<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
_______________________________
MARINE DRILLING COMPANIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 76-2558926
(State of Incorporation or organization) (I.R.S. Employer Identification Number)
ONE SUGAR CREEK CENTER BLVD., SUITE 600
HOUSTON, TEXAS 77478-3556
(Address of principal executive offices) (Zip code)
</TABLE>
Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Junior Participating Preferred
Stock, par value $.01 per share
_______________________________________________________________________________
Title of Class
<PAGE> 2
Item 1. Description of Registrant's Securities to be Registered.
On November 8, 1996, the Board of Directors of Marine Drilling
Companies, Inc. (the "Company") authorized the issuance of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par
value $.01 per share (the "Common Shares"), of the Company. The rights will be
issued on November 20, 1996 (the "Record Date") to the stockholders of record
on that date. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Junior Participating Preferred Stock,
par value $.01 per share (the "Preferred Shares"), of the Company, at a price
of $56.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth
in a Rights Agreement (the "Rights Agreement") dated as of November 15, 1996
between the Company and American Stock Transfer & Trust Company, as Rights
Agent (the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding Voting Shares (as
defined in the Rights Agreement) of the Company, or (ii) 10 business days
following the commencement or announcement of an intention to commence a tender
offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of such outstanding
Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of
the Rights) (i) the Rights will be evidenced, with respect to the Common Shares
outstanding on November 20, 1996, by the certificates representing such Common
Shares with a copy of the Summary of Rights to Purchase Preferred Shares
included as Exhibit 4 hereto (the "Summary of Rights") attached thereto, (ii)
the Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after November 20, 1996, upon transfer or new
issuance of the Common Shares, will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of November 20, 1996, even without such
notation or a copy of the Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on November 19, 2006 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
If a person or group were to acquire 15% or more of the Voting Shares
of the Company, each Right then outstanding (other than Rights beneficially
owned by the Acquiring Person which would become null and void) would become a
right to buy that number of Common Shares (or under certain circumstances, the
equivalent number of one one- thousandths of a Preferred Share) that at the
time of such acquisition would have a market value of two times the Purchase
Price of the Right.
If the Company were acquired in a merger or other business combination
transaction or assets constituting more than 50% of its consolidated assets or
producing more than 50% of its earning power or cash flow were sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction would have a market value of two times
the Purchase Price of the Right.
<PAGE> 3
PREFERRED SHARES. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate,
1,000 times the dividend declared on the Common Shares. In the event of
liquidation, the holders of the Preferred Shares will be entitled to receive a
preferential liquidation payment equal to the greater of (i) $1,000 per share,
or (ii) in the aggregate, 1,000 times the payment made on the Common Shares.
In the event of any merger, consolidation or other transaction in which Common
Shares are exchanged for or changed into other stock or securities, cash or
other property, each whole Preferred Share will be entitled to receive 1,000
times the amount received per Common Share. Each whole Preferred Share shall
be entitled to 1,000 votes on all matters submitted to a vote of the
stockholders of the Company, and Preferred Shares shall generally vote together
as one class with the Common Stock and any other capital stock on all matters
submitted to a vote of stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary
adjustments from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
EXCHANGE OPTION. At any time after the acquisition by a person or
group of affiliated or associated persons of beneficial ownership of 15% or
more of the outstanding Voting Shares of the Company and before the acquisition
by a person or group of 50% or more of the outstanding Voting Shares of the
Company, the Board of Directors may, at its option, issue Common Shares in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common
Share (or one one-thousandth of a Preferred Share) for each two Common Shares
for which each Right is then exercisable, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the first public
announcement that a person or group has become the beneficial owner of 15% or
more of the outstanding Voting Shares, the Board of Directors of the Company
may redeem all but not less than all the then outstanding Rights at a price of
$0.01 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
NO RIGHTS AS STOCKHOLDER. 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.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during
which the Rights may be redeemed, except that after the first public
announcement that a person or group has become the beneficial owner of 15% or
more of the outstanding Voting Shares, no such amendment may materially and
adversely affect the interests of the holders of the Rights.
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<PAGE> 4
The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
form of Statement of Resolution Establishing Series of Shares of Junior
Participating Preferred Stock, form of Right Certificate, form of the Summary
of Rights and the specimen of the legend to be placed on new Common Share
certificates, filed as exhibits hereto and incorporated by reference herein.
Item 2. Exhibits.
1. Rights Agreement, dated as of November 15, 1996, between the
Company and American Stock Transfer & Trust Company, as Rights
Agent, specifying the terms of the Rights, which includes the
form of Statement of Resolution Establishing Series of Shares
of Junior Participating Preferred Stock as Exhibit A, the form
of Right Certificate as Exhibit B and the form of the Summary
of Rights to Purchase Preferred Shares as Exhibit C.
2. Form of Statement of Resolution Establishing Series of Shares
of Junior Participating Preferred Stock (included as Exhibit A
to the Rights Agreement filed as Exhibit 1 hereto) setting
forth the terms of the Junior Participating Preferred Stock,
par value $.01 per share.
3. Form of Right Certificate (included as Exhibit B to the Rights
Agreement filed as Exhibit 1 hereto). Pursuant to the Rights
Agreement, printed Right Certificates will not be delivered
until as soon as practicable after the Distribution Date.
4. Form of Summary of Rights to Purchase Preferred Shares
(included as Exhibit C to the Rights Agreement filed as
Exhibit 1 hereto) which, together with certificates
representing the outstanding Common Shares of the Company,
shall represent the Rights prior to the Distribution Date.
5. Specimen of legend to be placed, pursuant to Section 3(d) of
the Rights Agreement, on all new Common Share certificates
issued by the Company after November 20, 1996, and prior to
the Distribution Date upon transfer, exchange or new issuance.
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<PAGE> 5
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
MARINE DRILLING COMPANIES, INC.
Date: November 15, 1996 By: /s/ William H. Flores
----------------------------------
Name: William H. Flores
Title: Executive Vice President and
Chief Financial Officer
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<PAGE> 6
EXHIBIT INDEX
Exhibit
Number Description
------- -----------
1 Rights Agreement, dated as of November 15, 1996,
between the Company and American Stock Transfer & Trust
Company, as Rights Agent, specifying the terms of the
Rights, which includes the form of Statement of Resolution
Establishing Series of Shares of Junior Participating
Preferred Stock as Exhibit A, the form of Right
Certificate as Exhibit B and the form of the Summary of
Rights to Purchase Preferred Shares as Exhibit C.
2 Form of Statement of Resolution Establishing Series of
Shares of Junior Participating Preferred Stock (included
as Exhibit A to the Rights Agreement filed as Exhibit 1
hereto) setting forth the terms of the Junior
Participating Preferred Stock, par value $.01 per share.
3 Form of Right Certificate (included as Exhibit B to
the Rights Agreement filed as Exhibit 1 hereto).
Pursuant to the Rights Agreement, printed Right
Certificates will not be delivered until as soon as
practicable after the Distribution Date.
4 Form of Summary of Rights to Purchase Preferred Shares
(included as Exhibit C to the Rights Agreement filed as
Exhibit 1 hereto) which, together with certificates
representing the outstanding Common Shares of the
Company, shall represent the Rights prior to the
Distribution Date.
5 Specimen of legend to be placed, pursuant to Section
3(d) of the Rights Agreement, on all new Common Share
certificates issued by the Company after November 20, 1996,
and prior to the Distribution Date upon transfer, exchange
or new issuance.
<PAGE> 1
EXHIBIT 1
________________________________________________________________________________
RIGHTS AGREEMENT
between
MARINE DRILLING COMPANIES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
Dated as of November 15, 1996
________________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5. Execution, Authentication and Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . 18
Section 9. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10. Reservation and Availability of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 11. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 12. Adjustment of Purchase Price, Number of Shares or Number of Rights . . . . . . . . . . . . . . . . . . . 22
Section 13. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . . . 32
Section 14. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . . . 32
Section 15. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 16. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 17. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 18. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 21. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . 43
Section 22. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
</TABLE>
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<TABLE>
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Section 23. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 24. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 25. Mandatory Redemption and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 26. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 27. Securities Laws Registrations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 28. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 29. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 30. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 31. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 32. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 33. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 34. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 35. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Exhibits
- --------
Exhibit A - Certificate of Designation of Preferred Shares
Exhibit B - Right Certificate
Exhibit C - Summary of Rights
</TABLE>
-ii-
<PAGE> 4
RIGHTS AGREEMENT
This Rights Agreement, dated as of November 15, 1996, is between
Marine Drilling Companies, Inc., a Texas corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York trust company, as Rights
Agent.
