FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
RENTECH, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0957421
(State of incorporation or organization) (I.R.S. Employer
Identification Number)
Rentech, Inc.
1331 17th Street, Suite 720
Denver, Colorado 80202
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
to be so registered which each class is to be registered
None None
If this Form relates to the registration of a class of debt
securities and is effective upon filing pursuant to General Instruction
A.(c)(l), please check the following box. [ ]
If this Form relates to the registration of a class of debt
securities and is to become effective simultaneous 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 Act registration statement to which this form relates:
----------------------. (if applicable)
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
(Title of Class)
Item 1. Description of Securities to be Registered
On October 28, 1998, the Board of Directors of Rentech, Inc., a
Colorado corporation (the "Company") declared a dividend of one
preference share purchase right (a "Right") for each outstanding share of
common stock, par value $.01 per share (the "Common Shares"), of the
Company. The dividend is payable on December 1, 1998 to stockholders of
record on November 10, 1998 (the "Record Date"). Each Right represents
the right of the registered holder to purchase from the Company one
one-hundredth of a share of Series 1998-C Participating Cumulative
Preference Stock, $10 par value per share (the "Preference Shares"), of
the Company at a price of $12.00 per one one-hundredth of a Preference
Share (the "Purchase Price"), subject to adjustment. The description and
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terms of the Rights are set forth in a Rights Agreement dated as of
November 10, 1998 (the "Rights Agreement") between the Company and
American Securities Transfer and Trust, Inc. as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
have acquired beneficial ownership of 15% or more of the outstanding
Common Shares and have become an "Acquiring Person" according to the
terms of the Rights Agreement or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate, with a copy of a Summary
of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common
Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of the Summary of Rights being
attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 1, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as described
below.
The Purchase Price payable, and the number of Preference Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
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event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preference Shares, (ii) upon the grant to
holders of the Preference Shares of certain rights or warrants to
subscribe for or purchase Preference Shares at a price, or securities
convertible into Preference Shares with a conversion price, less than the
then-current market price of the Preference Shares or (iii) upon the
distribution to holders of the Preference Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings or dividends payable in Preference
Shares) or of subscription rights or warrants (other than those referred
to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preference Share issuable upon exercise of each Right
are also subject to adjustment in the event of a stock split of the
Common Shares or a stock dividend on the Common Shares payable in Common
Shares or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preference Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preference Share will be entitled to a minimum
preferential quarterly dividend payment of $10 per share but will be
entitled to an aggregate dividend of 100 times the dividend declared per
Common Share. In the event of liquidation, the holders of the Preference
Shares will be entitled to a minimum preferential liquidation payment of
$100 per share but will be entitled to an aggregate payment of 100 times
the payment made per Common Share. Each Preference Share will have 100
votes, voting together with the Common Shares. Finally, in the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged, each Preference Share will be entitled to receive 100 times
the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preference Shares' liquidation and
voting rights, the value of the one one-hundredth interest in a
Preference Share purchasable upon exercise of each Right should
approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after a person or group has become an
Acquiring Person, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of
the Right. In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper provision shall be
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made so that each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise that number of Common Shares
having a market value at the time of such occurrence of two times the
exercise price of the Right.
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of
the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preference Share, per
Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Preference Shares will be
issued (other than fractions which are integral multiples of one
one-hundredth of a Preference Share which may, at the election of the
Company, be evidenced by depository receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preference Shares on the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more
of the outstanding Common Shares, the Board of Directors of the Company
may redeem the Rights in whole, but not in part, at a price of $.0001 per
Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including
an amendment to lower certain thresholds described above to not less than
the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially
owned by any person or group of affiliated or associated persons and
(ii) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, no such
amendment may adversely affect the interests of the holders of the
Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
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The Rights Agreement and a form of press release announcing the
declaration of the Rights are attached hereto as exhibits and are
incorporated herein by reference. The foregoing description of the
Rights is qualified in its entirety by reference to such exhibits.
Item 2. Exhibits
1. Rights Agreement, dated as of November 10, 1998, between
Rentech, Inc. and American Securities Transfer and Trust,
Inc. as Rights Agent.
2. Form of Articles of Amendment to Articles of
Incorporation-Designation, Preferences and Rights of Series
1998-C Participating Cumulative Preference Stock, included in
Exhibit A to the Rights Agreement.
3. Forms of Rights Certificate, Assignment, and Election to
Purchase, included in Exhibit B to the Rights Agreement.
4. Summary of Rights to Purchase Preference Shares, included in
Exhibit C to the Rights Agreement.
5. Form of press release dated November 10, 1998.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized.
Rentech, Inc.
(signature)
By:
----------------------------------
Dennis L. Yakobson,
Chairman of the Board, President
and Chief Executive Officer
Dated: November 18, 1998.
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EXHIBIT INDEX
Exhibit
No. Description
1. Rights Agreement, dated as of November 10, 1998,
between Rentech, Inc. and American Securities
Transfer and Trust, Inc. as Rights Agent.
2. Form of Articles of Amendment to Articles of
Incorporation-Designation, Preferences and Rights
of Series 1998-C Participating Cumulative
Preference Stock, included in Exhibit A to the
Rights Agreement.
3. Forms of Rights Certificate, Assignment, and
Election to Purchase, included in Exhibit B to the
Rights Agreement.
4. Summary of Rights to Purchase Preference Shares,
included in Exhibit C to the Rights Agreement.
5. Form of press release dated November 10, 1998.
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EXHIBIT 1
RENTECH, INC.
and
AMERICAN SECURITIES TRANSFER AND TRUST, INC.
