<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JULY 24, 1997
ROWAN COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-5491 75-0759420
(COMMISSION FILE NUMBER ) (IRS EMPLOYER IDENTIFICATION NO.)
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5450 Transco Tower
2800 Post Oak Boulevard
Houston, Texas 77056-6196
(Address of principal executive office, including zip code)
(713) 621-7800
(Registrant's telephone number, including area code)
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<PAGE> 2
ITEM 5. OTHER EVENTS
On July 24, 1997, the Board of Directors of Rowan Companies, Inc. (the
"Company") amended the Company's Rights Agreement dated February 25, 1992, as
amended, (the "Rights Agreement") to increase the Purchase Price defined in
Section 7(b) of such Rights Agreement for each one one-hundredth of a share of
Series A Junior Preferred Stock purchasable upon the exercise of a Right from
$30.00 to $75.00, subject to adjustment.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ ----------------------------------------------------
<S> <C>
4.1 Amendment No. 3 dated July 24, 1997 to the Rights
Agreement dated February 25, 1992, as amended,
between the Company and Citibank, N.A., as Rights
Agent.
4.2 Rights Agreement dated February 25, 1992, as amended,
between the Company and Citibank, N.A., as Rights
Agent, which includes exhibits as follows: Exhibit A -
Form of Rights Certificate; Exhibit B - Summary of
Rights to Purchase Junior Preferred Stock and
Exhibit C - Certificate of Designation of Series A
Junior Preferred Stock.
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROWAN COMPANIES, INC.
BY: /s/ E. E. THIELE
----------------------------------------
E. E. Thiele,
Senior Vice President - Administration and
Finance and Principal Financial Officer
DATED: AUGUST 5, 1997
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
------ ----------------------------------------------------
<S> <C>
4.1 Amendment No. 3 dated July 24, 1997 to the Rights
Agreement dated February 25, 1992, as amended,
between the Company and Citibank, N.A., as Rights
Agent.
4.2 Rights Agreement dated February 25, 1992, as amended,
between the Company and Citibank, N.A., as Rights
Agent, which includes exhibits as follows: Exhibit A -
Form of Rights Certificate; Exhibit B - Summary of
Rights to Purchase Junior Preferred Stock and
Exhibit C - Certificate of Designation of Series A
Junior Preferred Stock.
</TABLE>
<PAGE> 1
EXHIBIT NO. 4.1
THIRD AMENDMENT
TO
RIGHTS AGREEMENT
The following is THE THIRD AMENDMENT TO THE RIGHTS AGREEMENT, dated as
of July 24, 1997 (the "Amendment"), between Rowan Companies, Inc., a Delaware
Corporation (the "Company"), and Citibank, N.A., a national banking
association, as Rights Agent (the "Rights Agent"):
WHEREAS, the undersigned Rights Agent and Rowan Companies, Inc. are
parties to a Rights Agreement dated as of February 25, 1992, as amended (the
"Rights Agreement"); and
WHEREAS, the Company (with the approval of not less than a majority of
the Continuing Directors (as defined in the Rights Agreement)) and the Rights
Agent desire to amend the Rights Agreement, pursuant to Section 26 of the
Rights Agreement, as set forth in this Third Amendment to the Rights Agreement
(the "Amendment").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. AMENDMENT TO SECTION 7(B) OF THE RIGHTS AGREEMENT.
Section 7(b) of the Rights Agreement is hereby amended by deleting the
reference to the initial dollar amount of the Purchase Price designated therein
as "$30.00" and replacing it with "$75.00."
SECTION 2. AMENDMENT TO EXHIBIT A OF THE RIGHTS AGREEMENT. (a)
The first paragraph of Exhibit A of the Rights Agreement is hereby amended by
deleting the reference to the initial dollar amount of the Purchase Price
designated therein as "$30" and replacing it with "$75.00."
(b) The first paragraph of Exhibit A of the
Rights Agreement is hereby amended by deleting the reference to the par value
of the Junior Preferred Stock designated therein as "without par value" and
replacing it with "$1.00 par value per share."
SECTION 3. AMENDMENT TO EXHIBIT B OF THE RIGHTS AGREEMENT. (a)
The first paragraph of Exhibit B of the Rights Agreement is hereby amended by
deleting the reference to the initial dollar amount of the Purchase Price
designated therein as "$30.00" and replacing it with "$75.00."
<PAGE> 2
(b) The first paragraph of Exhibit B of the
Rights Agreement is hereby amended by deleting the reference to the par value
of the Junior Preferred Stock designated therein as "without par value" and
replacing it with "$1.00 par value per share."
SECTION 4. SEVERABILITY. If any term, provision, covenant or
restriction of this Amendment 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 Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
SECTION 5. GOVERNING LAW. This Amendment, the Rights Agreement,
each Right and each Rights Certificate issued hereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed entirely in such State.
SECTION 6. COUNTERPARTS. This Amendment 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
one and the same instrument.
SECTION 7. EFFECT OF AMENDMENT. Except as expressly modified
herein, the Rights Agreement shall remain in full force and effect.
(NOTE: "AGREEMENT" WILL BE CHANGED TO "RIGHTS AGREEMENT" THROUGHOUT)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of July 24, 1997.
ROWAN COMPANIES, INC.
ATTEST:
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By: /s/ MARK H. HAY By: /s/ E. E. THIELE
--------------------------------- ---------------------------------
Name: Mark H. Hay Name: E. E. Thiele
Title: Corporate Secretary Title: Senior Vice President
Finance, Administration
and Treasurer
CITIBANK, N.A.
ATTEST:
By: /s/ KERRY A. MONAGHAN By: /s/ LISA J. PRICE
--------------------------------- --------------------------------
Name: Kerry A. Monaghan Name: Lisa J. Price
Title: Senior Trust Officer Title: Vice President
<PAGE> 1
EXHIBIT 4.2
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ROWAN COMPANIES, INC.
and
CITIBANK, N.A.,
Rights Agent
_______________
Rights Agreement
As Amended
Dated as of February 25, 1992
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<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Section Page
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<S> <C> <C>
1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3 Issue of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4 Form of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5 Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6 Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7 Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . 13
8 Cancellation and Destruction of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . 16
9 Reservation and Availability of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10 Junior Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11 Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
12 Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . 34
13 Consolidation, Merger or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14 Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
15 Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
16 Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
17 Rights Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . . . . . . . . . . . . . 43
18 Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
19 Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . 45
20 Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
</TABLE>
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<TABLE>
<S> <C> <C>
21 Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
22 Issuance of New Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
23 Redemption and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
24 Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
25 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
26 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
27 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
28 Determinations and Actions by the Board of Directors, etc. . . . . . . . . . . . . . . . . . . . 56
29 Benefits of this Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
30 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
31 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
32 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
33 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
Exhibit C -- Certificate of Designation
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<PAGE> 4
RIGHTS AGREEMENT
RIGHTS AGREEMENT ("Rights Agreement"), dated as of February 25, 1992
(the "Rights Agreement"), between Rowan Companies, Inc., a Delaware corporation
(the "Company"), and Citibank, N.A., a national banking association (the "Rights
Agent").
WHEREAS, on February 25, 1992 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
distribution of one Right for each share of common stock, par value $.125 per
share, of the Company (the "Company Common Stock") outstanding at the Close of
Business on March 11, 1992 (the "Record Date"), and has authorized the issuance
of one Right (as such number may hereinafter be adjusted pursuant hereto) for
each share of Company Common Stock issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and, except as
otherwise provided in Section 22, the Distribution Date, each Right initially
representing the right to purchase upon the terms and subject to the conditions
hereinafter set forth one Unit of Series A Junior Preferred Stock (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Rights Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the
Company, any Subsidiaries of the Company, any employee benefit plan maintained
by the Company or any of its Subsidiaries or any trustee or fiduciary with
respect to such plan acting in such capacity) which shall be the Beneficial
Owner of 15% or more of the shares of Company Common Stock then outstanding.
<PAGE> 5
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", any securities:
(i) of which such Person or any of such Person's Affiliates
or Associates is considered to be a "beneficial owner" under Rule
13d-3 of the General Rules and Regulations under the Exchange Act (the
"Exchange Act Regulations") as in effect on the date hereof, provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own", any securities under this subparagraph (i)
as a result of an agreement, arrangement or understanding to vote such
securities if such agreement, arrangement or understanding (A) arises
solely from a revocable proxy given in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
provisions of the Exchange Act and the Exchange Act Regulations, and
(B) is not reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report);
(ii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate of such 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) (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (i) of this paragraph (c)) or disposing of
such securities; provided, however, that in no case shall an officer
or director of
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<PAGE> 6
the Company be deemed (x) the Beneficial Owner of any securities
beneficially owned by another officer or director of the Company
solely by reason of actions undertaken by such persons in their
capacity as officers and directors of the Company or (y) the
Beneficial Owner of securities held of record by the trustee of any
employee benefit plan of the Company or any Subsidiary of the Company
for the benefit of any employee of the Company or any Subsidiary of
the Company, other than the officer or director, by reason of any
influence that such officer or director may have over the voting of
the securities held in the plan;
(iii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right or obligation to
acquire (whether such right or obligation is exercisable immediately
or only after the passage of time or upon the satisfaction of
conditions) pursuant to any agreement, arrangement or understanding
(whether or not in writing) (other than customary agreements with and
between underwriters and selling group members with respect to a bona
fide public offering of securities) or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights), warrants or
options, or otherwise; or
(iv) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to
vote pursuant to any agreement, arrangement or understanding (whether
or not in writing);
provided, however, that under this paragraph (c) a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own", (A) securities tendered
pursuant to a tender or exchange offer made in accordance with Exchange Act
Regulations by such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, (B)
securities that may be issued upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities that may be issued upon
exercise of Rights from and after the occurrence of a
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<PAGE> 7
Triggering Event, which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date or pursuant to
Section 3(c) or Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made with respect to any
Original Rights.
