreement may be supplemented or amended from time to
time pursuant to Section 27.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of Preferred
Stock or any other securities which may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof (except as provided in Section 7(f)), or to
give or withhold consent to any corporate action (except as provided in Section
7(f)), or to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 25), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by 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, preparation, delivery,
amendment and execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Corporation also agrees to indemnify
the Rights Agent, its directors, officers, employees, and agents for, and to
hold each of them harmless against, any loss, liability, damage, judgement,
fine, penalty, claim, demand, settlement, loss or expense,
25 - RIGHTS AGREEMENT
<PAGE>
incurred without gross negligence, bad faith or willful misconduct, as
determined by a court of competent jurisdiction, on the part of the Rights Agent
or such other indemnified party, for any action taken, suffered or omitted by
the Rights Agent or such other indemnified party in connection with the
acceptance, amendment and administration of this Rights Agreement or the
performance of the Rights Agent's duties hereunder, including without limitation
the costs and expenses of defending against any claim of liability directly or
indirectly relating to the Rights or this Rights Agreement. The indemnity
provided herein shall survive the termination of this Rights Agreement and the
termination and expiration of the Rights. The costs and expenses incurred in
enforcing this right of indemnification shall be paid by the Corporation.
Anything to the contrary notwithstanding, in no event shall the Rights Agent be
liable for special, punitive, indirect consequential or incidental loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage.
(b) The Rights Agent shall be protected against, 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 or the performance
of the Rights Agent's duties hereunder, in reliance upon any Rights Certificate
or certificate for Preferred Stock or for other securities of the Corporation,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons or
otherwise upon the advice of counsel as forth in Section 20 hereof.
(c) The indemnity provided in this Section 18 shall survive the
expiration of the Rights and the termination of this Agreement.
Section 19. Merger or Consolidation of, or Change in Name of, the Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services 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 Person would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Rights Agreement any of the Rights 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 Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights 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 Rights Certificates shall have the full force provided in the Rights
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
26 - RIGHTS AGREEMENT
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may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign
such Rights Certificates either in its prior name or in its changed name; in all
such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent.
The Rights Agent undertakes only the duties and obligations expressly
imposed by this Rights Agreement upon the following terms and conditions, by all
of which the Corporation and the holders of Rights Certificates by their
acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Corporation), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this 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 or
the determination of the current per share market price) be proved or
established by the Corporation prior to taking, suffering or omitting of any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, any President
or any Senior or Executive Vice President and by the Treasurer or the Secretary
of the Corporation and delivered to the Rights Agent. Any such certificate shall
be full authorization and protection to the Rights Agent for any action taken,
suffered or omitted by it under the provisions of this Rights Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Corporation and
any other Person only for its own gross negligence, bad faith or willful
misconduct, as determined by a court of competent jurisdiction.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Corporation only.
(e) The Rights Agent shall not be under any liability or 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 Rights Certificate (except its
countersignature thereof); nor shall it be responsible or liable for any breach
by the Corporation of any covenant or condition contained in this Rights
Agreement or in any Rights Certificate; nor shall it be responsible or liable
for any change in the exercisability of the Rights (including the Rights
becoming null and void pursuant to Section 7(e)) or any adjustment required
under the provisions of Section 11 or 13 or responsible or liable for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require
27 - RIGHTS AGREEMENT
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any such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Rights Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Corporation agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of the Rights Agreement.
(g) The Rights Agent is authorized and directed to accept instructions
with respect to the performance of its duties hereunder from the Chairman of the
Board, any President or any Vice President or the Secretary or the Treasurer of
the Corporation, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while awaiting
instructions. Any application by the Rights Agent for written instructions from
the Corporation may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or suffered,
or such omission shall be effective. The Rights Agent shall not be liable for
any action taken or suffered by, or omission of, the Rights Agent in accordance
with a proposal included in any such application on or after the date specified
in such application (which date shall not be less than five Business Days after
the date any officer of the Corporation actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, director, Affiliate, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Corporation or become financially interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not the Rights Agent under this Rights Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Corporation or for
any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided the Rights Agent was not grossly negligent in
the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and obligations
imposed on it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent.
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(k) If with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Corporation.
(l) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against risk or liability is not reasonably assured to
it.
Section 21. 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 Corporation and to each transfer agent of the Common Stock
and the Preferred Stock by registered or certified mail. The Corporation may
remove the Rights Agent or any successor Rights Agent (with or without cause)
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 Stock and
the Preferred Stock by registered or certified mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the
Corporation shall appoint a successor to the Rights Agent. Notwithstanding the
foregoing provisions of this Section 21, in no event shall the resignation or
removal of a Rights Agent be effective until a successor Rights Agent shall have
been appointed and have accepted such appointment. If the Corporation shall fail
to make such appointment within a period of 30 days after 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 Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Corporation), then the incumbent Rights Agent or the holder of record of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be (a) a Person organized and doing
business under the laws of the United States or of any state thereof, in good
standing, which is authorized to do business under such laws and is subject to
supervision or examination by federal or state authorities and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate controlled by a Person described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed, 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 Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
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the case may be. Notwithstanding the foregoing provisions, in the event of
resignation, removal or incapacity of the Rights Agent, the Corporation shall
have the authority to act as the Rights Agent until a successor Rights Agent
shall have assumed the duties of the Rights Agent hereunder.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of
the Rights to the contrary, the Corporation may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Exercise Price per share
and the number or kind or class of shares of stock or other securities or
property purchasable under the Rights Certificates made in accordance with the
provisions of this Rights Agreement.
Section 23. Redemption by Action of the Board of Directors.
(a) The Corporation may, at its option, by the vote of a majority of
the Board of Directors, redeem all but not less than all of the then outstanding
Rights, at any time prior to the Close of Business on the earlier of (i) the
Distribution Date (subject to extension by the Corporation as provided in
Section 27) or (ii) the Expiration Date, at a redemption price of $0.001 per
Right, subject to adjustments as provided in subsection (c) below (the
"Redemption Price"). Notwithstanding anything contained in this Rights Agreement
to the contrary, the Rights shall not be exercisable pursuant to Section
11(a)(ii) prior to the expiration of the Corporation's right of redemption
hereunder.
(b) Without any further action and without any notice, the right to
exercise the Rights will terminate effective at the time so designated by action
of the Board of Directors ordering the redemption of the Rights and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within 10 days after the effective time of the action of the Board of
Directors ordering the redemption of the Rights, the Corporation shall give
notice of such redemption to the Rights Agent and 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 Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each notice of
redemption will state the method by which the payment of the Redemption Price
will be made. At the option of the Board of Directors, the Redemption Price may
be paid in cash to each Rights holder or by the issuance of shares (and, at the
Corporation's election pursuant to Section 14, cash or depositary receipts in
lieu of fractions of shares other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock or Common Stock having a Fair
Market Value equal to such cash payment.
(c) In the event the Corporation shall at any time after the date of
this Rights Agreement (A) pay any dividend on Common Stock in shares of Common
Stock, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares or (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, or (D) combine or consolidate the
30 - RIGHTS AGREEMENT
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outstanding shares of Common Stock into a smaller number of shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), then, and in each such
event, the Redemption Price shall be appropriately adjusted to reflect the
foregoing.