Rights Agent
Rights Agreement
Dated as of November 10, 1998
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RIGHTS AGREEMENT
This Rights Agreement, is entered into as of November 10, 1998 (the
"Agreement"), between Rentech, Inc., a Colorado corporation (the
"Company"), and American Securities Transfer and Trust, Inc., as Rights
Agent hereunder (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on October 28, 1998, the Board of Directors of the Company
has authorized and declared a dividend, payable as of December 1, 1998,
of one preference share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding on November 10, 1998
(the "Record Date"), each Right representing the right to purchase one
one-hundredth of a Preference Share (as hereinafter defined), upon the
terms and subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date (as such terms are hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the Common Shares of the Company then outstanding, but shall not
include the Company, any Subsidiary (as such term is hereinafter defined)
of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any trust or other entity holding Common
Shares for or pursuant to the terms of any such plan. Notwithstanding
the foregoing, no Person shall become an "Acquiring Person" for any
purpose of this Agreement: (i) as the result of an acquisition of Common
Shares by the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares of the Company
then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall be deemed
to be an "Acquiring Person"; (ii) as the result of one or more
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acquisitions of Beneficial Ownership of Common Shares of the Company from
the Company or any Subsidiary of the Company, which, together with Common
Shares of the Company then Beneficially Owned by the Person, aggregate
15% or more of the Common Shares of the Company then outstanding, unless
and until thereafter the Person acquires Beneficial Ownership of any
additional Common Shares from anyone other than the Company or any
Subsidiary of the Company and the Person's aggregate Beneficial Ownership
is 15% or more of the Common Shares of the Company then outstanding, in
which event the Person shall become an "Acquiring Person"; (iii) if the
Board of Directors of the Company determines in good faith that a Person
who would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be
an "Acquiring Person," as defined pursuant to the foregoing provisions of
this paragraph (a).
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as in effect on the date of this Agreement.
(c) "Beneficial Owner." 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 the above-defined 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, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if the agreement,
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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 provisions of
Section 1(c)(ii)(B)) or disposing of any securities
of the Company.
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 beneficially own
hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of the
principal office of the Rights Agent 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.,
local time in the State of Colorado where the principal Colorado office
of the Rights Agent is located, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., local time in
the State of Colorado, where the principal Colorado office of the Rights
Agent is located, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $.01 per share, of the
Company. "Common Shares" when used with reference to any Person other
than the Company shall 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.
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(g) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation, general
or limited partnership, limited liability company or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(j) "Preference Shares" shall mean shares of Series 1998-C
Participating Cumulative Preference Stock, $10 par value per share, of
the Company, having the rights and preferences set forth in the form of
Certificate of Designation attached to this Agreement as Exhibit A.
(k) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(1) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring
Person has become such.
(m) "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 equity interest is owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to
the Distribution Date also be the holders of the Common Shares) 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
which event it shall notify the Rights Agent of the name and address of
any such Co-Rights Agent appointed by it.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Share
Acquisition Date or (ii) the tenth business day (or such later date as
may be determined by action of the Board of Directors of the Company
prior to such time as any Person becomes an Acquiring Person) after the
date of the 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 trust or other entity holding Common
Shares 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
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Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any trust or other entity
holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would
Result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares,
irrespective of whether any shares are actually purchased pursuant to any
such offer (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 Shares registered in the names of
the holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the right
to receive Right Certificates will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of business
on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each
Common Share so held. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On or about December 1, 1998, or as promptly as reasonably
practicable thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preference Shares, in substantially the form of
Exhibit C hereto (the "Summary of Rights"), by postage-prepaid mail, to
each record holder of Common Shares 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 Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders
thereof together with a copy of the Summary of Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for
Common Shares 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 Shares represented
thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in
the last sentence of this paragraph (c)) after the Record Date but prior
to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
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This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Rentech, Inc. (the "Company") and American Securities Transfer and
Trust, Inc. (the "Rights Agent"), dated as of November 10, 1998 (as
amended from time to time, the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt
of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or
by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires
any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed
canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which are no longer
outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and
the forms of election to purchase Preference Shares and of assignment to
be printed on the reverse thereof) shall be substantially in the form set
forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon
as 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 Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a
Preference Share as shall be set forth therein (the "Purchase Price"),
but the number of such one one-hundredths of a Preference Share or other
securities purchasable and the Purchase Price shall be subject to
adjustment as provided herein.
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Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its President or Vice President, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be countersigned by the Rights Agent, either
manually or by facsimile signature, and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right 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 Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates, the date of each of the Right Certificates and the
certificate number for each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right 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 earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void pursuant to
Section 11(a)(ii) hereof or that have been exchanged pursuant to Section
24 hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a Preference
Share as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office
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of the Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Company will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 26 of this Agreement, the registered holder
of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the principal office of the Rights
Agent, together with payment of the Purchase Price for each one
one-hundredth of a Preference Share as to which the Rights are exercised,
at or prior to the earliest of (i) the close of business on December 1,
2008 (the "Final Expiration Date"), (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (the "Redemption Date"), or
(iii) the time at which such Rights are exchanged as provided in Section
24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preference
Share purchasable pursuant to the exercise of a Right shall initially be
$12.00, and shall be subject to adjustment from time to time as provided
in Section 11 or 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 Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied
by payment of the Purchase Price for the shares to be purchased and an
amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof, the
Rights Agent shall thereupon promptly (i) requisition from any transfer
<PAGE>
PAGE 16
agent of the Preference Shares certificates for the number of Preference
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) as provided in
Section 14(b), at the election of the Company, cause depositary receipts
in lieu of fractional shares to be issued, (iii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof, (iv)
after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated
by such holder and (v) when appropriate, after receipt, deliver such cash
to or upon the order of the registered holder of such Right Certificate.