WHEREAS, the Board of Directors of the Company, having determined its
actions to be in the interests of the Company, has authorized the creation of
Rights, has authorized and directed the issuance to the holders of record of
Common Shares of the Company outstanding on November 20, 1996 of one Right with
respect to each Common Share of the Company outstanding on November 20, 1996,
and has further authorized and directed the issuance of one Right with respect
to each Common Share that shall become outstanding between November 20, 1996
and the earlier of the Distribution Date, the Redemption Date and the Final
Expiration Date; and
WHEREAS, the Board of Directors of the Company has authorized and
directed that the terms and conditions under which the Rights are to be
distributed, including without limitation those affecting the exercise thereof,
the securities or other property to be acquired thereby and the purchase price
to be paid therefor, shall be set forth in a written agreement between the
Company and a rights agent made for the benefit of the holders of the Rights to
the extent so provided therein.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the Voting
<PAGE> 5
Shares of the Company then outstanding, but shall not include the
Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding
Voting Shares for or pursuant to any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result
of an acquisition of Voting Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 15% or more of the
Voting Shares of the Company then outstanding; provided, however,
that, if a Person shall become the Beneficial Owner of 15% or more of
the Voting Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company and at a time when such Person is the Beneficial Owner of 15%
or more of the Voting Shares of the Company then outstanding, become
the Beneficial Owner of any additional Voting Shares of the Company,
then such Person shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board of Directors of the
Company determines in good faith that a Person who would otherwise be
an "Acquiring Person", as defined pursuant to the foregoing provisions
of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
"Agreement" shall mean this Rights Agreement as hereafter
amended from time to time.
-2-
<PAGE> 6
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "own beneficially" any securities which (without
duplication):
(i) such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, within the
meaning of either Section 13 or 16 of the Exchange Act;
(ii) such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting or disposing of any securities of the Company; provided,
however, that, for purposes of each clause of this definition, a
Person shall not be deemed the Beneficial Owner of, or to own
beneficially, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
-3-
<PAGE> 7
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; and provided, further, that, for purposes of
each clause of this definition, a Person shall not be deemed the
Beneficial Owner of, or to own beneficially, any security as a result
of any agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding (1) arises solely from
a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on Schedule
13D under the Exchange Act (or any comparable or successor report) and
provided, further, that notwithstanding anything to the foregoing to
the contrary, a Person engaged in the business of underwriting
securities shall not be deemed the "Beneficial Owner" of, or to "own
beneficially", any securities acquired in good faith in a firm
commitment underwriting until the expiration of 40 days after the date
of such acquisition.
Notwithstanding anything in this definition to the contrary,
the phrase "then outstanding", when used with reference to a Person's
Beneficial Ownership of securities of the Company (or to the number of
such securities "beneficially owned"), shall mean the number of such
securities then issued and outstanding together with the number of
such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Texas
are authorized or obligated by law or executive order to close.
-4-
<PAGE> 8
"Close of Business" on any given date shall mean 5:00 P.M.,
Houston time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Houston time, on the next
succeeding Business Day.
"Closing Price", with respect to any security, shall mean the
last sale price, regular way, on a specific Trading Day or, in case no
such sale takes place on such Trading Day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange or, if such security is not then listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such
security is listed or admitted to trading or, if such security is not
then listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or such other system then in use, or, if
on any such Trading Day such security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Company. If such
security is not publicly held or so listed or traded, "Closing Price"
shall mean the fair value per unit of such security as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
"Common Shares" when used with reference to the Company shall
mean shares of capital stock of the Company which have no preference
over any other class of stock with
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<PAGE> 9
respect to dividends or assets, which are not redeemable at the option
of the Company and with respect to which no sinking, purchase or
similar fund is provided and shall initially mean the shares of Common
Stock, par value $.01 per share, of the Company. "Common Shares" when
used with reference to any Person other than the Company shall, if
used with reference to a corporation, mean the capital stock (or
equity interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person, the Person
or Persons which ultimately control such first-mentioned Person and,
if used with reference to any Person other than a corporation, mean
the equity interest in such Person (or, if the net worth determined in
accordance with generally accepted accounting principles of another
Person (other than an individual) which controls such first-mentioned
Person is greater than such first-mentioned Person, then such other
Person) with the greatest voting power or managerial power with
respect to the business and affairs of such Person.
"Company" shall mean Marine Drilling Companies, Inc., a Texas
corporation, and its successors.
"Company Order" means a written request or order signed in the
name of the Company by its Chairman of the Board, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Rights
Agent.
"Corporate Trust Office" means the principal office of the
Rights Agent at which it administers its corporate trust business,
which, in the case of American Stock Transfer & Trust Company shall,
until hereafter changed, be its office at 40 Wall Street, New York,
New York 10005.
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<PAGE> 10
"Distribution Date" shall mean the earlier of (i) the tenth
Business Day after the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity
holding Voting Shares for or pursuant to the terms of any such plan)
of, or after the date of the first public announcement of the intent
of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the
Company, or any entity holding Voting Shares for or pursuant to the
terms of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the
Beneficial Owner of 15% or more of the then outstanding Voting Shares
of the Company; provided, however, that an occurrence described in
clause (ii) of this definition above shall not cause the occurrence of
the Distribution Date if the Board of Directors of the Company shall,
prior to such tenth Business Day (or such later date as described in
clause (ii) above), determine that such tender or exchange offer is
spurious, unless, thereafter, the Board of Directors of the Company
shall make a contrary determination, in which event the Distribution
Date shall occur on the later to occur of such tenth Business Day (or
such later date as described in clause (ii) above) and the date of
such latter determination.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto.
"Final Expiration Date" shall mean the Close of Business on
November 19, 2006.
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<PAGE> 11
"Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, trust or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
"Preferred Shares" shall mean shares of Junior Participating
Preferred Stock, par value $.01 per share, of the Company having the
rights and preferences set forth in the form of Statement of
Resolution Establishing Series of Shares of Junior Participating
Preferred Stock attached hereto as Exhibit A.
"Purchase Price" shall mean the initial price at which the
holder of a Right may, subject to the terms and conditions of this
Agreement, purchase one one-thousandth (1/1000) of a Preferred Share
(which initial price is set forth in Section 8(b) hereof), as such
price shall be adjusted pursuant to the terms of this Agreement.
"Redemption Date" shall mean the time at which the Rights are
redeemed pursuant to Section 24 herein or the time at which all of the
Rights are mandatorily redeemed and exchanged pursuant to Section 25
hereof.
"Redemption Price" shall have the meaning specified in Section
24(b) herein.
"Right" shall mean one preferred share purchase right which
initially represents the right of the registered holder thereof to
purchase one one-thousandth (1/1000) of a Preferred Share upon the
terms and subject to the conditions herein set forth.
"Right Certificate" shall mean a certificate, in substantially
the form of Exhibit B attached to this Rights Agreement, evidencing
the Rights registered in the name of the holder thereof.
"Rights Agent" shall mean American Stock Transfer & Trust
Company, a New York trust company, and any successor thereto appointed
in accordance with the terms hereof, in
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<PAGE> 12
its capacity as agent for the Company and the holders of the Rights
pursuant to this Agreement.
"Rights Register" and "Rights Registrar" shall have the
meanings specified in Section 6.
"Shares Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition shall include
without limitation a report filed pursuant to Section 13(d) or Section
16(a) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the outstanding capital stock or other
equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
"Summary of Rights" shall mean a Summary of Rights to Purchase
Preferred Shares in substantially the form attached as Exhibit C to
this Agreement.