Section 24. Redemption by Action of the Stockholders
(a) In the event that (i) the Corporation receives a Qualifying Offer
from any Offeror (as such terms are defined below), and (ii) within 60 days
after such receipt (such sixtieth day being referred to as the "Offer Date"),
the Board of Directors has not either (x) redeemed all but not less than all of
the then outstanding rights pursuant to Section 23 or (y) approved an
alternative transaction which the Board of Directors has determined to be
financially superior for the holders of shares of Common Stock other than the
Offeror and its affiliates, the Board of Directors shall call a special meeting
of stockholders (the "Special Meeting") for the purpose of voting on a
resolution requesting the Board of Directors to redeem the Rights or to make the
Rights Plan inapplicable to the Qualifying Offer, as such Qualifying Offer may
be amended or revised by the Offeror from time to time (the "Resolution"). The
Board of Directors shall select a date for the Special Meeting and shall use its
best efforts to ensure that the Special Meeting actually be held on such date,
which date shall not be later than the later of (A) the date that is 120 days
after the Offer Date and (B) the date of any meeting of stockholders already
scheduled as of the Offer Date; provided, however, that if (x) such other
meeting shall have been called for the purpose of voting on a resolution with
respect to another offer and (y) the Offer Date shall be not later than 15 days
after the date such other offer was received by the Company, then both the
Resolution and such other resolution shall be voted on at such meeting and such
meeting shall be deemed to be the Special Meeting. The Board of Directors shall
set a date for determining the stockholders of record entitled to notice of and
to vote at the Special Meeting in accordance with the Corporation's Certificate
of Incorporation and Bylaws and with applicable law. At the Offeror's request,
the Corporation shall include in any proxy soliciting material prepared by it in
connection with the Special Meeting proxy soliciting material submitted by the
Offeror; provided, however, that the Offeror shall by written agreement with the
Corporation contained in or delivered with such request have indemnified the
Corporation against any and all liabilities resulting from any misstatements,
misleading statements and omissions contained in the Offeror's proxy soliciting
material and have agreed to pay the Corporation's incremental costs incurred as
a result of including such material in the Corporation's proxy soliciting
material. Notwithstanding the foregoing, no Special Meeting shall be held from
and after such time as any Person becomes an Acquiring Person, and any Special
Meeting scheduled prior to such time and not theretofore held shall be
cancelled.
(b) If at the Special Meeting, the Resolution receives the affirmative
vote of a majority of the shares of Common Stock outstanding as of the record
date of the Special Meeting, not including the shares of the Offeror and its
Affiliates, then the Rights Plan shall be inapplicable to the Qualifying Offer
or Other Offer (as defined below), or all of the rights shall be redeemed by
such stockholder action, effective immediately prior to the consummation of the
Qualifying Offer or any Other Offer. An "Other Offer" means another tender or
exchange offer to purchase all of the shares of Common Stock held by Persons
other than such Offeror and its Affiliates at a price per share in cash and/or
at an exchange ratio which is equal to or financially superior to the
31 - RIGHTS AGREEMENT
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cash price and/or the exchange ratio contained in the Resolution approved at the
Special Meeting; provided, however, that the rights under the Rights Plan shall
not be redeemed at any time from and after such time as any Person becomes an
Acquiring Person.
(c) A "Qualifying Offer" shall mean an all-cash tender offer for all
outstanding shares of Common Stock which meets all of the following
requirements:
(i) the Person or group making the tender offer (an "Offeror")
must, prior to or upon commencing such offer, have provided the Corporation firm
written commitments from responsible financial institutions, which have been
accepted by such Person or group, to provide, subject only to customary terms
and conditions (which shall in no event include conditions requiring access by
such financial institutions to non-public information to be provided by the
Corporation, conditions based on the accuracy of any information concerning the
Corporation other than such as would be the subject of representations and
warranties in a public financing by the Corporation, or conditions requiring the
Corporation to make any representations, warranties or covenants in connection
with such financing) funds for such offer which, when added to the amount of
cash and cash equivalents which such Person or group then has available and has
irrevocably committed in writing to the Corporation to utilize for purposes of
the offer if consummated, and to set apart and maintain available for such
purpose until the offer is consummated or withdrawn, will be sufficient to pay
for all shares outstanding on a fully diluted basis and all related expenses;
and
(ii) such Person or group must own, after consummating such offer,
at least two-thirds of the then outstanding shares of Common Stock; and
(iii) the price per share offered in such offer must be at least
the greater of (a) 35% above the average closing price of the Common Stock for
the 20 consecutive trading days ending on the fourth trading day preceding the
commencement of the offer, or (b) the highest price at which the Common Stock
has traded during the period 12 months immediately preceding the offer date,
provided that if another tender offer for shares of Common Stock (a "Competing
Offer") is commenced during the pendency of a Qualifying Offer (the "First
Offer"), such Competing Offer shall constitute a Qualifying Offer only if, in
addition to satisfying the requirements of clauses (i), (ii), (iv) and (v)
hereof, the per share price offered in such Competing Offer is at least 10%
higher than the per share price offered in the First Offer; and
(iv) such offer must remain open for at least 60 Business Days and
must be extended for at least 20 Business Days after the last increase in the
price offered and after any bona fide higher alternative offer is made and shall
be subject only to customary terms and conditions, which shall in no event
include satisfaction of any conditions relating to the business, financial
condition, results of operations or prospects of the Corporation other than such
as are based on information publicly disclosed by the Corporation; and
(v) prior to or upon commencing such offer, such Person or group
must irrevocably commit in writing to the Corporation and in the offer to
purchase relating to the offer:
32 - RIGHTS AGREEMENT
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A. to consummate promptly upon completion of the offer an all-
cash transaction whereby all shares of Common Stock not tendered
into the offer will be acquired at the same price per share paid
pursuant to the offer, and otherwise not to purchase any shares of
Common Stock following completion of the offer; and
B. that such Person or group will not materially amend such
offer, except to increase the price offered; and
C. that such Person or group will not make any offer for any
equity securities of the Corporation for six months after
commencement of the original offer if the original offer does not
result in the tender of the number of shares required to be
purchased pursuant to clause (ii) above, unless a Competing Offer
which meets the conditions for a Qualifying Offer (including the
proviso in clause (iii) above) is commenced by another Person or
Persons not affiliated or associated with, acting in concert with,
or instigating or financed by, the Person or group making the
original offer or with whom the Person or group making the original
offer has any agreement, arrangement or understanding relating to
the Corporation or any assets or securities of it or any of its
Subsidiaries; and
(vi) is not subject to any financing, funding or similar condition,
nor any condition relating to completion of or satisfaction with any due
diligence or similar investigation and otherwise provides for usual and
customary terms and conditions; and
(vii) is accompanied by an opinion from a nationally recognized
investment bank that the price specified in the Qualifying Offer is fair to the
stockholders of the Corporation, which opinion explains with particularity how
such investment bank defines the term "fair" and the basis for its conclusion
that the Qualifying Offer is fair; and
(viii) requests the Corporation to call a special meeting of the
holders of Common Stock for the purpose of voting on a resolution requesting the
Board of Directors to either redeem the Rights or adopt such Qualifying Offer;
and
(ix) contains a written agreement of the Offeror to pay (or share
with any other Offeror) the Corporation's costs of the Special Meeting
(inclusive of the Corporation's costs of preparing and mailing proxy material
for its own solicitation but exclusive of the fees and expenses of the
Corporation's own financial and legal advisors, and proxy solicitor).