(d) "Board Approval" shall mean the adoption by the Board of
Directors of the Company of a resolution or resolutions authorizing or
approving the action or determination (A) by the unanimous written consent of
all of the members of the Board of Directors of the Company or (B) by the
affirmative vote of not less than a majority of the members of the Board of
Directors of the Company (including not less than a majority of Continuing
Directors) at a meeting duly called and held at which a quorum was present and
acting throughout, provided, that at the time of adoption by the Board of
Directors of any such resolution or resolutions (x) there are not less than
three Continuing Directors and (y) a majority of the members of the Board of
Directors of the Company are Continuing Directors.
(e) "Board of Directors" shall mean the Board of Directors of the
Company.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the states of New York or
Texas 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, New York time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., New York, New York time, on the
next succeeding Business Day.
(h) "Common Stock" of any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or, if such
Person shall have no capital stock, the equity securities or other equity
interest having power to control or direct the management of such Person.
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<PAGE> 8
(i) "common stock equivalents" has the meaning set forth in Section
11(a)(iii).
(j) "Company Common Stock" has the meaning set forth in the
Whereas Clause.
(k) "Continuing Director" shall mean, as of the time a
determination is made, a member of the Board of Directors of the Company who is
not an Acquiring Person or an Affiliate or Associate of an Acquiring Person or
a director, officer or agent of an Acquiring Person or of any such Affiliate or
Associate, and who either (i) was a member of the Board of Directors of the
Company on February 25, 1992 or (ii) subsequently becomes a director of the
Company and whose election or nomination for election by the Company's
stockholders, received Board Approval.
(l) "current market price" has the meaning set forth in Section
11(d).
(m) "Current Value" has the meaning set forth in Section
11(a)(iii).
(n) "Distribution Date" has the meaning set forth in Section 3(a).
(o) "equivalent preferred stock" has the meaning set forth in
Section 11(b).
(p) "Expiration Date" has the meaning set forth in Section 7(a).
(q) "Final Expiration Date" has the meaning set forth in Section
7(a).
(r) "Junior Preferred Stock" shall mean the Series A Junior
Preferred Stock, $1.00 par value, of the Company having the voting powers,
designation, preferences and relative, participating, optional or other special
rights and qualifications, limitations and restrictions set forth in the form
of Certificate of Designation attached to this Rights Agreement as Exhibit C.
(s) "Person" shall mean any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity,
as well as any syndicate or group deemed to be a person under Section 14(d)(2)
of the Exchange Act.
(t) "Principal Party" has the meaning set forth in Section 13(b).
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<PAGE> 9
(u) "Purchase Price" has the meaning set forth in Section 7(b).
(v) "Record Date" has the meaning set forth in the Whereas Clause.
(w) "Redemption Price" has the meaning set forth in Section 23.
(x) "Right" has the meaning set forth in the Whereas Clause.
(y) "Rights Certificate" has the meaning set forth in Section 3(a).
(z) "Rights Dividend Declaration Date" has the meaning set forth
in the Whereas Clause.
(aa) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) hereof.
(bb) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(cc) "Stock Acquisition Date" shall mean the earlier of (i) the
first date of public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such and (ii) the first date on which the Company
has actual knowledge of a filing with the Securities and Exchange Commission of
a report pursuant to Section 13(d) or 13(f) of the Exchange Act (which shall
include, without limitation, reports on Schedule 13D, Schedule 13G and Form
13F) by an Acquiring Person reflecting that an Acquiring Person has become
such.
(dd) "Subsidiary" shall mean, with reference to any Person, any
other Person of which an amount of voting securities or equity interests
sufficient to elect at least a majority of the directors or equivalent
governing body of such other Person is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such first-mentioned
Person.
(ee) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
(ff) "Unit" has the meaning set forth in Section 7(b).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3, shall prior to the Distribution Date also
be holders of the Common Stock) in accordance with the terms and conditions
hereof,
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<PAGE> 10
and the Rights Agent hereby accepts such appointment. With the consent of the
Rights Agent, the Company may from time to time appoint such Co-Rights Agents
("Co-Rights Agents") as it may deem necessary or desirable. In the event the
Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier of (i)
the Close of Business on the tenth day after the Stock Acquisition Date, and
(ii) the Close of Business on the tenth day after the date of the commencement
of, or first public announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan maintained by
the Company or any of its Subsidiaries or any trustee or fiduciary with respect
to such plan acting in such capacity) to commence (which intention to commence
remains in effect for five business days after such announcement), a tender or
exchange offer, if upon consummation thereof such Person would be the
Beneficial Owner of 30% or more of the shares of Company Common Stock then
outstanding (the earlier of (i) and (ii) above being the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for shares of Company Common Stock
registered in the names of the holders of shares of Company Common Stock as of
and subsequent to the Record Date (which certificates for shares of Company
Common Stock shall be deemed also to be certificates for Rights) and not be
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Company Common Stock
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign and the Company will send or cause to be sent (and the Rights Agent
will, if requested by the Company, send) by first-class, insured, postage
prepaid mail, to each record holder of shares of Company Common Stock as of the
Close of Business on the Distribution
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<PAGE> 11
Date, at the address of such holder shown on the records of the Company, one or
more rights certificates, in substantially the form of Exhibit A hereto (the
"Rights Certificates"), evidencing one Right for each share of Company Common
Stock so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Company Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the
Rights Certificates, the Company may make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Junior Preferred
Stock, in a form which may be appended to certificates that represent shares of
Company Common Stock, in substantially the form attached hereto as Exhibit B
(the "Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of shares of Company Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect
of all shares of Company Common Stock which are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates,
representing such shares of Company Common Stock, issued after the Record Date
shall bear the following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement between
Rowan Companies, Inc. (the "Company") and Citibank, N.A. (the "Rights
Agent") dated as of February 25, 1992 (the "Rights Agreement"), the
terms of
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<PAGE> 12
which are hereby incorporated herein by reference and a copy
of which is on file at the principal office of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may expire, or may be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void."
With respect to certificates representing shares of Company Common Stock
(whether or not such certificates include the foregoing legend or have appended
to them the Summary of Rights), until the earlier of the Distribution Date and
the Expiration Date, the Rights associated with the shares of Company Common
Stock represented by such certificates shall be evidenced by such certificates
alone and registered holders of the shares of Company Common Stock shall also
be the registered holders of the associated Rights, and the transfer of any of
such certificates shall also constitute the transfer of the Rights associated
with the shares of Company Common Stock represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATE. (a) The Rights Certificates (and
the forms of election to purchase, assignment and certificate to be printed on
the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any applicable law or any rule
or regulation thereunder or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of
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the Record Date and on their face shall entitle the holders thereof to purchase
such number of Units of Junior Preferred Stock as shall be set forth therein at
the price set forth therein, but the amount and type of securities, cash or
other assets that may be acquired upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that represents
Rights beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or any such Associate or Affiliate) to holders of
equity interests in such Acquiring Person (or such Associate or Affiliate) or
to any Person with whom such Acquiring Person (or such Associate or Affiliate)
has any continuing agreement, arrangement or understanding regarding either the
transferred Rights, shares of Company Common Stock or the Company or (B) a
transfer which the Board of Directors by Board Approval has determined to be
part of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of Section 7(e) hereof shall, upon the written direction
of the Board of Directors, contain (to the extent feasible), the following
legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of such Rights
Agreement.
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<PAGE> 14
The Company shall notify the Rights Agent and, if such notification is
given orally, the Company shall confirm same in writing on or prior to the
Business Day next following, at such time as the Company has notice that any
Person constitutes an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, and until such notice is received by the Rights Agent, the
Rights Agent may conclusively presume for all purposes that the foregoing
legend need be imprinted only on Rights Certificates beneficially owned by
Persons that the Company has previously identified to the Rights Agent as
constituting an Acquiring Person or an Affiliate or Associate of an Acquiring
Person and transferees of any such Persons.