The payment of the Purchase Price may be made (x) in cash or by certified
bank check or bank draft payable to the order of the Company, or (y) by
delivery of a certificate or certificates (with appropriate stock powers
executed in blank attached thereto) evidencing a number of Common Shares
of the Company equal to the then Purchase Price divided by the current
market price (as determined pursuant to Section 11(d) hereof) per Common
Share on the date of such exercise. In the event that the Company is
obligated to issue other securities (including Common Shares) of the
Company 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 Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder
of such Right Certificate or to such holder's duly authorized assigns,
subject to the provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation
or in canceled form, or, if surrendered to the Rights Agent, shall be
canceled by it, and no Right Certificates shall be issued in lieu thereof
except as 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 Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
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PAGE 17
Section 9. Availability of Preference Shares.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preference
Shares or any Preference Shares held in its treasury, the number of
Preference Shares that will be sufficient to permit the exercise in full
of all outstanding Rights in accordance with Section 7. The Company
covenants and agrees that it will take all such action as may be
necessary to ensure that all Preference Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such
Preference Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
(b) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
that may be payable with respect to the issuance or delivery of the Right
Certificates or of any Preference Shares upon the exercise of Rights.
The Company shall not, however, be required to pay any transfer tax that
may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preference Shares in a name
other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Preference Shares upon the
exercise of any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
Section 10. Preference Shares Record Date. Each person in whose
name any certificate for Preference Shares is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of
record of the Preference Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preference Shares 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 Preference Shares transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate shall not be entitled to any rights of a holder of
Preference 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.
<PAGE>
PAGE 18
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights.
(a) The Purchase Price, the number and kind of Preference Shares or
other 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.
(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preference Shares payable in
Preference Shares, (B) subdivide the outstanding Preference Shares, (C)
combine the outstanding Preference Shares into a smaller number of
Preference Shares or (D) issue any shares of its capital stock in a
reclassification of the Preference Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 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 Preference Shares
transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one Right. If
an event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) which follows, 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) which follows.
(ii) Subject to Section 24 of this Agreement, in the event any
Person, alone or together with its Affiliates and Associates, becomes an
Acquiring Person, each holder of a Right shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a
Preference Share for which the Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of Preference Shares, and
subject to Section 26 of this Agreement, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-hundredths of a
Preference Share for which a Right is then exercisable and dividing that
product by (y) 50% of the then current per share market price of the
Company's Common Shares (determined pursuant to Section 11(d) hereof) on
<PAGE>
PAGE 19
the date of the occurrence of such event. If any Person shall become an
Acquiring Person at a time when the Rights are then outstanding, the
Company shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights. From and after the time
at which any Person, alone or together with its Affiliates and
Associates, becomes an Acquiring Person when Rights are not outstanding,
any Rights that are or were acquired or beneficially owned by any such
Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be void and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement. No
Right Certificate shall be issued pursuant to 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 Right 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 Right 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.
(iii) If the number of shares of Common Stock that are authorized
by the Company's Amended and Restated Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full
of the Rights in accordance with Section 11(a)(ii) hereof, the Company
shall (A) determine an amount obtained by subtracting the Purchase Price
from the aggregate value (the "Current Value") of the shares of Common
Stock that would otherwise be issuable upon the exercise of a Right in
accordance with Section 11(a)(ii) hereof (the amount derived from such
subtraction being referred to herein as the "Excess Amount") and (B) with
respect to each Right, substitute for such shares of Common Stock, upon
payment of the applicable Purchase Price, (1) cash, (2) an amount
reflecting any reduction in the Purchase Price, (3) Common Stock (to the
extent available) or other equity securities of the Company, (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 (less the
amount of any reduction in the Purchase Price), where such aggregate
value has been determined by a majority of the Independent Directors (as
defined hereinafter) and the Board of Directors of the Company, based
upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided, however,
that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within 30 days following the date upon
which any Person, alone or together with its Affiliates and Associates,
becomes an Acquiring Person (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,
<PAGE>
PAGE 20
shares of Common Stock (to the extent available) and then, if necessary,
cash, securities and/or assets that have an aggregate value equal to the
Excess Amount, where such aggregate value has been determined by a
majority of the Independent Directors and the Board of Directors of the
Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
further, however, that if the Independent Directors shall determine in
good faith that it is likely that sufficient additional Common Shares
could be authorized for issuance upon exercise of the Rights in full, the
30-day period referred to above may, in the sole discretion of the
Independent Directors, be extended to the extent necessary, but not more
than 90 days following the Section 11(a)(ii) Trigger Date, in order for
the Company to seek stockholder approval for the authorization of such
additional shares. To the extent that action is to be taken pursuant to
the first sentence of this Section 11(a)(iii), the Company (1) shall
provide, subject to the exceptions specified in Section 11(a)(ii) hereof,
that such action shall to the maximum extent possible apply uniformly to
all outstanding Rights that shall not have become null and void, subject
to Section 26 of this Agreement, and (2) may suspend the exercisability
of the Rights until the 31st day following the Section 11(a)(ii) Trigger
Date in order to decide the appropriate form of distribution to be made
pursuant to such first sentence 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 shall be the current per share
market price per share of the Common Stock (as determined pursuant to
Section 11(d) hereof) on the Section 11(a)(ii) Trigger Date. For
purposes of this paragraph, "Independent Director" shall mean any member
of the Board of Directors of the Company, while such person is a member
of the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative or nominee of an
Acquiring Person or of any such Affiliate or Associate, and was a member
of the Board prior to the time that any Person becomes an Acquiring
Person, and any successor of an Independent Director, while such
successor is a member of the Board, who is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, or a representative or
nominee of an Acquiring Person or of any such Affiliate or Associate, and
is recommended or elected to succeed the Independent Director by a
majority of the Independent Directors.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preference Shares entitling
them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preference Shares (or shares having
