FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR (G) OF THE
SECURITIES EXCHANGE ACT OF 1934
NUEVO ENERGY COMPANY
(Exact name of registrant as
specified in its charter)
DELAWARE
(State of incorporation or organization)
75-0304436
(I.R.S. Employer Identification No.)
1331 LAMAR, SUITE 1650
HOUSTON, TEXAS 77010
(Address of principal executive
offices, including zip code)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
Series C Preferred Stock Purchase Rights New York Stock Exchange
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. [ ]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. [ ]
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
(Title of class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
On March 5, 1997, the Board of Directors of Nuevo Energy Company (the
"Company") authorized and declared a dividend of one preferred stock purchase
right (a "Right") for each share of common stock, par value $.01 per share, of
the Company (the "Common Shares"). The dividend is payable on March 21, 1997
(the "Record Date") to the holders of record of Common Shares as of the close of
business on such date.
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement") dated as of March 5,
1997 by and between the Company and American Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
1. COMMON SHARE CERTIFICATES REPRESENTING RIGHTS
Until the Distribution Date (as defined in Section 2 below), (a) the
Rights shall not be exercisable, (b) the Rights shall be attached to and trade
only together with the Common Shares and (c) the stock certificates representing
Common Shares shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior to the
Distribution Date shall contain a notation incorporating the Rights Agreement by
reference.
2. DISTRIBUTION DATE
The "Distribution Date" is the earliest of (a) the tenth day following the
date of the first public announcement that any person (other than the Company or
certain related entities, and with certain additional exceptions) has become the
beneficial owner of 15% or more of the then outstanding Common Shares (such
person is an "Acquiring Person" and the date of such public announcement is the
"Stock Acquisition Date") or (b) the close of business on the tenth business day
(or such later day as shall be designated by the Board of Directors) following
the date of the commencement of, or the announcement of an intention to make, a
tender offer or exchange offer, the consummation of which would cause any person
(other than the Company and certain related entities and with certain additional
exceptions) to become an Acquiring Person. In calculating the percentage of
outstanding Common Shares that are beneficially owned by any person, such person
shall be deemed to beneficially own any Common Shares issuable upon the
exercise, exchange or conversion of any options, warrants or other securities
beneficially owned by such person and any Common Shares beneficially owned by
certain affiliates and associates of such person. Notwithstanding the foregoing,
if any person shall become the beneficial owner of at least 15% of the
outstanding Common Shares by reason of purchases of Common Shares by the
Company, then such person shall not be deemed an "Acquiring Person" until such
person thereafter acquires beneficial ownership of, in the aggregate, a number
of additional Common Shares equal to 1% or more of the then outstanding Common
Shares.
After the Distribution Date, the Rights shall separate from the Common
Shares, Rights certificates shall be issued, and the Rights shall become
exercisable to purchase Preferred Shares as described in Section 5 below.
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3. ISSUANCE OF RIGHTS CERTIFICATES
As soon as practicable following the Distribution Date, separate
certificates representing only Rights shall be mailed to the holders of record
of Common Shares as of the close of business on the Distribution Date, and such
separate Rights certificates alone shall represent such Rights from and after
the Distribution Date.
4. EXPIRATION OF RIGHTS
The Rights shall expire on March 21, 2007, unless earlier redeemed or
exchanged.
5. EXERCISE OF RIGHTS
Unless the Rights have expired or been redeemed or exchanged, they may be
exercised, at the option of the holders, pursuant to paragraphs (a), (b) or (c)
below. No Right may be exercised more than once or pursuant to more than one of
such paragraphs. From and after the first event of the type described in
paragraphs (b) or (c) below, each Right that is beneficially owned by an
Acquiring Person or an affiliate or associate thereof shall be void.
(a) RIGHT TO PURCHASE PREFERRED SHARES. From and after the close of
business on the Distribution Date, each Right (other than a Right that has
become void) shall be exercisable to purchase one one-hundredth of a share of
Series C Preferred Stock, par value $1.00 per share, of the Company (the
"Preferred Shares"), at an exercise price of $150.00 (one hundred and fifty
dollars) (the "Purchase Price"). The Preferred Shares are nonredeemable and,
unless otherwise provided in connection with the creation of a subsequent series
of preferred stock, are subordinate to any other series of the Company's
preferred stock whether issued before or after the issuance of the Preferred
Shares. The Preferred Shares may not be issued except upon exercise of Rights.
The holder of a Preferred Share is entitled to receive when, as and if declared,
the greater of (i) cash and non-cash dividends in an amount equal to 100 times
the dividends declared on each Common Share or (ii) a preferential annual
dividend of $100.00 per Preferred Share ($1.00 per one one-hundredth of a
Preferred Share). In the event of liquidation, the holders of Preferred Shares
shall be entitled to receive a liquidation payment in an amount equal to the
greater of (1) $15,000.00 per Preferred Share ($150.00) per one one-hundredth of
a Preferred Share), plus all accrued and unpaid dividends and distributions on
the Preferred Shares, or (2) an amount equal to 100 times the aggregate amount
to be distributed per Common Share. Each Preferred Share has 100 votes, voting
together with the Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, the holder of a
Preferred Share shall be entitled to receive 100 times the amount received per
Common Share. The rights of the Preferred Shares as to dividends, voting and
liquidation preferences are protected by antidilution provisions. It is
anticipated that the value of one one-hundredth of a Preferred Share should
approximate the value of one Common Share.
(b) RIGHT TO PURCHASE COMMON SHARES OF THE COMPANY. In the event that any
person, alone or together with its affiliates or associates, shall become an
Acquiring Person (subject to certain exceptions), each Right (other than a Right
that has become void) shall be exercisable to purchase, at the Purchase Price
(initially $150.00), Common
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Shares with a market value equal to two times the Purchase Price. If the Company
does not have sufficient Common Shares available for all Rights to be exercised
the Company shall, or otherwise if the Company so elects the Company may,
substitute for all or any portion of the Common Shares that would otherwise be
issuable upon the exercise of the Rights, cash, assets or other securities
having the same aggregate value as such Common Shares.
(c) RIGHT TO PURCHASE COMMON STOCK OF A SUCCESSOR CORPORATION. If, after a
person has become an Acquiring Person, (i) the Company is acquired in a merger
or other business combination in which the Company is not the surviving
corporation, (ii) the Company is the surviving corporation in a merger or other
business combination in which all or part of the outstanding Common Shares are
changed into or exchanged for stock or assets of another person or (iii) 50% or
more of the Company's consolidated assets or earning power are sold, then each
Right (other than a Right that has become void) shall thereafter be exercisable
to purchase, at the Purchase Price (initially $150.00), shares of common stock
or cash of the surviving corporation or purchaser, respectively, with an
aggregate market value equal to two times the Purchase Price.
6. ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price, the number of outstanding Rights and the number of
Preferred Shares or Common Shares issuable upon exercise of the Rights are
subject to adjustment from time to time as set forth in the Rights Agreement in
order to prevent dilution. With certain exceptions, no adjustment in the
Purchase Price shall be required until cumulative adjustments require an
adjustment of at least 1%.
7. CASH PAID INSTEAD OF ISSUING FRACTIONAL SECURITIES
No fractional securities shall be issued upon exercise of a Right (other
than fractions of Preferred Shares that are integral multiples of one
one-hundredth of a Preferred Share, which fractions may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment
in cash shall be made based on the market price of such securities on the last
trading date prior to the date of exercise.
8. REDEMPTION
Prior to the earlier of the close of business on the tenth business day
following a Stock Acquisition Date or the close of business on the earlier of
expiration, redemption or exchange of the Rights, the Company may, by resolution
of its Board of Directors (or of certain "Continuing Directors", as hereinafter
defined, if such resolution is adopted after a Stock Acquisition Date), redeem
all of the then outstanding Rights at a redemption price of $.01 per Right,
subject to adjustment, payable in cash, Common Shares or other appropriate
consideration.