The provisions of Section 7(e) shall be operative whether or not the
foregoing legend is contained on any such Rights Certificate.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Rights
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Rights Certificate
may be manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of the individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature of such
Rights Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under this
Rights Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature, for purposes of authentication only, duly
executed by the Rights Agent by manual signature of an authorized signatory, and
such countersignature upon any Rights Certificate shall be conclusive evidence,
and the only evidence, that such Rights Certificates has been duly countersigned
as
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<PAGE> 15
required hereunder. It shall not be necessary for the same signatory of the
Rights Agent to countersign all of the Rights Certificates issued hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder and shall keep such books until three years
following the first to occur of (i) the Expiration Date or (ii) the effective
date of redemption of the Rights pursuant to Section 23. Such books shall show
the name and address of each holder of the Rights Certificates, the number of
Rights evidenced on its face by each Rights Certificate, the Certificate number
and the date of each Rights Certificate.
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 4(b), 7(e) and 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of Units of Junior Preferred Stock (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) as the
Rights Certificate or Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and executed the certificate set
forth in the form of assignment on the reverse side of such
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<PAGE> 16
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Associates or Affiliates thereof as
the Company shall reasonably request; whereupon the Rights Agent shall, subject
to the provisions of Section 4(b), Section 7(e) and Section 14, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of a
Rights Certificate or Rights Certificates.
(b) If a Rights Certificate shall be mutilated, lost, stolen or
destroyed, upon request by the registered holder of the Rights represented
thereby and upon payment to the Company and the Rights Agent of all reasonable
expenses incident thereto, there shall be issued, in exchange for and upon
cancellation of the mutilated Rights Certificate, or in substitution for the
lost, stolen or destroyed Rights Certificate, a new Rights Certificate, in
substantially the form of the prior Rights Certificate, of like tenor and
representing the equivalent number of Rights, but, in the case of loss, theft
or destruction, only upon receipt of evidence satisfactory to the Company and
the Rights Agent of such loss, theft or destruction of such Rights Certificates
and, if requested by the Company or the Rights Agent, indemnity also
satisfactory to it.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Prior to the earlier of (i) the Close of Business on February 25,
2002 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being
the "Expiration Date"), the registered holder of any Rights Certificate may,
subject to the provisions of Sections 7(e) and 9(c), exercise the Rights
evidenced thereby in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with
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<PAGE> 17
the form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price (as hereinafter defined for the number of Units of Junior Preferred Stock
(or, following a Triggering Event, other securities, cash or other assets, as
the case may be) for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-hundredth of a share (each
such one one-hundredth of a share being a "Unit") of Junior Preferred Stock
upon exercise of Rights shall be $75.00, subject to adjustment from time to
time as provided in Sections 11 and 13(a) hereof (such purchase price, as so
adjusted, being the "Purchase Price"), and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised, of
the Purchase Price for the Units of Junior Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
to be purchased thereby as set forth below and an amount equal to any
applicable transfer tax or evidence satisfactory to the Company of payment of
such tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) requisition from any transfer agent of the Junior Preferred Stock
or Company Common Stock, as the case may be (or make available, if the Rights
Agent is the transfer agent) certificates for the number of Units of Junior
Preferred Stock or Company Common Stock, as the case may be, to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests,(ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates, cause the same to be delivered to or
upon the order of the registered
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<PAGE> 18
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash,
if any, to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue Company
Common Stock, other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such Company Common Stock, other securities,
cash and/or other property are available for distribution by the Rights Agent,
if and when appropriate. The payment of the Purchase Price (as such amount may
be reduced pursuant to Section 11(a)(iii) hereof) may be made in cash or by
certified or bank check or money order payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and 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, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) which becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and which receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person (or any such Associate or Affiliate) to holders of equity
interests in such Acquiring Person (or any such Associate or
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<PAGE> 19
Affiliate) or to any Person with whom the Acquiring Person (or such Associate or
Affiliate) has any continuing agreement, arrangement or understanding (whether
or not in writing) regarding the transferred Rights, shares of Company Common
Stock or the Company or (B) a transfer which the Board of Directors by Board of
Approval has determined to be part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e), shall be
null and void without any further action, and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Rights Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights or any other Person as a result of its failure to make any
determination under this Section 7(e) or such Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
(f) Notwithstanding anything in this Rights Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed 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) of the Rights represented by such Rights Certificate or
Associates or Affiliates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATE. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered
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<PAGE> 20
to the Rights Agent, shall be cancelled by it, and no Rights Certificates shall
be issued in lieu thereof except as expressly permitted by this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. (a) The
Company shall at all times prior to the Expiration Date cause to be reserved and
kept available out of its authorized and unissued shares of Junior Preferred
Stock, the number of shares of Junior Preferred Stock that, as provided in this
Rights Agreement, will be sufficient to permit the exercise in full of all
outstanding Rights. Upon the occurrence of any events resulting in an increase
in the aggregate number of shares of Junior Preferred Stock (or other equity
securities of the Company) issued upon exercise of all outstanding Rights above
the number then reserved, the Company shall make appropriate increases in the
number of shares so reserved,
(b) So long as the shares of Junior Preferred Stock to be issued
and delivered upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall during the period from the Distribution
Date through the Expiration Date use its best efforts to cause all securities
reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
(c) The Company shall use its best efforts (i) as soon as
practicable following the occurrence of a Section 11(a)(ii) Event and a
determination by the Company in accordance with Section 11(a)(iii) hereof of
the consideration to be delivered by the Company upon exercise of the Rights
or, if so required by law, as
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soon as practicable following the Distribution Date (such date being the
"Registration Date"), to file a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the securities that may be acquired upon exercise of the Rights (the
"Registration Statement"), (ii) to cause the Registration Statement to become
effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement, and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws.
(d) The Company shall take such action as may be necessary to
ensure that all shares of Junior Preferred Stock (and, following the occurrence
of a Triggering Event, any other securities that may be delivered upon exercise
of Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights Certificates
or upon the exercise of Rights; provided, however, the Company shall not be
required to pay any such tax imposed in connection with the issuance or
delivery of Units of Junior Preferred Stock, or any certificates or depositary
receipts for such Units of Junior Preferred Stock (or, following the occurrence
of a Triggering Event, any other securities, cash or assets, as the case may
be) to any Person other than the registered holder of the Rights Certificates
evidencing the Rights surrendered for exercise. The Company shall not be
required to issue or deliver any certificates or depositary
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receipts for Units of Junior Preferred Stock (or, following the occurrence of a
Triggering Event, any other securities, cash or assets, as the case may be) to,
or in a name other than that of, the registered holder upon the exercise of any
Rights until any such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
SECTION 10. JUNIOR PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for Units of Junior Preferred Stock (or, following the
occurrence of a Triggering Event, other securities) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Units of Junior Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Junior Preferred
Stock (or following the occurrence of a Triggering Event, other securities)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such securities on, and such certificate shall be
dated, the next succeeding Business Day on which the Junior Preferred Stock
(or, following the occurrence of a Triggering Event, other securities) transfer
books of the Company are open and, further provided, however, that if delivery
of Units of Junior Preferred Stock is delayed pursuant to Section 9(c) hereof,
such Persons shall be deemed to have become the record holders of such Units of
Junior Preferred Stock only when such Units first become deliverable. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights
Certificates shall not be entitled to any rights of a stockholder of the
Company with respect to securities for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive
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dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as and to the extent provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of securities
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Rights Agreement (A) declare a dividend on the Junior Preferred Stock
payable in shares of Junior Preferred Stock, (B) subdivide the outstanding
Junior Preferred Stock, (C) combine the outstanding Junior Preferred Stock into
a smaller number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Junior Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of Junior
Preferred Stock or capital stock, as the case may be, issuable on such date upon
exercise of the Rights, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive, upon payment
of the Purchase Price then in effect, the aggregate number and kind of shares of
Junior Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such date, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the
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adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11 (a)(ii)
hereof.