(d) Nothing contained in this Section 24 shall be deemed to be a
delegation of the obligation of the Board of Directors of the Corporation to
exercise its fiduciary duty. Without limiting the foregoing, this Section 24
shall not be construed to suggest or imply that the Board of Directors shall not
be entitled to reject any Qualifying Offer, or to recommend that holders of
shares of Common Stock reject any tender or exchange 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 to the Special Meeting) with respect to any Qualifying
Offer or any tender or exchange offer that the Board of Directors believes is
necessary or appropriate in the exercise of such fiduciary duty.
33 - RIGHTS AGREEMENT
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(e) Nothing in this Section 24 shall be construed as limiting or
prohibiting the Corporation or any Offeror from proposing or engaging, at any
time, in any acquisition, disposition or other transfer of any securities of the
Corporation, any merger or consolidation involving the Corporation, any sale or
other transfer of assets of the Corporation, any liquidation, dissolution or
winding-up of the Corporation, or any other business combination or other
transaction, or any other action by the Corporation or such Offeror; provided,
however, that the holders of rights shall have the rights set forth in the
Rights Plan with respect to any such acquisition, disposition, transfer, merger,
consolidation, sale, liquidation, dissolution, winding-up, business combination,
transaction or action.
(f) This Section 24 may only be amended or repealed by the approval of
the holders of a majority of the issued and outstanding shares of Common Stock.
Section 25. Notice of Proposed Actions.
(a) In case the Corporation, after the Distribution Date, shall propose
(i) effect any of the transactions referred to in Section 11(a)(i) or 11(g) or
(ii) to offer to the holders of record of its Common Stock options, warrants, or
other rights to subscribe for or to purchase shares of Common Stock (including
any security convertible into or exchangeable for Common Stock) or shares of
stock of any class or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) to effect any reclassification
of its Preferred Stock or Common Stock or any recapitalization or reorganization
of the Corporation, or (iv) to effect any consolidation or merger with or into,
or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Corporation, then, in
each such case, the Corporation shall give the Rights Agent and each holder of
record of a Rights Certificate, in accordance with Section 26, notice of such
proposed action, which shall specify the record date for the purposes of such
transaction referred to in Section 11(a)(i) or 11(g) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Common Stock or Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of record of the Preferred Stock for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of record of Common Stock or Preferred
Stock, whichever shall be the earlier. The failure to give notice required by
this Section 25 or any defect therein shall not affect the legality or validity
of the action taken by the Corporation or the vote upon any such action.
(b) In case any of the transactions referred to in Section 11(a)(i),
11(g) or 13 of this Rights Agreement are proposed, then, in any such case, the
Corporation shall give to the Rights Agent and each holder of Rights, in
accordance with Section 26, notice of the proposal of such transaction at least
10 days prior to consummating such transaction, which notice shall specify the
proposed event and the consequences of the event to holders of Rights under
Section 11(a)(i),
34 - RIGHTS AGREEMENT
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11(g) or 13, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights.
Section 26. Notices.
Notices or demands authorized by this Rights Agreement to be given or
made by the Rights Agent or by the holder of record of any Rights Certificate or
Right to or on the Corporation 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:
Oregon Steel Mills, Inc.
1000 Broadway Building
Suite 2200
Portland, Oregon 97205
Attention: President
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Corporation or by the holder of
record of any Rights Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Corporation) as
follows:
ChaseMellon Shareholder Services, LLC
520 Pike Street
Suite 1220
Seattle, WA 98101
Attn: Joe Campbell
Notices or demands authorized by this Rights Agreement to be given or made by
the Corporation or the Rights Agent to the holder of record of any Rights
Certificate or Right shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Corporation.
Section 27. Supplements and Amendments.
For as long as the Rights are then redeemable, the Corporation may in
its sole and absolute discretion, and the Rights Agent shall if the Corporation
so directs, supplement or amend any provision of this Rights Agreement without
the approval of any holders of the Rights. At any time when the Rights are not
then redeemable, the Corporation may, and the Rights Agent shall if the
Corporation so directs, supplement or amend this Rights Agreement without the
approval of any holders of Rights Certificates (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period provided in this Rights Agreement, provided that no such
supplement or amendment pursuant to this clause (iii) shall shorten or lengthen
any time period provided in this Rights Agreement unless such shortening or
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of and/or the benefits to the holders of Rights, or (iv) to change or supplement
the provisions hereunder in any
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manner which the Corporation may deem necessary or desirable, provided that no
such supplement or amendment pursuant to this clause (iv) shall materially
adversely affect the interest of the holders of Rights (other than an Acquiring
Person or any affiliate of Associate of an Acquiring Person). Upon the delivery
of a certificate from an appropriate officer of the Corporation which states
that the proposed supplement or amendment is in compliance with the terms of
this Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Agreement to the contrary, (a)
no supplement or amendment that changes the rights, duties, liabilities or
obligations of the Rights Agent under this Agreement shall be effective without
the execution of such supplement on amendment by the Rights Agent, and (b) no
supplement or amendment shall be made which changes the Redemption Price or the
Expiration Date.
Section 28. Exchange.
(a) The Board of Directors of the Corporation may, at its option, at
any time after a Distribution Date, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e)) for shares of Common Stock at an
exchange ratio of one share per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio").
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 28 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice of any such
exchange with prompt notice thereof to the Rights Agent; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Corporation promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the shares of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become null and void pursuant to the provisions of
Section 7(e)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 28, the Corporation may,
at its option, substitute shares of Preferred Stock (or shares of another class
of stock having the same rights, privileges and preferences as the Preferred
Stock) for some or all of the shares of Common Stock exchangeable for Rights
pursuant to Section 28(a) at a ratio of one one-thousandth of a share of
Preferred Stock (or such other class of stock having the same rights, privileges
and preferences as the Preferred Stock) as adjusted to reflect adjustments to
the voting rights of the Preferred Stock, so that the fraction of share of
Preferred Stock (or such other class of stock having the same rights, privileges
and preferences as the Preferred Stock) shall have the same voting rights as one
share of Common Stock.
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(d) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 28, the
Corporation shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(e) The Corporation shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional shares.
In lieu of such fractional shares, the Corporation shall pay to the registered
holders of the Rights Certificates with regard to which such fractional shares
of Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole share of Common Stock. For the
purposes of this paragraph (e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common Stock for the
Trading Day immediately prior to the date of exchange pursuant to this Section
28.
Section 29. Successors.
All of the covenants and provisions of this Rights Agreement by or for
the benefit of the Corporation or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Rights Agreement.
Nothing in this Rights Agreement shall be construed to give to any
Person other than the Corporation, the Rights Agent and the registered holders
of the Rights Certificates (and, prior to the Distribution Date, the holders of
Common Stock in their capacity as holders of the Rights) 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 Corporation, the Rights Agent
and the holders of record of the Rights Certificates (and, prior to the
Distribution Date, the holders of Common Stock in their capacity as holders of
the Rights).
Section 31. Delaware Contract.
This Rights Agreement and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed and enforced in
accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed entirely within such State.
Section 32. Counterparts.
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.
37 - RIGHTS AGREEMENT
<PAGE>
Section 33. 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 hereof.
Section 34. 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 in full force
and effect and shall in no way be affected, impaired or invalidated.
Section 35. Determinations and Actions by the Board Of Directors, etc.
(a) The Board of Directors of the Corporation 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 or to the
Corporation, 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 a determination to redeem or not redeem the Rights
or to amend the Rights Agreement and a determination of whether there is an
Acquiring Person). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith shall (x) be final, conclusive and binding on the Corporation, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors to any liability to the holders of the Rights.