"Trading Day" shall mean a day on which the principal national
securities exchange or the NASDAQ National Market (or successor
thereto) on which any of the Voting Shares of the Company are listed
or admitted to trading is open for the transaction of business or, if
none of the Voting Shares of the Company is listed or admitted to
trading on any national stock exchange or the NASDAQ National Market
(or successor thereto), a Business Day.
"Voting Shares" shall mean (i) the Common Shares of the
Company and (ii) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger or
consolidation of the Company, any sale of all or substantially all of
the Company's assets or
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<PAGE> 13
any liquidation, dissolution or winding up of the Company. Whenever any
provision of this Agreement requires a determination of whether a
number of Voting Shares comprising a specified percentage of such
Voting Shares is, was or will be beneficially owned or has been voted,
tendered, acquired, sold or otherwise disposed of or a determination of
whether a Person has offered or proposed to acquire a number of Voting
Shares comprising such specified percentage, the number of Voting
Shares comprising such specified percentage of Voting Shares shall in
every such case be deemed to be the number of Voting Shares comprising
the specified percentage of all the Company's then outstanding Voting
Shares.
"Wholly-Owned Subsidiary" of a Person shall mean any
corporation or other entity all the outstanding capital stock or other
equity interests of which having ordinary voting power in the election
of directors or similar officials (other than directors' qualifying
shares or similar interests) are owned, directly or indirectly, by
such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common Shares of the Company) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) From and after November
20, 1996 until the Distribution Date, (i) outstanding Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for outstanding Common Shares of the Company and not by separate
Right Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the
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<PAGE> 14
Distribution Date, the Rights Agent will send, by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of Business on the Distribution Date, at the address of such
holder shown on the stock transfer records of the Company, a Right Certificate
evidencing one Right for each Common Share so held. From and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On November 27, 1996, or as soon thereafter as
practicable, the Company will send a copy of a Summary of Rights, by
first-class, postage-prepaid mail, to each record holder of Common Shares of
the Company as of the Close of Business on November 20, 1996, at the address of
such holder shown on the stock transfer records of the Company. With respect
to Common Shares of the Company outstanding on November 20, 1996, the
certificates evidencing such Common Shares shall, together with copies of such
Summary of Rights, thereafter also evidence the outstanding Rights (as such
Rights may be amended or supplemented) distributed with respect thereto until
the earlier of the Distribution Date or the date of surrender thereof to the
Company's transfer agent for registration of transfer or exchange of Common
Shares of the Company. Until the Distribution Date (or, if earlier, the
Redemption Date or Final Expiration Date), the surrender for registration of
transfer or exchange of any certificate for Common Shares of the Company
outstanding as of the Close of Business on November 20, 1996 with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
surrender for registration of transfer or exchange of the outstanding Rights
associated with the Common Shares represented thereby.
(c) The Company agrees that, at any time after November
20, 1996 and prior to the Distribution Date (or, if earlier, the Redemption
Date or Final Expiration Date) at which it issues any of its Common Shares upon
original issue or out of treasury, it will concurrently distribute to the
holder of such Common Shares one Right for each such Common Share, which Right
shall be
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<PAGE> 15
subject to the terms and provisions of this Agreement and will evidence the
right to purchase the same number of one one-thousandths (1/1000) of a
Preferred Share at the same Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares of the Company issued
after November 20, 1996 but prior to the earliest of the Distribution Date, the
Redemption Date and the Final Expiration Date, whether upon registration of
transfer or exchange of Common Shares of the Company outstanding on November
20, 1996 or upon original issue or out of treasury thereafter, shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between Marine
Drilling Companies, Inc. and American Stock Transfer & Trust Company,
dated as of November 15, 1996 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of Marine Drilling
Companies, Inc. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Marine Drilling Companies, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. As described in the Rights
Agreement, Rights issued to or acquired by any Acquiring Person or any
Affiliate or Associate thereof (each as defined in the Rights
Agreement) shall, under certain circumstances, become null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares of the
Company represented by such certificates shall be evidenced by such
certificates alone, and the surrender of any such certificate for registration
of transfer or exchange of the Common Shares evidenced thereby shall also
constitute surrender for registration of transfer or exchange of outstanding
Rights (as such Rights may be amended or supplemented) associated with the
Common Shares represented thereby.
(e) If the Company purchases or acquires any of its Common Shares
after November 20, 1996, but prior to the Distribution Date, any Rights
associated with such Common Shares shall be
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<PAGE> 16
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The form of Right
Certificates (and the forms of election to purchase Preferred Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed or as may be necessary to conform to
usage. Subject to the provisions of Section 23 hereof, the Right Certificates,
whenever issued, shall be dated as of the date of authentication thereof, but,
regardless of any adjustments of the Purchase Price or the number of Preferred
Shares (or other securities) as to which a Right is exercisable (whether
pursuant to this Agreement or any future amendments or supplements to this
Agreement), or both, occurring after November 20, 1996 and prior to the date of
such authentication, such Right Certificates may, on their face, without
invalidating or otherwise affecting any such adjustment, expressly entitle the
holders thereof to purchase such number of Preferred Shares at the Purchase
Price per one one-thousandth (1/1000) of a Preferred Share as to which a Right
would be exercisable if the Distribution Date were November 20, 1996; no
adjustment of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable, or both, effected subsequent to
the date of authentication of any Right Certificate shall be invalidated or
otherwise affected by the fact that such adjustment is not expressly reflected
on the face or in the provisions of such Right Certificate.
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<PAGE> 17
Pending the preparation of definitive Right Certificates, the Company
may execute, and upon Company Order the Rights Agent shall authenticate and
send, by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares of the Company as of the Close of Business on the Distribution
Date, temporary Right Certificates which are printed, lithographed,
typewritten, mimeographed or otherwise produced substantially of the tenor of
the definitive Right Certificates in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Right Certificates may determine, as evidenced by
their execution of such Right Certificates.
If temporary Right Certificates are issued, the Company will cause
definitive Right Certificates to be prepared without unreasonable delay. After
the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for
cancellation of any one or more temporary Right Certificates, the Company shall
execute and the Rights Agent shall authenticate and deliver in exchange
therefor one or more definitive Right Certificates, evidencing a like number of
Rights. Until so exchanged, the temporary Right Certificates shall in all
respects be entitled to the same benefits under this Agreement as definitive
Right Certificates.
Section 5. Execution, Authentication and Delivery. The Right
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 Right Certificates
may be manual or facsimile.
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<PAGE> 18
Right Certificates bearing the manual or facsimile signatures of
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 authentication and delivery of such Right
Certificates or did not hold such offices at the date of authentication of such
Right Certificates. At any time and from time to time after the execution and
delivery of this Agreement and prior to the Distribution Date, the Company may
deliver Right Certificates executed by the Company to the Rights Agent for
authentication, together with a Company Order for the authentication and
delivery of such Right Certificates; and the Rights Agent in accordance with
such Company Order shall authenticate and deliver such Right Certificates as in
this Agreement provided and not otherwise.
No Right Certificate shall be entitled to any benefit under this
Agreement or be valid or obligatory for any purpose unless there appears on
such Right Certificate a certificate of authentication substantially in the
form provided for herein executed by the Rights Agent by manual signature, and
such certificate upon any Right Certificate shall be conclusive evidence, and
the only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. Registration, Registration of Transfer and Exchange. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a Rights Register (a "Rights
Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Right Certificates
and of transfers of Rights. The Rights Agent is hereby appointed the registrar
and transfer agent (the "Rights Registrar") for the purpose of registering
Right Certificates and transfers of Rights as herein provided and the Rights
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<PAGE> 19
Agent agrees to maintain such Rights Register in accordance with such
regulations so long as it continues to be designated as Rights Registrar
hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
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<PAGE> 20
The provisions of this Section 6 shall be subject to the provisions of
Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right Certificates.
If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
If there shall be delivered to the Company and the Rights Agent (i)
evidence to their satisfaction of the destruction, loss or theft of a Right
Certificate and (ii) such security or indemnity, if any, as may be required by
them to save each of them and any agent of either of them harmless, then, in
the absence of notice to the Company or the Rights Agent that such Right
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Right Certificate, a new Right
Certificate of like tenor, for a like number of Rights and bearing a
registration number not contemporaneously outstanding.