(ii) In the event:
(A) Any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Rights
Agreement, directly or indirectly, (1) shall merge into the Company or
otherwise combine with the Company and the Company shall be the
continuing or surviving corporation of such merger or combination and
the Company Common Stock shall remain outstanding and unchanged, (2)
shall, in one transaction or a series of transactions, transfer any
assets to the Company or to any of its Subsidiaries in exchange (in
whole or in part) for shares of Company Common Stock, for other equity
securities of the Company or any such Subsidiary, or for securities
exercisable for or convertible into shares of equity securities of the
Company or any of its Subsidiaries (whether Company Common Stock or
otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional shares of
such equity securities or securities exercisable for or convertible
into such equity securities (other than pursuant to a pro rata
distribution to all holders of Company Common Stock), (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of transactions,
to, from or with (as the case may be) the Company or any of its
Subsidiaries or any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity, assets (including securities) on
terms and conditions less favorable to the Company or such Subsidiary
or plan than those that could have been obtained in arm's-length
negotiations with an unaffiliated third party, other than pursuant to a
transaction set forth in Section 13(a) hereof, (4) shall sell,
purchase, lease,
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exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of, in one transaction or a series of transactions, to, from or with
the Company or any of the Company's Subsidiaries or any employee
benefit plan maintained by the Company or any of its Subsidiaries or
any trustee or fiduciary with respect to such plan acting in such
capacity, assets (including securities) having an aggregate fair
market value of more than $5,000,000, other than pursuant to a
transaction set forth in Section 13(a) hereof, (5) shall receive, or
any designee, agent or representative of such Acquiring Person or any
Associate or Affiliate of such Acquiring Person shall receive, any
compensation from the Company or any of its Subsidiaries other than
compensation for full-time employment as a regular employee at rates
in accordance with the Company's (or its Subsidiaries') past
practices, or (6) shall receive the benefit, directly or indirectly
(except proportionately as a holder of Company Common Stock or as
required by law or governmental regulation), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits
or other tax advantage provided by the Company or any of its
Subsidiaries or any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity; or
(B) any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan maintained by the Company or
any of its Subsidiaries or any trustee or fiduciary with respect to
such plan acting in such capacity) shall become the Beneficial Owner
of 15% or more of the shares of Company Common Stock then outstanding,
other than pursuant to any transaction set forth in Section 13(a)
hereof, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split) or recapitalization of the Company, or any merger or
consolidation of the Company
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with any of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries, other
than a transaction or transactions to which the provisions of Section
13(a) apply (whether or not with or into or otherwise involving an
Acquiring Person), which has the effect, directly or indirectly, of
increasing by more than 1% the proportionate share of the outstanding
shares of any class of equity securities of the Company or any of its
Subsidiaries which is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person;
then, immediately upon the date of the occurrence of an event described in
Section 11(a)(ii)(A)-(C) hereof (a "Section 11(a)(ii) Event"), proper provision
shall be made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Rights Agreement, in lieu of the number of Units of Junior Preferred Stock for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, such number of shares of Company Common Stock as shall
equal the result obtained by (x) multiplying the then current Purchase Price by
the then number of Units of Junior Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event (such product thereafter being, for all purposes of this Rights Agreement
other than Section 13 hereof, the "Purchase Price"), and (y) dividing that
product by 50% of the then current market price (determined pursuant to Section
11(d) hereof) per share of Company Common Stock on the date of such first
occurrence (such number of shares of Company Common Stock being the "Adjustment
Shares").
(iii) In the event that, upon the occurrence of a Section 11(a)(ii)
Event, the number of shares of Company Common Stock which are treasury shares
or are authorized by the Company's Certificate of Incorporation and are not
issued or
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reserved for issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii) of this Section 11(a), the Company, by Board
Approval, shall: (a) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess being the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for such Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) a number of shares, or units of shares, or other equity
securities of the Company (including, without limitation, shares, or units of
shares, of preferred stock (such other shares being "common stock
equivalents")), (4) debt securities of the Company, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
by Board Approval, after receiving advice from a nationally recognized
investment banking firm; provided, however, that if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within 90
days following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(iii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Company Common Stock (to the extent
available) and then, if necessary, cash, which shares of Company Common Stock
and/or cash shall have an aggregate value equal to the Spread. To the extent
that the Company determines that some action need be taken pursuant to the
first sentence of this Section 11(a)(iii), the Company shall provide, subject
to Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights. For purposes of this Section 11(a)(iii), the value of a
share of Company Common Stock
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<PAGE> 28
shall be the current market price (as determined pursuant to Section 11(d)
hereof) per share of Company Common Stock on the Section 11(a)(iii) Trigger
Date and the value of any common stock equivalent shall be deemed to have the
same value as the Company Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Junior Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) shares of Junior Preferred Stock (or
shares having substantially the same rights, privileges and preferences as
shares of Junior Preferred Stock ("equivalent preferred stock")) or securities
convertible into Junior Preferred Stock or equivalent preferred stock at a
price per share of Junior Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security convertible into
Junior Preferred Stock or equivalent preferred stock) less than the current
market price (as determined pursuant to Section 11(d) hereof) per share of
Junior Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the sum of the number of shares of Junior Preferred Stock
outstanding on such record date plus the number of shares of Junior Preferred
Stock which the aggregate offering price of the total number of shares of
Junior Preferred Stock and/or equivalent preferred stock so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of Junior Preferred Stock outstanding on
such record date plus the number of additional shares of Junior Preferred Stock
and/or equivalent preferred stock to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
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consideration part or all of which may be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors by Board Approval, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Junior Preferred Stock owned by or
held for the account of the Company or any Subsidiary shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of shares of Junior Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable in shares of
Junior Preferred Stock, but including any dividend payable in stock other than
Junior Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to Section
11(d) hereof) per share of Junior Preferred Stock on such record date less the
fair market value (as determined in good faith by the Board of Directors by
Board Approval, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the holder
of the Rights) of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants distributable in respect
of a share of Junior Preferred Stock and the
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denominator of which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per share of Junior Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock or Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of such
shares for the ten consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, if prior to the
expiration of such requisite ten Trading Day period the issuer announces either
(A) a dividend or distribution on such shares payable in such shares or
securities convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such shares, then, following
the ex-dividend date for such dividend or the record date for such subdivision,
as the case may be, the "current market price" shall be properly adjusted to
take into account such event. The closing price for each date shall be, if the
shares are listed and admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which such shares are listed or admitted to trading or, if such 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 such 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 such shares
selected by the Board of Directors by Board Approval. If on
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any such date no market maker is making a market in such shares, the fair value
of such shares on such date as determined in good faith by the Board of
Directors by Board Approval shall be used. If such shares are not publicly
held or not so listed or traded, "current market price" per share shall mean
the fair value per share as determined in good faith by the Board of Directors
by Board Approval, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. The term
"Trading Day" shall mean, if such shares are listed or admitted to trading on
any national securities exchange, a day on which the principal national
securities exchange on which such shares are listed or admitted to trading is
open for the transaction of business or, if such shares are not so listed or
admitted, a Business Day.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Junior Preferred Stock shall be determined in the
same manner as set forth above for Company Common Stock in clause (i) of this
Section 11(d) (other than the fourth sentence thereof). If the current market
price per share of Junior Preferred Stock cannot be determined in the manner
provided above or if the Junior Preferred Stock is not publicly held or listed
or traded in a manner described in clause (i) of Section 11(d), the "current
market price" per share of Junior Preferred Stock shall be conclusively deemed
to be an amount equal to 100 (as such amount may be appropriately adjusted for
such events as stock splits, stock dividends and recapitalizations with respect
to Company Common Stock occurring after the date of this Agreement) multiplied
by the current market price per share of Company Common Stock. If neither
Company Common Stock nor Junior Preferred Stock is publicly held or so listed
or traded, "current market price" per share of the Junior Preferred Stock shall
mean the fair value per share as determined in good faith by the Board of
Directors by Board Approval whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent
and
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the holders of the Rights. For all purposes of this Rights Agreement, the
"current market price" of a Unit of Junior Preferred Stock shall be equal to the
"current market price" of one share of Junior Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share of Company Common
Stock or Common Stock or other share or one-millionth of a share of Junior
Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Sections 11(a)(ii) or 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Junior Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Junior Preferred Stock contained in Sections
11(a), (b), (c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Junior
Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted, Purchase Price, the number of Units of Junior
Preferred Stock (or other securities or amount of cash or combination thereof)
that may be
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acquired from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
Units of Junior Preferred Stock (calculated to the nearest one-ten thousandth
of a Unit) obtained by (i) multiplying (x) the number of Units of Junior
Preferred Stock covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of Units of Junior Preferred Stock that may be acquired upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of Units of Junior
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
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effective
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have
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been issued, shall be at least ten days later than the date of such public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of 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 Company,
shall cause to be distributed to such holders of 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 Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Units of Junior Preferred Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per Unit and the number of Units of
Junior Preferred Stock which was expressed in the initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value of the number of Units of
Junior Preferred Stock issuable upon exercise of the Rights, or below the then
par value of the shares of Company Common Stock if then issuable upon exercise
of the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue such fully paid and non-assessable number of Units of Junior
Preferred Stock or, if applicable, shares
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of Company Common Stock at such adjusted Purchase Price. If upon any exercise
of the Rights, a holder is to receive a combination of Units of Junior
Preferred Stock and preferred stock equivalents or Company Common Stock and
common stock equivalents, a portion of the consideration paid upon such
exercise, equal to at least the then par value of a share of Junior Preferred
Stock or Company Common Stock, as the case may be, shall be allocated as
payment for each share of Junior Preferred Stock or Company Common Stock so
received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of Units of Junior Preferred Stock and shares of other capital
stock or securities of the Company, if any, issuable upon such exercise over
and above the number of Units of Junior Preferred Stock and shares of other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares (fractional or otherwise) or securities upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors by Board
Approval shall determine to be advisable in order that any (i) consolidation or
subdivision of the Junior Preferred Stock, (ii) issuance wholly for cash of any
shares of Junior Preferred Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Junior Preferred Stock or securities
which by their terms are convertible into or
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exchangeable for shares of Junior Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Junior Preferred Stock, shall
not be taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction, or
a series of transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), if (x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
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 Person which constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof shall
have distributed or otherwise transferred (or will distribute or otherwise
transfer) to its stockholders, or other persons holding an equity interest in
such Person, Rights previously owned by such Person or any of its Affiliates
and Associates; provided, however, this Section 11(n) shall not affect the
ability of any Subsidiary of the Company to consolidate with, merge with or