(b) Nothing contained in this Rights Agreement shall be deemed to be a
derogation or abrogation of the obligation of the Board of Directors 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 shares of
Common Stock 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.
38 - RIGHTS AGREEMENT
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
OREGON STEEL MILLS, INC.
By: /s/ L.R. Adams
------------------------------------
Name: L.R. Adams
Title: CFO
CHASEMELLON SHAREHOLDER SERVICES, LLC
By: /s/ Joseph S. Campbell
------------------------------------
Name: Joseph S. Campbell
Title: Assistant Vice President
39 - RIGHTS AGREEMENT
EXHIBIT A
TO RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT (AS
REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS
OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND
MAY NOT BE TRANSFERRED TO ANY PERSON.
OREGON STEEL MILLS, INC.
SUMMARY OF RIGHTS TO PURCHASE
PARTICIPATING PREFERRED STOCK
On December 23, 1999, the Board of Directors of Oregon Steel Mills,
Inc. (the "Corporation") declared a dividend distribution of one preferred stock
purchase right (a "Right") for each outstanding share of Common Stock, $0.01 par
value per share (the "Common Stock"), of the Corporation held by stockholders of
record on January 12, 2000 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Corporation one one-thousandth (1/1,000)
of a share of preferred stock of the Corporation, designated as Participating
Preferred Stock (the "Preferred Stock") at a price of $42.00 per one
one-thousandth (1/1,000) of a share (the "Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement"), dated as of December 23, 1999, between the Corporation and
ChaseMellon Shareholder Services, LLC, as Rights Agent (the "Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors or by the
stockholders pursuant to a Qualifying Offer (as defined below), become
exercisable upon the Close of Business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following the first date (the "Stock
Acquisition Date") on which there is a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person"), with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Corporation or such earlier or later date
(not beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may determine or (ii) the tenth business day (or such later date as
may be determined by the Board of Directors prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person) after the
date of the commencement or announcement of a person's or group's intention to
commence a tender or exchange offer the consummation of which would result in
the ownership of 15% or more of the Corporation's outstanding voting stock (even
if no shares are actually purchased pursuant to
1 - EXHIBIT A
<PAGE>
such offer); prior thereto, the Rights will not be exercisable, will not be
represented by a separate certificate, and will not be transferable apart from
the Common Stock, but will instead be evidenced, (i) with respect to any of the
shares of Common Stock held in uncertificated book-entry form (a "Book-Entry")
outstanding as of the Record Date, by such Book-Entry and (ii) with respect to
the shares of Common Stock evidenced by Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificate, together with a copy of
this Summary of Rights. An Acquiring Person does not include (A) the
Corporation, (B) any subsidiary of the Corporation, (C) any employee benefit
plan or employee stock plan of the Corporation or of any subsidiary of the
Corporation, or any trust or other entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such plan, (D) any
person or group becomes the beneficial owner of 15% or more of the voting stock
of the Corporation then outstanding as a result of the acquisition of such stock
directly from the Corporation, or (E) any person or group whose ownership of 15%
or more of the shares of voting stock of the Corporation then outstanding solely
by reason of (i) any action or transaction or transactions approved by the Board
of Directors before such person or group became an Acquiring Person or (ii) a
reduction in the number of outstanding shares of voting stock of the Corporation
pursuant to a transaction or transactions approved by the Board of Directors
(provided that any person or group that does not become an Acquiring Person by
reason of clause (i) or (ii) above shall become an Acquiring Person upon
acquisition of an additional 1% or more of the Corporation's voting stock then
outstanding, unless such acquisition of additional voting stock will not result
in such person or group becoming an Acquiring Person by reason of such clause
(i) or (ii). For purposes of the foregoing, outstanding voting stock of the
Corporation includes voting stock that trades on a "when issued" basis on a
national securities exchange or on the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ").
In the event that (i) the Corporation receives a Qualifying Offer from
any Offeror (as such terms are defined below), and (ii) within 60 days after
such receipt (such sixtieth day being referred to as the "Offer Date"), the
Board of Directors has not either (x) redeemed all but not less than all of the
then outstanding rights or (y) approved an alternative transaction which the
Board of Directors has determined to be financially superior for the holders of
shares of Common Stock other than the Offeror and its affiliates, the Board of
Directors shall call a special meeting of stockholders (the "Special Meeting")
for the purpose of voting on a resolution requesting the Board of Directors to
redeem the Rights or to make the Rights Plan inapplicable to the Qualifying
Offer, as such Qualifying Offer may be amended or revised by the Offeror from
time to time (the "Resolution"). Notwithstanding the foregoing, no Special
Meeting shall be held from and after such time as any Person becomes an
Acquiring Person, and any Special Meeting scheduled prior to such time and not
theretofore held shall be cancelled.
If at the Special Meeting, the Resolution receives the affirmative vote
of a majority of the shares of Common Stock outstanding as of the record date of
the Special Meeting, not including the shares of the Offeror and its Affiliates,
then the Rights Plan shall be inapplicable to the Qualifying Offer or Other
Offer (as defined below), or all of the rights shall be redeemed by such
stockholder action, effective immediately prior to the consummation of the
Qualifying Offer or any Other Offer. An "Other Offer" means another tender or
exchange offer to purchase all of the shares of Common Stock held by Persons
other than such Offeror and its Affiliates at a price per share in cash and/or
at an exchange ratio which is equal to or financially superior to the cash price
and/or the exchange ratio contained in the Resolution approved at the Special
Meeting;
2 - EXHIBIT A
<PAGE>
provided, however, that the rights under the Rights Plan shall not be
redeemed at any time from and after such time as any Person becomes an Acquiring
Person.
A "Qualifying Offer" is defined in the Rights Agreement to mean and
all-cash tender offer for all outstanding shares of Common Stock which meets all
of the following requirements:
(a) FULLY FINANCED. The person or group making the tender offer must,
prior to or upon commencing the offer, have provided the Corporation firm
written commitments from responsible financial institutions, accepted by such
person or group, to provide funds for the offer which, when added to the amount
of cash and cash equivalents which such person or group then has available and
has irrevocably committed to be used for the purpose, will be sufficient to pay
for all shares outstanding on a fully diluted basis and all related expenses.
The financing commitments must be subject only to customary terms and
conditions, which may not include (i) conditions requiring access by the
financial institutions to non-public information to be provided by the
Corporation, (ii) conditions based on the accuracy of any information concerning
the Corporation other than such as would be the subject of representations in a
public financing by the Corporation, or (iii) conditions requiring the
Corporation to make any representations, warranties or covenants in connection
with the financing.
(b) TWO-THIRDS REQUIREMENT. The person or group making the tender offer
must own, immediately after consummating the offer, at least two-thirds of the
then outstanding shares of Common Stock.
(c) 35% PREMIUM. The price per share offered in the offer must be at
least the greater of (a) 35% above the average closing price of the Common Stock
for the 20 consecutive trading days ending on the fourth trading day preceding
the commencement of the offer, or (b) the highest price at which the Common
Stock has traded during the period 12 months immediately preceding the offer
date. If another tender offer is commenced during the pendency of a Qualifying
Offer, the competing offer will constitute a Qualifying Offer if the per share
price offered is at least 10% higher than the price offered in the first offer
and the other requirements for a Qualifying Offer are satisfied.