the same rights, privileges and preferences as the Preference Shares
("equivalent preference shares")) or securities convertible into
<PAGE>
PAGE 21
Preference Shares or equivalent preference shares at a price per
Preference Share or equivalent preference share (or having a conversion
price per share, if a security convertible into Preference Shares or
equivalent preference shares) less than the then current per share market
price of the Preference Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preference Shares outstanding on such record
date plus the number of Preference Shares that the aggregate offering
price of the total number of Preference Shares and/or equivalent
preference shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall
be the number of Preference Shares outstanding on such record date plus
the number of additional Preference Shares and/or equivalent preference
shares 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 one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one
Right. In case 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 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. Preference Shares 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, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preference Shares (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regularly scheduled cash dividend or
a dividend payable in Preference Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the then
current per share market price of the Preference Shares on such record
date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the assets
or evidences of indebtedness so to be distributed or of such subscription
<PAGE>
PAGE 22
rights or warrants applicable to one Preference Share and the denominator
of which shall be such current per share market price of the Preference
Shares; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued upon 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 then be in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of
this Section 11(d)(i)) on any particular date shall be deemed to be the
average of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that
the current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior
to the expiration of 30 Trading Days after the 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
per share market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. 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
Security is 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 Security is listed or admitted to
trading or, if the Security is 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 Quotations System ("NASDAQ") or such other system then in
use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company, or, if on any such
date no such market maker is making a market in the Security, the fair
value of the Security on such date as determined in good faith by the
Board of Directors of the Company. The term "Trading Day" shall mean a
<PAGE>
PAGE 23
day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preference Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the
Preference Shares are not publicly traded, the "current per share market
price" of a share of the Preference Shares shall be conclusively deemed
to be the current per share market price of a Common Share as determined
pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof), multiplied by one hundred. If neither the Common Shares nor the
Preference Shares are publicly held or so listed or traded, "current per
share market price" 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.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; provided, however, that any adjustments which by
reason of this Section 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 one one-millionth of a Preference Share or one ten-thousandth
of any other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise
any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preference Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Preference Shares contained in
Section 11(a) through (c), inclusive, and the provisions of Sections 7,
9, 10 and 13 with respect to the Preference Shares shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a Preference Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment
as provided herein.
<PAGE>
PAGE 24
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a Preference Share
(calculated to the nearest ones one-millionth of a Preference Share)
obtained by (i) multiplying (x) the number of one one-hundredths of a
share covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing 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 one one-hundredths of a Preference Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for
the number of one one-hundredths of a Preference Share for which a Right
was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount
of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right 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 Right Certificates on such record
date Right 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 Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders
of record of Right Certificates on the record date specified in the
public announcement.
<PAGE>
PAGE 25
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preference Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the
number of one one-hundredths of a Preference Share which were expressed
in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par
value, if any, of the Preference Shares 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 Preference Shares
at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of the Preference Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preference Shares 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 in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision
of the Preference Shares, issuance wholly for cash of any Preference
Shares at less than the current market price, issuance wholly for cash of
Preference Shares or securities which by their terms are convertible into
or exchangeable for Preference Shares, dividends on Preference Shares
payable in Preference Shares or issuance of rights, options or warrants
referred to hereinabove , in Section 11(b), hereafter made by the Company
to holders of its Preference Shares shall not be taxable to such
stockholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay
any dividend on the Common Shares payable in Common Shares or (ii) effect
a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
<PAGE>
PAGE 26
Shares) into a greater or lesser number of Common Shares, then in any
such case (A) the number of one one-hundredths of a Preference Share
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of a
Preference Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after such event, and
(B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to
it. The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting
forth such adjustment, and a brief statement of the facts accounting for
such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Shares or the Preference Shares a copy of such
certificate and (c) subject to Section 25(c), mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section
25 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to give such notice shall not affect the validity of or the force
or effect of or the requirement of such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, directly or indirectly, at any time after a
Person has become an Acquiring Person, (x) the Company shall consolidate
with, or merge with and into, any other Person, (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 Common Shares
shall be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more 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, then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a Preference Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preference Shares, such number of Common Shares
<PAGE>
PAGE 27
of such other Person (including the Company as successor thereto or as
the surviving corporation but subject to Section 26 of this Agreement) as
shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preference Share
for which a Right is then exercisable and dividing that product by (B)
50% of the then current per share market price of the Common Shares of
such other Person (determined pursuant to Section 11(d) hereof) on the
date of consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares 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
issuer; and (iv) such issuer shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares
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 the Common
Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental agreement so
providing. 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. The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or
other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall be
the closing price of the Rights (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable.