into, or sell or transfer assets or earning power to, any other Subsidiary of
the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23 or Section 26 hereof, take (or permit any Subsidiary to
take)
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any action if at the time such action is taken it is reasonably foreseeable
that such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
(p) Anything in this Rights Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Company Common Stock payable in shares
of Company Common Stock, (ii) subdivide the outstanding shares of Company Common
Stock, (iii) combine the outstanding shares of Company Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of Company Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), the number of Rights associated with each share of
Company Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Company Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Company Common Stock immediately
prior to such event by a fraction the numerator of which shall be the total
number of shares of Company Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Company Common Stock outstanding immediately following the
occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Junior
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Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Company Common Stock) in accordance with Section 25 hereof; provided,
however, that the failure of the Company to make such a certificate or give
such notice shall not affect the validity or the force or effect of the
requirement for such an adjustment. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until
it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. (a) In the event that, following the Stock Acquisition Date,
directly or indirectly, either (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company 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 Company
Common Stock shall be converted into or exchanged for stock or other securities
of any other Person or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) to any Person or Persons (other than the Company or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) (any such event being a "Section 13 Event"),
then, and in each such case, proper provision
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<PAGE> 39
shall be made so that: (i) each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price, such number of validly authorized
and issued, fully paid, and non-assessable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), which shares shall not be
subject to any liens, encumbrances, rights of call or first refusal, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of Units of
Junior Preferred Stock for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11 (a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
number of such Units for which a Right would be exercisable hereunder but for
the occurrence of such Section 11(a)(ii) Event by the Purchase Price which would
be in effect hereunder but for such first occurrence) and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be
the "Purchase Price" for all purposes of this Rights Agreement) by 50% of the
current market price (determined pursuant to Section 11(d) hereof) per share of
the Common Stock of such Principal Party on the date of consummation of such
Section 13 Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and duties
of the Company pursuant to this Rights Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to ensure that
the provisions of this Rights Agreement shall thereafter be applicable to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
and (v) the
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provisions of Section 11(a)(ii) hereof shall be of no further effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), (A) the Person that is
the issuer of any securities into which shares of Company Common Stock
are converted in such merger or consolidation, or, if there is more
than one such issuer, the issuer of Common Stock that has the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof) and (B) if no securities are so issued, the Person that is the
other party to such merger or consolidation, or, if there is more than
one such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof); and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the party
receiving the largest 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 received
the same portion of the assets or earning power transferred pursuant
to such transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be determined,
whichever Person the Common Stock of which has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof);
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act
("Registered Common Stock"), or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person that has Registered
Common Stock outstanding,
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"Principal Party" shall refer to such other Person; (2) if the Common Stock of
such Person is not Registered Common Stock or such Person is not a corporation,
and such Person is a direct or indirect Subsidiary or another Person but is not
a direct or indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate parent entity
of such firstmentioned Person; (3) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such Person is
directly or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, "Principal Party"
shall refer to whichever of such other Persons is the issuer of the Registered
Common Stock having the highest aggregate current market price (determined
pursuant to Section 11(d) hereof); and (4) if the Common Stock of such Person
is not Registered Common Stock or such Person is not a corporation, and such
Person is directly or indirectly controlled by more than one Person, and none
of such other Persons have Registered Common Stock outstanding, "Principal
Party" shall refer to whichever ultimate parent entity is the corporation
having the greatest shareholders equity or, if no such ultimate parent entity
is a corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party will:
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(i) (A) prepare and file on an appropriate form, as soon as
practicable following the execution of such agreement and at its own
expense, a registration statement under the Securities Act with
respect to the Common Stock that may be acquired upon exercise of the
Rights, (B) use its best efforts to cause such registration statement
to become and remain effective (and to include a prospectus complying
with the requirements of the Securities Act) until the Expiration
Date, and (C) as soon as practicable following the execution of such
agreement, take such action as may be required to ensure that any
acquisition of such Common Stock upon the exercise of the Rights
complies with any applicable state security or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(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 current market price per share (determined pursuant to Section 11(d)
hereof) or securities exercisable for, or convertible into, Common Stock of
such Principal Party at less than such than current market price (other than,
in each case, to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of the Common Stock of such Principal Party pursuant to the
provisions of this Section 13; then, in such event, the Company shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and
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delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled, 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) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the Persons to which such fractional Rights
would otherwise be issuable, an amount in cash equal to such fraction of the
market value of a whole Right. For purposes of this Section 14(a), the market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be,
if the Rights are listed or admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the
Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making
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a market in the Rights selected by the Board of Directors by Board Approval.
If on any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by the Board
of Directors by Board Approval shall be used and such determination shall be
described in a statement filed with the Rights Agent and the holders of the
Rights.
(b) The Company shall not be required to issue fractions of shares
of Junior Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Junior Preferred Stock) upon exercise of the
Rights or to distribute certificates which evidence such fractional shares of
Junior Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Junior Preferred Stock). Fractions of shares
of Junior Preferred Stock in integral multiples of one one-hundredth of a share
of Junior Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the
fractions of shares of Junior Preferred Stock represented by such depositary
receipts. In lieu of such fractional shares of Junior Preferred Stock that are
not integral multiples of one one-hundredth of a share, the Company may pay to
the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the then current market price of a share of Junior Preferred Stock on the day
of exercise, determined in accordance with Section 11(d) hereof.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
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SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Rights Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders
of certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company 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 a certificate representing shares of Company 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 Company or any
other Person 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 shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Rights Agreement. Holders of Rights shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred by them in any contested
action to enforce the provisions of this Rights Agreement where that action is
terminated and the relief requested by the holders is granted.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company Common
Stock;
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(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
purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates duly
executed;
(c) subject to Section 6(a) and Section 7(f), the Company
and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
Company Common Stock certificate) 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 Company Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence
of Section 7(e), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Rights Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or any 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 Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as promptly as practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
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dividends or be deemed for any purpose the holder of the number of shares of
Junior Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or, except as provided in Section
24 hereof, to receive notice of meetings or other actions affecting
stockholders, 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 thereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the execution and administration of this Rights Agreement and
the exercise and performance of its duties hereunder. The Company shall
indemnify the Rights Agent for, and hold it harmless against, any loss,
liability, or expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this Rights
Agreement, including the costs and expenses of defending against any claim of
liability arising therefrom, directly or indirectly, or prosecuting any action
to determine the rights or obligations of the parties hereunder.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon any
Rights Certificate or certificate for Junior Preferred Stock or Company Common
Stock or for other
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securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement or other paper or document believed by it to be
genuine and to have been signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. (a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or shareholder services businesses 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 document or any further
act on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. 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 a 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 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 Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name
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and deliver Rights Certificates so countersigned; and 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; and 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 the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company 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 Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be specified herein) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; provided, however, that so long as any Person is an
Acquiring Person hereunder, such certificate shall be signed and delivered by a
majority of the Continuing Directors; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Rights Agreement in reliance upon such
certificate.
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(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any responsibility for the
validity of this Rights Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or for the validity or execution
of any Rights Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Rights Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt by the Rights
Agent of the certificate describing any such adjustment contemplated by Section
12); nor shall it be responsible for any determination by the Board of Directors
by Board Approval of Current Value or Spread pursuant to the provisions of
Section 11(a)(iii) or the current market price of the Junior Preferred Stock,
Company Common Stock or any other security pursuant to the provisions of Section
11(d); 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 Junior
Preferred Stock or any other securities to be issued pursuant to this Rights
Agreement or any Rights Certificate or as to whether any shares of Junior
Preferred Stock or any other securities will, when so issued, be validly
authorized and issued, fully paid and non-assessable; nor shall it be liable for
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any federal or state transfer taxes or charges that may be due upon the
issuance or transfer of any shares of Junior Preferred Stock, Company Common
Stock or other securities or any Rights Certificate.
(f) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the performance by the Rights Agent of its duties under this Rights
Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer;
provided, however, that so long as any Person is an Acquiring Person hereunder,
the Rights Agent shall accept such instructions and advice only from a majority
of the Continuing Directors and shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with such instructions
of the majority of the Continuing Directors. Any application by the Rights
Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted
by the Rights Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable for any action taken by, or omission of, the
Rights Agent in accordance with a proposal included in any such application on
or after the date specified in such application (which date shall not be less
than five Business Days after the date any such officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless,
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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 or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Rights Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.
(j) No provision of this Rights 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 or in the exercise of its rights
hereunder if the Rights Agent shall have reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
the Company. If such certificate has been completed and signed and shows a
negative response to clauses 1 and 2 of such certificate, unless previously
instructed otherwise in writing by the Company (which
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instructions may impose on the Rights Agent additional ministerial
responsibilities, but no discretionary responsibilities), the Rights Agent may
assume without further inquiry that the Rights Certificate is not owned by a
person described in Section 4(b) or Section 7(e) hereof and shall not be
charged with any knowledge to the contrary.
