SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
HOME-STAKE OIL & GAS COMPANY
(Exact name of registrant as specified in its charter)
Oklahoma 73-0288030
(State of incorporation or (I.R.S. Employer Identification No.)
15 East 5th Street, Suite 2800, Tulsa, Oklahoma 74103
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act: None
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. o
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. |X|
Securities Act registration statement file number to which this form relates:
____________ (if applicable)
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
(Title of class)
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Item 1. Description of Registrant's Securities to be Registered.
On November 4, 1999, the Board of Directors of Home-Stake Oil & Gas
Company (the "Corporation") adopted a new shareholder rights plan to replace the
Corporation's existing shareholder rights plan that will expire on January 3,
2000, and declared a dividend distribution of one preferred share purchase right
(a "Right") for each outstanding share of Common Stock, par value $.01 per share
(the "Common Shares"), of the Corporation. The dividend is payable to the
shareholders of record of the Corporation on January 3, 2000 (the "Record
Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to Common Shares issued after the Distribution Date. Except as set forth below,
each Right, when it becomes exercisable, entitles the registered holder to
purchase from the Corporation one one-thousandth of a share of Series A Junior
Participating Preferred Stock, with a par value of $1.00 per share, of the
Corporation (the "Preferred Shares") at a price of $22.00 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement, as the
same may be amended from time to time (the "Rights Agreement"), between the
Corporation and UMB Bank, N.A., as Rights Agent, dated as of January 3, 2000.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earlier to
occur of (i) the first date of public announcement of a person or group of
affiliated or associated persons having acquired beneficial ownership of 15% or
more of the outstanding Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 days (or such later date as the Board of
Directors of the Corporation (the "Board") may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the earlier of such dates
being called the "Distribution Date"). A person or group whose acquisition of
Common Shares causes a Distribution Date pursuant to clause (i) above is an
"Acquiring Person." The first date of public announcement that a person or group
has become an Acquiring Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, 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 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
to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
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The Rights are not exercisable until the Distribution Date and will
expire at the close of business on January 3, 2010, unless earlier redeemed or
exchanged by the Corporation as described below.
In the event that any person or group becomes an Acquiring Person
(except pursuant to a tender or exchange offer which is for all outstanding
Common Shares at a price and on terms which a majority of certain members of the
Board determines to be adequate and in the best interests of the Corporation,
its shareholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise, in lieu of Preferred Shares, the number of Common Shares (or, in the
discretion of the Board, one one-thousandths of a Preferred Share or, in certain
circumstances, other securities of the Corporation) having a value (immediately
prior to such triggering event) equal to two times the exercise price of the
Right. Notwithstanding the foregoing, following the occurrence of the event
described above, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, then each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right (the "Flip-Over Right") to receive, upon
exercise, common shares of the acquiring company having a value equal to two
times the exercise price of the Right. The holder of a Right will continue to
have the Flip-Over Right whether or not such holder exercises or surrenders the
Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities 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 Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The Purchase Price and number of outstanding Rights 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.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 1,000 times the dividend
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declared per Common Share. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation payment
of $1,000 per share; thereafter, and after the holders of the Common Shares
receive a liquidation payment of $1.00 per share, the holders of the Preferred
Shares and the holders of the Common Shares will share the remaining assets in
the ratio of 1,000 to 1 (as adjusted) for each Preferred Share and Common Share
so held, respectively. Each Preferred Share will have 1,000 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
Preferred Share will be entitled to receive 1,000 times the amount received per
Common Share. These rights are protected by customary antidilution provisions.
In the event that the amount of accrued and unpaid dividends on the Preferred
Shares is equivalent to six full quarterly dividends or more, the holders of the
Preferred Shares shall have the right, voting as a class, to elect two directors
in addition to the directors elected by the holders of the Common Shares until
all cumulative dividends on the Preferred Shares have been paid through the last
quarterly dividend payment date or until non-cumulative dividends have been paid
regularly for at least one year.
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 Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, which may, at the election of the Board, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") which redemption shall be
effective upon the action of the Board. Additionally, following the Shares
Acquisition Date, the Corporation may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price, provided that such redemption
is in connection with a merger or other business combination transaction or
series of transactions involving the Corporation in which all holders of Common
Shares are treated alike but not involving an Acquiring Person or its affiliates
or associates.
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 may exchange the Rights (other than Rights
owned by the Acquiring Person, which will have become void), in whole or in
part, at an exchange ratio of one Common Share, or one one-thousandth of a
Preferred Share (or of a share of a class or series of the Corporation's
preferred stock having equivalent rights, preferences and privileges), per Right
(subject to adjustment).
All of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board only in order to
cure any ambiguity, defect or inconsistency, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
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Until a Right is exercised or exchanged, the holder thereof, as such,
will have no right to vote or receive dividends and will have no other rights as
a shareholder of the Corporation. While the distribution of the Rights will not
be taxable to shareholders of the Corporation, shareholders may, depending upon
the circumstances, recognize taxable income should the Rights become exercisable
or upon the occurrence of certain events thereafter.
The Rights Agreement between the Corporation and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the form of
Certificate of Designations of Series A Junior Participating Preferred Stock of
the Corporation, as Exhibit B the form of Right Certificate and as Exhibit C the
Summary of Rights to Purchase Preferred Shares, is attached hereto as an exhibit
and incorporated herein by reference. The foregoing description of the Rights is
qualified by reference to such exhibit.
Item 2. Exhibits.
4.1 Rights Agreement, dated as of January 3, 2000, between
Home-Stake Oil & Gas Company and UMB Bank, N.A., as Rights
Agent, together with the following exhibits thereto: Exhibit
A-- Form of Certificate of Designations of Series A Junior
Participating Preferred Stock of Home-Stake Oil & Gas Company;
Exhibit B--Form of Right Certificate; Exhibit C--Summary of
Rights to Purchase Preferred Shares of Home-Stake Oil & Gas
Company.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Date: December 22, 1999
HOME-STAKE OIL & GAS COMPANY
By: /s/ Chris K. Corcoran
----------------------------------------
Chris K. Corcoran
Executive Vice President,
Chief Financial Officer and Secretary
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EXHIBIT INDEX
Exhibit Number Description
4.1 Rights Agreement, dated as of January 3, 2000,
between Home-Stake Oil & Gas Company and UMB Bank,
N.A., as Rights Agent, together with the following
exhibits thereto: Exhibit A-- Form of Certificate of
Designations of Series A Junior Participating
Preferred Stock of Home-Stake Oil & Gas Company;
Exhibit B--Form of Right Certificate; Exhibit
C--Summary of Rights to Purchase Preferred Shares of
Home-Stake Oil & Gas Company.
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Exhibit 4.1
RIGHTS AGREEMENT
by and between
HOME-STAKE OIL & GAS COMPANY
and
UMB BANK, N.A.,
as Rights Agent
Dated as of January 3, 2000
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions.......................................1
Section 2. Appointment of Rights Agent...............................5
Section 3. Issuance of Right Certificates............................5
Section 4. Form of Right Certificates................................7
Section 5. Countersignature and Registration.........................8
Section 6. Transfer, Split-Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.........................9
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.................................10
Section 8. Cancellation and Destruction of Right Certificates........12
Section 9. Reservation and Availability of Capital Stock.............13
Section 10. Preferred Shares Record Date..............................14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights.......................................14
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares..........................................22
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power...................................22
Section 14. Fractional Rights and Fractional Shares...................25
Section 15. Rights of Action..........................................26
Section 16. Agreement of Right Holders................................27
Section 17. Right Certificate Holder Not Deemed a Shareholder.........28
Section 18. Concerning the Rights Agent...............................28
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Section 19. Merger or Consolidation or Change of
Name of Rights Agent......................................28
Section 20. Duties of Rights Agent....................................29
Section 21. Change of Rights Agent....................................32
Section 22. Issuance of New Right Certificates........................33
Section 23. Redemption and Termination................................33
Section 24. Exchange..................................................34
Section 25. Notice of Certain Events..................................35
Section 26. Notices...................................................36
Section 27. Supplements and Amendments................................37
Section 28. Determination and Actions by the Board, etc...............38
Section 29. Successors................................................38
Section 30. Benefits of this Agreement................................38
Section 31. Severability..............................................38
Section 32. Governing Law.............................................38
Section 33. Counterparts..............................................39
Section 34. Descriptive Headings......................................39
Signatures ..........................................................39
Exhibit A Form of Certificate of Designations of Preferred Stock...A-1
Exhibit B Form of Right Certificate................................B-1
Exhibit C Summary of Rights to Purchase Preferred Shares...........C-1
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "Agreement") is made and entered into as of
January 3, 2000, by and between Home-Stake Oil & Gas Company, an Oklahoma
corporation (the "Corporation"), and UMB Bank, N.A., as Rights Agent, (the
"Rights Agent").