(b) The Company shall not be required to issue fractions of
Preference Shares (other than fractions which are integral multiples of
one one-hundredth of a Preference Share) upon exercise of the Rights or
to distribute certificates which evidence fractional Preference Shares
<PAGE>
PAGE 28
(other than fractions which are integral multiples of one one-hundredth
of a Preference Share). Fractions of Preference Shares in integral
multiples of one one-hundredth of a Preference Share may, at the election
of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by
it; provided, that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preference Shares
represented by such depositary receipts. In lieu of fractional
Preference Shares that are not integral multiples of one one-hundredth of
a Preference Share, the Company shall pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current
market value of one Preference Share. For the purposes of this Section
14(b), the current market value of a Preference Share shall be the
closing price of a Preference Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided in this
section).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders
of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of
any Right Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in such holder's own behalf and for such holder's
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect
of, such holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right 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 for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of
the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
<PAGE>
PAGE 29
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in
connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right 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
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificate or the
associated Common Shares certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the
contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder of a Right, as such, shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preference Shares 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 Right Certificate be construed to confer upon the holder
of any Rights, 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 Right Certificate shall have
been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability related to this Agreement. The Rights Agent shall promptly
<PAGE>
PAGE 30
notify the Company of any claim for which it may seek indemnity. The
Company shall defend any such claim for which the Rights Agent is
entitled to indemnification, and the Rights Agent shall cooperate in the
defense. The Rights Agent may engage separate counsel to review the
progress of the defense to any claim and to advise the Rights Agent as to
its obligation to cooperate in such defense, and the Company shall pay
the reasonable fees and expenses of such counsel.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by
it in connection with, its administration of this Agreement in reliance
upon any Right Certificate or certificate for the Preference Shares or
Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate (including certificates
delivered under Section 12), statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
(c) The Rights Agent has no duty to determine when an adjustment
under this Rights Agreement should be made, how it should be made, or
what it should be. The Rights Agent makes no representation as to the
validity or value of any securities or assets issued upon exercise of the
Rights. The Rights Agent shall not be responsible for the Company's
failure to comply with this Agreement. Each Co-Rights Agent shall have
the same protection under this section as the Rights Agent.
(d) If the Rights are listed on the New York Stock Exchange, the
Rights Agent shall maintain all facilities in the area located south of
Chambers Street in the Borough of Manhattan, New York, New York, that are
required by Section 6 of the New York Stock Exchange Listed Company
Manual.
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 stock transfer or corporate trust business
of the Rights Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this 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
<PAGE>
PAGE 31
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Right Certificates so countersigned) and in case at that time any of
the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name
of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned) and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this 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
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed
by any one of the Chief Executive Officer and President, Vice President
and Chief Operating Officer, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this 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.
<PAGE>
PAGE 32
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its 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 Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or
in any Right Certificate; nor shall it be responsible for any change in
the exercisability of the Rights (including the Rights becoming void
pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof) provided for
in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required); nor shall it
by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preference Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any
Preference Shares will, when 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 Chief Executive Officer and President, Vice President and
Chief Operating Officer, the Treasurer or the Secretary of the Company,
and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
(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.
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PAGE 33
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
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 Shares or Preference Shares by
registered or certified mail, and, after the Distribution Date, to the
holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without
cause) upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of
the Common Shares or Preference Shares by registered or certified mail,
and, after the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered
holder of any Right 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 corporation organized and doing business under the laws of the
United States or of any other state of the United States, in good
standing, 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, or which is a Subsidiary of such a banking
institution, and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $20 million. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preference Shares, and,
after the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
<PAGE>
PAGE 34
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 Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right 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 and the number or
kind or class of shares or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at
any time prior to such time as any Person becomes an Acquiring Person,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $.0001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of
the Rights by the Board of Directors may be made effective at such time,
on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a)
of this Section 23, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any
such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer
agent for the Common Shares. Any notice that is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
<PAGE>
PAGE 35
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, 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 11(a)(ii) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, subject to Section 26 of this Agreement, and
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). 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 trust or other entity holding Common Shares
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Common Shares then outstanding.
(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 24 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
Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio, subject to Section 26 of this
Agreement. 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 Common Shares for Rights will be effected and, in the
event of any partial exchange, the number of Rights that will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24,
the Company may take any such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights. In
the event the Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such additional Common
Shares in a timely manner, the Company may substitute, for each Common
<PAGE>
PAGE 36
Share that would otherwise be issuable upon exchange of a Right, a number
of Preference Shares or fraction thereof such that the current per share
market price of one Preference Share multiplied by such number or
fraction is equal to the current per share market price of one Common
Share as of the date of issuance of such Preference Shares or fraction
thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay
to the registered holders of the Right Certificates with regard to which
such fractional Common Shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole
Common Share. For the purposes of this paragraph (d), the current market
value of a whole Common Share shall be the closing price of a Common
Share (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 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preference Shares or
to make any other distribution to the holders of its Preference Shares
(other than a regularly scheduled cash dividend), (ii) to offer to the
holders of its Preference Shares rights or warrants to subscribe for or
to purchase any additional Preference Shares or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preference Shares (other than a reclassification
involving only the subdivision of outstanding Preference Shares), (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 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to, any other Person, (v) to effect the liquidation,
dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, or 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 Common Shares or Preference Shares, 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
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PAGE 37
date for determining holders of the Preference Shares 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 Common Shares or Preference
Shares, whichever shall be earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26 hereof,
a notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights under
Section 11(a)(ii) hereof.
(c) Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to
the holders of securities of the Company, including the Rights, for
purposes of this Agreement and no other notice need be given.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Rentech, Inc.
1331 17th Street, Suite 720
Denver, CO 80202
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights 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 Securities Transfer and Trust, Inc.
938 Quail Street, Suite 101
Lakewood, CO 80215
Attention: Corporate Trust
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
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Section 27. Supplements and Amendments.
(a) The Company may from time to time supplement or amend this
Agreement without the approval of any holders of Rights 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.