(d) DURATION AND CONDITIONS. The offer must remain open for at least 60
business days and must be extended for at least 20 business days after the last
increase in the price offered and after any bona fide higher alternative offer
is made. The offer must be subject only to customary terms and conditions, which
may in no event include any satisfaction of any conditions relating to the
business, financial condition, results of operations or prospects of the
Corporation other than such as are based on information publicly disclosed by
the Corporation.
(e) SECOND STEP COMMITMENT. The person or group making the tender offer
must irrevocably commit, prior to or upon commencement of the offer, (i) to
consummate promptly upon completion of the offer an all-cash transaction whereby
all shares not tendered in the offer will be acquired at the same price per
share paid pursuant to the offer, and otherwise not to purchase any shares of
Common Stock following completion of the offer, (ii) that such person or group
will not materially amend the terms of the offer (other than an increase in the
price offered), and (iii) that such person or group will not make an offer for
any equity securities of the Corporation for six months after the commencement
of the original offer if the original offer
3 - EXHIBIT A
<PAGE>
does not result in the tender of the required minimum of two-thirds of the
outstanding shares, except in certain circumstances involving the making by an
unrelated party of a competing offer which constitutes a Qualifying Offer under
the provisions described in paragraph (c) above.
(f) OTHER CONDITIONS. The offer must (i) not be subject to any
financing, funding or similar condition, nor any condition relating to
completion of or satisfaction with any due diligence or similar investigation
and otherwise provide for usual and customary terms and conditions, (ii) be
accompanied by an opinion from a nationally recognized investment bank that the
price specified in the Qualifying Offer is fair to the stockholders of the
Corporation, which opinion explains with particularity how such investment bank
defines the term "fair" and the basis for its conclusion that the Qualifying
Offer is fair, (iii) request the Corporation to call a special meeting of the
holders of Common Stock for the purpose of voting on a resolution requesting the
Board of Directors to either redeem the Rights or adopt such Qualifying Offer,
and (iv) contain a written agreement of the Offeror to pay (or share with any
other Offeror) the Corporation's costs of the Special Meeting (inclusive of the
Corporation's costs of preparing and mailing proxy material for its own
solicitation but exclusive of the fees and expenses of the Corporation's own
financial and legal advisors, and proxy solicitor).
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after January 12, 2000 will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), transfer
on the Corporation's registration system of any Common Stock represented by a
Book-Entry or a certificate outstanding as of January 12, 2000, and, in each
case, with or without a copy of this Summary of Rights attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such Book-Entry or certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. Unless
earlier redeemed by the Corporation as described below, the Rights will expire
at the Close of Business on December 22, 2009 (the "Expiration Date") (or, if
the Distribution Date shall have occurred before December 22, 2009, at the Close
of Business on the 90th day following the Distribution Date).
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock (i)
subordinate to any other series of the Corporation's preferred stock and (ii)
senior to the Common Stock. The Preferred Stock may not be issued except upon
exercise of Rights. Each share of Preferred Stock will be entitled to receive
when, as and if declared, a quarterly dividend in an amount equal to (i) 1,000
times the cash dividends declared on the Corporation's Common Stock, and (ii) a
preferential cash dividend, if any, in preference to holders of Common Stock in
an amount equal to $.01 per share of Preferred Stock less the per share amount
of all cash dividends declared on the Preferred Stock pursuant to clause (i)
since the immediately preceding quarterly dividend payment date. In addition,
Preferred Stock is entitled to 1,000 times any noncash dividends (other than
dividends payable in equity securities) declared on the Common Stock, in like
kind. In the event of the liquidation of the Corporation, the holders of
Preferred Stock will be entitled to receive, for each
4 - EXHIBIT A
<PAGE>
share of Preferred Stock, a payment in an amount equal to the greater of $1.00
per one one-thousandth (1/1,000) of a share plus accrued and unpaid dividends
and distributions thereon or 1000 times the payment made per share of Common
Stock. Each share of Preferred Stock will have 1000 votes, voting together with
the Common Stock. In the event of any merger, consolidation or other transaction
in which Common Stock is exchanged, each share of Preferred Stock will be
entitled to receive 1,000 times the amount received per share of Common Stock.
The rights of Preferred Stock as to dividends, liquidation and voting are
protected by anti-dilution provisions. If the dividends accrued on the Preferred
Stock for four or more quarterly dividend periods, whether consecutive or not,
shall not have been declared and paid or irrevocably set aside for payment, the
holders of record of the Preferred Stock of the Corporation of all series
(including the Preferred Stock) will have the right to elect two members to the
Corporation's Board of Directors.
The number of shares of Preferred Stock issuable upon exercise of the
Rights is subject to certain adjustments from time to time in the event of a
stock dividend on, or a subdivision or combination of, the Common Stock. The
Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that, after the
time that a Person becomes an Acquiring Person, the Corporation were to be
acquired in a merger or other business combination (in which any shares of
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Corporation and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record, other than the Acquiring
Person, of a Right will from and after such date have the right to receive, upon
payment of the Exercise Price, that number of shares of common stock of the
acquiring company having a market value at the time of such transaction equal to
two times the Exercise Price.
In addition, unless the Rights are earlier redeemed, in the event that
a person or group becomes an Acquiring Person, the Rights Agreement provides
that proper provision will be made so that each holder of record of a Right,
other than the Acquiring Person (whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the Exercise
Price, that number of one one-thousandth (1/1,000) of a share of Preferred Stock
having a market value at the time of the transaction equal to two times the
Exercise Price (such market value to be determined with reference to the market
value of the Corporation's Common Stock as provided in the Rights Agreement).
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding voting stock, the Board of Directors of the Corporation may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share) may, at the election of the
Corporation, be evidenced by
5 - EXHIBIT A
<PAGE>
depositary receipts. The Corporation may also issue cash in lieu of fractional
shares which are not integral multiples of one one-thousandth (1/1,000) of a
share.
At any time on or prior to the Close of Business on the earlier of (i)
the tenth day after the Stock Acquisition Date (or such later date as a majority
of the Board of Directors may determine) or (ii) the Expiration Date, the
Corporation may redeem the Rights in whole, but not in part, at a price of
$0.001 per Right (the "Redemption Price"). Immediately upon the effective time
of the action of the Board of Directors of the Corporation authorizing
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Corporation may
amend the Rights in any manner, including an amendment to extend the time period
in which the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Corporation may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as
a stockholder of the Corporation, including, without limitation, the right to
vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to any person or group that attempts to acquire the
Corporation, other than pursuant to a Qualifying Offer, without the approval of
the Corporation's Board of Directors. Because the Corporation's Board of
Directors can redeem the Rights or approve an offer, the Rights should not
interfere with a merger or other business combination approved by the
Corporation's Board of Directors.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Corporation's report on Form 8-K dated
December 23, 1999. A copy of the Rights Agreement is available free of charge
from the Corporation. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement which is incorporated in this summary description herein by reference.