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' prior notice in writing mailed to the Company, and to
each transfer agent of the Junior Preferred Stock and the Company Common Stock,
by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' prior notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the
Junior Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then any registered holder 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 Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or the States
of Texas or New York in good standing, shall be authorized to do business as a
banking institution in the State of New York, shall be authorized under such
laws to exercise corporate trust or stock transfer powers, shall be subject to
supervision or examination by
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federal or state authorities and shall have at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a corporation described in clause (a). After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Junior Preferred Stock
and the Company Common 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 the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Rights Agreement or the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board of Directors by Board Approval to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement in the Purchase Price or the number or kind or class of shares
or other securities or property that may be acquired under the Rights
Certificates. In addition, in connection with the issuance or sale of shares of
Company Common Stock following the Distribution Date and prior to the Expiration
Date, the Company (a) shall, with respect to shares of Company Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and
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(b) may, in any other case, if deemed necessary or appropriate by the Board of
Directors by Board Approval, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. REDEMPTION AND TERMINATION. (a) Subject to Section 30
hereof, the Company may, at its option, by the Board of Directors acting by
Board Approval, at any time prior to the earlier of (i) the Close of Business
on the tenth day following the Stock Acquisition Date, or (ii) the Close of
Business on the Final Expiration Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.Ol per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"), and the Company may,
at its option, by the Board of Directors acting by Board Approval, pay the
Redemption Price either in cash, shares of Company Common Stock (based on the
"current market price", as defined in Section 11(d) hereof, of the shares of
Company Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors by Board Approval.
(b) Immediately upon the action of the Board of Directors by Board
Approval ordering the redemption of the Rights, evidence of which shall be
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of
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Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board of Directors by Board Approval ordering
the redemption of the Rights, the Company 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 each holder's last address as it appears
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for Company 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 such notice of redemption
will state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23, and other than in connection
with the purchase or acquisition of Company Common Stock prior to the
Distribution Date.
SECTION 24. NOTICE OF CERTAIN EVENTS. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Junior Preferred Stock or to
make any other distribution to the holders of Junior Preferred Stock (other
than a regular quarterly cash dividend out of earnings or retained earnings of
the Company), (ii) to offer to the holders of Junior Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Junior
Preferred Stock or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Junior Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Junior Preferred Stock), (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other
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transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
or (v) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Junior 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 20 days prior to the
record date for determining holders of the shares of Junior Preferred Stock for
purposes of such action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Junior Preferred Stock
whichever shall be the earlier; provided, however, no such notice shall be
required pursuant to this Section 24, if any Subsidiary of the Company effects
a consolidation or merger with or into, or effects a sale or other transfer of
assets or earning power to, any other Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) hereof.
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SECTION 25. NOTICES. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
any telex, telegram or cable) and mailed or sent or delivered, if to the
Company, at its address at:
Rowan Companies, Inc.
5450 Transco Tower
2800 Post Oak Boulevard
Houston, Texas 77056-6196
Attention: Secretary
And if to the Rights Agent, at its address at:
Citibank, N.A.
111 Wall Street
5th Floor, Equity Administration
New York, New York 10043
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) 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 Company or the Rights Agent,
as the case may be.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Rights Agreement without the approval of any holders of
certificates representing shares of Company Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Rights Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time
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period hereunder, or (iv) to change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, this Rights Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) subject to Section 30
hereof, a time period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company or, so long as any Person
is an Acquiring Person hereunder, from the majority of the Continuing Directors
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Rights Agreement to the
contrary, no supplement or amendment shall be made which changes the Redemption
Price, the Purchase Price, the Expiration Date or the number of Units of Junior
Preferred Stock for which a Right is exercisable without the approval of a
majority of the Continuing Directors. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Company Common Stock.
SECTION 27. SUCCESSORS. All the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the
number of shares of Company Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Company
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Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date hereof. Except
as otherwise specifically provided herein, the Board of Directors of the Company
shall have the exclusive power and authority to administer this Rights Agreement
and to exercise all rights and powers specifically granted to the Board or to
the Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power (i) to
interpret the provisions of this Rights Agreement, and (ii) to make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement. All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board or by a majority
of the Continuing Directors in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board or any member thereof to any
liability to the holders of the Rights.
SECTION 29. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this
Rights Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of shares of Company
Common Stock) any legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of shares
of Company Common Stock).
SECTION 30. 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
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restrictions of this Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Rights Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to
be invalid, void or unenforceable and the Board of Directors by Board Approval
determines in its good faith judgment that severing the invalid language from
this Rights Agreement would adversely affect the purpose or effect of this
Rights Agreement and the Rights shall not then be redeemable, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by a majority of the Continuing Directors.
SECTION 31. GOVERNING LAW. THIS RIGHTS AGREEMENT, EACH RIGHT AND
EACH RIGHTS CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS
EXECUTED IN AND TO BE PERFORMED ENTIRELY IN SUCH STATE.
SECTION 32. COUNTERPARTS. This Rights Agreement may be executed
in one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original, but
all of which taken together shall constitute one and the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. The headings contained in this
Rights Agreement are for descriptive purposes only and shall not affect in any
way the meaning or interpretation of this Rights Agreement.
-58-
<PAGE> 62
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be daily executed, all as of the date first above written.
ATTEST: ROWAN COMPANIES, INC.
By: /s/ MARK H. HAY By: /s/ E.E. THIELE
Name: Mark H. Hay Name: E.E. Thiele
Title: Corporate Secretary Title: Vice President
ATTEST: CITIBANK, N.A.
By: /s/ JOHN W. REASOR By: /s/ P. DEFELICE
Name: John W. Reasor Name: P. Defelice
Title: Assistant Vice President Title: Vice President
-59-
<PAGE> 63
EXHIBIT A
(Form of Rights Certificate)
Certificate No. Rights
-----------
NOT EXERCISABLE AFTER THE EARLIER OF FEBRUARY 25, 2002 OR THE EXPIRATION
DATE (AS DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN THE RIGHTS
AGREEMENT), RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT REFERRED TO BELOW). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]
Rights Certificate
ROWAN COMPANIES, INC.
This certifies that , or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of February 25, 1992 (the "Rights Agreement";
terms defined therein are used herein with the same meaning unless otherwise
defined herein) between Rowan Companies, Inc., a Delaware corporation (the
"Company"), and Citibank, N.A., a national banking association, as Rights Agent
(which term
* The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
<PAGE> 64
shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Distribution Date and prior to
the earlier of the Expiration Date or the Final Expiration Date at the
principal office of the Rights Agent, one one-hundredth of a fully paid and
non- assessable share of Series A Junior Preferred Stock, $1.00 par value per
share (the "Junior Preferred Stock"), of the Company at the Purchase Price
initially of $75.00 per one one-hundredth share (each such one-hundredth of a
share being a "Unit") of Junior Preferred Stock, upon presentation and
surrender of this Rights Certificate with the Election to Purchase and related
certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of Units which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per Unit set forth above shall
be subject to adjustment in certain events as provided in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person or, under
certain circumstances described in the Rights Agreement, a transferee of any
such Acquiring Person, Associate or Affiliate, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the
rights evidenced hereby may entitle the registered holder thereof to purchase
capital stock of an entity other than the Company or receive cash or other
assets, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and
conditions of the Rights Agreement, which terms and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and
<PAGE> 65
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates. Copies of the Rights Agreement are on file at the
principal office of the Company and are available from the Company upon written
request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered. If this Rights Certificate shall be exercised
in part, the registered 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 Company under certain
circumstances at its option at a redemption price of $.01 per Right, payable at
the Company's option in cash or in common stock of the Company, subject to
adjustment in certain events as provided in the Rights Agreement.
No fractional shares of Junior Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one-hundredth of a share of Junior Preferred
Stock), but in lieu thereof a cash payment will 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 Junior
Preferred Stock or of any other securities which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to
<PAGE> 66
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 Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificates shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ,19____.
ATTEST: ROWAN COMPANIES, INC.
By By
-------------------------- -------------------------
Name: Name:
----------------------- ----------------------
Title: Title:
---------------------- ---------------------
Countersigned for purposes of
authentication only:
Citibank, N.A., as Rights Agent
By
--------------------------
Name:
-----------------------
Title:
----------------------
<PAGE> 67
[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)
- --------------------------------------------------------------------------------
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
Company, with full power of substitution.
Dated: , 19
----------- ---
------------------------------
Signature
Signature Guaranteed:
<PAGE> 68
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) THIS Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an acquiring
person or an affiliate or associate of any such acquiring person (as such terms
are defined pursuant to 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 of an Acquiring Person.
Dated: , 19
--------------- -- -------------------------------------
Signature
Signature Guaranteed:
- --------------------------------------------------------------------------------
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.
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and, in the case of an Assignment,
will affix a legend to that effect on any Rights Certificates issued in
exchange for this Rights Certificate.
<PAGE> 69
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: ROWAN COMPANIES, INC.
The undersigned hereby irrevocably elects to exercise (________) Rights
represented by this Rights Certificate to purchase the Units of Junior
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person or other property which may be
issuable upon the exercise of the Rights) and requests that certificates for
such Units be issued in the name of and delivered to:
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Please insert social security
or other identifying
number:
-------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Please insert social security
or other identifying
number:
-------------------------------------------------------------------------
Dated: ,19
------------- ---
----------------------------------------
Signature
<PAGE> 70
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ]
are [ ] are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as 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.