9. EXCHANGE
At any time after any Person becomes an Acquiring Person and prior to the
first date thereafter upon which an Acquiring Person (with certain exceptions)
shall be the beneficial owner of 50% or more of the outstanding Common Shares,
the Board of Directors may, at its option, direct the Company to exchange all,
but not less than all, of
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the then outstanding Rights for Common Shares at an exchange ratio of one Common
Share per Right, subject to adjustment. Immediately upon such action by the
Board of Directors, the right to exercise Rights shall terminate and the only
right of the holders of Rights thereafter shall be to receive a number of Common
Shares to which such holder is entitled pursuant to such exchange ratio.
10. NO STOCKHOLDER RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, shall have no
rights as a stockholder of the Company (other than rights resulting from such
holder's ownership of Common Shares), including, without limitation, the right
to vote or to receive dividends.
11. AMENDMENT OF RIGHTS AGREEMENT
The board of Directors may, from time to time, without the approval of any
holder of Rights, direct the Company and the Rights Agent to supplement or amend
any provision of the rights Agreement in any manner, whether or not such
supplement or amendment is adverse to any holder of Rights, and the Company and
the the Rights Agent shall so supplement or amend such provision; provided,
however, that from and after the time that any person becomes an Acquiring
Person, the Rights Agreement shall not be supplemented or amended in any manner
that would adversely affect any holder of outstanding Rights other than an
Acquiring Person; provided, further that from and after the time that any person
becomes an Acquiring Person, the Rights Agreement shall not be supplemented or
amended in any manner without the approval of certain Directors who were elected
at a regularly scheduled, annual meeting of the Company or Directors appointed
by such Directors so elected ("Continuing Directors").
ITEM 2. EXHIBITS
Attached hereto as an exhibit and incorporated herein by reference is the
Rights Agreement dated as of March 5, 1997 by and between the Company and
American Stock Transfer & Trust Company, as Rights Agent, and which includes, as
Exhibit A thereto, the form of Certificate of Designations, Preferences and
Rights of Series C Preferred Stock, as Exhibit B thereto, the form of Rights
Certificate and, as Exhibit C thereto, the Summary of Rights.
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SIGNATURES
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.
Date: March 31, 1997 NUEVO ENERGY COMPANY, a Delaware corporation
By: /S/ MICHAEL D. WATFORD
Name: Michael D. Watford
Title: President, Chief Executive Officer and
Chief Operating Officer of Nuevo Energy
Company
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EXHIBIT INDEX
Exhibit
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1. Rights Agreement by and between Nuevo Energy Company and American Stock
Transfer & Trust Company, as Rights Agent, dated as of March 1997, and
which includes as Exhibit A Thereto the form of Certificate of
Designation, Preferences and Rights of Series C Preferred Stock, as
Exhibit B thereto the form of Rights Certificate and a Exhibit C thereto
the Summary of Rights.
EXHIBIT 1
================================================================================
RIGHTS AGREEMENT
by and between
NUEVO ENERGY COMPANY
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
Dated as of March 5, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions..............................................1
Section 2. Appointment of Rights Agent......................................4
Section 3. Issue of Rights Certificates.....................................4
Section 4. Form of Rights Certificates......................................6
Section 5. Countersignature and Registration................................7
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Certificates........7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.................................................................8
Section 8. Cancellation and Destruction of Rights Certificates.............10
Section 9. Reservation and Availability of Preferred Stock.................10
Section 10. Preferred Stock Record Date....................................11
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights......................................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....20
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.........................................................20
Section 14. Fractional Rights and Fractional Shares........................23
Section 15. Rights of Action...............................................24
Section 16. Agreement of Rights Holders....................................25
Section 17. Rights Certificate Holder Not Deemed a Stockholder.............25
Section 18. Concerning the Rights Agent....................................25
Section 19. Merger or Consolidation or Change of Name of Rights Agent......26
Section 20. Duties of Rights Agent.........................................27
Section 21. Change of Rights Agent.........................................29
Section 22. Issuance of New Rights Certificates............................30
Section 23. Exchange.......................................................30
Section 24. Redemption.....................................................31
Section 25. Notice of Certain Events.......................................32
Section 26. Notices........................................................33
Section 27. Supplements and Amendments.....................................34
Section 28. Determination and Actions by the Board of Directors, etc.......34
Section 29. Successors.....................................................35
Section 30. Benefits of this Agreement.....................................35
Section 31. Severability...................................................35
Section 32. Governing Law..................................................35
Section 33. Counterparts...................................................35
Section 34. Descriptive Headings...........................................35
Exhibit A Form of Certificate of Designation, Preferences
and Rights of Series C Preferred Stock........................A-1
Exhibit B Form of Rights Certificate....................................B-1
Exhibit C Summary of Rights.............................................C-1
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RIGHTS AGREEMENT
This Agreement, dated as of March 5, 1997, between Nuevo Energy Company, a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, a New York corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on March 5, 1997, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each share of common stock, $0.01 par value, of the Company (the
"Common Stock") outstanding as of the close of business on March 21, 1997 (the
"Record Date"), and contemplates the issuance of one Right (subject to
adjustment as provided herein) for each share of Common Stock of the Company
issued between the Record Date and the earliest of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined), each Right representing
the right to purchase, initially, one one-hundredth of one share of Preferred
Stock of the Company (as defined in Section 1 hereof), upon the terms and
subject to the conditions hereinafter set forth (the "Rights").
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates (as hereinafter
defined) and Associates (as hereinafter defined) of such Person, shall be
the Beneficial Owner (as hereinafter defined) of securities representing
15% or more of the shares of Common Stock then outstanding, but shall not
include the Company, any Subsidiary (as hereinafter defined) of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity organized, appointed or established by the Company
or any Subsidiary of the Company for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, (i) no Person shall become an
"Acquiring Person" as a result of an acquisition of Common Stock by the
Company which, by reducing the aggregate number of shares of Common Stock
outstanding, increases the percentage of the total number of shares of
Common Stock outstanding which are beneficially owned by such Person to
15% or more; PROVIDED HOWEVER, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Stock then outstanding by
reason of purchases of Common Stock by the Company and such Person shall,
after such share purchases by the Company, become the Beneficial Owner of
additional shares of Common Stock totaling 1% or more of the shares of
Common Stock then outstanding, then such Person shall constitute an
"Acquiring Person" and (ii) 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 in good faith, and, if requested by
the Board of Directors, such Person agrees to
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divest himself of a sufficient number of shares of Common Stock so that
such Person would no longer be an Acquiring Person, as defined pursuant to
the foregoing provisions of this paragraph (a), then such Person shall not
be deemed to be an "Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended and as in effect on
the date of this Agreement (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (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; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; or (B) the right to vote pursuant
to any agreement, arrangement or understanding; PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement, arrangement or
understanding to vote such security (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); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to
Section l(c)(ii)(B)) or disposing of any securities of the Company.
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Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference
to a Person's Beneficial Ownership of securities of the Company, 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.
(d) "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.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Houston, Texas time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day it shall mean 5:00 P.M., Houston, Texas time, on the
next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the shares of common stock, par value $.01 per share, of the Company.
"Common Stock" when used with reference to any Person other than the
Company shall 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.
(g) "Company" shall mean Nuevo Energy Company, a Delaware
corporation.
(h) "Continuing Director" shall mean, as of the time a determination
is made, a member of the Board of Directors of the Company who was elected
by the stockholders of the Company at a regularly scheduled annual meeting
of stockholders or who was appointed by the Board of Directors of the
Company at a time when at least a majority of the members of the Board of
Directors of the Company were elected by the stockholders of the Company
at a regularly scheduled annual meeting of stockholders.
(i) "Distribution Date" shall have the meaning assigned to such term
in Section 3 hereof.
(j) "Expiration Date" shall have the meaning assigned to such term
in Section 7 hereof.
(k) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust or other entity and shall
include any successor (by merger or otherwise) of such entity.
(l) "Preferred Stock" shall mean the Series C Preferred Stock, $1.00
par value, of the Company having the rights and preferences set forth in
the Form
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of Certificate of Designation, Preferences and Rights attached to this
Agreement as Exhibit A.