6 - EXHIBIT A
EXHIBIT B
TO RIGHTS AGREEMENT
Certificate No. W-________- _______ Rights
NOT EXERCISABLE AFTER (I) DECEMBER 22, 2009, OR (II) IF THE
DISTRIBUTION DATE (AS DEFINED BELOW) SHALL HAVE OCCURRED BEFORE THE
DATE SPECIFIED IN CLAUSE (I), THE DATE WHICH IS NINETY (90) DAYS AFTER
THE DISTRIBUTION DATE, OR EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE CORPORATION AND UNDER CERTAIN OTHER
CIRCUMSTANCES, AT $0.001 PER RIGHT (SUBJECT TO ADJUSTMENT), ON THE
TERMS SET FORTH OR REFERRED TO IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO
BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
Rights Certificate
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 December 23, 1999 (the "Rights Agreement") between Oregon
Steel Mills, Inc. (the "Corporation"), and ChaseMellon Shareholder Services, LLC
(the "Rights Agent"), to purchase from the Corporation at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 p.m. (New York City time) on December 22, 2009 (or if the Distribution Date
shall have occurred before December 22, 2009, at the Close of Business on the
90th day following the Distribution Date) at the office of the Rights Agent
designated in the Rights Agreement for such purpose, or its successor as Right
Agent, one one-thousandth (1/1,000) of a fully paid nonassessable share of
Participating Preferred Stock, $0.01 par value per share, of the Corporation
(the "Preferred Stock") at a purchase price of $42.00 per one one-thousandth
(1/1,000) of a share, as the same may from time to time be adjusted in
accordance with the Rights Agreement (the "Exercise Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Preferred Stock which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Rights
Certificate, as provided in the Rights Agreement.
1
<PAGE>
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is made for a full description of the rights, limitations of
rights, obligations, duties and immunities of the Rights Agent, the Corporation
and the holders of record of Rights Certificates. Copies of the Rights Agreement
are on file at the principal executive office of the Corporation.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated in the Rights
Agreement for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder of record to purchase a like aggregate number of shares of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Corporation at its option or under
certain other circumstances at a redemption price of $0.001 per Right. No
fractional shares of Preferred Stock (other than fractions which are integral
multiplies of one one-thousandth (1/1,000) of a share) are required to be issued
upon the exercise of any Right or Rights evidenced hereby, and in lieu thereof
the Corporation may cause depositary receipts to be issued and/or a cash payment
may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities of the Corporation 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 Corporation or any right to vote for the
election of directors or upon any matter submitted to stockholders at meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall
have been exercised as provided in the Rights Agreement. This Rights Certificate
shall not be valid or obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
2
<PAGE>
WITNESS the facsimile signature of the proper officers of the
Corporation. Dated as of ________________.
ATTEST:
- ------------------------------------- By:----------------------------------
Secretary Title
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES LLC
By:----------------------------------
3
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate)
FOR VALUE RECEIVED _______________________ hereby sells, assigns and
transfers unto ____________________________ (Please print name and address of
transferee) __________________________________ Rights evidenced by this Rights
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ______________________ attorney to
transfer the within Rights Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: _____________
------------------------------------
Signature
Signature Guaranteed:
4
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
Dated: -------------- ----------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Rights Certificate)
TO: -----------------------------
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such share(s) be issued in the following name:
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 Rights
Certificate, a new Rights 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 must conform in all respects
to name of holder as specified on the
face of this Rights Certificate)
Signature Guaranteed:
6
EXHIBIT C
Certificate of Designations of
Participating Preferred Stock of
Oregon Steel Mills, Inc.
Pursuant to Section 151 of the
Delaware General Corporation Law
I, L. Ray Adams, Vice President of Oregon Steel Mills, Inc., a
corporation organized and existing under the Delaware General Corporation Law
(the "Corporation"), in accordance with the provisions of Section 151 of such
law, DO HEREBY CERTIFY: that pursuant to the authority conferred upon the Board
of Directors by the Restated Certificate of Incorporation of the Corporation,
the Board of Directors on December 23, 1999 adopted the following resolution
which creates a series of Six Hundred Thousand (600,000) shares of preferred
stock designated as Participating Preferred Stock, as follows:
RESOLVED, that pursuant to Section 151(g) of the Delaware General
Corporation Law and the authority vested in the Board of Directors of the
Corporation in accordance with the provisions of FOURTH ARTICLE of the Restated
Certificate of Incorporation of the Corporation, a series of Preferred Stock of
the Corporation be, and is, created, and the powers, designations, preferences
and relative, participating, optional or other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof, be,
and are, as follows:
Section 1. Designation and Amount.
The shares of such series shall be designated as "Participating
Preferred Stock" (the "Participating Preferred Stock") and the number of shares
constituting such series shall be Six Hundred Thousand (600,000).
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Participating Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 1,000 times the aggregate per share amount of all
cash dividends declared or paid on the Common Stock, $0.01 par value per share,
of the Corporation (the "Common Stock") and (ii) a preferential cash dividend
(the "Preferential Dividends"), if any, in preference to the holders of Common
Stock, on the last day of February, May, August and November of each year (each
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Participating Preferred Stock, payable in an amount (except in the case of the
first Quarterly Dividend Payment if the date of the first issuance of
Participating Preferred Stock is a date other than a Quarterly Dividend Payment
date, in which case such payment shall be a prorated amount of such amount)
equal to $.01 per share of Participating Preferred Stock less the per share
amount of all cash dividends declared on the Participating Preferred Stock
pursuant to clause (i) of this sentence 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
Participating Preferred Stock. In the event the Corporation shall, at any time
after the issuance of any share or fraction of a share of
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Participating Preferred Stock, make any distribution on the shares of Common
Stock of the Corporation, whether by way of a dividend or a reclassification of
stock, a recapitalization, reorganization or partial liquidation of the
Corporation or otherwise, which is payable in cash or any debt security, debt
instrument, real or personal property or any other property (other than cash
dividends subject to the immediately preceding sentence, a distribution of
shares of Common Stock or other capital stock of the Corporation or a
distribution of rights or warrants to acquire any such share, including any debt
security convertible into or exchangeable for any such share, at a price less
than the Fair Market Value (as hereinafter defined) of such share), then, and in
each such event, the Corporation shall simultaneously pay on each then
outstanding share of Participating Preferred Stock of the Corporation a
distribution, in like kind, of 1,000 times such distribution paid on a share of
Common Stock (subject to the provisions for adjustment hereinafter set forth).
The dividends and distributions on the Participating Preferred Stock to which
holders thereof are entitled pursuant to clause (i) of the first sentence of
this paragraph and pursuant to the second sentence of this paragraph are
hereinafter referred to as "Dividends" and the multiple of such cash and
non-cash dividends on the Common Stock applicable to the determination of the
Dividends, which shall be 1,000 initially but shall be adjusted from time to
time as hereinafter provided, is hereinafter referred to as the "Dividend
Multiple." In the event the Corporation shall at any time after January 12, 2000
(i) declare or pay any dividend or make any distribution on Common Stock payable
in shares of Common Stock, (ii) effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, or (iii) issue any shares of
its capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), then in each such case
the Dividend Multiple thereafter applicable to the determination of the amount
of Dividends which holders of shares of Participating Preferred Stock shall be
entitled to receive shall be the Dividend Multiple applicable immediately prior
to such event multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare each Dividend at the same time it
declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash dividend
or distribution on the Common Stock in respect of which a Dividend is required
to be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Participating Preferred
Stock; provided that, in the event that no dividend or distribution is declared
on the Common Stock during any period between any Quarterly Dividend Payment
Date and the next Quarterly Dividend Payment Date, the Preferential Dividends
shall nevertheless be payable on such next Quarterly Dividend Payment Date.