(b) 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 thresholds set forth in Sections 1(a) and 3(a) to
not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares 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, or any trust or other entity holding
Common Shares for or pursuant to the terms of any such plan) and (ii)
10%.
Section 28. 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 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares) 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 Right Certificates (and, prior to the
Distribution Date, the Common Shares).
Section 30. 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 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Colorado and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts made and to be performed entirely within such State.
<PAGE>
PAGE 39
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 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 attested, all as of the day and year first above
written.
ATTEST: RENTECH, INC.
-------------------------- By: ---------------------------------
Ronald C. Butz, Secretary Dennis L. Yakobson, President
ATTEST: AMERICAN SECURITIES TRANSFER
AND TRUST, INC.
-------------------------- By: ---------------------------------
Name:
Title:
EXHIBIT 2
<PAGE>
PAGE 40
Exhibit A to Rights Agreement
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES 1998-C
PARTICIPATING CUMULATIVE PREFERENCE STOCK
OF RENTECH, INC.
RENTECH, INC., a Colorado corporation (the "Corporation"), does
hereby certify that it duly adopted the following resolution without
shareholder action, which shareholder action was not required, pursuant
to the authority conferred upon the Board of Directors by the Amended and
Restated Articles of Incorporation, as amended, of the Corporation and
pursuant to Section 7-106-102 of the Colorado Business Corporation Act,
said Board of Directors, at a duly convened special meeting held on
October 28, 1998:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Amended and Restated Articles 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 stated in the Corporation's Amended and Restated Articles of
Incorporation and as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Series 1998-C Participating Cumulative Preference Stock"
and shall consist of 500,000 shares of Preferred Stock, $10 par value per
share, having the preferences, limitations and relative rights set forth
below. Such number of shares may be increased or decreased by resolution
of the Board of Directors; provided, however, that no decrease shall
reduce the number of shares of Series 1998-C Participating Cumulative
Preference Stock to a number less than the number of such shares then
outstanding plus the number of such shares reserved for issuance upon the
exercise of outstanding options or rights or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series
1998-C Participating Cumulative Preference Stock.
2. Dividends and Distributions. The holders of Series 1998-C
Participating Cumulative Preference Stock shall have the following
dividend rights:
(a) Subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend
<PAGE>
PAGE 41
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), that may be
declared on the Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock"). In the event the Corporation shall at
any time after November 10, 1998 (the "Rights Declaration Date") (i)
declare or pay 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 1998-C
Participating Cumulative Preference 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. Declaration
of a dividend on the Common Stock is at the sole discretion of the
Corporation.
(b) The Corporation shall declare a dividend or
distribution on the Series 1998-C Participating Cumulative Preference
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).
(c) Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series 1998-C Participating Cumulative
Preference Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series 1998-C Participating
Cumulative Preference Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 45
days prior to the date fixed for the payment thereof.
3. Voting Rights. In addition to the voting rights otherwise
required by law, the holders of shares of Series 1998-C Participating
Cumulative Preference Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series 1998-C Participating Cumulative
Preference 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 or pay 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
<PAGE>
PAGE 42
shares of Series 1998-C Participating Preference 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 in the Corporation's
Amended and Restated Articles of Incorporation or by law, the holders of
shares of Series 1998-C Participating Cumulative Preference 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 1998-C
Participating Cumulative Preference Stock shall be in arrears in an
amount equal to six 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 1998-C
Participating Cumulative Preference 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
1998-C Participating Cumulative Preference 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 1998-C Participating Cumulative Preference 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
10% 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 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
<PAGE>
PAGE 43
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 part passu with the Series
1998-C Participating Cumulative Preference 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 10% 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 Chairman of the
Board, Chief Executive Officer and President, a Senior 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 the holder
the last address appearing on the books of the Corporation. Such meeting
shall be called for a time not earlier than 20 days and not 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 10% 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 have 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.
<PAGE>
PAGE 44
(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
Corporation's Amended and Restated Articles 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 thereafter in any manner provided by law or in the Amended and
Restated Articles 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
1998-C Participating Cumulative Preference 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.
4. Cancellation. Any shares of Series 1998-C Participating
Cumulative Preference Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created
by resolution or resolutions of the shareholders or the Board of
Directors, subject to the conditions and restrictions on issuance set
forth in the Corporation's Amended and Restated Articles of
Incorporation.
5. Restrictions. The Corporation shall abide by the following
restrictions:
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series 1998-C Participating Cumulative
Preference Stock as provided for in Section 2 are in arrears or the
Corporation shall be in default in payment thereof, thereafter and until
all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series 1998-C Participating Cumulative Preference
Stock outstanding shall have been paid or set aside for payment in full,
and in addition to any and all other rights which any holder of shares of
Series 1998-C Participating Cumulative Preference Stock may have in such
circumstances, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
1998-C Participating Cumulative Preference Stock;
<PAGE>
PAGE 45
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series
1998-C Participating Cumulative Preference Stock, unless dividends are
paid ratably on the Series 1998-C Participating Cumulative Preference
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Series 1998-C
Participating Cumulative Preference Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series 1998-C Participating Cumulative Preference
Stocks or redeem or purchase or otherwise acquire for consideration any
shares of Series 1998-C Participating Cumulative Preference Stock, or any
shares of stock ranking on a parity with the Series 1998-C Participating
Cumulative Preference Stock (either as to dividends or upon liquidation,
dissolution or winding up), 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 5, purchase or otherwise acquire such
shares at such time and in such manner.
6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, the holders of
Series 1998-C Participating Cumulative Preference Stock shall have the
following rights.