The Board of Directors of the Corporation has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Corporation outstanding at the Close of Business
(as hereinafter defined) on January 3, 2000 (the "Record Date"), each Right
representing the right to purchase one one-thousandth of a Preferred 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 and the
Final Expiration Date (as such terms are hereinafter defined); provided,
however, that Rights may be issued with respect to Common Shares that shall
become outstanding after the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date in accordance with the provisions
of this Agreement.
Accordingly, 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 who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the then outstanding Common
Shares (other than as a result of a Permitted Offer) or was such a
Beneficial Owner at any time after the date hereof, whether or not such
Person continues to be the Beneficial Owner of 15% or more of the then
outstanding Common Shares. Notwithstanding the foregoing, (i) the term
"Acquiring Person" shall not include (A) the Corporation, (B) any
Subsidiary of the Corporation, (C) any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation, or (D) any Person
or entity organized, appointed or established by the Corporation for or
pursuant to the terms of any such plan; and (ii) no Person shall be
deemed to be an "Acquiring Person" either (A) as a result of the
acquisition of Common Shares by the Corporation which, by reducing the
number of Common Shares outstanding, increases the proportional number
of shares beneficially owned by such Person together with all
Affiliates and Associates of such Person (except that if (1) a Person
would become an Acquiring Person (but for the operation of this
subclause A) as a result of the acquisition of Common Shares by the
Corporation, and (2) after such share acquisition by the Corporation,
such Person, or an Affiliate or Associate of such Person, becomes the
Beneficial Owner of any additional Common Shares (other than pursuant
to a dividend or distribution paid or made by the Corporation on the
outstanding Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), then such Person shall be deemed an
Acquiring Person), or (B) if (1) within eight days after such Person
would otherwise have become an Acquiring Person (but for the operation
of this
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subclause B), such Person notifies the Board that such Person did so
inadvertently and (2) within two days after such notification, such
Person is the Beneficial Owner of less than 15% of the outstanding
Common Shares.
(b) "Act" shall mean the Securities Act of 1933, as amended
and as in effect on the date of this Agreement.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this
Agreement.
(d) 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, directly or indirectly, beneficially
owns (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act, as in effect on
the date of this Agreement);
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A) the
right to acquire (whether such right is exercisable
immediately or only upon the occurrence of certain events or
after the passage of time or both) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or
upon the exercise of conversion rights, exchange rights,
rights (other than the 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
(whether such right is exercisable immediately or only upon
the occurrence of certain events or after the passage of time
or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security
under this clause B as a result of an agreement, arrangement
or understanding to vote such security, if such agreement,
arrangement or understanding (1) arises solely from a
revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations
promulgated under the Exchange Act, and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such
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Person's Affiliates or Associates) has any agreement,
arrangement or understanding, whether or not in writing (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), relating to the acquisition, holding,
voting (except to the extent contemplated by the proviso to
Section 1(d)(ii)(B) hereof) or disposing of any securities of
the Corporation.
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 Corporation,
shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued
and outstanding which such Person would be deemed to own beneficially
hereunder.
(e) "Board" shall mean the Board of Directors of the
Corporation.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, U.S. federal holiday, or a day on which banking institutions in
the State of Missouri or the city in which the office of the Rights
Agent is located are authorized or obligated by law or executive order
to close.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Kansas City, Missouri time, on such date; provided, however, that
if such date is not a Business Day "Close of Business" shall mean 5:00
P.M., Kansas City, Missouri time, on the next succeeding Business Day.
(h) "Common Shares" shall mean the shares of Common Stock, par
value $.01 per share, of the Corporation or, in the event of a
subdivision, combination or consolidation with respect to such shares
of Common Stock, the shares of Common Stock resulting from such
subdivision, combination or consolidation, except that, when used with
reference to any Person other than the Corporation, "Common Shares"
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.
(i) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended and as in effect on the date of this Agreement.
(k) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
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(l) "Interested Shareholder" shall mean any Acquiring Person
or any Affiliate or Associate of an Acquiring Person or any other
Person in which any such Acquiring Person, Affiliate or Associate has
an interest which represents in excess of 5% of the total combined
economic or voting power of such other Person, or any other Person
acting directly or indirectly on behalf of or in concert with any such
Acquiring Person, Affiliate or Associate.
(m) "Nasdaq" shall mean The Nasdaq Stock Market.
(n) "Permitted Offer" shall mean a tender or exchange offer
which is for all outstanding Common Shares at a price and on terms
determined, prior to the purchase of shares under such tender or
exchange offer, by at least a majority of the members of the Board who
are not Acquiring Persons or Affiliates, Associates, nominees or
representatives of an Acquiring Person, to be adequate (taking into
account all factors that such Directors deem relevant, including
without limitation prices that could reasonably be achieved if the
Corporation or its assets were sold on an orderly basis designed to
realize maximum value) and otherwise in the best interests of the
Corporation and its shareholders (other than the Person or any
Affiliate or Associate thereof on whose basis the offer is being made)
taking into account all factors that such Directors may deem relevant.
(o) "Person" shall mean any individual, firm, partnership,
corporation, limited liability company, trust, association, joint
venture or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(p) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, with a par value of $1.00 per share, of
the Corporation having the relative rights, preferences and limitations
set forth in the Form of Certificate of Designations attached to this
Agreement as Exhibit A.
(q) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(r) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(s) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(t) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
(u) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a) hereof.
(v) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed
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pursuant to the Exchange Act) by the Corporation or an Acquiring Person
that an Acquiring Person has become such; provided, that, if such
Person is determined not to have become an Acquiring Person pursuant to
Section 1(a)(ii) hereof, then no Shares Acquisition Date shall be
deemed to have occurred.
(w) "Subsidiary" of any Person shall mean any corporation or
other Person of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
(x) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(y) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Corporation hereby appoints
the Rights Agent to act as agent for the Corporation in accordance with the
terms and conditions hereof. The Rights Agent hereby accepts such appointment.
The Corporation may from time to time appoint such co-Rights Agents as it may
deem necessary or desirable, in which case the respective duties of the Rights
Agent and any co-Rights Agent shall be as the Corporation shall determine. The
Rights Agent shall have no duty to supervise, and in no event shall be liable
for, the acts or omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Shares Acquisition Date or
(ii) the Close of Business on the tenth day (or such later date as may
be determined by action of the Board) after the date of the
commencement by any Person (other than the Corporation, any Subsidiary
of the Corporation, any employee benefit plan of the Corporation or of
any Subsidiary of the Corporation or any Person or entity organized,
appointed or established by the Corporation 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 Corporation, any Subsidiary of
the Corporation, any employee benefit plan of the Corporation or of any
Subsidiary of the Corporation or any Person or entity organized,
appointed or established by the Corporation for or pursuant to the
terms of any such plan) to commence (which intention to commence
remains in effect for five Business Days after such announcement), a
tender or exchange offer the consummation of which would result in any
Person becoming an Acquiring Person (including, in the case of both
clause (i) and (ii), 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," (1) 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 (2) the
right to receive Right Certificates will be transferable only in
connection with the transfer of the underlying
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Common Shares (including without limitation a transfer to the
Corporation); provided, however, that, if a tender offer is terminated
prior to the occurrence of a Distribution Date, then no Distribution
Date shall occur as a result of such tender offer. Upon the occurrence
of a Distribution Date, the Corporation shall promptly notify the
Rights Agent and request a shareholder list from the Corporation's
transfer agent. As soon as practicable after the Rights Agent receives
such notice and list, the Corporation will prepare and execute, the
Rights Agent will countersign, and the Corporation will send or cause
to be sent by first-class mail, postage-prepaid, 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 Corporation,
a Right Certificate, substantially in 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) As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to Purchase
Preferred Shares, in substantially the form of Exhibit C hereto (the
"Summary of Rights"), by first-class mail, postage-prepaid, 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
Corporation. 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 attached thereto.
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 such Common
Shares. The Corporation shall use all reasonable efforts to ensure that
the provisions of this Section 3(b) hereof are complied with, but shall
have no liability to any holder of Right Certificates or other Person
as a result of its failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates or transferees
thereof.
(c) Rights shall be issued in respect of all Common Shares
outstanding as of the Record Date or issued (on original issuance or
out of treasury) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date.
In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date, the Corporation (i)
shall, with respect to Common Shares so issued or sold, pursuant to the
exercise of stock options or under any employee plan or arrangement or
upon the exercise, conversion or exchange of other securities issued by
the Corporation prior to the Distribution Date, and (ii) may, in any
other case, if deemed necessary or appropriate by the Board, issue
Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that no such
Right Certificate shall be issued if, and to the extent that (x) the
Corporation shall be advised by counsel that such issuance would create
a significant risk of material adverse tax consequences to the
Corporation or
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the Person to whom such Right Certificate would be issued or (y)
appropriate adjustment shall otherwise have been made in lieu of the
issuance thereof.