(C) Preferential Dividends shall begin to accrue on outstanding shares
of Participating Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Participating Preferred Stock,
unless the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after the record date
for determination of holders of shares of Participating Preferred Stock entitled
to receive a Preferential Dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to
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accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid Preferential Dividends shall cumulate but shall not bear interest
Preferential Dividends paid on the shares of Participating Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of the Participating Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights.
The holders of shares of Participating Preferred Stock shall have the
following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth,
each share of Participating Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the holders of the Common
Stock. The number of votes which a holder of Participating Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Vote Multiple." In the event the
Corporation shall at any time after January 12, 2000, (i) declare or pay any
dividend on Common Stock payable in shares of Common Stock, (ii) effect a
subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, or (iii) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Corporation is the
continuing or surviving corporation), then in each such case the Vote Multiple
thereafter applicable to the determination of the number of votes per share to
which holders of shares of Participating Preferred Stock shall be entitled after
such event shall be the Vote Multiple immediately prior to such event multiplied
by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, in the Corporation's Restated
Certificate of Incorporation or Bylaws, or by law, the holders of shares of
Participating Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(C) In the event that the Preferential Dividends accrued on the
Participating Preferred Stock for four or more consecutive quarterly periods
shall not have been declared and paid or set apart for payment, the holders of
record of the Participating Preferred Stock, voting together with the holders of
record of any other series of preferred stock of the Corporation which shall
then have the right, expressly granted by the Restated Certificate of
Incorporation of the Corporation or in any resolution or resolutions of the
Board of Directors of the Corporation providing for the issue of such shares of
preferred stock, to elect directors upon such a default in the payment of
dividends by the Corporation shall have the right, at the next meeting of
stockholders called for the election of directors, voting together as a class,
to elect two members to the Board of Directors, which directors shall be elected
to fill any then existing vacancies on the Board of Directors, or if no such
vacancies exist or if the number of vacancies is insufficient to allow such
stockholders to elect two directors, then the directors elected by such
stockholders shall be in addition to the number provided for pursuant to the
Corporation's Bylaws prior to such event, to
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serve until the next annual meeting and until their successors are elected and
qualified or their earlier resignation, removal or incapacity or until such
earlier time as all accrued and unpaid Preferential Dividends upon the
outstanding shares of Participating Preferred Stock shall have been paid (or set
aside for payment) in full. The holders of shares of Participating Preferred
Stock shall continue to have the right to elect directors as provided by the
immediately preceding sentence until all accrued and unpaid Preferential
Dividends upon the outstanding shares of Participating Preferred Stock shall
have been paid (or set aside for payment) in full. Such directors may be removed
and replaced by such stockholders, and vacancies in such directorships may be
filled only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law. Subject to the
foregoing, any directors elected pursuant to this paragraph 3(C) shall be
elected annually and shall not constitute members of any Class of directors as
contemplated by Fifth Article of the Corporation's Restated Certificate of
Incorporation.
(D) Except as otherwise required by the Corporation's Restated
Certificate of Incorporation or Bylaws or set forth herein, holders of
Participating Preferred Stock shall have no other 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 the taking of any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Dividends are in arrears or the
Corporation shall be in default of payment thereof, thereafter and until all
accrued and unpaid Preferential Dividends and Dividends, whether or not
declared, on shares of Participating Preferred Stock outstanding shall have been
paid or set irrevocably aside for payment in full, and in addition to any and
all other rights which any holder of shares of Participating Preferred Stock may
have in such circumstances, 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 Participating 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) as to dividends with the
Participating Preferred Stock, unless dividends are paid ratably on the
Participating 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 if the full dividends accrued thereon were to
be paid;
(iii) except as permitted by subparagraph (iv) of this Section
4(A), 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 Participating 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 (both as to dividends and upon liquidation, dissolution or
winding up) to the Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Participating Preferred Stock, or any shares of stock ranking on a
parity with the Participating Preferred Stock
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(either as to dividends or upon liquidation, dissolution or winding up), except
in accordance with a purchase offer made 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 (as hereinafter
defined) 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. A "Subsidiary" of the Corporation shall mean any
corporation or other entity of which securities or other ownership interests
having ordinary voting power sufficient to elect a majority of the Board of
Directors of such corporation or other entity or other persons performing
similar functions are beneficially owned, directly or indirectly, by the
Corporation or by any corporation or other entity that is otherwise controlled
by the Corporation.
(C) The Corporation shall not issue any shares of Participating
Preferred Stock except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of December 23, 1999 between the Corporation and
ChaseMellon Shareholder Services, LLC, as Rights Agent, a copy of which is on
file with the Secretary of the Corporation at its principal executive office and
shall be made available to stockholders of record without charge upon written
request addressed to the Secretary of the Corporation. Notwithstanding the
foregoing sentence, nothing contained in the provisions of this Certificate of
Designations shall prohibit or restrict the Corporation from issuing for any
purpose any series of Preferred Stock with rights and privileges similar to,
different from, or greater than, those of the Participating Preferred Stock.
Section 5. Reacquired Shares.
Any shares of Participating 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 upon their
retirement and cancellation shall become authorized but unissued shares of
Preferred Stock, without designation as to series, and such shares may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, no distribution shall be made (i) to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Participating Preferred Stock unless the
holders of shares of Participating Preferred Stock shall have received, subject
to adjustment as hereinafter provided, (A) $1.00 per one one-thousandth
(1/1,000) of a share plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment or,
(B) if greater than the amount specified in clause (i)(A) of this sentence, an
amount equal to 1,000 times the aggregate amount to be distributed per share to
holders of Common Stock, as the same may be adjusted as hereinafter provided and
(ii) to the holders of stock ranking on a parity with the Participating
Preferred Stock upon liquidation, dissolution or winding up, unless
simultaneously therewith distributions are made ratably on the Participating
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Participating Preferred Stock
are entitled
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under clause (i)(A) of this sentence and to which the holders of such parity
shares are entitled, in each case upon such liquidation, dissolution or winding
up. The amount to which holders of Participating Preferred Stock may be entitled
upon liquidation, dissolution or winding up of the Corporation is hereinafter
referred to as the "Participating Liquidation Amount" and the multiple of the
amount to be distributed to holders of shares of Common Stock upon the
liquidation, dissolution or winding up of the Corporation applicable pursuant to
clause (i)(B) of the foregoing sentence, as said multiple may be adjusted from
time to time as hereinafter provided, is hereinafter referred to as the
"Liquidation Multiple." Following payment in full of the Participating
Liquidation Amount, the liquidation preferences of all other series of preferred
stock, if any, that rank on a parity with the Participating Preferred Stock, and
any amounts payable upon liquidation, dissolution or winding up to holders of
Common Stock, holders of shares of Participating Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Liquidation Multiple
to 1 for the Participating Preferred Stock and Common Stock, respectively. In
the event the Corporation shall at any time after January 12, 2000 (i) declare
or pay any dividend on Common Stock payable in shares of Common Stock, (ii)
effect a subdivision or split or a combination, consolidation or reverse split
of the outstanding shares of Common Stock into a greater or lesser number of
shares of Common Stock, or (iii) issue any shares of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Corporation is continuing
or surviving corporation), then, in each such case, the Liquidation Multiple
thereafter applicable to the determination of the Participating Liquidation
Amount to which holders of Participating Preferred Stock shall be entitled after
such event shall be the Liquidation Multiple applicable immediately prior to
such event multiplied by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Certain Reclassification and Other Events.