(m) "Purchase Price" shall mean the price per share of Common Stock
described in Section 7 hereof.
(n) "Record Date" shall have the meaning as set forth in the
Preamble of this Agreement.
(o) "Rights" shall have the meaning as set forth in the Preamble of
this Agreement.
(p) "Rights Agent" shall have the meaning as set forth in the
Preamble of this Agreement.
(q) "Rights Certificate" shall have the meaning assigned to such
term in Section 3 hereof.
(r) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(s) A "Section 13 Event" shall mean any event described in Section
13(a)(x), (y) or (z) hereof.
(t) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(u) A "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or interest is owned, directly, or indirectly, by such Person.
(v) A "Triggering Event" shall mean a Section 11(a)(ii) Event or any
Section 13 Event.
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 Stock) 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. In the event the Company appoints one or
more co-Rights Agents, the respective duties of the Rights Agent and any
co-Rights Agent shall be as the Company shall determine.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. (a) Until the earlier of (i) the
tenth day after the Stock Acquisition Date or (ii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the
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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 Common Stock for or pursuant to the terms of any
such plan) of, or of the first public announcement of the intention 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 Common Stock for or pursuant to the terms of any such plan) to commence,
a tender or exchange offer that, if consummated, would result in such Person,
alone or together with its Affiliates and Associates, becoming an Acquiring
Person (including any such date which is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates for
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be Rights Certificates)
and not by separate Rights Certificates, and (y) the right to receive Rights
Certificates will be transferable only in connection with the transfer of the
underlying shares of Common Stock. As soon as practicable after the Company has
notified the Rights Agent of the occurrence of the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, postage prepaid mail, to each record holder of
the Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(p) hereof, at the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of a Summary of Rights, in substantially the form of Exhibit C
hereto (the "Summary of Rights"), by first-class, postage-prepaid mail, to each
record holder of Common Stock as of the close of business on the Record Date, at
the address of such holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date, until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the Rights will be evidenced by such certificates for the Common Stock
registered in the name of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution Date (or earlier
redemption, expiration or termination of the Rights), the surrender for transfer
of any certificate for Common Stock outstanding on the Record Date, with or
without a copy of the Summary of Rights attached thereto, shall also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
(c) Certificates for Common Stock which become outstanding (including,
without limitation, shares issued out of treasury and certificates issued upon
transfer or exchange of Common Stock) after the Record Date, but prior to the
earliest of the
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Distribution Date or the redemption, expiration or termination of the Rights
shall be deemed also to be certificates for Rights, and shall have impressed,
printed, stamped, written or otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Nuevo Energy Company
(the "Company") and American Stock Transfer & Trust Company (the "Rights
Agent"), dated as of March 5, 1997 (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 the Company and the Rights
Agent. Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may expire, or may be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a written
request therefor. Under certain circumstances, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement)
whether currently held by or on behalf of such Person or by any subsequent
holder, may be null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the transfer of
any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. If the
Company purchases or acquires any Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any rights associated with the shares of Common Stock that are no
longer outstanding.
SECTION 4. FORM OF RIGHTS CERTIFICATES. The Rights Certificates (and the
forms of election to purchase and of assignment to be printed on the reverse
thereof) shall each be substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of authentication thereof, and on their face
shall entitle the holders thereof to purchase such number of one-hundredths of a
share of Preferred Stock at the exercise price as shall be set forth therein
(such exercise price per one one-hundredth of a share of Preferred Stock being
herein referred to as the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
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SECTION 5. COUNTERSIGNATURE AND REGISTRATION. (a) The Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, a Vice
Chairman, its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificate shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company. Any Rights
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. (a) Subject to
the provisions of Section 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Business on the
Expiration Date (as such term is defined in Section 7(a) hereof), any Rights
Certificate or Rights Certificates (other than Rights Certificates representing
Rights that have become void pursuant to Section 7(e) hereof or that may have
been exchanged pursuant to Section 23 hereof) may be transferred, split up,
combined or exchanged for another Rights Certificate or other Rights
Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock (or Common Stock, other securities or other property,
as the case may be) as the Rights Certificate or Rights Certificates surrendered
then entitled such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged, with the form
of assignment duly executed, at the principal office or offices of the Rights
Agent designated for such purpose. Thereupon the Rights Agent shall countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
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(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Rights 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 Rights Certificate,
with the form of election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal office or offices of
the Rights Agent designated for such purpose, together with the aggregate
Purchase Price with respect to the total number of one-hundredths of a share of
Preferred Stock (or other securities or property, as the case may be) as to
which the Rights are exercised, at or prior to the earlier of (i) the Close of
Business on the tenth anniversary of the Record Date, (ii) the time at which the
Rights are redeemed as provided in Section 24 hereof or (iii) the time at which
the Board of Directors of the Company orders the exchange of Rights pursuant to
paragraph (a) of Section 23 (the earlier of (i), (ii) and (iii) is herein
referred to as the "Expiration Date"). Subject to adjustment as provided herein,
each Right shall initially be exercisable for one one-hundredth of a share of
Preferred Stock.
(b) The Purchase Price for each one one-hundredth share of Preferred Stock
pursuant to the exercise of a Right shall initially be $150.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 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 Rights Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment,
with respect to each Right so exercised, of the Purchase Price per one
one-hundredth of a share of Preferred Stock (or for such Common Stock, other
securities or other property, as the case may be) to be purchased, and an amount
equal to any applicable transfer tax payable in accordance with Section 9(e) (as
determined by the Rights Agent), in cash, or by certified check, cashier's check
or money order payable to the order of the Company (or other proper party in the
case of payments to be made in accordance with Section 9(e)), the Rights Agent
shall, subject to Section 20(k), thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent therefor) certificates for the total number
of shares of Preferred Stock to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company, in its sole discretion, shall have elected to deposit the total number
of shares of Preferred Stock issuable upon exercise of the Rights hereunder with
a depositary agent, requisition from the depositary agent depositary receipts
representing such number of one-hundredths of a
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share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such request, (ii) requisition from the Company
the amount of cash, if any, to be paid in lieu of issuance of fractional shares
in accordance with Section 14, (iii) promptly after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt promptly
deliver such cash, if any, to or upon the order of the registered holder of such
Rights Certificate. In the event that the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so that
such other securities are available for distribution by the Rights Agent, if and
when appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Rights Certificate, registered in such name or names as may be designated
by such holder, subject to the provisions of Section 14 hereof.
(e) From and after the occurrence of a Section 11(a)(ii) Event, any Rights
that are or were acquired or Beneficially Owned by any Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be void and any holder of
such Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Rights Certificate shall be issued pursuant to
Section 3 that represents Rights Beneficially Owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Rights Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Rights
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be canceled.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as
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expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK. (a) Subject to
the terms of its certificate of incorporation, the Company covenants and agrees
that it shall use its best efforts to cause to be reserved and kept available
out of its authorized and unissued shares of Preferred Stock, or any authorized
and issued shares of Preferred Stock held in its treasury, the number of shares
of Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights and, after the occurrence of a Triggering Event, shall so
reserve and keep available a sufficient number of shares of Preferred Stock
(and/or other securities) which may be required to permit the exercise in full
of all outstanding Rights in accordance with Section 7.