(a) Upon any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, no distribution shall
be made to the holders of shares of stock ranking (either as to dividends
or upon liquidation, dissolution or winding up) junior to the Series
1998-C Participating Cumulative Preference Stock unless, prior thereto,
the holders of shares of Series 1998-C Participating Cumulative
Preference Stock shall have received $100 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
<PAGE>
PAGE 46
declared, to the date of such payment (the "Series 1998-C Liquidation
Preference"). Following the payment of the full amount of the Series
1998-C Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series 1998-C Participating Cumulative
Preference 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 1998-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 1998-C Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series
1998-C Participating Cumulative Preference Stock and Common Stock,
respectively, holders of Series 1998-C Participating Cumulative
Preference 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 Series 1998-C Participating Cumulative Preference Stock and Common
Stock, on a per share basis, respectively.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series 1998-C
Liquidation Preference and the liquidation preferences of all other
series of Preferred Stock, if any, which rank on a parity with the Series
1998-C Participating Cumulative Preference 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,
however, that 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 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 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 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.
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 1998-C Participating Cumulative Preference
<PAGE>
PAGE 47
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 or pay 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
1998-C Participating Cumulative Preference 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
were outstanding immediately prior to such event.
8. No Redemption. The shares of Series 1998-C Participating
Cumulative Preference Stock shall not be redeemable by the holders
thereof.
9. Amendment. The Amended and Restated Articles of
Incorporation of the Corporation shall not be further amended in any
manner which would materially alter or change the powers, preferences or
special rights of the Series 1998-C Participating Cumulative Preference
Stock so as to affect them adversely without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series 1998-C
Participating Cumulative Preference Stock, voting separately as a class.
10. Fractional Shares. Series 1998-C Participating Cumulative
Preference 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
1998-C Participating Cumulative Preference Stock.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to the Articles of Incorporation to be executed in its name and
its corporate seal to be affixed hereto by its duly authorized officers
on this ------ day of --------------------, 1998.
RENTECH INC.
By:
----------------------------------------
Dennis L. Yakobson, Chairman of the Board,
President and Chief Executive Officer
ATTEST:
--------------------------
Ronald C. Butz, Secretary
<PAGE>
PAGE 48
EXHIBIT 3
Exhibit B to Rights Agreement
Form of Right Certificate
Certificate No. R----------- ------- Rights
NOT EXERCISABLE AFTER DECEMBER 1, 2008 OR EARLIER.
IF REDEMPTION OR EXCHANGE OCCURS, THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
RENTECH INC.
This certifies that -------------------------, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of
----------------------, 1998 (the "Rights Agreement"), between Rentech
Inc., a Colorado corporation (the "Company"), and American Securities
Transfer and Trust, Inc. (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 P.M., local time in the state
of the principal office of the Rights Agent, on December 1, 2008 at the
principal office of the Rights Agent, or at the office of its successor
as Rights Agent, one one-hundredth of a fully paid non-assessable share
of Series 1998-C Participating Cumulative Preference Stock, $10 par value
per share (the "Preference Shares"), of the Company, at a purchase price
of $12.00 per one one-hundredth of a Preference Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Right Certificate (and the number of one one-hundredths
of a Preference Share which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number and
Purchase Price as of November 10, 1998, based on the Preference Shares as
constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preference Share
(or other securities) which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the occurrence of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
<PAGE>
PAGE 49
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on file at
the principal executive offices of the Company and the above-mentioned
offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preference Shares as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.0001 per Right or (ii) may be exchanged in whole
or in part for Preference Shares or shares of the Company's Common Stock,
par value $.01 per share.
No fractional Preference Shares 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 Preference Share, which may,
at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the
Preference Shares or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
PAGE 50
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ------------------------.
ATTEST: RENTECH INC.
--------------------------- By: ---------------------------------
Name: ------------------------------
Title: -----------------------------
Countersigned:
American Securities Transfer and Trust, Inc.
By: ----------------------
Authorized Signature
<PAGE>
PAGE 51
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Attorney, to
transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
Dated: -------------------- --------------------------------
Signature
<PAGE>
PAGE 52
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the
Right Certificate.)
To: RENTECH INC.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the Preference Shares
issuable upon the exercise of such Rights and requests that certificates
for such Preference Shares be issued in the name of and delivered to:
(Please print name and address and insert social security or other
identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
(Please print name and address and insert social security or other
identifying number)
Dated:--------------- -----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
Dated: ---------------- ----------------------------------
Signature
<PAGE>
PAGE 52
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon
the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is
not completed, the Company and the Rights Agent will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) and such Assignment or Election to Purchase will not be
honored.
<PAGE>
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EXHIBIT 4
Exhibit C to Rights Agreement
SUMMARY OF RIGHTS TO PURCHASE PREFERENCE SHARES
On October 28, 1998, the Board of Directors of Rentech, Inc. (the
"Company") declared a dividend of one preference share purchase right (a
"Right") for each outstanding share of common stock, par value $.01 per
share (the "Common Shares"), of the Company. The dividend is payable on
December 1, 1998 to stockholders of record on November 10, 1998 (the
"Record Date"). Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series 1998-C
Participating Cumulative Preference Stock, $10 par value per share (the
"Preference Shares"), of the Company at a price of $12 per one
one-hundredth of a Preference Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Rights Agreement dated as of November 10, 1998 (the "Rights Agreement")
between the Company and American Securities Transfer and Trust, Inc., as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
have acquired beneficial ownership of 15% or more of the outstanding
Common Shares and have become an "Acquiring Person" according to the
terms of the Rights Agreement or (ii) 10 business days (or such later
date as may be determined by action of the Board of Directors prior to
such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares (the earlier of such dates
being called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate with a copy of this Summary
of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Shares. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common
Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares outstanding as of the Record Date,
even without such notation or a copy of this Summary of Rights being
attached thereto, will also constitute the transfer of the Rights
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associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed
to holders of record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on December 1, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case, as described
hereinafter.