Upon the issuance of any new Right Certificate under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Rights Agent) connected
therewith.
Every new Right Certificate issued pursuant to this Section in lieu of
any destroyed, lost or stolen Right Certificate shall constitute an additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Right Certificate shall be at any time enforceable by anyone, and shall
be entitled to all the benefits of this Agreement equally and proportionately
with any and all other Right Certificates duly issued hereunder.
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<PAGE> 21
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its Corporate Trust Office, together with
payment of the Purchase Price for each one one-thousandth (1/1000) of a
Preferred Share (or other securities) as to which the Rights are exercised, at
or prior to the earliest of (i) the Close of Business on the Final Expiration
Date, (ii) the time of redemption on the Redemption Date or (iii) the time at
which such Rights are mandatorily redeemed and exchanged as provided in Section
25 hereof.
(b) The Purchase Price for each one one-thousandth
(1/1000) of a Preferred Share pursuant to the exercise of a Right shall
initially be Fifty-Six dollars ($56.00), shall be subject to adjustment from
time to time as provided in Sections 12 and 14 hereof and shall be payable in
lawful money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the securities to be purchased
and an amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 10 in cash, or by
certified check or cashier's check payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred Shares (or other securities) certificates for such
number of one one-thousandths of a Preferred Share (or other securities) as are
to be purchased
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<PAGE> 22
and registered in such name or names as may be designated by the registered
holder of such Right Certificate or, if appropriate, in the name of a
depositary agent or its nominee, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, and (B) requisition from a
depositary agent appointed by the Company, if any, depositary receipts
representing such number of one one-thousandths of a Preferred Share as are to
be purchased and registered in such name or names as may be designated by such
holder (in which case certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with such depositary agent),
and the Company hereby directs such depositary agent to comply with all such
requests, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 15, (iii) promptly after receipt of such certificates or depositary
receipts registered in such name or names as may be designated by such holder,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate and (iv) when appropriate, after receipt, promptly
deliver such cash to or upon the order of such holder.
(d) If the registered holder of the Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equal to the Rights remaining unexercised shall
be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 15 hereof.
Section 9. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer or
exchange shall, if surrendered to the Company or to any of its other agents, be
delivered to the Rights Agent for such purpose and for cancellation or, if
surrendered to the Rights Agent for such purpose, shall be canceled by it. No
Right Certificates shall be authenticated in lieu of or in exchange for any
Right Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. The Company
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<PAGE> 23
shall deliver to the Rights Agent for cancellation, and the Rights Agent shall
so cancel, any other Right Certificate purchased or acquired by the Company.
The Rights Agent shall deliver all canceled Right Certificates to the Company,
or shall, pursuant to a Company Order, destroy such canceled Right Certificates
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 10. Reservation and Availability of Shares. The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with Section 8;
provided, however, that the Company will not be required to reserve and keep
available Common Shares or Preferred Shares sufficient to permit the exercise
in full of all outstanding Rights pursuant to the adjustments set forth in
Section 12(a)(ii) or Section 14 until such time as the Rights become
exercisable pursuant to such adjustments.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares or Common Shares of the
Company issued upon exercise of Rights shall (subject to payment of the
Purchase Price) be duly authorized, validly issued, fully paid and
nonassessable. The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares (or depositary receipts therefor) or Common Shares
of the Company upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or in
respect of the issuance or delivery of certificates or depositary receipts for
the Preferred Shares or Common Shares of the Company upon exercise of Rights
evidenced by Right Certificates in a name other than that of, the registered
holder
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<PAGE> 24
of the Right Certificate evidencing Rights surrendered for transfer or exercise
or to issue or deliver any certificates or depositary receipts for Preferred
Shares or Common Shares of the Company upon the exercise of any Rights until
any such tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender thereof) or until it has been
established to the Company's satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any certificate
for Preferred Shares or Common Shares of the Company is issued upon the
exercise of, or upon mandatory redemption and exchange of, Rights shall for all
purposes be deemed to have become the holder of record of the Preferred Shares
or Common Shares represented thereby on, and such certificate shall be dated,
(i) in the case of the exercise of Rights, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made, or (ii) in the
case of the mandatory redemption and exchange of Rights, the date of such
mandatory redemption and exchange; provided, however, that, if the date of such
surrender and payment or mandatory redemption and exchange is a date upon which
the transfer books of the Company for its Preferred Shares or Common Shares, as
the case may be, are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which such transfer books of the Company are open.
Prior to the exercise of (or the mandatory redemption and exchange of) the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares (or Common Shares of the
Company) for which the Rights shall be exercisable, including without
limitation the rights to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
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<PAGE> 25
Section 12. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of shares of capital stock
of the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a
dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into
a smaller number of Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 12(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised thereafter shall be entitled to receive, upon
payment of the Purchase Price for the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to such
date, the aggregate number and kind of shares of capital stock which, if such
Right had been duly exercised immediately prior to such date (at a time when
the Preferred Shares transfer books of the Company were open), such holder
would have acquired upon such exercise and been entitled to receive upon
payment or effectuation of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment under both Section
12(a)(i) and
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<PAGE> 26
Section 12(a)(ii), the adjustment provided for in this Section 12(a)(i) shall
be in addition to, and shall be made prior to, any adjustment required pursuant
to Section 12(a)(ii).
(ii) Subject to action of the Board of Directors of the
Company pursuant to Section 25 of this Agreement, if any Person shall become an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable and dividing that product by (y) 50% of the
then current per share market price of the Company's Common Shares (determined
pursuant to Section 12(d)) on the date such Person became an Acquiring Person.
If any Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the Rights.
Notwithstanding any other provision of this Agreement, from and after
the time any Person shall become an Acquiring Person, any Rights that are or
were acquired or beneficially owned by any such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be null and void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement. No Right Certificate shall be issued
pursuant to this Agreement that represents Rights beneficially owned by an
Acquiring Person whose Rights would be null and void pursuant to the preceding
sentence or by any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person
whose Rights would be null and void pursuant to the preceding sentence or to
any Associate or Affiliate thereof or to any
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<PAGE> 27
nominee (acting in its capacity as such) of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be null and void pursuant to the
preceding sentence or to any Associate or Affiliate thereof or to any nominee
(acting in its capacity as such) of such Acquiring Person, Associate or
Affiliate shall be canceled.