(A) In the event that holders of shares of Common Stock of the
Corporation receive after January 12, 2000 in respect of their shares of Common
Stock any share of capital stock of the Corporation (other than any share of
Common Stock of the Corporation), whether by way of reclassification,
recapitalization, reorganization, dividend or other distribution or otherwise (a
"Transaction"), then, and in each such event, the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the Corporation of
the shares of Participating Preferred Stock shall be adjusted so that after such
event the holders of Participating Preferred Stock shall be entitled, in respect
of each share of Participating Preferred Stock held, in addition to such rights
in respect thereof to which such holder was entitled immediately prior to such
adjustment, to (i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such Transaction multiplied by the additional
dividends which the holder of a share of Common Stock shall be entitled to
receive by virtue of the receipt in the Transaction of such capital stock, (ii)
such additional voting rights as equal the Vote Multiple in effect immediately
prior to such Transaction multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock and (iii) such additional
distributions upon liquidation, dissolution or winding up of the Corporation as
equal the Liquidation Multiple in effect immediately prior to such Transaction
multiplied by the additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or winding up of the
Corporation by virtue of the
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receipt in the Transaction of such capital stock, as the case may be, all as
provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the
Corporation receive after January 12, 2000 in respect of their shares of Common
Stock any right or warrant to purchase Common Stock (including as such a right,
for all purposes of this paragraph, any security convertible into or
exchangeable for Common Stock) at a purchase price per share less than the Fair
Market Value of a share of Common Stock on the date of issuance of such right or
warrant, then and in each such event the dividend rights, voting rights and
rights upon the liquidation, dissolution or winding up of the Corporation of the
shares of Participating Preferred Stock shall each be adjusted so that after
such event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the
Corporation receive after January 12, 2000 in respect of their shares of Common
Stock any right or warrant to purchase capital stock of the Corporation (other
than shares of Common Stock), including as such a right, for all purposes of
this paragraph, any security convertible into or exchangeable for capital stock
of the Corporation (other than Common Stock), at a purchase price per share less
than the Fair Market Value of such shares of capital stock on the date of
issuance of such right or warrant, then and in each such event the dividend
rights, voting rights and rights upon liquidation, dissolution or winding up of
the Corporation of the shares of Participating Preferred Stock shall each be
adjusted so that after such event each holder of a share of Participating
Preferred Stock shall be entitled, in respect of each share of Participating
Preferred Stock held, in addition to such rights in respect thereof to which
such holder was entitled immediately prior to such event, to receive (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such event multiplied, first, by the additional dividends to which the holder
of a share of Common Stock shall be entitled upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction (as hereinafter defined)
and (ii) such additional voting rights as equal the Vote Multiple in effect
immediately prior to such event multiplied, first, by the additional voting
rights to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount Fraction and
(iii) such additional distributions upon liquidation, dissolution or winding up
of the Corporation as equal the Liquidation Multiple in effect immediately prior
to such event multiplied, first, by the additional amount which the holder of a
share of Common Stock shall be entitled to receive upon liquidation, dissolution
or winding up of the Corporation upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction. For purposes of this paragraph, the
"Discount Fraction" shall be a fraction the numerator of which shall be the
difference between the Fair Market Value of a share of the capital stock subject
to a
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right or warrant distributed to holders of shares of Common Stock of the
Corporation as contemplated by this paragraph immediately after the distribution
thereof and the purchase price per share for such share of capital stock
pursuant to such right or warrant and the denominator of which shall be the Fair
Market Value of a share of such capital stock immediately after the distribution
of such right or warrant.
(D) For purposes of this Certificate of Designations, the "Fair Market
Value" of a share of capital stock of the Corporation (including a share of
Common Stock) on any date shall be deemed to be the average of the daily closing
price per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that, in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and
in each such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Corporation to take into account ex-dividend or
post-effective date trading. The closing price for any day shall be the last
sale price, regular way, or, in case, no such sale takes place on such day, the
average of the closing bid and asked prices, regular way (in either case, as
reported in the applicable transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange), or, if
the shares are not listed or admitted to trading on the New York Stock Exchange,
as reported in the applicable transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares are listed or admitted to trading or, if the shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or if on any such date the shares are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the shares selected by the Board of Directors of
the Corporation. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares are listed or admitted to
trading is open for the transaction of business or, if the shares are not listed
or admitted to trading on any national securities exchange, on which the New
York Stock Exchange or such other national securities exchange as may be
selected by the Board of Directors of the Corporation is open. If the shares are
not publicly held or not so listed or traded on any day within the period of 30
Trading Days applicable to the determination of Fair Market Value thereof as
aforesaid, "Fair Market Value" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors of the Corporation.
In either case referred to in the foregoing sentence, the determination of Fair
Market Value shall be described in a statement filed with the Secretary of the
Corporation.
Section 8. 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 and/or any other
property, then in any such case each outstanding share of Participating
Preferred Stock shall at the same time be similarly exchanged for or changed
into the aggregate amount of stock, securities, cash and/or other property
(payable in like kind), as the case may be, for which or into which each share
of Common Stock is changed or exchanged
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multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Participating Preferred Stock required by the
provisions of this Certificate of Designations shall be effective as of the time
at which the event requiring such adjustments occurs.
(B) The Corporation shall give prompt written notice to the Rights
Agent and each holder of a share of Participating Preferred Stock of the effect
of any adjustment to the voting rights, dividend rights or rights upon
liquidation, dissolution or winding up of the Corporation of such shares
required by the provisions of this Certificate of Designations. Notwithstanding
the foregoing sentence, the failure of the Corporation to give such notice shall
not affect the validity of or the force or effect of or the requirement for such
adjustment.
Section 10. No Redemption.
The shares of Participating Preferred Stock shall not be redeemable at
the option of the Corporation or any holder thereof. Notwithstanding the
foregoing sentence of this Section, the Corporation may acquire shares of
Participating Preferred Stock in any other manner permitted by law, the
provisions of this Certificate of Designations and the Restated Certificate of
Incorporation of the Corporation.
Section 11. Ranking.
Unless otherwise provided in the Restated Certificate of Incorporation
of the Corporation or a Certificate of Designations relating to a subsequent
series of preferred stock of the Corporation, the Participating Preferred Stock
shall rank junior to all other series of the Corporation's preferred stock as to
the payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and senior to the Common Stock.
Section 12. Amendment.
At any time when any shares of Participating Preferred Stock are
outstanding, the provisions of this Certificate of Designations and the Restated
Certificate of Incorporation of the Corporation shall not be amended in any
manner which would adversely affect the rights, privileges or powers of the
Participating Preferred Stock without, in addition to any other vote of
stockholders required by law, the affirmative vote of the holders of two-thirds
or more of the outstanding shares of Participating Preferred Stock, voting
together as a single class.
Section 13. Fractional Shares.
Participating Preferred Stock may be issued in fractions of a share
that shall entitle the holder, in proportion to such holder's fractional shares,
to exercise voting rights, receive distributions, participate in distributions
and have the benefit of all other rights of holders of Participating Preferred
Stock.
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IN WITNESS WHEREOF, Oregon Steel Mills, Inc. has caused this
Certificate of Designations to be signed and attested this ______ day of
December 1999.
OREGON STEEL MILLS, INC.
By:-------------------------------------------
Name: L. Ray Adams
Title: Vice President of Finance and Chief
Financial Officer
ATTEST:
- --------------------------------
Name: LaNelle F. Lee
Title: Secretary
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