(d) Certificates for Common Shares which become outstanding
(including without limitation reacquired Common Shares referred to in
the last sentence of this paragraph (d)) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date, shall be deemed also to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Home-Stake Oil & Gas Company and UMB Bank, N.A., as Rights
Agent, dated as of January 3, 2000 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive
offices of Home-Stake Oil & Gas 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, may be redeemed or
exchanged or may expire. Home-Stake Oil & Gas Company will
mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. As set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring
Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) and certain related Persons,
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
Corporation 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 cancelled and retired so that the
Corporation shall not be entitled to exercise any Rights associated
with such Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase 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 Corporation may deem appropriate
(which do not affect the duties or responsibilities of the Rights
Agent) and as are
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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 or interdealer quotation system on which the Rights may
from time to time be listed or quoted, or to conform to usage. Subject
to the provisions of Sections 11 and 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one
one-thousandths of a Preferred Share as shall be set forth therein at
the price per one one-thousandth of a Preferred Share set forth
therein, as specified in Section 7(b) hereof (the "Purchase Price"),
but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and void
pursuant to Section 7(e) of this Agreement and any Right Certificate
issued pursuant to Section 6 or 11 hereof upon transfer, exchange,
replacement or adjustment of any other Right Certificate referred to in
this sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented hereby are
null and void.
Provisions of Section 7(e) of this Agreement shall be operative whether
or not the foregoing legend is contained on any such Right Certificate.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, its Chief Executive Officer,
its President, any of its Vice Presidents, or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto the
Corporation's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Corporation, either manually
or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Corporation
who shall have signed any of the Right Certificates shall cease to be
such officer of the Corporation before countersignature by the Rights
Agent and issuance and delivery by the Corporation, such Right
Certificates may nevertheless be countersigned by the Rights Agent and
issued and delivered by the Corporation with the same force and effect
as though the Person who signed such Right Certificates had not ceased
to be such officer of the Corporation; and any Right Certificate may be
signed on behalf of the Corporation by any Person who, at the actual
date of the execution of such Right Certificate, shall be a proper
officer of the Corporation to sign
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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 and receipt by the Rights
Agent of the notice and list of record holders of Rights referred to in
Section 3(a) hereof, the Rights Agent will keep or cause to be kept, at
its office designated pursuant to Section 26 hereof as the appropriate
place for surrender of Right Certificates upon exercise, transfer or
exchange, 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 and the
certificate number and the date of 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 Sections 4(b), 7(e) and 14
hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate or
Right Certificates 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-thousandth of a
Preferred Share (or, following a Triggering Event, other securities, as
the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder (or former holder in the case of
a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any 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 office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor
the Corporation shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Corporation or the Rights Agent
shall reasonably request. Thereupon the Rights Agent shall, subject to
Sections 4(b), 7(e) and 14 hereof, countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as
the case may be, as so requested. The Corporation or the Rights Agent
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. The
Rights Agent may delay the processing of such transaction until it
receives evidence that all applicable taxes and governmental charges
have been paid.
(b) Upon receipt by the Rights Agent of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of a
Right Certificate, and, in case of loss, theft or
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destruction, of indemnity or security of the Corporation and the Rights
Agent reasonably satisfactory to the Rights Agent, and, at the
Corporation's request, reimbursement to the Corporation 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 Rights Agent will make and deliver a new Right
Certificate of like tenor for 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 7(e) hereof, 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 and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment (in lawful
money of the United States of America by certified check, cashier's
check or money order payable to the order of the Corporation) of the
aggregate Purchase Price for the total number of one one-thousandths of
a Preferred Share (or other securities, as the case may be) as to which
such surrendered Rights are exercised, and an amount equal to any
applicable transfer tax, at or prior to the earliest of (i) the Close
of Business on January 3, 2010 (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 the Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of a
Preferred Share pursuant to the exercise of a Right shall initially be
$22.00, shall be subject to adjustment from time to time as provided in
the next sentence and in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) of this Section 7. Anything in
this Agreement to the contrary notwithstanding, in the event that, at
any time after the date of this Agreement and prior to the Distribution
Date, the Corporation 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 Shares) into a
greater or lesser number of Common Shares, then, in any such case, each
Common Share outstanding following such subdivision, combination or
consolidation shall continue to have a Right associated therewith and
the Purchase Price following any such event shall be proportionately
adjusted to equal the result obtained by multiplying the Purchase Price
immediately prior to such event by a fraction the numerator of which
shall be the total number of Common Shares outstanding immediately
prior to the occurrence of the event and the denominator of which shall
be the total number of Common Shares outstanding immediately following
the occurrence of such event. The adjustment provided for in the
preceding sentence shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or consolidation
is effected.
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(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment of the Purchase Price
for the Preferred Shares (or other securities, as the case may be) to
be purchased and an amount equal to any applicable transfer tax or
governmental charge required to be paid by the holder of such Right
Certificate in accordance with Section 6 hereof by certified check,
cashier's check or money order payable to the order of the Corporation,
the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares certificates for the number of
Preferred Shares to be purchased (and the Corporation hereby
irrevocably authorizes its transfer agent to comply with all such
requests), or (B) if the Corporation, in its sole discretion, shall
have elected to deposit the Preferred Shares issuable upon exercise of
the Rights hereunder into a depositary, requisition from the depositary
agent of depositary receipts representing such number of one
one-thousandths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and
the Corporation will direct the depositary agent to comply with such
requests; (ii) when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof; (iii) 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 (iv) when appropriate, after receipt thereof, deliver such cash to
or upon the order of the registered holder of such Right Certificate.
In the event that the Corporation is obligated to issue other
securities (including Common Shares) of the Corporation pursuant to
Section 11(a) hereof, the Corporation will make all arrangements
necessary so that such other securities are available for distribution
by the Rights Agent, if and when necessary to comply with this
Agreement.
In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii) hereof, the Rights Agent shall
return such Right Certificate to the registered holder thereof after
imprinting, stamping or otherwise indicating thereon that the rights
represented by such Right Certificate no longer include the rights
provided by Section 11(a)(ii) hereof and, if less than all the Rights
represented by such Right Certificate were so exercised, the Rights
Agent shall indicate on the Right Certificate the number of Rights
represented thereby which continue to include the rights provided by
Section 11(a)(ii) hereof.
(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 his duly authorized assigns,
subject to the provisions of Sections 6 and 14 hereof, or the Rights
Agent shall place an appropriate notation on the Right Certificate with
respect to those Rights exercised.
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(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii)
Event, any Rights beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any Affiliate or Associate thereof) who becomes
a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any Affiliate or Associate
thereof) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has a continuing
agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined is part of an
agreement, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become null and
void without any further action and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Corporation shall notify
the Rights Agent when this Section 7(e) applies and shall use all
reasonable efforts to insure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but neither the Corporation
nor the Rights Agent shall have any liability to any holder of Right
Certificates or other Person as a result of the Corporation's failure
to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or any transferee of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be
obligated to undertake any action with respect to a registered holder
of Rights upon the occurrence of any purported transfer pursuant to
Section 6 hereof or exercise as set forth in this Section 7, unless
such registered holder (i) shall have properly completed and signed the
certificate contained in the form of assignment or election to
purchase, as the case may be, set forth on the reverse side of the
Right Certificate surrendered for such transfer or exercise, as the
case may be, (ii) shall not have indicated an affirmative response to
clause 1 or 2 thereof, and (iii) shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Corporation or the
Rights Agent shall reasonably request.
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 Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Corporation 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
Corporation otherwise than upon the exercise thereof. The Rights Agent shall
destroy all cancelled Right Certificates in accordance with applicable laws and
regulations, and in such case shall deliver a certificate of destruction thereof
to the Corporation.
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Section 9. Reservation and Availability of Capital Stock.
(a) The Corporation covenants and agrees that (i) at all times
prior to the occurrence of a Section 11(a)(ii) Event, it will cause to
be reserved and kept available out of its authorized and unissued
Preferred Shares, or any authorized and issued Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights, and (ii) after
the occurrence of a Section 11(a)(ii) Event, it will, to the extent
reasonably practicable, so reserve and keep available a sufficient
number of Common Shares (and/or other securities) which may be required
to permit the exercise in full of the Rights pursuant to this
Agreement.
(b) So long as the Preferred Shares (and, after the occurrence
of a Section 11(a)(ii) Event, Common Shares or any other securities)
issuable upon the exercise of the Rights may be listed on any stock
exchange, or quoted on Nasdaq, the Corporation shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all securities reserved for such issuance to be listed on
such exchange, or quoted on Nasdaq, upon official notice of issuance
upon such exercise.