(iii) If on or after the Distribution Date there shall not be
sufficient Common Shares issued but not outstanding, or authorized but
unissued, to permit the exercise in full of all outstanding Rights in
accordance with the foregoing subparagraph (ii), the Company agrees to take all
such action as is within its power, including without limitation appropriate
action by its Board of Directors, as may be necessary to amend the Company's
articles of incorporation to authorize additional Common Shares for issuance
upon exercise of the Rights. If, notwithstanding the foregoing, the
shareholders shall not approve an amendment to the Company's articles of
incorporation authorizing such additional Common Shares within 60 days, the
adjustment prescribed in Section 12(a)(ii) shall not be made but, in lieu
thereof, each holder of a Right shall thereafter have the right to receive,
upon exercise thereof in accordance with the terms of this Agreement, such
number of one one-thousandths of Preferred Shares as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
one one-thousandths of a Preferred Share for which a Right is then exercisable
and dividing that product by (y) 50% of the then current per share market price
of one one-thousandth of a Preferred Share (determined pursuant to Section
12(d)) on the date such Person became an Acquiring Person.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
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privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exchangeable for Preferred Shares
or equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (together with any additional consideration required upon
conversion or exchange in the case of a security convertible into or
exchangeable for Preferred Shares or equivalent preferred shares), less than
the current per share market price of the Preferred Shares (determined pursuant
to Section 12(d) on such record date), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (together with the aggregate of any additional consideration required
upon conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current market price and
the denominator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or into
or for which the convertible or exchangeable securities so to be offered are
initially convertible or exchangeable); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case all or part of such subscription or
purchase price may be paid in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Preferred Shares owned by or held for the account of the
Company or any of its Subsidiaries shall not be deemed outstanding for the
purpose of any computation described in this Section 12(b). The
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<PAGE> 29
adjustment described in this Section 12(b) shall be made successively whenever
such a record date is fixed; and, if none of such rights, options or warrants
is 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) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 12(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market price of the
Preferred Shares (determined pursuant to Section 12(d)) on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon the exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and, if such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
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<PAGE> 30
(d)(i) For the purpose of any computation hereunder, the "current per
share market price" of the Common Shares on any date shall be deemed to be the
average of the daily Closing Prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to such date; provided, however,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, the current per share market price of the Common Shares
shall be appropriately adjusted to reflect the current market price per Common
Share equivalent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
the same manner as set forth above for Common Shares in paragraph (i) of this
Section 12(d). If the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares (determined in the manner
provided above) multiplied by one thousand.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided; however, that any adjustments which by reason of this
Section 12(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
12 shall be made to the nearest cent or to the nearest ten-thousandth of a
Common Share or other share or one ten-millionth of a Preferred Share, as the
case may be, and references herein to the "number of one one-thousandths of a
Preferred Share" (or similar phrases) shall be construed to include
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fractions of one one-thousandth of a Preferred Share. Notwithstanding the
first sentence of this Section 12(e), any adjustment required by this Section
12 shall be made no later than the earlier of (i) three years from the date of
the transaction which requires such adjustment or (ii) the thirtieth day
preceding the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
shares contained in this Section 12, and the provisions of this Agreement,
including without limitation Sections 8, 10, 11 and 14, with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall, whether or not the Right
Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one one-thousandths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price pursuant
to Section 12(b) or 12(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price per one one-thousandth of a Preferred Share, that
number of one one-thousandths of a Preferred Share obtained by (i) multiplying
(x) the number of one-thousandths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing
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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 outstanding in lieu of any
adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. Until such
record date, however, any adjustment in the number of one one-thousandths of a
Preferred Share for which a Right shall be exercisable made as required by this
Agreement shall remain in effect. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 12(i), the
Company shall, as promptly as practicable, cause to be distributed to holders
of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 15 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior
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to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and authenticated in the manner provided
for herein and shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the amount of
consideration per Preferred Share determined by the Board of Directors of the
Company to be capital, or below one one-thousandth of the par value, if any,
per Preferred Share issuable upon exercise of the Rights, the Company agrees to
take such corporate action as is within its power, including without limitation
appropriate action by its Board of Directors, and which is, in the opinion of
its counsel, necessary in order that the Company may validly and legally issue
fully paid and nonassessable one one-thousandths of Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 12 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 the Preferred Shares or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares or other
capital stock or securities of the
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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 securities upon the occurrence
of the event requiring such adjustment.
(m) Anything in this Section 12 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 12, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any combination or subdivision of the Preferred Shares, issuance
wholly for cash of any of the Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of
rights, options or warrants referred to in subsection (b) of this Section 12,
hereafter effected by the Company to holders of its Preferred Shares shall not
be taxable to such shareholders.
(n) If at any time prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision or combination of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i) the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (ii) the number of Rights outstanding immediately after
such event shall be adjusted, either through cancellation of outstanding Rights
or through distribution of additional Rights (but
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without duplication of the Company's obligations under Section 3(c)), so that
the certificate evidencing each Common Share outstanding immediately after such
event shall also evidence the associated Right to purchase the same number of
one one-thousandths of a Preferred Share as to which a Right would have
entitled the holder thereof to purchase immediately prior to such event. The
adjustment provided for in this Section 12(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision or
combination is effected. If an event occurs which would require an adjustment
under Section 12(a)(ii) and this Section 12(n), the adjustments provided for in
this Section 12(n) shall be in addition and prior to any adjustment required
pursuant to Section 12(a)(ii).
Section 13. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 12 or 14 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
Common Shares of the Company and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of record of a
Right Certificate in accordance with Section 28 hereof.
Section 14. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) If, directly or indirectly, at any time after a Person has
become an Acquiring Person (i) the Company shall consolidate with, or merge
with and into, any other Person, (ii) any Person shall merge with and into the
Company and the Company shall be the continuing or surviving corporation of
such merger and, in connection with any such merger, all or part of the Common
Shares of the Company shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (iii) the Company shall sell or otherwise transfer (or one or more of
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its Subsidiaries shall sell or otherwise transfer), in one or a series of two
or more transactions, assets of the Company or its Subsidiaries which
constitute more than 50% of the assets or which produce more than 50% of the
earning power or cash flow of the Company and its Subsidiaries (taken as a
whole) to any Person other than the Company or one or more of its Wholly-Owned
Subsidiaries, then, and in each such case, the Company agrees that, as a
condition to engaging in any such transaction, it will make or cause to be made
proper provision so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Principal Party (as such term is
hereinafter defined) as shall be equal to the result obtained by (X)
multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to Section
12(a)(ii)) and dividing that product by (Y) 50% of the current per share market
price of the Common Shares of the Principal Party (determined pursuant to
Section 12(d)) on the date of consummation of such consolidation, merger, sale
or transfer; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company", as used herein, shall thereafter be deemed to refer to such
Principal Party; and (iv) such Principal Party shall take such steps (including
without limitation the reservation of a sufficient number of shares of its
Common Shares in accordance with Section 10) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares of the Principal Party thereafter deliverable upon the exercise
of the Rights. The Company shall not enter into any transaction of the kind
referred to in this Section 14 if at the time of such transaction there
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are outstanding any rights, warrants, instruments or securities or any
agreement or arrangements which, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights. The Company shall not consummate any
such consolidation, merger, sale or transfer unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent
an agreement supplemental to this Agreement complying with the provisions of
this Section 14. The provisions of this Section 14 shall similarly apply to
successive mergers or consolidations or sales or other transfers. For the
purposes of this Section 14, 50% of the assets of the Company and its
Subsidiaries shall be determined by reference to the book value of such assets
as set forth in the most recent consolidated balance sheet of the Company and
its Subsidiaries (which need not be audited) and 50% of the earning power or
cash flow of the Company and its Subsidiaries shall be determined by reference
to the mathematical average of the operating income or cash flow, respectively,
resulting from the operations of the Company and its Subsidiaries for the two
most recent full fiscal years as set forth in the consolidated and
consolidating financial statements of the Company and its Subsidiaries for such
years; provided, however, that, if the Company has, during such period, engaged
in one or more transactions to which purchase accounting is applicable, such
determination shall be made by reference to the pro forma operating income of
the Company and its Subsidiaries giving effect to such transactions as if they
had occurred at the commencement of such two-year period.
(b) The term "Principal Party" shall mean: (i) in the case of any
transaction described in clause (i) or (ii) of the first sentence of Section
14(a), the Person that is the issuer of any securities into which Common Shares
of the Company are converted in such merger or consolidation, and, if no
securities are so issued, the Person that is the other party to such merger or
consolidation; and (ii) in the case of any transaction described in clause
(iii) of the first sentence of Section 14(a), the
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Person that is the party receiving the greatest portion of the assets
transferred pursuant to such transaction or transactions; provided, however,
that in any such case (1) if the Common Shares of such Person are not at such
time and have not been continuously over the preceding twelve months registered
under Section 12 of the Exchange Act and such Person is a direct or indirect
subsidiary of another Person the Common Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of two or more of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized Common Shares which have not been issued or reserved for
issuance to permit the exercise in full of the rights in accordance with this
Section 14 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 subsections (a) and (b) of this Section 14
and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets referenced in the first
sentence of Section 14(a), the Principal Party shall: (i) prepare and file a
registration statement under the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
and shall use its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date; and (ii) shall 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 of a class of securities
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under the Exchange Act. The provisions of this Section 14 shall similarly
apply to successive mergers, consolidations, sale or other transfers of assets.
If an event subject to this Section 14 shall occur at any time after the
occurrence of an event subject to Section 12(a)(ii), the Rights that have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 14(a).