Dated: , 19
--------------- ----
-------------------------------------
Signature
Signature Guaranteed:
- -------------------------------------------------------------------------------
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix
a legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
<PAGE> 71
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
JUNIOR PREFERRED STOCK
On February 25, 1992, the Board of Directors of Rowan Companies, Inc.
(the "Company") declared a distribution of one Right for each outstanding share
of Common Stock, par value $.125 per share (the "Company Common Stock"), to
stockholders of record at the close of business on March 11, 1992 and for each
share of Company Common Stock issued (including shares distributed from
Treasury) by the Company thereafter and prior to the Distribution Date. Each
Right entitles the registered holder, subject to the terms of the Rights
Agreement, to purchase from the Company one one-hundredth of a share (a "Unit")
of Series A Junior Preferred Stock, $1.00 par value per share (the "Junior
Preferred Stock"), at a Purchase Price of $75.00 per Unit, subject to
adjustment. The Purchase Price is payable in cash or by bank check or money
order payable to the order of the Company. The description and terms of the
Rights are set forth in a Rights Agreement between the Company and Citibank,
N.A., as Rights Agent (the "Rights Agreement").
Copies of the Rights Agreement and the Certificate of Designation for
the Junior Preferred Stock have been filed with the Securities and Exchange
Commission as exhibits to a Registration Statement on Form 8-A dated March 2,
1992 (the "Form 8-A"). Copies of the Rights Agreement and the Certificate of
Designation are available free of charge from the Company. This summary
description of the Rights and the Junior Preferred Stock does not purport to be
complete and is qualified in its entirety by reference to all the provisions of
the Rights Agreement and the Certificate of Designation, including the
definitions therein of certain terms, which Rights Agreement and Certificate of
Designation are incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates representing
shares of outstanding Common Stock, and no separate Rights certificates will be
distributed. The Rights will separate from the Common Stock and the date of
distribution of the certificates evidencing the Rights (the "Distribution Date")
will occur upon the earlier of (i) ten days following the earlier of (x) the
first date of a public announcement and (y) the first date on which the Company
has actual knowledge of a filing of a report pursuant to Section 13(d) or 13(f)
of the Securities Exchange Act of 1934, as amended (the date of such
announcement or knowledge of a filing being the "Stock Acquisition Date"),
reflecting that a person or group of affiliated or associated persons (other
than the Company, any subsidiary of the Company or any employee benefit plan of
the Company or such subsidiary) (an "Acquiring Person") has acquired, obtained
the right to acquire, or otherwise obtained beneficial ownership of 15% or more
of the then outstanding shares of Common Stock, or (ii) ten days following the
commencement of, or first public announcement of the intention to commence, a
tender offer or exchange offer that would result in a person or group
beneficially owning 30% or more of the then outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after March 11, 1992
(also including shares distributed from treasury) will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates representing outstanding Common Stock will also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
<PAGE> 72
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on February 25, 2002 unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Company Common Stock as of
the close of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in
a merger with an Acquiring Person and shares of Company Common Stock shall
remain outstanding, (ii) a Person becomes the beneficial owner of 15% or more
of the then outstanding shares of Company Common Stock, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's ownership interest being
increased by more than 1% (eg., by means of a reverse stock split or
recapitalization), then, in each such case, each holder of a Right will
thereafter have the right to receive, upon exercise, Units of Junior Preferred
Stock (or, in certain circumstances, Company Common Stock, cash, property or
other securities of the Company) having a value equal to two times the exercise
price of the Right. The exercise price is the Purchase Price multiplied by the
number of Units of Junior Preferred Stock issuable upon exercise of a Right
prior to the events described in this paragraph. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction and the Company is not the surviving corporation (other than a
merger described in the preceding paragraph), (ii) any Person consolidates or
merges with the Company and all or part of the Company Common Stock is
converted or exchanged for securities, cash or property of any other Person or
(iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the Acquiring Person having a value equal to two
times the exercise price of the Right.
The Purchase Price payable, and the number of Units of Junior
Preferred Stock issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution, (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Junior Preferred
Stock, (ii) if holders of the Junior Preferred Stock are granted certain rights
or warrants to subscribe for Junior
<PAGE> 73
Preferred Stock or convertible securities at less than the current market price
of the Junior Preferred Stock, or (iii) upon the distribution to the holders of
the Junior Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu
thereof, an adjustment in cash may be made based on the market price of the
Junior Preferred Stock prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, a
majority of the Board of Directors (including a majority of the Continuing
Directors) may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"), payable, at the election of such majority
of Board of Directors (including a majority of the Continuing Directors), in
cash or shares of Company Common Stock. Immediately upon the action of a
majority of the Board of Directors (including a majority of the Continuing
Directors) ordering the redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption
Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Units of Junior Preferred Stock (or other
consideration).
Any of the provisions of the Rights Agreement may be amended at any
time prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended in order to cure any
ambiguity, defect or inconsistency, to make changes which do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable.
Description of Junior Preferred Stock
The Units of Junior Preferred Stock that may be acquired upon exercise
of the Rights will be nonredeemable and subordinate to any other shares of
preferred stock that may be issued by the Company.
Each Unit of Junior Preferred Stock will have a minimum preferential
quarterly dividend rate of $0.01 per Unit but will, in any event, be entitled
to a dividend equal to the per share dividend declared on the company Common
Stock.
<PAGE> 74
In the event of liquidation, the holder of a Unit of Junior Preferred
Stock will receive a preferred liquidation payment equal to the greater of $.01
per Unit or the per share amount paid in respect of a share of Company Common
Stock.
Each Unit of Junior Preferred Stock will have one vote, voting
together with the Company Common Stock. The holders of Units of Junior
Preferred Stock, voting as a separate class, shall be entitled to elect two
directors if dividends on the Junior Preferred Stock are in arrears for six
fiscal quarters.
In the event of any merger, consolidation or other transaction in
which shares of Company are exchanged, each Unit of Junior Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Junior Preferred Stock to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
Because of the nature of the Junior Preferred Stock's dividend,
liquidation and voting rights, the economic value of one Unit of Junior
Preferred Stock that may be acquired upon the exercise of each Right should
approximate the economic value of one share of Company Common Stock.
<PAGE> 75
EXHIBIT C
CERTIFICATE OF DESIGNATION
OF SERIES A JUNIOR PREFERRED STOCK
OF
ROWAN COMPANIES, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, C. R. Palmer, President of Rowan Companies, Inc., a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"), and Mark H. Hay, Secretary of the Corporation, in
accordance with the provisions of Section 151 thereof, DO HEREBY CERTIFY":
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation (the "Certificate") of the Corporation, the
Board of Directors on February 25, 1992 duly adopted the following resolution
creating a series of 1,500,000 shares of Preferred Stock designated as Series A
Junior Preferred Stock:
RESOLVED that, pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate, a series of Preferred Stock of this Corporation be and it is
hereby created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional or other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof, are as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Preferred Stock" ("Series A Junior Preferred
Stock") and the number of shares constituting such series shall be 1,500,000.
Such number of shares may be adjusted by appropriate action of the Board of
Directors.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS. (A) Subject to the prior and
superior rights of the holders of any shares of any other series of Junior
Preferred
<PAGE> 76
Stock or any other shares of preferred stock of the Corporation ranking prior
and superior to the shares of Series A Junior Preferred Stock with respect to
dividends, each holder of one one-hundredth (1/100th) of a share (a "Unit") of
Series A Junior Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for that
purpose, (i) quarterly dividends payable in cash on the first day of January,
April, July and October in each year (each such date being a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of such Unit of Series A Junior Preferred Stock,
in an amount per Unit (rounded to the nearest cent) equal to the greater of (a)
$0.01 or (b) subject to the provision for adjustment hereinafter set forth, the
aggregate per share amount of all cash dividends declared on shares of the
Common Stock since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of a Unit of Series A Junior Preferred Stock, and (ii) subject to the
provision for adjustment hereinafter set forth, quarterly distributions
(payable in kind) on each Quarterly Dividend Payment Rate in an amount per Unit
equal to the aggregate per share amount of all non-cash dividends or other
distributions (other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock, by reclassification or
otherwise) declared on shares of Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or with respect to the first Quarterly
Dividend Payment Date, since the first issuance of a Unit of Series A Junior
Preferred Stock. In the event that the Corporation shall at any time after
February 25, 1992 (the "Rights Declaration Date") (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock or (iii) combine outstanding
shares of Common Stock into a smaller number of shares, then in each such case
the amount to which the holder of a Unit of Series A Junior Preferred Stock was
entitled
-2 -
<PAGE> 77
immediately prior to such event pursuant to the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which shall
be the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
Units of Series A Junior Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the shares of
Common Stock (other than a dividend payable in shares of Common Stock);
provided, however, that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date,
a dividend of $0.01 per Unit on the Series A Junior Preferred Stock shall
nevertheless accrue on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on
each outstanding Unit of Series A Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issuance of such Unit of
Series A Junior Preferred Stock, unless the date of issuance of such Unit is
prior to the record date for the first Quarterly Dividend Payment Date, in
which case, dividends on such Unit shall begin to accrue from the date of
issuance of such Unit, or unless the date of issuance is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of
holders of Units of Series A Junior Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either
of which events such dividends shall begin to accrue and be cumulative from
such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on Units of Series A Junior Preferred Stock in
an amount less than the aggregate amount of all such dividends at the time
accrued and
-3 -
<PAGE> 78
payable on such Units shall be allocated pro rata on. a unit-by-unit basis
among all Units of Series A Junior Preferred Stock at the time outstanding.