(b) So long as the shares of Preferred Stock (and, after the occurrence of
a Triggering Event, any other securities) issuable upon the exercise of the
Rights may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all shares or units of such other securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii) hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Securities Act of
1933, as amended (the "Act"), with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing and (iii)
cause such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities and (B) the
Expiration Date of the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed 90 days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any such provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise
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thereof shall not be permitted under applicable law, or a registration statement
shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock and/or other
securities delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares or securities.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of
any certificates for shares of Preferred Stock and/or Common Stock 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
Rights Certificates to a person other than, or in respect of the issuance or
delivery of the shares of Preferred Stock and/or Common Stock in a name other
than that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for shares of
Preferred Stock, and/or Common Stock in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Rights Certificate evidencing such Rights was
duly presented and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such presentation and
payment is a date upon which the Preferred Stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11:
(a) (i) In the event the Company shall at any time after the Record
Date (A) declare a dividend on its then outstanding Preferred Stock that
is payable
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in shares of Preferred Stock, (B) subdivide the outstanding shares of
Preferred Stock, (C) combine the outstanding shares of Preferred Stock
into a smaller number of shares of Preferred Stock or (D) issue any shares
of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in
effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, he would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; PROVIDED, HOWEVER, that in
no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 23 of this Agreement, in the event (a
"Section 11(a)(ii) Event") that any Person (other than any employee
benefit plan of the Company or any Subsidiary of the Company or any Person
organized, appointed or established by the Company or such Subsidiary for
or pursuant to the terms of any such employee benefit plan), alone or
together with its Affiliates and Associates (other than the Company, any
Subsidiary of or other Person controlled by the Company, any employee
benefit plan of the Company or any Subsidiary of the Company or any Person
organized, appointed or established by the Company or such Subsidiary for
or pursuant to the terms of any such employee benefit plan), shall become
an Acquiring Person, then proper provision shall be made so that each
holder of a Right, except as provided in Sections 7(e) and 11(a)(iii)
hereof, shall have a right to receive upon exercise of each Right at a
price equal to the then current Purchase Price multiplied by the number of
one-hundredths of a Preferred Share for which a Right is then exercisable,
in accordance with the terms of this Agreement and in lieu of shares of
Preferred Stock, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Purchase Price by the then number of one-hundredths of a share of
Preferred Stock for which a Right was exercisable (or, if the Distribution
Date shall not have occurred prior to the date of such Section 11(a)(ii)
Event, the number of one-hundredths of a Preferred Share for which a Right
would have been exercisable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such Section 11(a)(ii)
Event) immediately prior to such Section 11(a)(ii) Event and (y) dividing
that product by 50% of the current market price per one share of Common
Stock of the Company (determined pursuant to Section 11(d)) on the date of
the occurrence of the event set forth in this subparagraph (ii) (such
number of shares being referred to as the
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number of "adjustment shares"). Successive adjustments shall be made
pursuant to this paragraph each time a Section 11(a)(ii) Event occurs. In
the event that 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.
(iii) In lieu of issuing shares of Common Stock of the Company in
accordance with Section 11(a)(ii) hereof, the Company, acting by
resolution of its Board of Directors (which resolution shall be effective
only with the concurrence of a majority of the Continuing Directors), may,
and, in the event that the number of shares of Common Stock which are
authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit exercise in full of the Rights
in accordance with Section 11(a)(ii) hereof, shall (A) determine the
excess of (1) the value of the adjustment shares issuable upon the
exercise of a Right (the "current value"), over (2) the Purchase Price
attributable to each Right (such excess, the "spread") and (B) with
respect to each Right (subject Section 7(e) hereof), make adequate
provision to substitute for the adjustment shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares of preferred
stock which the Board of Directors of the Company (with the concurrence of
a majority of the Continuing Directors) has deemed to have the same value
as shares of Common Stock of the Company (such shares or units of
preferred stock hereinafter called "common stock equivalents")), (4) debt
securities of the Company, (5) other assets or (6) any combination of the
foregoing having an aggregate value equal to the current value, where such
aggregate value has been determined by action of the Board of Directors of
the Company (with the concurrence of a majority of the Continuing
Directors) based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company which has
theretofore performed no services for the Company or any Subsidiary of the
Company in the past five years; PROVIDED, HOWEVER, that if the Company
shall not have made adequate provision to deliver value pursuant to clause
(B) above within thirty days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the first date that the
right to redeem the Rights pursuant to Section 24 hereof, as such date may
be amended pursuant to Section 26 hereof, shall expire (the later of (x)
and (y) being referred to herein as the "Section 11(a)(ii) trigger date"),
then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock of the Company (to the extent available) and then,
if necessary, cash, which shares or cash have an aggregate value equal to
the spread. If, after the occurrence of a Section 11(a)(ii) Event, the
number of shares of Common Stock that are authorized by the Company's
certificate of incorporation but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not sufficient to
permit exercise in full of the Rights in accordance with Section 11(a)(ii)
hereof and the Company, acting by resolution of its Board of Directors
(which resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), shall determine in
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good faith that it is likely that sufficient additional shares of its
Common Stock could be authorized for issuance upon exercise in full of the
Rights, then the thirty-day period set forth above may be extended to the
extent necessary, but not more than ninety days after the Section
11(a)(ii) trigger date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period as
it may be extended, the "substitution period"). To the extent that the
Company determines that some action is to be taken pursuant to the terms
of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the substitution period in order to seek such
stockholder approval for the authorization of additional shares or to
decide the appropriate form of distribution to be made pursuant to the
first sentence of this Section 11(a)(iii) and to determine the value
thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock of the Company shall be the
current market price per share (determined in accordance with Section
11(d) hereof) of the Common Stock of the Company on the date of the
occurrence of the Section 11(a)(ii) Event, and the per share or per unit
value of any Common Stock Equivalents shall be deemed to equal the current
market price (determined in accordance with Section 11(d) hereof) per
share of the Common Stock of the Company on such date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or shares having the
same or more favorable rights, privileges and preferences as the Preferred
Stock ("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per share of
Preferred Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into Preferred Stock
or equivalent preferred stock) less than the current market price (as
defined in Section 11(d)) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus
the number of shares of Preferred Stock which the aggregate offering price
of the total number of shares of Preferred Stock and/or equivalent
preferred stock to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall be the number
of shares of Preferred Stock outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or equivalent preferred
stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible);
PROVIDED, HOWEVER, that in no event shall the consideration to be paid
upon the exercise of a Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of
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one Right. If such subscription price may be paid in a consideration part
or all of which shall be in a form other than cash, the value of such
consideration shall be determined reasonably and with good faith to the
holders of Rights by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent. Shares of Preferred Stock
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) of evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable
in Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or convertible securities, subscription rights or
warrants (excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the current market
price (as defined in Section 11(d)) per share of Preferred Stock on such
record date, less the fair market value (as determined reasonably and with
good faith to the holders of Rights by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed or
of such convertible securities, subscription rights or warrants
distributable in respect of one share of Preferred Stock and the
denominator of which shall be the current market price (determined
pursuant to Section 11(d)) per share of the Preferred Stock; 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 exercise of one Right.
Such adjustments shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which
would be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than in
Section 11(a) (iii), the "current market price" per share of Common Stock
on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the 30 consecutive "trading days" (as
such term is hereinafter defined) immediately prior to such date and for
purposes of computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of the Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the 10 consecutive trading days immediately following
such date; PROVIDED, HOWEVER, that in the event that the
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current per share market price of the Common Stock is determined during a
period following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in shares of
such Common Stock or securities convertible into shares of such Common
Stock (other than the Rights) or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of 30
trading days after the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification,
then, and in each such case, the "current market price" shall be properly
adjusted to take into account ex-dividend trading. The closing price for
each day shall be the last sale price, regular way or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and
low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use, or, if on any such
date the shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by
the Board of Directors of the Company. If on any such date no market maker
is making a market in the Common Stock, the fair value of such shares on
such date as determined reasonably and with good faith by the Board of
Directors of the Company shall be used and shall be binding on the Rights
Agent. The term, "trading day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or,
if the shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, "current market price" per share
shall mean the fair value per share determined reasonably and with good
faith to the holders of Rights by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent.