(d) For purposes of this Agreement, including this Section 14, a
share exchange of the type permitted by Part Five of the Texas Business
Corporation Act shall be deemed to be a merger.
Section 15. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
fractional Right, the Company shall, in lieu thereof, pay or cause to be paid
to such Person an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purpose of this Section 15(a), the
current market value of a whole Right shall be the Closing Price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the
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holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares. If, on the Distribution Date or thereafter, as a result of any
adjustment effected hereunder in the number of one one-thousandths of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-thousandth of a Preferred Share, the Company
shall, in lieu thereof, pay to such Person at the time such Right is exercised
as herein provided an amount in cash equal to the same fraction (which is not
an integral multiple of one one-thousandth of a Preferred Share) of the current
market value of one Preferred Share. For purposes of this Section 15(b), the
current market value of a Preferred Share shall be the Closing Price of a
Preferred Share for the Trading Day immediately prior to the date of such
exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or any
mandatory redemption and exchange contemplated by Section 25 occur, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute certificates which evidence fractional Common Shares.
If after any such adjustment or mandatory redemption and exchange, a Person
would otherwise be entitled to receive a fractional Common Share of the Company
upon exercise of any Right Certificate or upon mandatory redemption and
exchange as contemplated by Section 25, the Company shall, in lieu thereof, pay
to such Person at the time such Right is exercised as herein provided or upon
such mandatory redemption and exchange an amount in cash equal to the same
fraction of the current market value of one Common Share. For purposes of this
Section 15(c), the current market value of a Common Share shall be the Closing
Price of a Common Share for the Trading Day immediately prior to the date of
such exercise or the date of such mandatory redemption and exchange.
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(d) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. Rights of Action. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any
registered holder of any Rights may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding,
judicial or otherwise, against the Company to enforce, or otherwise to act in
respect of, such holder's right to exercise such Rights in the manner provided
in the Right Certificate evidencing such Rights and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief against
actual or threatened violations of, the obligations of any Person subject to
this Agreement.
(b) No right or remedy herein conferred upon or reserved to the
registered holder of Rights is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right
or remedy.
(c) No delay or omission of any registered holder of Rights to
exercise any right or remedy accruing hereunder shall impair any such right or
remedy or constitute a waiver of any default hereunder or an acquiescence
therein. Every right and remedy given hereunder or by law to
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such holders may be exercised from time to time, and as often as may be deemed
expedient, by such holders.
Section 17. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares
of the Company;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the Corporate Trust Office of the Rights Agent duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company or any
other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such,
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any of the rights of a stockholder of the Company, including without limitation
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26) or to receive dividends or
subscription rights until the Right or Rights evidenced by such Right
Certificate shall have been exercised (or mandatorily redeemed and exchanged)
in accordance with the provisions hereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for Preferred Shares, Common Shares of the Company
or other securities of the Company, Company Order, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to
be genuine and to be executed and, where necessary, verified or acknowledged,
by the proper person or persons, or otherwise upon the advice of its counsel as
set forth in Section 20 hereof.
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Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete 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 Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company or
any other Person only for its own negligence, bad faith or willful misconduct.
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(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its authentication thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not have any responsibility with
respect to the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or with respect to the
validity or execution of any Right Certificate (except its authentication
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 12(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 12, 14, 24 and 25, or the
ascertainment of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares to be issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares or Common Shares will, when issued, be
duly authorized, validly issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
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(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary 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.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such
attorneys or agents or for any loss of the Company resulting from any such act,
default, neglect or misconduct provided reasonable care was exercised in the
selection and continued employment thereof.
Section 21. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights
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<PAGE> 47
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22. If at the time such successor Rights Agent shall
succeed to the agency created by this Agreement any of the Right Certificates
shall have been authenticated but not delivered, any such successor Rights
Agent may adopt the authentication of the predecessor Rights Agent and deliver
such Right Certificates so authenticated, and, if at that time any of the Right
Certificates shall not have been authenticated, any successor Rights Agent may
authenticate such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent for the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each
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transfer agent for the Common Shares of the Company and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the registered holder of a Right Certificate
(or, prior to the Distribution Date, of Common Shares), then any registered
holder of a Right Certificate (or, prior to the Distribution Date, of Common
Shares) may apply to any court of competent jurisdiction for the appointment of
a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of any state of the United States, which
is authorized under such laws to exercise corporate trust powers and is subject
to supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus of
at least $50 million. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, 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 for the Common Shares of the Company and the Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 22, however, or any
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defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 23. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares or other securities purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by action of
the Board of Directors of the Company pursuant to paragraph (b) of this Section
24, or may be redeemed and exchanged by action of the Board of Directors of the
Company pursuant to Section 25 herein, but shall not be redeemed in any other
manner.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the time any Person becomes an Acquiring Person redeem all
but not less than all the then outstanding Rights at a redemption price of one
cent ($0.01) per Right then outstanding, appropriately adjusted to reflect any
adjustment in the number of Rights outstanding pursuant to Section 12(i) herein
(such redemption price being hereinafter referred to as the "Redemption
Price"). Any such redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates to
exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the
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time of adoption by the Board of Directors of the Company of a resolution
authorizing and directing the redemption of the Rights pursuant to paragraph
(b) of this Section 24 (or, alternatively, if the Board of Directors qualified
such action as to time, basis or conditions, then at such time, on such basis
and with such conditions as the Board of Directors may have established
pursuant to such paragraph (b)); thereafter, the only right of the holders of
Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any redemption resolution pursuant to paragraph (b) of
this Section 24; provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption. Within 10
days after the adoption of any redemption resolution pursuant to paragraph (b)
of this Section 24, the Company shall give notice of such redemption to the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agents for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or Associates
may acquire (other than, in the case of such Affiliates and Associates, in
their capacity as holders of Common Shares of the Company), redeem or purchase
for value any Rights at any time in any manner other than as specifically set
forth in this Section 24 or in Section 25 herein, and other than in connection
with the purchase of Common Shares prior to the Distribution Date.
Section 25. Mandatory Redemption and Exchange. (a) The Board of
Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, issue Common Shares of the Company in mandatory
redemption of, and in exchange for, all or part of the
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then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 12(a)(ii)
hereof) at an exchange ratio of one Common Share for each two Common Shares for
which each Right is then exercisable pursuant to the provisions of Section
12(a)(ii) hereof. Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such redemption and exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any such Subsidiary, or any entity holding
Voting Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Voting Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the mandatory redemption and exchange of any Rights pursuant
to subsection (a) of this Section 25 and without any further action and without
any notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive such number of
Common Shares as is provided in paragraph (a) of this Section 25. The Company
shall promptly give public notice of any such redemption and exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such redemption and exchange. The Company
promptly shall mail a notice of any such redemption and exchange to all the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of mandatory redemption and exchange shall state the method by
which the redemption and exchange of the Common Shares for Rights will be
effected and, in the event of any partial redemption and exchange, the number
of Rights which will be redeemed and exchanged. Any partial redemption and
exchange shall be effected pro rata based on the number of Rights (other
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than Rights which have become null and void pursuant to the provisions of
Section 12(a)(ii) hereof) held by each holder of Rights.
(c) In any mandatory redemption and exchange pursuant to this
Section 25, the Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section 12(b) hereof)
for Common Shares, at the initial rate of one one-thousandth of a Preferred
Share (or equivalent preferred share) for each Common Share, as appropriately
adjusted.