(c) The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares (or
Common Shares and/or other securities, as the case may be) delivered
upon exercise of Rights shall, at the time of delivery of the
certificates for such shares or other securities (subject to payment of
the Purchase Price), be duly and validly authorized and issued and
fully paid and non-assessable shares or securities.
(d) The Corporation further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or delivery
of the Right Certificates or of any Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of
Rights. The Corporation shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the issuance
or delivery of certificates or depositary receipts for the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
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 Preferred Shares
(or Common Shares and/or other securities, as the case may be) 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
Corporation's satisfaction that no such tax is due.
(e) The Corporation shall use its best efforts to (i) file, as
soon as practicable following the Shares Acquisition Date (or, if
required by law, at such earlier time following the Distribution Date
as so required), a registration statement under the Act, with respect
to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such
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registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of
the Act and the rules and regulations thereunder) until the date of the
expiration of the rights provided by Section 11(a)(ii) hereof. The
Corporation will also take such action as may be appropriate under the
blue sky laws of the various states. The Corporation may temporarily
suspend, for a period of time not to exceed 90 days after the date set
forth in clause (i) of this Section 9(e), the exercisability of the
Rights in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the
Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. Notwithstanding any such provision of this Agreement to the
contrary, the Rights shall not be exercisable for securities in any
jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, such exercise therefor shall not be permitted
under applicable law, or a registration statement in respect of such
securities shall not have been declared effective.
(f) The Corporation agrees to provide to the Rights Agent,
immediately following the later to occur of an event described in
Section 11(a)(ii) or Section 13 hereof or the Distribution Date, an
opinion of counsel reasonably acceptable to the Rights Agent that the
Common Shares underlying the Rights have been or are being properly
registered under the Act, or in the alternative, the Rights are not
subject to registration under the Act.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) 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 and other governmental charges) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the transfer books of the Corporation relating to the Preferred
Shares (or Common Shares and/or other securities, as the case may be) are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the applicable transfer books are open.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide
the outstanding Preferred Shares into a greater number of
Preferred Shares, (C) combine the outstanding Preferred Shares
into a smaller number of Preferred Shares, or (D) issue any
shares of its capital stock in a
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reclassification of the Preferred Shares (including without
limitation any such reclassification in connection with a
consolidation or merger in which the Corporation is the
continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect immediately prior to 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 (except as otherwise
provided herein, including without limitation Section 7(e)
hereof) thereafter be entitled to receive, upon exercise
thereof at the Purchase Price in effect immediately prior to
such date, 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 applicable transfer
books of the Corporation were open, such holder would have
been entitled to receive upon such exercise by virtue of such
dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Corporation issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event any Person, alone or together with
its Affiliates and Associates, shall, at any time after the
date of this Agreement, become an Acquiring Person, then
proper provision shall be made so that each holder of a Right
shall (except as provided below and in Section 7(e) hereof),
for a period of 60 days after the later of the occurrence of
any such event or the effective date of an appropriate
registration statement under the Act pursuant to Section 9
hereof, have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price, in accordance
with the terms of this Agreement, in lieu of Preferred Shares,
such number of duly authorized, validly issued, fully paid and
non-assessable Common Shares (or, in the discretion of the
Board, one one-thousandths of a Preferred Share) as shall
equal the result obtained by (A) multiplying the then current
Purchase Price by the then number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event,
and dividing that product by (B) 50% of the then current per
share market price of the Common Shares (determined pursuant
to Section 11(d) hereof) on the date of such first occurrence
(such number of shares being referred to as the "Adjustment
Shares"); provided, however, that, if the transaction that
would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
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(iii) In the event that there shall not be sufficient
treasury shares or authorized but unissued (and unreserved)
Common Shares to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof and the Rights become
so exercisable (and the Board has determined to make the
Rights exercisable into fractions of a Preferred Share),
notwithstanding any other provision of this Agreement, to the
extent necessary and permitted by applicable law, each Right
shall thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with
the terms of this Agreement, (A) a number of (or fractions of)
Common Shares (up to the maximum number of Common Shares which
may permissibly be issued) and (B) one-one-thousandths of a
Preferred Share or a number of, or fractions of other equity
securities of the Corporation (or, in the discretion of the
Board, debt) which the Board has determined to have the same
aggregate current market value (determined pursuant to
Sections 11(d)(i) and (ii) hereof, to the extent applicable)
as one Common Share (such number of, or fractions of,
Preferred Shares or other equity securities or debt of the
Corporation being referred to as a "capital stock
equivalent"), equal in the aggregate to the number of
Adjustment Shares; provided, however, if sufficient Common
Shares and/or capital stock equivalents are unavailable, then
the Corporation shall, to the extent permitted by applicable
law, take all such action as may be necessary to authorize
additional Common Shares or capital stock equivalents for
issuance upon exercise of the Rights, including the calling of
a meeting of shareholders; and provided, further, that, if the
Corporation is unable to cause sufficient Common Shares and/or
capital stock equivalents to be available for issuance upon
exercise in full of the Rights, then each Right shall
thereafter represent the right to receive the Adjusted Number
of Shares upon exercise at the Adjusted Purchase Price (as
such terms are hereinafter defined). As used herein, the term
"Adjusted Number of Shares" shall mean that number of (or
fractions of) Common Shares (and/or capital stock equivalents)
equal to the product of (X) the number of Adjustment Shares
and (Y) a fraction, the numerator of which is the number of
Common Shares (and/or capital stock equivalents) available for
issuance upon exercise of the Rights and the denominator of
which is the aggregate number of Adjustment Shares otherwise
issuable upon exercise in full of all Rights (assuming there
were a sufficient number of Common Shares available) (such
fraction being referred to as the "Proration Factor"). The
"Adjusted Purchase Price" shall mean the product of the
Purchase Price and the Proration Factor. The Board may, but
shall not be required to, establish procedures to allocate the
right to receive Common Shares and capital stock equivalents
upon exercise of the Rights among holders of Rights.
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all
holders of Preferred Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights, privileges
and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into or exercisable
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for Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred Shares or
equivalent preferred shares) less than the then current per share
market price of the Preferred Shares (as determined pursuant to Section
11(d) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares
which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to
be offered) would purchase at such current per share market price, and
the denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into 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 Corporation issuable upon exercise of one Right. In case such
subscription price may be paid by delivery of 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, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. Preferred Shares owned
by or held for the account of the Corporation 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 Corporation shall fix a record date for the
making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Corporation is the continuing or
surviving corporation) of evidences of indebtedness, equity securities
other than Preferred Shares or assets (other than a regular periodic
cash dividend or a dividend payable in Preferred Shares) or
subscription rights, options 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 (as
determined pursuant to Section 11(d) hereof) of the Preferred Shares on
such record date, less the fair market value (as determined in good
faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes) of the portion of the assets, equity securities or evidences
of indebtedness so to be distributed or of such subscription rights,
options or warrants applicable to one Preferred Share, and the
denominator of which shall be such current per share market price of
the Preferred Shares; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the
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Corporation 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 date shall be
deemed to be the average of the daily closing prices per share
of such Security for the 30 consecutive Trading Days
immediately prior to and not including such date; provided,
however, that, in the event 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
ex-dividend date for such dividend or distribution or the
record date for such subdivision, combination or
reclassification, then, and in each such case, the current 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 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. 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 shall be used. The term "Trading Day" shall mean
a 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 Preferred Shares
shall be determined in accordance with the method set forth in
Section 11(d)(i) hereof. If the Preferred Shares are not
publicly traded, the "current per share market price" of the
Preferred Shares shall be
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conclusively deemed to be the current per share market price
of the Common Shares as determined pursuant to Section
11(d)(i) hereof, (appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after
the date of this Agreement), multiplied by 1,000. If neither
the Common Shares nor the Preferred Shares are publicly held
or so listed or traded, "current per share market price" of
the Preferred Shares shall mean the fair value per share as
determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e), are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
to the nearest one one-millionth of a Preferred 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
mandates such adjustment or (ii) the Final Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive, upon exercise of such Right, any
shares of capital stock of the Corporation other than Preferred Shares,
thereafter the number of 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 Preferred Shares contained in Sections 11(a) through (c)
hereof, inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Shares shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Corporation subsequent
to any adjustment made hereunder shall evidence the right to purchase,
at the adjusted Purchase Price, the number of one one-thousandths of a
Preferred Share and other capital stock of the Corporation purchasable
from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) The Corporation may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights, in
lieu of any adjustment in the number of one one-thousandths of a
Preferred 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-thousandths of a Preferred
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
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adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Corporation
shall make a public announcement (and shall promptly deliver a copy of
such announcement to the Rights Agent) 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(h), the Corporation 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 Corporation, 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 Corporation, 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 may, at the option of the Corporation, reflect the adjusted
Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(i) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price and the number of one one-thousandths of a Preferred Share which
were expressed in the initial Right Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
number of one one-thousandths of a Preferred Share, Common Shares or
other securities issuable upon exercise of the Rights, the Corporation
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and
legally issue such number of fully paid and non-assessable one
one-thousandths of a Preferred Share, Common Shares or other securities
at such adjusted Purchase Price.