The Board of Directors may fix a record date for the determination of holders
of Units of Series A Junior 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 Units of Series A Junior
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Junior Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the stockholders of
the Corporation. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares, then in each such case the number of votes per
Unit to which holders of Units of Series A Junior Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which shall be the number of shares of Common Stock
outstanding immediately after such event and the denominator of which shall be
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by law, the holders of
Units of Series A Junior Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Units of Series A Junior
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends
-4 -
<PAGE> 79
thereon, then during the period (a "default period") from the occurrence of
such event until such time as all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on all
Units of Series A Junior Preferred Stock then outstanding shall have been
declared and paid or set apart for payment, all holders of Units of Series A
Junior Preferred Stock, voting separately as a class, shall have the right to
elect two Directors.
(ii) During any default period, such voting rights of the holders
of Units of Series A Junior Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or
at any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting rights nor any right of the
holders of Units of Series A Junior Preferred Stock to increase, in certain
cases, the authorized number of Directors may be exercised at any meeting
unless a majority of the outstanding Units of Series A Junior Preferred Stock
shall be present at such meeting in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the exercise by the
holders of Units of Series A Junior Preferred Stock of such rights. At any
meeting at which the holders of Units of Series A Junior Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting separately as a class, to elect Directors to fill
up to two vacancies in the Board of Directors, if any such vacancies may then
exist, or, if such right is exercised at an annual meeting, to elect two
Directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Series A Junior Preferred
Stock shall have the right to make such increase in the number of Directors as
shall be necessary to permit the election by them of the required number.
After the holders of Units of Series A Junior Preferred Stock shall have
exercised their right to elect Directors during any default period, the number
of Directors shall not be increased or decreased except as approved by a vote
of the holders of Units of
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Series A Junior Preferred Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to the Series A Junior Preferred Stock.
(iii) Unless the holders of Series A Junior Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the total number of
Units of Series A Junior Preferred Stock outstanding may request in writing,
the calling of a special meeting of the holders of Units of Series A Junior
Preferred Stock, which meeting shall thereupon be called by the Secretary of
the Corporation. Notice of such meeting and of "any annual meeting at which
holders of Units of Series A Junior Preferred Stock are entitled to vote
pursuant to this paragraph (C)(iii) shall be given to each holder of record of
Units of Series of Junior Preferred Stock by mailing a copy of such notice to
him at his last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 10 days and not later
than 50 days after such order or request or in default of the calling of such
meeting within 50 days after such order or request, such meeting may be called
on similar notice by any stockholder or stockholders owning in the aggregate
not less than 10% of the total number of outstanding Units of Series A Junior
Preferred Stock.
(iv) During any default period, the holders of shares of Common
Stock and Units of Series A Junior Preferred Stock, and other classes or series
of stock of the Corporation, if applicable, shall continue to be entitled to
elect all the Directors until the holders of Units of Series A Junior Preferred
Stock shall have exercised their right to elect two Directors voting as a
separate class, after the exercise of which right (x) the Directors so elected
by the holders of Units of Series A Junior Preferred Stock shall continue in
office until their successors shall have been elected by such holders or until
the expiration of the default period, and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (C)(ii) of this Section 3) be
filled by
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vote of a majority of the remaining Directors theretofore elected by the
holders of the class of capital stock which elected the Director whose office
shall have become vacant. References in this paragraph (C) to Directors
elected by the holders of a particular class of capital stock shall include
Directors elected by such Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Units of Series A Junior Preferred Stock as a separate
class to elect Directors shall cease, (y) the term of any Directors elected by
the holders of Units of Series A Junior Preferred Stock as a separate class
shall terminate, and (z) the number of Directors shall be such number as may be
provided for in the Certificate or by-laws irrespective of any increase made
pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided by law or
in the Certificate or by-laws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding sentence may
be filled by a majority of the remaining Directors.
(vi) The provisions of this paragraph (C) shall govern the election
of Directors by holders of Units of Series A Junior Preferred Stock during any
default period notwithstanding any provisions of the Certificate to the
contrary.
(D) Except as set forth herein, holders of Units of Series A
Junior Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of shares of Common Stock as set forth herein) for taking any corporate
action.
SECTION 4. CERTAIN RESTRICTIONS. (A) Whenever quarterly dividends or
other dividends or distributions payable on Units of Series A Junior Preferred
Stock as provided in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on outstanding
Units of Series A Junior Preferred Stock shall have been paid in full, the
Corporation shall not
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(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any shares of
junior stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of parity stock, except dividends paid ratably on Units of Series A
Junior Preferred Stock and shares of all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the
holders of such Units and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any parity stock, provided, however, that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any junior stock;
(iv) purchase or otherwise acquire for consideration any Units of
Series A Junior Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors) to
all holders of such Units.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any Units of Series A Junior Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled automatically upon the acquisition
thereof. All such Units shall, upon their cancellation, become authorized but
unissued Units of Junior Preferred Stock and may be reissued as part of a new
series of Junior Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
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SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) 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
junior stock unless the holders of Units of Series A Junior Preferred Stock
shall have received, subject to adjustment as hereinafter provided in paragraph
(B), the greater of either (a) $.01 per Unit plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, or (b) the amount per Unit equal to the
aggregate per share amount to be distributed to holders of shares of Common
Stock, or (ii) to the holders of shares of parity stock, unless simultaneously
therewith distributions are made ratably on Units of Series A Junior Preferred
Stock and all other shares of such parity stock in proportion to the total
amounts to which the holders of Units of Series A Junior Preferred Stock are
entitled under clause (i)(a) of this sentence and to which the holders of
shares of such parity stock are entitled, in each case upon such liquidation,
dissolution or winding up.
(B) In the event the Corporation shall at any time after the
Rights Declaration Date i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock, or (iii) combine outstanding shares of Common Stock into a
smaller number of shares, then in each such case the aggregate amount to which
holders of Units of Series A Junior Preferred Stock were entitled immediately
prior to such event pursuant to clause (i)(b) of paragraph (A) of this Section
6 shall be adjusted by multiplying such amount by a fraction the numerator of
which shall be the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which shall be the number
of shares of Common Stock that were outstanding immediately prior to such
event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the
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shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series A Junior Preferred Stock shall at the same time be similarly exchanged
for or converted into an amount per Unit (subject to the provision for
adjustment hereinafter set forth) equal to the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (ii) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock, or (iii) combine outstanding Common Stock into a smaller number
of shares, then in each such case the amount set forth in the immediately
preceding sentence with respect to the exchange or conversion of Units of
Series A Junior Preferred Stock shall be adjusted by multiplying such amount by
a fraction the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
SECTION 8. REDEMPTION. The Units of Series A Junior Preferred Stock
shall not be redeemable.
SECTION 9. RANKING. The Units of Series A Junior Preferred Stock
shall rank junior to all other series of the Junior Preferred Stock and to any
other class of preferred stock as to the payment of dividends and the
distribution of assets, unless the Certificate or the terms of any such series
or class shall provide otherwise.
SECTION 10. AMENDMENT. The Certificate, including, without
limitation, this resolution, shall not hereafter be amended, either directly or
indirectly, or through merger or consolidation with another corporation, in any
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manner that would alter or change the powers, preferences or special rights of
the Series A Junior Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding Units
of Series A Junior Preferred Stock, voting separately as a class.
SECTION 11. FRACTIONAL SHARES. The Series A Junior Preferred Stock
may be issued in Units or other fractions of a share, which Units or fractions
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior Preferred
Stock.
SECTION 12. CERTAIN DEFINITIONS. As used herein with respect to the
Series A Junior Preferred Stock, the following terms shall have the following
meanings:
(A) The term "Common Stock" shall mean the class of stock
designated as the common stock, par value $.125 per share, of the Corporation
at the date hereof or any other class of stock resulting from successive
changes or reclassification of the common stock.
(B) The term "junior stock" (i) as used in Section 4, shall mean
the Common Stock and any other class or series of capital stock of the
Corporation hereafter authorized or issued over which the Series A Junior
Preferred Stock has preference or priority as to the payment of dividends and
(ii) as used in Section 6, shall mean the Common Stock and any other class or
series of capital stock of the Corporation over which the Series A Junior
Preferred Stock has preference or priority in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation.
(C) The term "parity stock" (i) as used in Section 4, shall mean
any class or series of stock of the Corporation hereafter authorized or issued
ranking pari passu with the Series A Junior Preferred Stock as to dividends and
(ii) as used in Section 6,
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shall mean any class or series of capital stock ranking pari passu with the
Series A Junior Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate
of Designation and do affirm the foregoing as true under the penalties of
perjury this 2nd day of March, 1992.
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President
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Secretary
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