(ii) For the purpose of any computation hereunder, the "current
market price" per share (or one one-hundredths of a share) of Preferred
Stock shall be determined in the same manner as set forth above for the
Common Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share (or one
one-hundredth of a share) of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this Section
11(d), the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such number may be
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appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after the
date of this Agreement) multiplied by the current market price per share
of the Common Stock and the "current market price" per one one-hundredth
of a share of Preferred Stock shall be equal to the current market price
per share of the Common Stock (as appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement). If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, "current market price" per share shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandths of
a share of Common Stock or other share or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of this
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a), the holder of
any Right thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than Preferred Stock, 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 Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k),
(m) and the provisions of Sections 7, 9, 10, 13, and 14 hereof with
respect to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of
Preferred Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that
number of one-hundredths of a share of Preferred Stock (calculated to the
nearest one-millionth) obtained by (i) multiplying (x) the number of
one-hundredths of a share of Preferred Stock
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covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment
in the number of Rights shall be exercisable for the number of
one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount
of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter but, if the Rights
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record
date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of shares
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of
Preferred Stock, Common Stock or other securities issuable upon exercise
of the rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of Preferred
Stock, Common Stock or other securities at such adjusted Purchase Price.
If upon any exercise of the Rights, a holder is to
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receive a combination of Common stock and common stock equivalents, a
portion of the consideration paid upon such exercise, equal to at least
the then par value of a share of Common Stock of the Company, shall be
allocated as the payment for each share of Common Stock of the Company so
received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the shares of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; PROVIDED, HOWEVER, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11 notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, stock dividends or issuance of
rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not
be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into,
or (iii) sell or transfer to, in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries taken as a
whole, any other Person or Persons if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights, warrants or
other instruments outstanding or agreements or arrangements in effect
which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with
or immediately after such consolidation, merger or sale, the shareholders
of a Person who constitutes, or would constitute, the "Principal Party"
for the purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that after the Distribution
Date it will not, except as permitted by Section 23 or 24 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by
the Rights.
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(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this
Agreement and prior to the Distribution Date (i) declare or pay any
dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, (iii) combine
the outstanding Common Stock into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the
outstanding Common Stock, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of which shall
be the total number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be
the total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Stock
and the Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of any such adjustment unless and until it shall have received
such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. (a) In the event that, at any time after a Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof) and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person shall consolidate with the Company or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of the shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell, mortgage or
otherwise transfer (or one or more of its Subsidiaries shall sell, mortgage or
otherwise transfer), in one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
one or more of its wholly-owned Subsidiaries in one or more transactions each of
which complies with Section 11(o) hereof) (each, a "Section 13 Event"), then,
and in each such case, proper provision shall be made so that (i) each holder of
a Right, subject to Section
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7(e) hereof, shall have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement, such
number of shares of validly authorized and issued, fully paid, non-assessable,
and freely tradable shares of Common Stock of the principal party (as
hereinafter defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable (without taking into account any adjustment previously made pursuant
to Section 11(a)(ii) hereof) and (2) dividing that product by 50% of the current
market price per share of the Common Stock of such principal party (determined
pursuant to Section 11(d) hereof) 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" shall thereafter be deemed to refer
to such principal party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such principal party; and (iv) such principal
party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section 9
hereof) in connection with such consummation as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights.
(b) "Principal party" shall mean
(i) in the case of any transaction described in (x) or (y) of the
first sentence of this Section 13, the Person that is the issuer of any
securities into which shares of Common Stock 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 the merger or consolidation (including,
if applicable, the Company, if it is the surviving corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions; PROVIDED, HOWEVER, that in any such
case, (1) if the Common Stock of such Person is not at such time and has
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person, "principal party" shall refer
to such other Person; (2) in case such Person is a Subsidiary, directly or
indirectly, or Affiliate of more than one Person, the Common Stocks of two
or more of which are and have been so registered, "principal party" shall
refer to whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value; and (3) in case such Person is
owned, directly or indirectly, by a joint venture formed by two or more
Persons, the rules set forth in (1) and (2) above shall apply to each of
the Persons having an interest in such joint venture as if such joint
venture were a "Subsidiary" of both or all of such Persons and, in
connection therewith, "principal party" shall refer to each of such
Persons and each such principal party shall bear the obligations set forth
in this
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Section 13 in the same ratio as their direct or indirect interests in such
joint venture bear to the total of such interests.
If, for any reason, the Rights cannot be exercised for Common Stock of the
Company or such principal party, then a holder of Rights will have the right to
exchange his Rights for cash from the Company or such principal party in an
amount equal to the number of shares of such Common Stock of the Company or of
such principal party he would otherwise be entitled to purchase times 50% of the
then current market price, as determined pursuant to Section 11(d)(i) hereof, of
the Common Stock of the Company or of such principal party, as the case may be.
If, for any reason, including, without limitation, if such principal party is an
individual, private partnership or private company, the foregoing formulation
cannot be applied to determine the cash amount into which the Rights are
exchangeable, then the Board of Directors, based upon the advice from one or
more investment banking firms, shall determine such amount reasonably and with
utmost good faith to the holders of Rights. Any such determination shall be
binding and final.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto the Company and each principal party and each
other Person who may become a principal party as a result of such consolidation,
merger, sale or transfer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger, sale or transfer of assets mentioned in
paragraph (a) of this Section 13, the principal party at its own expense will
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, will use its best efforts to cause such
registration statement to become effective as soon as practicable after
such filing and will use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws
of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the principal party and each of its Affiliates which comply
in all material respects with the requirements for registration on Form 10
under the Exchange Act.
(d) The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights.
(e) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13
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Event shall occur at any time after the occurrence of a Section 11(a)(ii) Event,
the Rights which have not theretofore been exercised shall be exercisable in the
manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company shall
not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the trading day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, then the fair value of the Rights
on such date as determined reasonably and with good faith to the holders of
Rights by the Board of Directors of the Company shall be used and shall be
binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). Fractions of shares of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares of Preferred Stock represented by
such depositary receipts. In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the trading day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 giving rise to the right to receive common stock
equivalents (other than Preferred Stock) or other securities upon the exercise
of a Right, the Company shall not be required to issue fractions of shares or
units of such common stock equivalents or other securities upon exercise of the
Rights or to distribute certificates which evidence
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fractional shares of such common stock equivalents or other securities. In lieu
of fractional shares or units of such common stock equivalents or other
securities, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of a share or unit of such
common stock equivalent or other securities. For purposes of this Section 14(c),
the current market value of such share or unit shall be determined in the manner
set forth in Section 11(d)(i) with respect to shares of Common Stock except that
the current market price shall be determined by reference only to the trading
day immediately prior to the date of such exercise.
(d) Except as otherwise expressly provided herein, the holder of a Right
by the acceptance of the Rights expressly waives his right to receive any
fractional Rights or any fractional shares upon exercise of a Right.
SECTION 15. RIGHTS OF ACTION. From and after the Record Date, all rights
of action in respect of this Agreement, except rights of action given to the
Rights Agent pursuant to Sections 20 and 21 hereof, are vested in the respective
registered holders of the Rights Certificates (and during the period that
commences on the Record Date and ends on the Distribution Date, the registered
holders of the Common Stock); and from and after the Record Date any registered
holder of any Rights Certificate (or, during the period that commences on the
Record Date and ends on the Distribution Date, of the Common Stock), without the
consent of the Rights Agent or of the holder of any other Rights Certificate
(or, prior to the Distribution Date, of the Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
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 or any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement. Holders of Rights shall be
entitled to recover the reasonable costs and expenses, including attorneys' fees
incurred by them in any action to enforce the provisions of this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) during the period that commences on the Record Date and ends on
the Distribution Date, the Rights will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer; and
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(c) the Company and the Rights Agent may deem and treat the person
in whose name a Rights Certificate (or, during the period that commences
on the Record Date and ends on the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common
Stock certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the shares of Preferred Stock, Common
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions thereof.
SECTION 18. CONCERNING THE RIGHTS AGENT. 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 disbursements and other reasonable 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 arising
therefrom, directly or indirectly. The indemnification provided for hereunder
shall survive the expiration of the Rights and the termination of this
Agreement.
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 Rights Certificate or
certificate for the Preferred Shares or Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it, after property inquiry or
examination, to be genuine and to be signed, executed and, where necessary
verified or acknowledged, by the proper Person or Persons or otherwise upon the
advice of counsel set forth in Section 20 hereof.