Section 26. Notice of Certain Events. If the Company shall, on or
after the Distribution Date, propose (a) to pay any dividend or other
distribution payable in stock of any class of the Company or any Subsidiary of
the Company to the holders of its Preferred Shares, (b) to distribute to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (c) to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash dividend),
(d) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to
effect the liquidation, dissolution or winding up of the Company or (g) if the
Rights have theretofore become exercisable with respect to Common Shares
pursuant to Section 12(a)(ii) herein, to declare or pay any dividend or other
distribution on the Common Shares payable in Common Shares or in stock of any
other class of the Company or any Subsidiary of the Company or to effect a
subdivision or combination of the Common Shares (by reclassification or
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otherwise than by payment of dividends in Common Shares) then, in each such
case, the Company shall give to each holder of a Right Certificate, in
accordance with Section 28 hereof, notice of such proposed action, which shall
specify the date of authorization by the Board of Directors of the Company of,
and record date for, such stock dividend or such distribution of rights or
warrants or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, winding up, subdivision or
combination is to take place and the date of participation therein by the
holders of the Common Shares of the Company or the Preferred Shares, or both,
if any such date is to be fixed. Such notice shall be so given in the case of
any action covered by clause (a), (b) or (g) above at least 20 days prior to
the record date for determining holders of the Preferred Shares or of the
Common Shares of the Company, as the case may be, 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 Preferred Shares or Common Shares of the Company, as the case
may be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 28 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 12(a)(ii) hereof.
Section 27. Securities Laws Registrations. To the extent legally
required, the Company agrees that it will prepare and file, no later than the
Distribution Date, and will use its best efforts to cause to be declared
effective, a registration statement under the Securities Act of 1933, as
amended, registering the offering, sale and delivery of the Preferred Shares
issuable upon exercise of the Rights, and the Company will, thereafter, use its
best efforts to maintain such registration
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statement (or another) continuously in effect so long as any Rights remain
outstanding and exercisable with respect to Preferred Shares. Should the
Rights become exercisable with respect to securities of the Company or one of
its Subsidiaries other than Preferred Shares, the Company agrees that it will,
to the extent legally required, promptly thereafter prepare and file, or cause
to be prepared and filed, and will use its best efforts to cause to be declared
effective, a registration statement under such Act registering the offering,
sale and delivery of such other securities and the Company will, thereafter,
use its best efforts to maintain such registration statement (or another)
continuously in effect so long as any outstanding Rights are exercisable with
respect to such securities. The Company further agrees to use its best
efforts, from and after the Distribution Date, to qualify or register for sale
the Preferred Shares or other securities of the Company or one of its
Subsidiaries issuable upon exercise of the Rights under the securities or "blue
sky" laws (to the extent legally required thereunder) of all jurisdictions in
which registered holders of Right Certificates reside determined by reference
to the Rights Register.
Section 28. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Marine Drilling Companies, Inc.
One Sugar Creek Center Blvd.
Suite 600
Sugar Land, Texas 77478-3556
Attention: Secretary
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights
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Agent shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement (which supplement or amendment shall be
evidenced by a writing signed by the Company and the Rights Agent) without the
approval of any holders of Right Certificates in order to cure any ambiguity,
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, to make any other provisions
in regard to matters or questions arising hereunder, or to add, delete, modify
or otherwise amend any provision, which the Company may deem necessary or
desirable, including without limitation extending the Final Expiration Date
and, provided that at the time of such amendment or supplement the Distribution
Date has not occurred, the period during which the Rights may be redeemed;
provided, however, that, from and after such time as any Person becomes an
Acquiring Person, any such amendment or supplement shall not materially and
adversely affect the interests of the holders of Right Certificates. Without
limiting the foregoing, the Board of Directors of the Company may by resolution
adopted at any time prior to such time as any Person becomes an Acquiring
Person amend this Agreement to lower the threshold set forth in the definitions
of
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Acquiring Person and Distribution Date herein from 15% to a percentage not less
than the greater of (i) any percentage greater than the largest percentage of
the outstanding Voting Shares then known to the Company to be beneficially
owned by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or
any entity holding Voting Shares for or pursuant to the terms of any such
plan), and (ii) 10%.
Section 30. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 31. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights.
Section 32. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Texas and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
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Section 34. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 35. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
MARINE DRILLING COMPANIES, INC.
Attest:
By /s/ Joan R. Smith By /s/ William H. Flores
------------------------------- -------------------------------
Title: Secretary Title: Executive Vice President
AMERICAN STOCK TRANSFER & TRUST
COMPANY,
As Rights Agent
Attest:
By /s/ Susan Silber By /s/ Herbert J. Lemmer
------------------------------- -------------------------------
Title: Authorized Officer Authorized Officer
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<PAGE> 59
EXHIBIT A
STATEMENT OF RESOLUTION ESTABLISHING
SERIES OF SHARES
OF
JUNIOR PARTICIPATING PREFERRED STOCK
of
MARINE DRILLING COMPANIES, INC.
Pursuant to Article 2.13 of the
Texas Business Corporation Act
Pursuant to the provisions of Article 2.13 of the Texas Business
Corporation Act, the undersigned corporation submits the following statement
for the purpose of establishing and designating a series of shares and fixing
and determining the relative rights and preferences thereof:
1. The name of the corporation is Marine Drilling Companies, Inc.
(the "Corporation").
2. The Board of Directors of the Corporation on November 8, 1996,
pursuant to the authority conferred upon the Board of Directors by the Articles
of Incorporation, as amended, of the Corporation (the "Articles of
Incorporation") and in accordance with the provisions of Article 2.13 of the
Texas Business Corporation Act, adopted the following resolution creating a
series of 200,000 shares of Preferred Stock, $.01 par value per share:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of Article Four of the Restated Articles of Incorporation, a series
of the Preferred Stock of the Corporation, $.01 par value per share, be, and it
hereby is, created and that the voting powers, designations, preferences and
relative, participating, optional and other special rights of the shares of
such series, and the qualification, limitations or restrictions thereof are as
follows:
Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Junior Participating Preferred Stock" (the "Junior Preferred
Stock") and the number of shares constituting the Junior Preferred Stock shall
be 200,000. Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided, that no decrease shall reduce the number
of shares of Junior Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants
<PAGE> 60
or upon the conversion of any outstanding securities issued by the Corporation
convertible into Junior Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Junior Preferred Stock with respect to dividends, the holders of shares of
Junior Preferred Stock, in preference to the holders of Common Stock, $.01 par
value per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable on the first business day of February, May, August and
November in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date") as provided in paragraphs (B) and (C) of this Section 2
in an amount per share (rounded to the nearest cent) equal to the greater of
(a) $1.00 in cash or (b) subject to the provision for adjustment hereinafter
set forth, 1,000 times the aggregate per share amount (payable in cash) of all
cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Junior Preferred Stock. If the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Junior Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Junior Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, if no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share payable in cash
on the Junior Preferred Stock shall nevertheless accrue and be cumulative on
the outstanding shares of Junior Preferred Stock as provided in paragraph (C)
of this Section 2.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Junior Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date
of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preferred Stock entitled to
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<PAGE> 61
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Junior
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Junior Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set
forth, each share of Junior Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the stockholders of the
Corporation. If the Corporation shall at any time declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
combination of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the number of votes per share to which holders of shares of
Junior Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that was
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Statement of
Resolution Establishing Series of Shares creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of Junior Preferred
Stock and the holders of shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise provided by law,
holders of 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 Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the 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 shares of Junior Preferred Stock
outstanding shall have been paid in full, or declared and a sum sufficient for
the payment therefor be set apart for payment and be in the process of payment,
the Corporation shall not:
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<PAGE> 62
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Junior Preferred Stock, except dividends paid ratably on the Junior
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Junior Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any stock of the Corporation ranking junior
(as to both dividends and upon dissolution, liquidation or winding up)
to the Junior Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred Stock or any shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the 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 shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
holders of the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Statement of Resolution establishing
Series of Shares creating a series of Preferred Stock or any similar stock or
as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as
to dividends or as to amounts payable upon liquidation, dissolution or winding
up) to the Junior Preferred Stock unless, prior thereto, the holders of Junior
Preferred Stock shall have received an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1,000 per share, or (b) an amount per share,
subject to the provision for adjustment hereinafter
A-4
<PAGE> 63
set forth, equal to 1,000 times the aggregate amount to be distributed per
share to holders of Common Stock, plus, in either case, an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (2) to the holders of stock ranking
on a parity (either as to dividends or as to amounts payable upon liquidation,
dissolution or winding up) with the Junior Preferred Stock, except
distributions made ratably on the Junior Preferred Stock and all such parity
stock in proportion to the total amounts to which the holders of all such
Shares are entitled upon such liquidation, dissolution or winding up. If the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1)(b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that was outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. If the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination thereof, then in any
such case each share of Junior Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount of stock, securities, cash or any other property (payable in
kind), or any combination thereof, as the case may be, into which or for which
each share of Common Stock is changed or exchanged. If the Corporation shall
at any time declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Junior Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that was outstanding immediately
prior to such event.