(k) 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 Corporation may elect (and shall provide the
Rights Agent with notice of such election) to defer, until the
occurrence of such event, the issuance to the holder of any Right
exercised after such record date of the Preferred Shares, Common Shares
or other securities of the Corporation, if any, issuable upon such
exercise over and above the Preferred Shares, Common Shares or other
securities of the Corporation, if any, issuable upon exercise on the
basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Corporation shall deliver to
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<PAGE>
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.
(l) Anything in this Section 11 to the contrary
notwithstanding, the Corporation 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
(i) consolidation or subdivision of the Preferred Shares, (ii) issuance
wholly for cash of Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred
Shares, (iv) stock dividends, or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the
Corporation to holders of its Preferred Shares shall not be taxable to
such shareholders.
(m) The Corporation covenants and agrees that it will not, at
any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Corporation in a transaction
which does not violate Section 11(n) hereof), (ii) merge with or into
any other Person (other than a Subsidiary of the Corporation in a
transaction which does not violate Section 11(n) hereof), or (iii) sell
or otherwise transfer (or permit any Subsidiary of the Corporation to
sell or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Corporation and its Subsidiaries (taken
as a whole) to any other Person or Persons (other than the Corporation
and/or any of its Subsidiaries in one or more transactions each of
which does not violate Section 11(n) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer there
are any charter or by-law provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect or other
actions taken, which would materially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, or (y) prior to,
simultaneously with or immediately after such consolidation, merger,
sale or transfer, the shareholders of the Person who constitutes, or
would constitute, the Principal Party (for purposes of Section 13(a)
hereof) shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates and Associates. The Corporation
shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Corporation and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(m).
(n) The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, 24
or 27 hereof, take (or permit any of its Subsidiaries to take) any
action the purpose of which is to, or if at the time such action is
taken it is reasonably foreseeable that the effect of such action would
be to, materially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights.
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(o) The exercise of Rights under Section 11(a)(ii) hereof
shall only result in the loss of rights under said Section 11(a)(ii) to
the extent so exercised and shall not otherwise affect the rights
represented by the Rights under this Agreement, including the rights
represented by Section 13 hereof.
(p) Unless the Corporation shall have exercised its election
as provided in Section 11(h) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in Section 11(b) or
(c) hereof, 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-thousandths of a
Preferred Share (calculated to the nearest one-millionth) obtained by
(i) multiplying (A) the number of one one-thousandths of a share for
which a Right was exercisable immediately prior to this adjustment by
(B) 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.
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
Corporation shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief, reasonably detailed statement of the facts,
computations and methodology giving rise to such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares and the
Preferred Shares a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing Common Shares) in accordance with
Section 26 hereof. The Rights Agent, which shall not be obligated or responsible
for calculating any such adjustment, shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall have no duty
with respect to and shall not be deemed to have knowledge of such adjustment
unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, on or following the Shares Acquisition
Date, directly or indirectly, (x) the Corporation shall consolidate
with, or merge with and into, any Person (and the Corporation shall not
be the continuing or surviving corporation of such consolidation or
merger), (y) the Corporation shall consolidate with, or merge with, any
Person, and the Corporation shall be the continuing or surviving
corporation of such consolidation or merger (other than, in a case of
any transaction described in clause (x) or (y) above, a merger or
consolidation which would result in all of the securities generally
entitled to vote in the election of directors ("voting securities") of
the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
securities of the surviving entity) all of the voting securities of the
Corporation or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation), or (z) the
Corporation shall sell or otherwise transfer (or one or
22
<PAGE>
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Corporation and its Subsidiaries (taken as a whole) to any Person
(other than the Corporation or any Subsidiary of the Corporation in one
or more transactions each of which does not violate Section 11(n)
hereof), then, and in each such case (except as provided in Section
13(d) hereof), proper provision shall be made so that (i) each holder
of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of duly
authorized, validly issued, fully paid, non-assessable and freely
tradeable Common Shares of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights of call or
first refusal or other adverse claims, as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the
number of one one-thousandths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment previously
made pursuant to Section 11(a)(ii) hereof) and dividing that product by
(B) 50% of the then current per share market price of the Common Shares
of such Principal Party (determined pursuant to Section 11(d)(i)
hereof) on the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the
Corporation pursuant to this Agreement; (iii) the term "Corporation"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a
Section 13 Event; and (iv) such Principal Party shall take such steps
(including without limitation the authorization and reservation of a
sufficient number of its Common Shares to permit exercise of all
outstanding Rights in accordance with this Section 13(a)) in connection
with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to the Common Shares of such
Principal Party thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a)
hereof, the Person that is the issuer of any securities into
which Common Shares of the Corporation are converted in such
merger or consolidation, and if no securities are so issued,
the Person that survives or results from such merger or
consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a) hereof, the
Person that is the party receiving the greatest portion of the
assets or earning power transferred pursuant to such
transaction or transactions;
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provided, however, that, in any of the foregoing cases, (A) if
the Common Shares of such Person are not at such time and have
not been continuously over the preceding 12 month period
registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person
the Common Shares of which are and have been so registered,
"Principal Party" shall refer to such other Person; (B) in
case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of two or more of
which are and have been so registered, "Principal Party" shall
refer to whichever of such Persons is the issuer of the Common
Shares having the greatest aggregate market value; and (C) in
case such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set
forth in clauses (A) and (B) above shall apply to each of the
chains of ownership having an interest in such joint venture
as if such party were a "Subsidiary" of both or all of such
joint venturers and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(c) The Corporation shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party
shall have a sufficient number of its authorized Common Shares which
have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Corporation and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in Sections 13(a) and (b) hereof and further
providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer mentioned in Section 13(a)
hereof, the Principal Party, at its own expense, shall:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the
Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
under the Exchange Act.
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The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. The
rights under this Section 13 shall be in addition to the rights to
exercise Rights and adjustments under Section 11(a)(ii) and shall
survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the
contrary, this Section 13 shall not be applicable to a transaction
described in clauses (x) and (y) of Section 13(a) hereof if: (i) such
transaction is consummated with a Person or Persons who acquired Common
Shares pursuant to a Permitted Offer (or a wholly owned Subsidiary of
any such Person or Persons); (ii) the price per Common Share offered in
such transaction is not less than the price per Common Share paid to
all holders of Common Shares whose shares were purchased pursuant to
such Permitted Offer; and (iii) the form of consideration offered in
such transaction is the same as the form of consideration paid pursuant
to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions
of Rights or to distribute 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 for the Trading Day
immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if
on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board. If on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as determined in
good faith by the Board shall be used.
(b) The Corporation shall not be required to issue fractions
of Preferred Shares (other than fractions which are one one-thousandth
or integral multiples of one
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one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares
(other than fractions which are one one-thousandth or integral
multiples of one one-thousandth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-thousandth of a
Preferred Share may, at the election of the Corporation, be evidenced
by depositary receipts, pursuant to an appropriate agreement between
the Corporation and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary receipts
shall have the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred Shares that
are not one one-thousandth or integral multiples of one one-thousandth
of a Preferred Share, the Corporation 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 one-thousandth of a Preferred Share. For
the purposes of this Section 14(b), the current market value of one
one-thousandth of a Preferred Share shall be one one-thousandth of the
closing price of a Preferred Share (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the transactions or
events specified in Section 11 hereof giving rise to the right to
receive Common Shares, capital stock equivalents (other than Preferred
Shares) or other securities upon the exercise of a Right, the
Corporation shall not be required to issue fractions of shares or units
of such Common Shares, capital stock equivalents or other securities
upon exercise of the Rights or to distribute certificates which
evidence fractions of such Common Shares, capital stock equivalents or
other securities. In lieu of fractional shares or units of such Common
Shares, capital stock equivalents or other securities, the Corporation
may pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of a share or unit of
such Common Shares, capital stock equivalents or other securities. For
purposes of this Section 14(c), the current market value shall be
determined in the manner set forth in Section 11(d) hereof for the
Trading Day immediately prior to the date of such exercise and, if such
capital stock equivalent is not traded, each such capital stock
equivalent shall have the value of one one-thousandth of a Preferred
Share.
(d) The holder of a Right, by the acceptance of the Right,
expressly waives his right to receive any fractional Rights or any
fractional share upon exercise of a Right (except as permitted by this
Section 14).
Section 15. Rights of Action. All rights of action in respect of this
Agreement (except 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
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of any other Right Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Corporation to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate (or, prior to the Distribution Date, such
Common Shares) 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
Corporation and the Rights Agent and with every other
holder of a Right as follows:
(a) Prior to the Distribution Date, the Rights 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 office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate form fully executed.