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SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at the time any of the Rights
Certificates shall not have been countersigned any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates in
this Agreement.
(b) If at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver the Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
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 Rights Certificates,
by their acceptance thereof, shall be bound;
(a) The Rights Agent may consult with legal counsel selected by it
(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 (including, without limitation, the identity of an Acquiring Person
and the determination of the current market price per share of Common
Stock) 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, a Vice Chairman, the Chief Executive Officer,
the President, any Vice President, the Secretary or the
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Treasurer 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 and
any other Person only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Sections 3, 11, 13, 23 or 24 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice that such change or adjustment is
required); nor shall it be responsible for any determination by the Board
of Directors of the Company of the current market value of the Rights or
Preferred Stock or Common Stock pursuant to the provisions of Section 14
hereof; nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Preferred Stock or other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or other securities will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, a Vice Chairman, the Chief Executive
Officer, the President, any Vice President, the Secretary or the Treasurer
of the Company, and is authorized 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 or for any delay in acting while
waiting for those instructions.
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(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, omission, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability
is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer without first
consulting with the Company.
(l) The Rights Agent shall not be required to take notice of or be
deemed to have notice of any fact, event or determination under this
Agreement unless and until the Rights Agent shall be specifically notified
in writing by the Company of such fact, event or determination.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock and Preferred Stock by registered or certified mail, and to
holders of the Rights 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 transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such
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resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or the State of Texas or the
State of New York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of New York, in good standing, having an office in the State of Texas or the
State of New York, which is authorized under such laws to exercise corporate
trust or stock transfer 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 or (b) an
affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS 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 or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.
SECTION 23. EXCHANGE. (a) The Board of Directors of the Company may, at
its option, at any time after any Person becomes an Acquiring Person, authorize
and direct the Company to exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for shares of Common Stock at
an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding shares of
Common Stock 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 shares of Common Stock then outstanding.
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(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 23
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 23, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b) hereof) for Common Shares exchangeable for
Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred Shares pursuant to the
terms thereof, so that the fraction of a Preferred Share delivered in lieu of
each Common Share shall have the same voting rights as one Common Share.
(d) In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 23, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence shares of Common Stock
in connection with any exchange made pursuant to this Section 23. In lieu of
such fractional shares of Common Stock, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole share of Common Stock. For the
purposes of this paragraph (e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
trading day immediately prior to the date of exchange pursuant to this Section
23.
SECTION 24. REDEMPTION. (a) The Company may, by resolution of its Board of
Directors (which resolution shall, if adopted following the Stock Acquisition
Date, be effective only with the concurrence of a majority of the Continuing
Directors and only if
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the Continuing Directors constitute a majority of the number of directors then
in office), at its option, at any time prior to the earlier of (x) the Close of
Business on the tenth Business Day following the Stock Acquisition Date or (y)
the Close of Business on the Expiration Date redeem all but not less than all of
the then outstanding Rights at a redemption price of $.01 per Right (payable in
cash, shares of Common Stock (based on the current market price, determined
pursuant to Section 11(d), of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors of the
Company), appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "redemption price"); PROVIDED, HOWEVER, that the
Board of Directors of the Company may act only with the concurrence of a
majority of the Continuing Directors in authorizing redemption of the Rights on
or after the date of a change (resulting from a proxy or consent solicitation
effected in compliance with applicable law and the requirements of any national
securities exchange on which the Common Stock of the company is listed) in a
majority of the directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated (or, if upon the
commencement of such solicitation, a majority of the Board of Directors of the
Company has determined in good faith) that such Person (or any of its Affiliates
or Associates) intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event.
(b) In the event that, following the occurrence of the Stock Acquisition
Date and following the expiration of the right of redemption under subparagraph
(a) of this Section 24, but prior to any Triggering Event, (i) a Person who is
an Acquiring Person shall have transferred or otherwise disposed of a number of
shares of Common Stock of the Company in one transaction, or a series of
transactions (not directly or indirectly involving the Company or any of its
Subsidiaries), which did not result in the occurrence of a Triggering Event,
such that such Person is thereafter a Beneficial Owner of 5% or less of the
outstanding Common Stock of the Company, (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons and (iii) the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors) shall so approve, then
the Company's right of redemption provided in subparagraph (a) of this Section
24 shall be reinstated and thereafter all outstanding Rights shall again be
subject to the provisions of this Section 24.
(c) Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event during such time as the Company has the right to redeem the
Rights under this Section 24.
(d) Immediately upon the action of the Board of Directors of the Company
(with, if required, the concurrence of a majority of the continuing Directors)
ordering the redemption of the Rights (or at such time subsequent to such action
as the Board of Directors, with the concurrence of a majority of the Continuing
Directors, may determine, including, without limitation, the time of the
occurrence of one or more events or the satisfaction of one or more conditions),
and without any further action and
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without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within 10 days after the action of the Board of Directors ordering the
redemption of the Rights, the Company shall give notice of such redemption to
the holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock of the Company. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase any Rights
at any time in any manner other than that specifically set forth in this Section
24, other than in connection with the repurchase of Common Stock of the Company
prior to the Distribution Date.
SECTION 25. NOTICE OF CERTAIN EVENTS. (a) If after the Record Date the
Company shall propose (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the holders
of Preferred Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company), (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of outstanding
shares of Preferred Stock), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate, in accordance
with Section 27 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least 10
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) If any of the events set forth in Section 11(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 Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof.
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SECTION 26. NOTICES. (a) Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
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:
Nuevo Energy Company
1331 Lamar, Suite 1650
Houston, Texas 77010
Attn: Secretary
(b) Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attn: Paula Caroppoli
(c) Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights 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 registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Rights
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, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; PROVIDED, HOWEVER, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person) and only if approved
by the Continuing Directors. Without limiting the foregoing, the Company may at
any time prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the threshold set forth in Section 1(a) to not less than the
greater of (i) any percentage greater than the largest percentage of the then
outstanding Common Stock then known by 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 any Subsidiary of the Company, any entity holding
Common Stock for or pursuant to the terms of any such plan) and (ii) 10%. Prior
to the Record Date, the Board of Directors of the Company may amend, modify or
terminate this Agreement in any manner determined, in their sole discretion, to
be necessary or appropriate.
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SECTION 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
or any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties, (y)
not subject the Board to any liability to the holders of the Rights
Certificates.
SECTION 29. 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 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the Common Stock) 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 Certificates (and, prior to the Distribution Date, the Common Stock).
SECTION 31. 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 32. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and to be performed entirely within such State.
SECTION 33. 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
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original, and all such counterparts shall together constitute but one and the
same instrument.
SECTION 34. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereto affixed and
attested, all as of the day and year first above written.
NUEVO ENERGY COMPANY
Attest: /s/ WILLARD I. BOSS, JR. By: /s/ MICHAEL D. WATFORD
Name: Michael D. Watford
Title: President, Chief Executive
Officer and Chief Operating
Officer
AMERICAN STOCK TRANSFER &
TRUST COMPANY
Attest: /s/ SUSAN SILBER By: /s/ PAULA CAROPPOLI
Name: Paula Caroppoli
Title: Vice President
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Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES C PREFERRED STOCK
OF
NUEVO ENERGY COMPANY
PURSUANT TO SECTION 151 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
I Michael D. Watford, President, Chief Executive Officer and Chief
Operating Officer of Nuevo Energy Company, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of Directors
on March 5, 1997, adopted the following resolution creating a series of 500,000
shares of Preferred Stock designated as Series C Preferred Stock.