The Purchase Price payable, and the number of Preference Shares or
other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preference Shares, (ii) upon the grant to
holders of the Preference Shares of certain rights or warrants to
subscribe for or purchase Preference Shares at a price, or securities
convertible into Preference Shares with a conversion price, less than the
then-current market price of the Preference Shares or (iii) upon the
distribution to holders of the Preference Shares of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid
out of earnings or retained earnings or dividends payable in Preference
Shares) or of subscription rights or warrants (other than those referred
to in this summary).
The number of outstanding Rights and the number of one
one-hundredths of a Preference Share issuable upon exercise of each Right
are also subject to adjustment in the event of a stock split of the
Common Shares or a stock dividend on the Common Shares payable in Common
Shares or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preference Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preference Share will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preference Shares will be
entitled to a minimum preferential liquidation payment of $100 per share
but will be entitled to an aggregate payment of 100 times the payment
made per Common Share. Each Preference Share will have 100 votes, voting
together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged,
each Preference Share will be entitled to receive 100 times the amount
received per Common Share. These rights are protected by customary
antidilution provisions.
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Because of the nature of the Preference Shares' dividend,
liquidation and voting rights, the value of the one
one-hundredth interest in a Preference Share purchasable upon exercise of
each Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after a person or group has become an
Acquiring Person, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of
the Right. In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper provision will be
made so that each holder of a Right, other than Rights beneficially owned
by the Acquiring Person (which will thereafter be void), will thereafter
have the right to receive upon exercise, that number of Common Shares
having a market value at the time of such occurrence of two times the
exercise price of the Right.
At any time after any person or group becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or more of
the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-hundredth of a Preference Share, per
Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Preference Shares will be
issued (other than fractions which are integral multiples of one
one-hundredth of a Preference Share, which may, at the election of the
Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preference Shares on the last trading day prior to the date of exercise.
At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more
of the outstanding Common Shares, the Board of Directors of the Company
may redeem the Rights in whole, but not in part, at a price of $.0001 per
Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
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The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including
an amendment to lower certain thresholds described above to not less than
the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Shares then known to the Company to be beneficially
owned by any person or group or affiliated or associated persons and
(ii) 10%, except that from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person, no such
amendment may adversely affect the interests of the holders of the
Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A dated November 18, 1998. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
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EXHIBIT 5
RENTECH, INC.
PRESS RELEASE
Rentech, Inc. Adopts Shareholder Rights Plan
DENVER, Nov. 10 / PRNewswire/ -- Rentech, Inc. (Nasdaq: RNTK) today
announced that its board of directors has adopted a Shareholder Rights
Plan. According to the Plan, stock purchase rights will be distributed
as a dividend to Rentech's common shareholders at the rate of one Right
for each common share held of record as of November 10, 1998. The rights
represent the right to purchase one one-hundredth of a share of a newly
created series of Rentech preferred stock. The initial exercise price is
$12.00 per Right.
The Shareholder Rights Plan is intended to protect shareholder
interests in the event the Company becomes the subject of a takeover
initiative that would deny the Company's shareholders the full value of
their investment. The Rights Plan is designed to discourage unfair and
abusive takeover tactics, and to enable all shareholders to realize the
long-term value of their investment in Rentech.
This action is not taken in response to any pending or threatened
takeover effort to acquire control of the Company.
The Rights, which will be issued as a dividend on December 1, 1998
to each common shareholder of record on November 10, 1998, will be
exercisable only if a person acquires, or announces a tender offer for
15% or more of the Company's common stock. In that event, a holder of a
Rights Certificate may, in lieu of obtaining preferred shares upon
payment of the exercise price, receive common stock having a value of
twice the exercise price.
Until the Rights become exercisable, they attach to and trade with
the common stock. A summary of the Rights Plan will be sent to
shareholders in the near future.
The Rights will expire on December 1, 2008, unless redeemed or
exchanged at an earlier date. The Rights may be redeemed by the board of
directors at $.0001 per Right before a person or group has accumulated
15% or more of the common stock. The board of directors will be
authorized in certain circumstances to lower the 15% threshold to not
less than 10%.
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Mr. Dennis L. Yakobson, President and Chief Executive Officer of
Rentech, said, "We believe that this Plan protects the interests of our
shareholders in the event that they and Rentech are confronted with
coercive or unfair takeover tactics." Mr. Yakobson stressed, however,
that "The Plan is not intended to prevent an acquisition of the Company
on terms that are favorable and fair to all shareholders. The Plan is
designed to deal with the problem of unilateral actions by hostile
persons that are calculated to deprive the Company's shareholders of the
value of their Rentech shares."
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Rentech, Inc. is a Denver based company that has developed and
licenses its process for converting gases and solid bearing carbons into
valuable liquid hydrocarbons.
For further information, contact Mark Koenig, Director of Investor
Relations at (303) 298-8008, ext. 116 or visit Rentech's website at
www.gastoliquids.com.
/CONTACT: Mark Koenig, Director of Investor Relations of Rentech,
Inc., 303-298-8008, ext. 116// Web site:
http://www.gastoliquids.com/(RNTK).
1331 17th Street, Suite 720, Denver, Colorado 80202 303/298-8008 FAX
303/298-8010