(c) Subject to Sections 6 and 7(f) hereof, the Corporation 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 on the registry books of the
Corporation 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 Corporation or the Rights Agent) for all purposes
whatsoever, and neither the Corporation nor the Rights Agent, subject
to the last sentence of Section 7(e) hereof, shall be affected by any
notice to the contrary.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or a beneficial interest in a Right
or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling
(whether interlocutory or final) issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided,
however, the Corporation must use its best efforts to have any such
order, decree, judgment or ruling lifted or otherwise overturned as
soon as possible.
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Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder of any Right Certificate, as such, shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Corporation which may at any time be issuable upon the
exercise or exchange of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a shareholder of
the Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof), or to
receive dividends or other distributions or to exercise any preemptive or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised or exchanged in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by the Rights Agent
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred
in the preparation, delivery, amendment, administration and execution
of this Agreement and the exercise and performance of its duties
hereunder. The Corporation also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense,
incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for any action taken, suffered or omitted
by the Rights Agent in connection with the acceptance and
administration of this Agreement or the exercise or performance of its
duties hereunder, including, without limitation the reasonable costs
and expenses of defending against any claim of liability in the
premises. The indemnity provided for herein shall survive the
expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for, or in respect of, any action taken,
suffered or omitted by it in connection with the acceptance and
administration of this Agreement or the exercise or performance of its
duties hereunder in reliance upon any Right Certificate or certificate
for Common Shares or for other securities of the Corporation,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, instruction, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to 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.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
Person resulting from any merger
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or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the stock transfer
or all or substantially all of the shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section
21 hereof. In case, at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor
Rights Agent and deliver such 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 in its name as 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, and only the duties and obligations, expressly imposed
by this Agreement (and no implied duties and obligations) upon the following
terms and conditions, by all of which the Corporation 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 Corporation), and the advice or opinion of
such counsel shall be full and complete authorization and protection to
the Rights Agent with respect to, and the Rights Agent shall incur no
liability for or in respect of, any action taken, suffered or omitted
by it in good faith and in accordance with such advice or opinion.
(b) Whenever, in the performance of its duties under this
Agreement, the Rights Agent shall deem it necessary or desirable that
any fact or matter (including without limitation the identity of an
Acquiring Person and the determination of the current market price of
any Security) be proved or established by the Corporation prior to the
Rights Agent's taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by any one
of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer or the Secretary of the
Corporation and delivered to the Rights Agent; and such certificate
shall
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be full authorization and protection to the Rights Agent with respect
to, and the Rights Agent shall incur no liability for or in respect of,
any action taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct. Anything in this
Agreement to the contrary notwithstanding, in no event shall the Rights
Agent be liable for special, indirect, punitive, incidental or
consequential loss or damages of any kind whatsoever (including without
limitation lost profits), even if the Rights Agent has been advised of
the likelihood of such loss or damages and regardless of the form of
action.
(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 on such Right
Certificates) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by
the Corporation only.
(e) The Rights Agent shall not be under any liability or
responsibility in respect of the validity of this 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 Corporation of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any change in the exercisability of the
Rights (including without limitation the Rights becoming null and void
pursuant to Section 7(e) hereof) or any adjustment required under the
provisions of Section 3, 11, 13, 23 or 24 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Agreement or any Right Certificate or as
to whether any Preferred Shares or Common Shares will, when issued, be
duly authorized, validly issued, fully paid and non-assessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or
the Secretary of the Corporation, and to apply to such officers for
advice or instructions in connection with its duties, and shall not be
liable for any action taken, suffered or omitted
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to be taken by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those
instructions. Any application by the Rights Agent for written
instructions from the Corporation may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken or omitted
by the Rights Agent under this Rights Agreement and the date on or
after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or
omitted to be taken by the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after
the date any officer of the Corporation actually receives such
application, unless any such officer shall have consented in writing to
an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instruction in response to such application specifying
the action to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Corporation or become pecuniarily interested
in any transaction in which the Corporation may be interested, or
contract with or lend money to the Corporation or otherwise act as
fully and freely as though it were not the Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Corporation or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Corporation or any other Person resulting from any such act,
default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative response
to clause 1 or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without
receiving written instructions from the Corporation.
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(l) The Rights Agent shall have no responsibility to the
Corporation, any holders of Rights, any holders of Common Shares or any
holders of Preferred Shares for interest or earnings on any monies held
by the Rights Agent pursuant to this Agreement.
(m) The Rights Agent shall not be required to take notice or
be deemed to have notice of any fact, event or determination (including
without limitation any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or
Associate) under this Agreement unless and until the Rights Agent shall
be specifically notified in writing by the Corporation of such fact,
event or determination, and all notices shall be effective if given in
accordance with Section 26 hereof, and in the absence of such notice
the Rights Agent may conclusively assume that no such event or
condition exists.
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 Corporation and to each transfer
agent of the Common Shares or Preferred Shares by registered or certified mail,
and, following the Distribution Date, to the holders of the Right Certificates
by first-class mail. The Corporation may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and,
following the Distribution Date, to 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 Corporation shall appoint a successor
to the Rights Agent. If the Corporation 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
Corporation), then the registered holder of any Right Certificate or resigning
Rights Agent may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be (a) a Person organized and doing
business under the laws of the United States or the laws of any state of the
United States or the District of Columbia, 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 and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000, or (b) an Affiliate of a Person described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed and the duties
and obligations of the retiring Rights Agent shall cease and terminate; however,
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and, following the Distribution
Date, mail a notice thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in this
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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
Corporation may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by the Board 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 and Termination.
(a) (i) The Board may, at its option, redeem all but not less
than all the then outstanding Rights at a redemption price of
$.01 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"), at any time prior to the earlier of (A) the
occurrence of a Section 11(a)(ii) Event, or (B) the Final
Expiration Date. The Corporation may, at its option, pay the
Redemption Price either in Common Shares (based on the
"current per share market price," as defined in Section 11(d)
hereof, of the Common Shares at the time of redemption) or
cash; provided, that if the Corporation elects to pay the
Redemption Price in Common Shares, the Corporation shall not
be required to issue any fractional Common Shares and the
number of Common Shares issuable to each holder of Rights
shall be rounded down to the next whole share.
(ii) In addition, the Board may, at its option, at
any time following the occurrence of a Section 11(a)(ii) Event
and the expiration of any period during which the holder of
Rights may exercise the rights under Section 11(a)(ii) but
prior to any Section 13 Event, redeem all but not less than
all of the then outstanding Rights at the Redemption Price (A)
in connection with any merger, consolidation or sale or other
transfer (in one transaction or in a series of related
transactions) of assets or earning power aggregating 50% or
more of the earning power of the Corporation and its
Subsidiaries (taken as a whole) in which all holders of Common
Shares are treated alike and not involving (other than as a
holder of Common Shares being treated like all other such
holders) an Interested Shareholder, or (B)(1) if and for so
long as the Acquiring Person is not thereafter the Beneficial
Owner of 10% or more of the Common Shares, and (2) at the time
of redemption no other Persons are Acquiring Persons.
(b) In the case of a redemption permitted under Section
23(a)(i) hereof, immediately upon the date for redemption set forth (or
determined in the manner specified) in a resolution of the Board
ordering the redemption of the Rights, evidence of which shall
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have been filed with the Rights Agent, and without any further action
and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held. In the case of a
redemption permitted only under Section 23(a)(ii) hereof, evidence of
which shall have been filed with the Rights Agent, the right to
exercise the Rights will terminate and represent only the right to
receive the Redemption Price upon the later of 10 Business Days
following the giving of such notice or the expiration of any period
during which the rights under Section 11(a)(ii) may be exercised. The
Corporation shall promptly give public notice of any such redemption to
the Rights Agent and the holders of the Rights in the manner set forth
in Section 26 hereof; 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 date for redemption set forth in
a resolution of the Board ordering the redemption of the Rights, the
Corporation 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 which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice
of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Corporation 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.
(c) The Corporation may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights in accordance with
this Agreement and (ii) mailing payment of the Redemption Price to the
registered holders of the Rights at their last addresses as they appear
on the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent of the Common Shares,
and, upon such action, all outstanding Rights and Right Certificates
shall be null and void without any further action by the Corporation.
Section 24. Exchange.