Section 8. Redemption. The shares of Junior Preferred Stock shall
not be redeemable. So long as any shares of Junior Preferred Stock remain
outstanding, the Corporation shall not purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Junior Preferred Stock
unless the Corporation shall substantially concurrently also purchase or
acquire for consideration a proportionate number of shares of Junior Preferred
Stock.
Section 9. Rank. The Junior Preferred Stock shall rank, with respect
to payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
A-5
<PAGE> 64
Section 10. Amendment. At any time that any shares of Junior
Preferred Stock are outstanding, the Restated Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences, privileges or special rights of the Junior
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of a majority of the outstanding shares of Junior Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Statement of Resolution Establishing Series
of Shares is executed on behalf of the Corporation by its President, and
attested by its Secretary, this 11th day of November, 1996.
MARINE DRILLING COMPANIES, INC.
By:
---------------------------------
Executive Vice President
A-6
<PAGE> 65
EXHIBIT B
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER NOVEMBER 19, 2006 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN
SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
MARINE DRILLING COMPANIES, INC.
This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of November 15, 1996 (the "Rights
Agreement"), between MARINE DRILLING COMPANIES, INC., a Texas corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 p.m., Houston, Texas
time, on November 19, 2006, at the Corporate Trust Office of the Rights Agent
(or at the office of its successor as Rights Agent), one one-thousandth
(1/1000) of a fully paid non-assessable share of Junior Participating Preferred
Stock, $.01 par value per share (the "Preferred Shares"), of the Company, at a
purchase price of $56.00 per one one-thousandth (1/1000) of a Preferred Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of November 20, 1996, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-thousandths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon that happening of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and
<PAGE> 66
made a part hereof and to which Rights Agreement reference is hereby made for a
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the Corporate Trust Office of
the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust Office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.01 per Right or (ii) may be exchanged by the Company in
whole or in part for Preferred Shares or shares of the Company's common stock,
$.01 par value per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Right Agent.
B-2
<PAGE> 67
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of
-------------------, ----.
ATTEST: MARINE DRILLING COMPANIES, INC.
[SEAL]
By
- ----------------------------------- ----------------------------------
Secretary President
Authentication:
This is one of the Right Certificates referred to in the within-mentioned
Rights Agreement.
American Stock Transfer & Trust Company, as Rights Agent
By:
------------------------------------
Authorized Signature
<PAGE> 68
[Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, ___________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
_________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated as of ___________________, ____.
___________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad- 15
of the Securities Exchange Act of 1934.
________________________________________________________________________________
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
__________________________________
Signature
<PAGE> 69
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO MARINE DRILLING COMPANIES, INC.:
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or other securities) be issued in
the name of:
Please insert social security
or other identifying number:
_______________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
______________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated as of ___________________, ____.
__________________________________
Signature
<PAGE> 70
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad- 15
of the Securities Exchange Act of 1934.
- --------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
________________________________
Signature
- --------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
<PAGE> 71
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On November 8, 1996, the Board of Directors of Marine Drilling
Companies, Inc. (the "Company"), authorized the issuance of one preferred share
purchase right (a "Right") with respect to each outstanding share of common
stock, $.01 par value per share (the "Common Shares"), of the Company. The
rights were issued on November 20, 1996 to the holders of record of Common
Shares on that date. Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of Junior Participating
Preferred Stock, $.01 par value per share (the "Preferred Shares"), of the
Company at a price of $56.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") dated as of
November 15, 1996, between the Company and American Stock Transfer & Trust
Company, as Rights Agent (the "Rights Agent").
Detachment of Rights; Exercise. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the outstanding Voting Shares (as
defined in the Rights Agreement) of the Company, or (ii) 10 business days
following the commencement or announcement of an intention to commence a tender
offer or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of such outstanding
Voting Shares.
Until the Distribution Date (or earlier redemption or expiration of
the Rights) (i) the Rights will be evidenced, with respect to any of the Common
Shares outstanding on November 20, 1996, by the certificates representing such
Common Shares with a copy of this Summary of Rights attached thereto, (ii) the
Rights will be transferred with and only with the Common Shares, (iii) new
Common Share certificates issued after November 20, 1996, upon transfer or new
issuance of the Common Shares will contain a notation incorporating the Rights
Agreement by reference, and (iv) the surrender for transfer of any certificates
for Common Shares outstanding as of November 20, 1996, even without such
notation or a copy of this Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
<PAGE> 72
The Rights are not exercisable until the Distribution Date. The
Rights will expire on November 19, 2006 (the "Final Expiration Date"), unless
the Final Expiration Date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
If a person or group were to acquire 15% or more of the Voting Shares
of the Company, each Right then outstanding (other than Rights beneficially
owned by the acquiring person which would become null and void) would become a
right to buy that number of Common Shares (or under certain circumstances, the
equivalent number of one one- thousandths of a Preferred Share) that at the
time of such acquisition would have a market value of two times the Purchase
Price of the Right.
If the Company were acquired in a merger or other business combination
transaction or assets constituting more than 50% of its consolidated assets or
producing more than 50% of its earning power or cash flow were sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction would have a market value of two times
the Purchase Price of the Right.
Preferred Shares. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non- redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate,
1,000 times the dividend declared on the Common Shares. In the event of
liquidation, the holders of the Preferred Shares will be entitled to receive a
preferential liquidation payment equal to the greater of (i) $1,000 per share,
or (ii) in the aggregate, 1,000 times the payment made on the Common Shares.
In the event of any merger, consolidation or other transaction in which Common
Shares are exchanged for or changed into other stock or securities, cash or
other property, each whole Preferred Share will be entitled to receive 1,000
times the amount received per Common Share. Each whole Preferred Share shall
be entitled to 1,000 votes on all matters submitted to a vote of the
stockholders of the Company, and Preferred Shares shall generally vote together
as one class with the Common Stock and any other capital stock on all matters
submitted to a vote of stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
Antidilution and Other Adjustments. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary
adjustments from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or
C-2
<PAGE> 73
subdivisions, consolidations or combinations of the Common Shares occurring, in
any such case, prior to the Distribution Date.
Exchange Option. At any time after the acquisition by a person or
group of affiliated or associated persons of beneficial ownership of 15% or
more of the outstanding Voting Shares of the Company and before the acquisition
by a person or group of 50% or more of the outstanding Voting Shares of the
Company, the Board of Directors may, at its option, issue Common Shares in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common
Share (or one one-thousandth of a Preferred Share) for each two Common Shares
for which each Right is then exercisable, subject to adjustment.
Redemption of Rights. At any time prior to the first public
announcement that a person or group has become the beneficial owner of 15% or
more of the outstanding Voting Shares, the Board of Directors of the Company
may redeem all but not less than all the then outstanding Rights at a price of
$0.01 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. Immediately upon the
action of the Board of Directors ordering redemption of the Rights, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
No Rights as Stockholder. 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.
Amendment of Rights. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during
which the Rights may be redeemed, except that after the first public
announcement that a person or group has become the beneficial owner of 15% or
more of the outstanding Voting Shares, no such amendment may materially and
adversely affect the interests of the holders of the Rights.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
November 15, 1996. A copy of the Rights Agreement is available free of charge
from the Company.
C-3
<PAGE> 1
EXHIBIT 5
SPECIMEN OF LEGEND FOR COMMON STOCK CERTIFICATES
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Marine Drilling
Companies, Inc. and American Stock Transfer & Trust Company, dated as of
November 15, 1996 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Marine Drilling Companies, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Marine Drilling Companies, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt of a
written request therefor. As described in the Rights Agreement, Rights issued
to or acquired by any Acquiring Person or any Affiliate or Associate thereof
(each as defined in the Rights Agreement) shall, under certain circumstances,
become null and void.