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation is
hereby created, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
SECTION 1. DESIGNATION AND AMOUNT. There shall be a series of
Preferred Stock of the Corporation which shall be designated as "Series C
Preferred Stock", par value $1.00 per share, and the number of shares
constituting such series shall be 500,000. 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 Series C Preferred Stock to a
number less than that of the shares then outstanding plus the number of shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Corporation.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS. (A) Subject to the prior and
superior rights of the holders of any shares of any series of Preferred Stock
ranking prior and superior to the Series C Preferred Stock with respect to
dividends, the holders of shares of Series C Preferred Stock in preference to
the holders of shares of Common
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Stock, par value $.01 per share (the "Common Stock"), of the Corporation and 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 in cash on the first day of January, April, July, and October
in each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series C Preferred Stock
in an amount per share (rounded to the nearest cent) equal to the greater of (a)
$.25 (twenty-five cents), or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash and
non-cash (payable in kind) dividends or other distributions other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
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 Series C Preferred Stock. In the event the Corporation
shall at any time after March 21, 1997 (the "Record Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series C 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 were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Series C Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $.25 (twenty-five cents) per share on the
Series C Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series C Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series C Preferred Stock unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series C Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series C 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
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determination of holders of shares of Series C Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 60 days prior to the date fixed for the payment
thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series C
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series C Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series C 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 were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series C Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series C Preferred Stock
shall be in arrears in an amount equal to six (6) quarterly dividends thereon,
the occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series C Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock (including holders of the
Series C Preferred Stock) with dividends in arrears in an amount equal to six
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect two Directors.
(ii) During any default period, such voting right of the holders
of Series C Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless the holders of ten
percent in number of shares of Preferred Stock outstanding shall be present in
person or by proxy. The absence of a quorum of the holders of Common Stock shall
not affect the exercise by the holders of Preferred Stock of such voting right.
At any meeting at which the holders of Preferred Stock shall exercise such
voting right initially during an existing default period, they shall have the
right, voting as a class, to elect Directors to fill such vacancies, if any, in
the Board of Directors as may then exist up to two
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Directors or, if such right is exercised at an annual meeting, to elect two
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series C Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent of the total number of shares
of Preferred Stock outstanding, irrespective of series, may request, the calling
of a special meeting of the holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii)
shall be given to each holder of record of Preferred Stock by mailing a copy of
such notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and no later than 60 days after such order or request or, in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent of the total number of shares of Preferred
Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which elected
the Director whose office shall become vacant. References in this paragraph (C)
to Directors elected by the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the Certificate of Incorporation or By-Laws
irrespective of any increase made pursuant to the provisions of paragraph
(C)(ii) of this Section 3 (such number being subject, however, to change
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thereafter in any manner provided by law or in the Certificate of Incorporation
or By-Laws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of
the remaining Directors.
(D) Except as set forth herein, holders of Series C 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 Series C Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
C Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:
(i) Declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series C Preferred Stock;
(ii) Declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Preferred Stock
except dividends paid ratably on the Series C Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) Redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C Preferred Stock
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for shares
of any stock of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series C Preferred
Stock; or
(iv) Purchase or otherwise acquire for consideration any shares of
Series C Preferred Stock or any shares of stock ranking on a parity with
the Series C Preferred Stock except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
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<PAGE>
SECTION 5. REACQUIRED SHARES. Any shares of Series C Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled 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
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to the dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred Stock unless, prior thereto, the holders
of shares of Series C Preferred Stock shall have received per share, the greater
of 100 times $150.00 or 100 times the payment made per share of Common Stock,
plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the "Series C Liquidation
Preference"). Following the payment of the full amount of the Series C
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series C Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series C
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
C Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series C Preferred Stock and Common Stock, respectively, holders of
Series C Preferred Stock and holders of shares of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively.
(B) In the event there are not sufficient assets available to permit
payment in full of the Series C Liquidation Preference and the liquidation
preferences of all other series of Preferred Stock, if any, which rank on a
parity with the Series C Preferred Stock, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion to their
respective liquidation preferences. In the event there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Record
Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock
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<PAGE>
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series C Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series C 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 are outstanding immediately prior to such
event.
SECTION 8. REDEMPTION. The shares of Series C Preferred Stock shall
not be redeemable.
SECTION 9. RANKING. The Series C Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
SECTION 10. FRACTIONAL SHARES. Series C Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series C Preferred Stock.
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<PAGE>
IN WITNESS WHEREOF, I have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this _____
day of March , 1997.
By:___________________________
Name: Michael D. Watford
Title: President, Chief Executive
Officer and Chief Operating
Officer
Attest:
- ------------------------------
Willard I. Boss, Jr., Secretary
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<PAGE>
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ______________Rights
NOT EXERCISABLE AFTER MARCH 21, 2007 OR EARLIER IF NOTICE OF EXCHANGE OR
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO EXPIRATION, REDEMPTION AND
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED
BE CERTAIN PERSONS MAY BECOME NULL AND VOID.
Rights Certificate
Nuevo Energy Company
(a Delaware corporation)
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 March 5, 1997 (the "Rights Agreement") between Nuevo
Energy Company, a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company (the "Rights Agent"), to purchase from the Company at
any time after the Distribution Date and prior to 5:00 P.M. (Houston, Texas
time) on March 21, 2007, unless prior thereto such Rights are redeemed or
exchanged in accordance with the terms of the Rights Agreement, at the office of
the Rights Agent designated for such purpose, one one-hundredth of a fully paid,
non-assessable share of Series C Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $150.00 per one one-hundredth of a share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the appropriate Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
___________, ____, based on the Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Preferred Stock or other securities or consideration which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
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<PAGE>
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company, and the
Company will mail to the holder a copy of the Rights Agreement within five days
of a written request therefor.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the ______________ of the Rights Agent
may be exercised for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $0.01 per Right, payable in cash, common stock or other
consideration.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be exchanged by the Company at its option at
an exchange price of one share of Common Stock (or certain other securities) per
Right, subject to adjustment.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock, 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 Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock 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 Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ____________, ____.
ATTEST: NUEVO ENERGY COMPANY
___________________________ By:_________________________
Name: Name:
Title: Title:
Countersigned:
- ----------------------------
as Rights Agent
- ----------------------------
Authorized Signature
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<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights represented by this Certificate.)
FOR VALUE RECEIVED ___________________________________sell, assigns
and transfers unto______________________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint , to transfer the within
Rights Certificate on the books of the within-named Company, will full power of
substitution.
Dated:_____________, ____
_________________________________
Signature
Signature Guaranteed:
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:______________, ____ _________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights)
To Nuevo Energy Company:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
(or Common Stock or such other securities of the Company or any other Person)
issuable upon the exercise of the Rights and requests that certificates for such
shares be issued in the name of:
________________________________________________________________________________
(Please insert social security or other identifying number)
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such
Rights which may still be exercised shall be returned to the undersigned unless
such person requests that the Rights Certificate be registered in the name of
and delivered to:
________________________________________________________________________________
(Please insert social security or other identifying number)
[complete only if Rights Certificate is to be
registered in a name other than the undersigned]
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated:______________, ____
------------------------------
Signature
Signature Guaranteed:
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated:_____________, ____ ______________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
Exhibit C
SUMMARY OF THE RIGHTS
On March 5, 1997, the Board of Directors of Nuevo Energy Company (the
"Company") authorized and declared a dividend of one preferred stock purchase
right (a "Right") for each share of common stock, par value $.01 per share, of
the Company (the "Common Shares"). The dividend is payable on March 21, 1997
(the "Record Date") to the holders of record of Common Shares as of the close of
business on such date.
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement") dated as of March 5,
1997 by and between the Company and American Stock Transfer & Trust Company, as
Rights Agent (the "Rights Agent").
1. COMMON SHARE CERTIFICATES REPRESENTING RIGHTS
Until the Distribution Date (as defined in Section 2 below), (a) the
Rights shall not be exercisable, (b) the Rights shall be attached to and trade
only together with the Common Shares and (c) the stock certificates representing
Common Shares shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior to the
Distribution Date shall contain a notation incorporating the Rights Agreement by
reference.