(a) The Board 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 null and void pursuant to the provisions of Section 7(e) or
11(a)(ii) hereof) for Common Shares of the Corporation at an exchange
ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall
not be empowered to effect such exchange at any time after any Person
(other than the Corporation, any Subsidiary of the Corporation, any
employee benefit plan of the Corporation or any such Subsidiary, any
Person organized, appointed or established by the
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Corporation for or pursuant to the terms of any such plan or any
trustee, administrator or fiduciary of such a 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 ordering the
exchange of any Rights pursuant to Section 24(a) hereof and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of the holders 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. The Corporation shall promptly give public notice and
notice to the Rights Agent 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 Corporation shall promptly
mail a notice of any such exchange to the Rights Agent and 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 which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) or 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Corporation, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section 11(b)
hereof) for some or all of the Common Shares exchangeable for Rights,
at the initial rate of one one-thousandth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately
adjusted to reflect adjustments in the voting rights of the Preferred
Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the
same dividend, liquidation and voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common
Shares or Preferred Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Corporation shall take all such action as may
be necessary to authorize additional Common Shares or Preferred Shares
for issuance upon exchange of the Rights.
Section 25. Notice of Certain Events.
(a) In case the Corporation shall, at any time after the
Distribution Date, propose (i) to pay any dividend payable in stock of
any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a
regularly quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class
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or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision or combination of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Corporation in a
transaction which does not violate Section 11(n) hereof), 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
Corporation and its Subsidiaries (taken as a whole) to any other Person
or Persons (other than the Corporation and/or any of its Subsidiaries
in one or more transactions each of which does not violate Section
11(n) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Corporation, then, in each such case, the Corporation shall
give to each holder of a Right Certificate, in accordance with Section
26 hereof, a notice of such proposed action and shall file a
certificate with the Rights Agent to that effect, which shall specify
the record date for the purposes of such dividend, distribution or
offering 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 Preferred 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 20 days
prior to the record date for determining holders of the Preferred
Shares for purposes of such action, and in the case of any such other
action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of
the Preferred Shares, whichever shall be the earlier. The failure to
give notice required by this Section 25 or any defect therein shall not
affect the legality or validity of the action taken by the Corporation
or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date, a public filing by the
Corporation with the Securities and Exchange Commission shall
constitute sufficient notice to the holders of securities of the
Corporation, including without limitation the Rights, for purposes of
this Agreement and no other notice need be given to such holders.
(c) In case of a Section 11(a)(ii) Event, then (i) the
Corporation 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, and (ii) all references in Section
25(a) hereof to Preferred Shares shall be deemed thereafter to refer
also to Common Shares and/or, if appropriate, other securities of the
Corporation.
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 Corporation shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed as follows (or to such other
address or addresses as the Corporation shall specify in writing to the Rights
Agent):
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Home-Stake Oil & Gas Company
15 East 5th Street, Suite 2800
Tulsa, Oklahoma 74103-4311
Attention: President
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Corporation or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
upon receipt if sent registered or certified mail, postage prepaid, addressed as
follows (or to such other address or addresses as the Rights Agent shall specify
in writing to the Corporation):
UMB Bank, N.A., as Rights Agent
P.O.Box 419692
Kansas City, Missouri 64141-6692
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of any Right Certificate or, if
prior to the Distribution Date, to the holder of certificates representing
Common Shares shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Corporation.
Section 27. Supplements and Amendments. Prior to the Distribution Date,
the Corporation and the Rights Agent shall, if the Corporation so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Shares. From and after the
Distribution Date, the Corporation and the Rights Agent shall, if the
Corporation so directs, supplement or amend this Agreement without the approval
of any holders of Right Certificates in order (a) to cure any ambiguity, (b) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (c) to shorten or lengthen any
time period hereunder, or (d) to change or supplement the provisions hereof in
any manner which the Corporation may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (c) of this sentence, (i) a time period relating to
when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (ii) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Corporation and an opinion of counsel reasonably
acceptable to the Rights Agent which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment, provided that such supplement or
amendment does not adversely affect the rights or obligations of the Rights
Agent under this Agreement. Prior to the Distribution Date, the interests
37
<PAGE>
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section 28. Determination and Actions by the Board, etc. The Board
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or the
Corporation, or as may be necessary or advisable in the administration of this
Agreement, including without limitation the right and power to (a) interpret the
provisions of this Agreement, and (b) make all determinations deemed necessary
or advisable for the administration of this Agreement (including without
limitation a determination to redeem or exchange or not to redeem or exchange
the Rights or to amend this Agreement and whether any proposed amendment
adversely affects the interests of the holders of Right Certificates). For all
purposes of this Agreement, any calculation of the number of Common Shares or
other securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith (the Rights Agent
may assume the Board acted in good faith), shall (x) be final, conclusive and
binding on the Corporation, the Rights Agent, the holders of the Right
Certificates and all other Persons, and (y) not subject the Board to any
liability to the holders of the Right Certificates.
Section 29. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Corporation, 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 Corporation, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Oklahoma 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; except that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and
38
<PAGE>
construed in accordance with the law of the State of Missouri applicable to
contracts made and to be performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts, 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 of reference 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 by their respective authorized officers, all as of the day and
year first above written.
HOME-STAKE OIL & GAS COMPANY
By: /s/ Robert C. Simpson
-----------------------------------
Robert C. Simpson
Chairman of the Board, CEO
and President
UMB BANK, N.A.
By: /s/ Frank Bramwell
-----------------------------------
Frank Bramwell
Senior Vice President
39
<PAGE>
Exhibit A
Form of
Certificate of Designations
of
Series A Junior Participating Preferred Stock
of
Home-Stake Oil & Gas Company
(Pursuant to Section 1032 of the
Oklahoma General Corporation Act)
Home-Stake Oil & Gas Company, a corporation organized and existing
under the Oklahoma General Corporation Act (hereinafter called the
"Corporation"), in accordance with the provisions of Section 1007 thereof, DOES
HEREBY CERTIFY:
That, pursuant to the authority granted to and vested in the Board of
Directors of the Corporation (hereinafter called the "Board of Directors") in
accordance with the provisions of the Restated and Amended Certificate of
Incorporation of the Corporation (hereinafter called the "Certificate of
Incorporation"), the following resolution was duly adopted by the Board of
Directors of the Corporation as required by Section 1032 of the Oklahoma General
Corporation Act at a meeting duly called and held on November 4, 1999:
RESOLVED, that, pursuant to the authority granted to and
vested in the Board of Directors in accordance with the provisions of
the Certificate of Incorporation, the Board of Directors hereby creates
a series of Preferred Stock, with a par value of $1.00 per share, of
the Corporation and hereby states the designation and number of shares,
and fixes the relative rights, preferences and limitations thereof (in
addition to the provisions set forth in the Certificate of
Incorporation which are applicable to the Preferred Stock of all
classes and series) as follows:
Series A Junior Participating Preferred Stock
Section 1. Designation, Par Value and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock"
(hereinafter referred to as "Series A Preferred Stock"), the shares of such
series shall be with par value of $1.00 per share, and the number of shares
constituting such series shall be 12,000; provided, however, that, if more than
a total of 12,000 shares of Series A Preferred Stock shall be issuable upon the
exercise of Rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of January 3, 2000, between the Corporation and UMB Bank, N.A., as Rights
Agent (as amended from time to time) (the "Rights Agreement"), the Board of
Directors, pursuant to Section 1032 of the Oklahoma General Corporation Act,
shall direct by resolution or resolutions that a certificate be properly
executed, acknowledged
0343k9.12.wpd
A-1
<PAGE>
and filed providing for the total number of shares of Series A Preferred Stock
authorized to be issued to be increased (to the extent that the Certificate of
Incorporation then permits) to the largest number of whole shares (rounded up to
the nearest whole number) issuable upon exercise of the Rights. Such number of
shares of the Series A Preferred Stock may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares issuable upon
exercise or conversion of outstanding rights, options or other securities issued
by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the shares of Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to the
holders of shares of any class or series of stock of the Corporation
ranking junior to the Series A Preferred Stock in respect thereof,
shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first business day of January, April,
July and October of each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $10.00 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions (other than a dividend payable in
shares of Common Stock, par value $.01 per share, of the Corporation
(the "Common Stock") or a subdivision of the outstanding shares of
Common Stock, by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time after
the record date for the initial distribution of the Rights pursuant to
the Rights Agreement (the "Rights Declaration Date") (i) declare or pay
any dividend on the 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 A Preferred
Stock were entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in paragraph (A) of this
Section 2 immediately after it declares
A-2
<PAGE>
a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock); provided, that, in the event no dividend or
distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date (or, with respect to the
first Quarterly Dividend Payment Date, the period between the first
issuance of any share or fraction of a share of Series A Preferred
Stock and such first Quarterly Dividend Payment Date), a dividend of
$10.00 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Series A Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue and be
cumulative from the date of issue of such shares, or unless the date of
issue is a date after the record date for the determination of holders
of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or before such Quarterly Dividend Payment Date, in
which case dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Preferred Stock
in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. In addition to any other voting rights required
by law, the holders of shares of Series A Preferred Stock shall have the
following voting rights:
(A) Except as provided in paragraph (C) of this Section 3 and
subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to
1,000 votes on all matters submitted to a vote of the shareholders of
the Corporation. In the event the Corporation shall, at any time after
the Rights Declaration Date (i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
A-3
<PAGE>
(B) Except as otherwise provided herein or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted
to a vote of shareholders of the Corporation.