2. DISTRIBUTION DATE
The "Distribution Date" is the earliest of (a) the tenth day following the
date of the first public announcement that any person (other than the Company or
certain related entities, and with certain additional exceptions) has become the
beneficial owner of 15% or more of the then outstanding Common Shares (such
person is an "Acquiring Person" and the date of such public announcement is the
"Stock Acquisition Date") or (b) the close of business on the tenth business day
(or such later day as shall be designated by the Board of Directors) following
the date of the commencement of, or the announcement of an intention to make, a
tender offer or exchange offer, the consummation of which would cause any person
(other than the Company and certain related entities and with certain additional
exceptions) to become an Acquiring Person. In calculating the percentage of
outstanding Common Shares that are beneficially owned by any person, such person
shall be deemed to beneficially own any Common Shares issuable upon the
exercise, exchange or conversion of any options, warrants or other securities
beneficially owned by such person and any Common Shares beneficially owned by
certain affiliates and associates of such person. Notwithstanding the foregoing,
if any person shall become the beneficial owner of at least 15% of the
outstanding Common Shares by reason of purchases of Common Shares by the
Company, then such person shall not be deemed an "Acquiring Person" until such
person thereafter acquires
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<PAGE>
beneficial ownership of, in the aggregate, a number of additional Common Shares
equal to 1% or more of the then outstanding Common Shares.
After the Distribution Date, the Rights shall separate from the Common
Shares, Rights certificates shall be issued, and the Rights shall become
exercisable to purchase Preferred Shares as described in Section 5 below.
3. ISSUANCE OF RIGHTS CERTIFICATES
As soon as practicable following the Distribution Date, separate
certificates representing only Rights shall be mailed to the holders of record
of Common Shares as of the close of business on the Distribution Date, and such
separate Rights certificates alone shall represent such Rights from and after
the Distribution Date.
4. EXPIRATION OF RIGHTS
The Rights shall expire on March 21, 2007, unless earlier redeemed or
exchanged.
5. EXERCISE OF RIGHTS
Unless the Rights have expired or been redeemed or exchanged, they may be
exercised, at the option of the holders, pursuant to paragraphs (a), (b) or (c)
below. No Right may be exercised more than once or pursuant to more than one of
such paragraphs. From and after the first event of the type described in
paragraphs (b) or (c) below, each Right that is beneficially owned by an
Acquiring Person or an affiliate or associate thereof shall be void.
(a) RIGHT TO PURCHASE PREFERRED SHARES. From and after the close of
business on the Distribution Date, each Right (other than a Right that has
become void) shall be exercisable to purchase one one-hundredth of a share of
Series C Preferred Stock, par value $1.00 per share, of the Company (the
"Preferred Shares"), at an exercise price of $150.00 (one hundred and fifty
dollars) (the "Purchase Price"). The Preferred Shares are nonredeemable and,
unless otherwise provided in connection with the creation of a subsequent series
of preferred stock, are subordinate to any other series of the Company's
preferred stock whether issued before or after the issuance of the Preferred
Shares. The Preferred Shares may not be issued except upon exercise of Rights.
The holder of a Preferred Share is entitled to receive when, as and if declared,
the greater of (i) cash and non-cash dividends in an amount equal to 100 times
the dividends declared on each Common Share or (ii) a preferential annual
dividend of $100.00 per Preferred Share ($1.00 per one one-hundredth of a
Preferred Share). In the event of liquidation, the holders of Preferred Shares
shall be entitled to receive a liquidation payment in an amount equal to the
greater of (1) $15,000.00 per Preferred Share ($150.00) per one one-hundredth of
a Preferred Share), plus all accrued and unpaid dividends and distributions on
the Preferred Shares, or (2) an amount equal to 100 times the aggregate amount
to be distributed per Common Share. Each Preferred Share has 100 votes, voting
together with the Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, the holder of a
Preferred Share shall be entitled to receive 100 times the amount received per
Common Share.
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The rights of the Preferred Shares as to dividends, voting and liquidation
preferences are protected by antidilution provisions. It is anticipated that the
value of one one-hundredth of a Preferred Share should approximate the value of
one Common Share.
(b) RIGHT TO PURCHASE COMMON SHARES OF THE COMPANY. In the event that any
person, alone or together with its affiliates or associates, shall become an
Acquiring Person (subject to certain exceptions), each Right (other than a Right
that has become void) shall be exercisable to purchase, at the Purchase Price
(initially $150.00), Common Shares with a market value equal to two times the
Purchase Price. If the Company does not have sufficient Common Shares available
for all Rights to be exercised the Company shall, or otherwise if the Company so
elects the Company may, substitute for all or any portion of the Common Shares
that would otherwise be issuable upon the exercise of the Rights, cash, assets
or other securities having the same aggregate value as such Common Shares.
(c) RIGHT TO PURCHASE COMMON STOCK OF A SUCCESSOR CORPORATION. If, after a
person has become an Acquiring Person, (i) the Company is acquired in a merger
or other business combination in which the Company is not the surviving
corporation, (ii) the Company is the surviving corporation in a merger or other
business combination in which all or part of the outstanding Common Shares are
changed into or exchanged for stock or assets of another person or (iii) 50% or
more of the Company's consolidated assets or earning power are sold, then each
Right (other than a Right that has become void) shall thereafter be exercisable
to purchase, at the Purchase Price (initially $150.00), shares of common stock
or cash of the surviving corporation or purchaser, respectively, with an
aggregate market value equal to two times the Purchase Price.
6. ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price, the number of outstanding Rights and the number of
Preferred Shares or Common Shares issuable upon exercise of the Rights are
subject to adjustment from time to time as set forth in the Rights Agreement in
order to prevent dilution. With certain exceptions, no adjustment in the
Purchase Price shall be required until cumulative adjustments require an
adjustment of at least 1%.
7. CASH PAID INSTEAD OF ISSUING FRACTIONAL SECURITIES
No fractional securities shall be issued upon exercise of a Right (other
than fractions of Preferred Shares that are integral multiples of one
one-hundredth of a Preferred Share, which fractions may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an adjustment
in cash shall be made based on the market price of such securities on the last
trading date prior to the date of exercise.
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8. REDEMPTION
Prior to the earlier of the close of business on the tenth business day
following a Stock Acquisition Date or the close of business on the earlier of
expiration, redemption or exchange of the Rights, the Company may, by resolution
of its Board of Directors (or of certain "Continuing Directors", as hereinafter
defined, if such resolution is adopted after a Stock Acquisition Date), redeem
all of the then outstanding Rights at a redemption price of $.01 per Right,
subject to adjustment, payable in cash, Common Shares or other appropriate
consideration.
9. EXCHANGE
At any time after any Person becomes an Acquiring Person and prior to the
first date thereafter upon which an Acquiring Person (with certain exceptions)
shall be the beneficial owner of 50% or more of the outstanding Common Shares,
the Board of Directors may, at its option, direct the Company to exchange all,
but not less than all, of the then outstanding Rights for Common Shares at an
exchange ratio of one Common Share per Right, subject to adjustment. Immediately
upon such action by the Board of Directors, the right to exercise Rights shall
terminate and the only right of the holders of Rights thereafter shall be to
receive a number of Common Shares to which such holder is entitled pursuant to
such exchange ratio.
10. NO STOCKHOLDER RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, shall have no
rights as a stockholder of the Company (other than rights resulting from such
holder's ownership of Common Shares), including, without limitation, the right
to vote or to receive dividends.
11. AMENDMENT OF RIGHTS AGREEMENT
The board of Directors may, from time to time, without the approval of any
holder of Rights, direct the Company and the Rights Agent to supplement or amend
any provision of the rights Agreement in any manner, whether or not such
supplement or amendment is adverse to any holder of Rights, and the Company and
Rights Agent shall so supplement or amend such provision; provided, however,
that from and after the time that any person becomes an Acquiring Person, the
Rights Agreement shall not be supplemented or amended in any manner that would
adversely affect any holder of outstanding Rights other than an Acquiring
Person; provided, further that from and after the time that any person becomes
an Acquiring Person, the Rights Agreement shall not be supplemented or amended
in any manner without the approval of certain Directors who were elected at a
regularly scheduled, annual meeting of the Company or Directors appointed by
such Directors so elected ("Continuing Directors").
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