(C) (i) If, on the date used to determine shareholders of
record for any meeting of shareholders for the election of directors, a
default in preference dividends (as defined in subparagraph (v) below)
on the Series A Preferred Stock shall exist, the holders of the Series
A Preferred Stock shall have the right, voting as a class as described
in subparagraph (ii) below, to elect two directors (in addition to the
directors elected by holders of Common Stock). Such right may be
exercised (a) at any meeting of shareholders for the election of
directors or (b) at a meeting of the holders of shares of Voting
Preferred Stock (as hereinafter defined), called for the purpose in
accordance with the Bylaws of the Corporation, until all such
cumulative dividends (referred to above) shall have been paid in full
or until non-cumulative dividends have been paid regularly for at least
one year.
(ii) The right of the holders of Series A Preferred
Stock to elect two directors, as described above, shall be exercised as
a class concurrently with the rights of holders of any other series of
Preferred Stock upon which voting rights to elect such directors have
been conferred and are then exercisable. The Series A Preferred Stock
and any additional series of Preferred Stock which the Corporation may
issue and which may provide for the right to vote with the foregoing
series of Preferred Stock are collectively referred to herein as
"Voting Preferred Stock."
(iii) Each director elected by the holders of shares
of Voting Preferred Stock shall be referred to herein as a "Preferred
Director." A Preferred Director so elected shall continue to serve as
such director for a term of one year, except that upon any termination
of the right of all of such holders to vote as a class for Preferred
Directors, the term of office of the Preferred Directors shall
terminate. Any Preferred Director may be removed by, and shall not be
removed except by, the vote of the holders of record of a majority of
the outstanding shares of Voting Preferred Stock then entitled to vote
for the election of directors, present (in person or by proxy) and
voting together as a single class (a) at a meeting of the shareholders,
or (b) at a meeting of the holders of shares of such Voting Preferred
Stock, called for the purpose in accordance with the Bylaws of the
Corporation, or (c) by written consent signed by the holders of a
majority of the then outstanding shares of Voting Preferred Stock then
entitled to vote for the election of directors, taken together as a
single class.
(iv) So long as a default in any preference dividends
on the Series A Preferred Stock shall exist or the holders of any other
series of Voting Preferred Stock shall be entitled to elect Preferred
Directors, (a) any vacancy in the office of a Preferred Director may be
filled (except as provided in the following clause (b)) by an
instrument in writing signed by the remaining Preferred Director and
filed with the Corporation and (b) in the case of the removal of any
Preferred Director, the vacancy may be filled by the vote or written
A-4
<PAGE>
consent of the holders of a majority of the outstanding shares of
Voting Preferred Stock then entitled to vote for the election of
directors, present (in person or by proxy) and voting together as a
single class, at such time as the removal shall be effected. Each
director appointed as aforesaid by the remaining Preferred Director
shall be deemed, for all purposes hereof, to be a Preferred Director.
Whenever (x) no default in preference dividends on the Series A
Preferred Stock shall exist and (y) the holders of other series of
Voting Preferred Stock shall no longer be entitled to elect such
Preferred Directors, then the number of directors constituting the
Board of Directors of the Corporation shall be reduced by two.
(v) For purposes hereof, a "default in preference
dividends" on the Series A Preferred Stock shall be deemed to have
occurred whenever the amount of cumulative and unpaid dividends on the
Series A Preferred Stock shall be equivalent to six full quarterly
dividends or more (whether or not consecutive), and, having so
occurred, such default shall be deemed to exist thereafter until, but
only until, all cumulative dividends on all shares of the Series A
Preferred Stock then outstanding shall have been paid through the last
Quarterly Dividend Payment Date or until, but only until,
non-cumulative dividends have been paid regularly for at least one
year.
(D) Except as set forth herein (or as otherwise required by
applicable law), holders of Series A Preferred Stock shall have no
general or special voting rights and their consent shall not be
required for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 above are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares
of Series A Preferred Stock outstanding shall have been paid in full,
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
A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
value any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred
Stock; provided, that the Corporation may at any time redeem, purchase
A-5
<PAGE>
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 dissolution, liquidation or winding up) to the Series
A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, in any other Certificate of Designations creating
a series of Preferred Stock or as otherwise required or permitted by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Subject to the prior and superior rights of holders of any
shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Preferred Stock with respect to rights upon
liquidation, dissolution or winding up (voluntary or otherwise), upon
any liquidation, dissolution or winding up of the Corporation
(voluntary or otherwise), no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred
Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series A Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Capital Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preference by (ii)
1,000 (as appropriately adjusted as set forth in paragraph (C) of this
Section 6) (such number in clause (ii) being hereinafter
A-6
<PAGE>
referred to as the "Adjustment Number"). Following the payment of the
full amount of the Series A Liquidation Preference and the Capital
Adjustment in respect of all outstanding shares of Series A Preferred
Stock and Common Stock, respectively, holders of Series A Preferred
Stock and holders of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to 1 with respect to such Preferred
Stock and Common Stock, on a per share basis, respectively.
(B) In the event, however that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
Preferred Stock, if any, which rank on a parity with the Series A
Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of Series A Preferred Stock and 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 Capital 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 or pay any dividend on the 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.
Section 7. Consolidation, Merger, Combination, 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 A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1,000 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 the 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 A Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
A-7
<PAGE>
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank junior to
all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. At any time that any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority or more
of the outstanding shares of Series A Preferred Stock, voting separately as a
class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, to receive dividends, to
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by a duly authorized officer this _____ day of
December, 1999.
HOME-STAKE OIL & GAS COMPANY
By:
Name:_______________________________
_______________________________
0343k9.12.wpd
A-8
<PAGE>
Exhibit B
Form of Right Certificate
Certificate
No. R- ____ Rights
NOT EXERCISABLE AFTER THE EARLIER OF JANUARY 3, 2010, AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED AS SET FORTH IN THE RIGHTS
AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. AS SET FORTH IN THE
RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR
BECOMES AN ACQUIRING PERSON OR AN 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, ARE NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY ARE NULL
AND VOID.]*
Right Certificate
HOME-STAKE OIL & GAS COMPANY
This Right Certificate 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 January 3, 2000, between
Home-Stake Oil & Gas Company, an Oklahoma corporation (the "Corporation"), and
UMB Bank, N.A., as Rights Agent (the "Rights Agent"), as the same may be amended
from time to time (the "Rights Agreement"), to purchase from the Corporation at
any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., Kansas City, Missouri time, on January 3,
2010, at the office of the Rights Agent designated for such purpose, or at the
office of its successor as Rights Agent, one one-thousandth of a fully paid,
non-assessable share of Series A Junior Participating Preferred Stock, with a
par value of $1.00 per share (the "Preferred Shares"), of the Corporation, at a
purchase price of $22.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), payable in lawful money of the United States of America, upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed.
- --------
* If applicable, insert this portion of the legend and delete the preceding
sentence.
B-1
<PAGE>
The number of Rights evidenced by this Right Certificate (and the
number of one one-thousandths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of January 3, 2000, based on the Preferred
Shares as constituted at such date and may have been or in the future be
adjusted as a result of the occurrence of certain events, as more fully provided
in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of an Acquiring Person or any such Associate or
Affiliate who becomes a transferee after the Acquiring Person becomes such, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of an Acquiring Person or any such Associate or Affiliate who becomes
a transferee prior to or concurrently with the Acquiring Person becoming such,
such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
of one one-thousandth of a Preferred 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 happening of certain events,
including Triggering Events (as such term is defined in the Rights Agreement).
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 description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Corporation and the office of the Rights Agent designated for such purpose.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares or other securities 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 Corporation at a redemption price
of $.01 per Right (subject to adjustment as provided in the Rights Agreement)
payable either in cash or the Corporation's
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Common Shares, par value $.01 per share, or (ii) may be exchanged in whole or in
part for Common Shares or Preferred Shares.
No fractional Preferred Shares or Common Shares will be issued upon the
exercise or exchange of any Right or Rights evidenced hereby (other than
fractions of Preferred Shares which are one one-thousandth or integral multiples
of one one-thousandth of a Preferred Share, which may, at the election of the
Corporation, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Corporation which may at any time be
issuable on the exercise or exchange 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 shareholder of the Corporation or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or other
distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised or exchanged 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.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of ______________, ____.
ATTEST: HOME-STAKE OIL & GAS COMPANY
By:
Name:_______________________________ Name:___________________________________
Title:_______________________________ Title:________________________________
Countersigned:
UMB BANK, N.A.,
as Rights Agent
By: ______________________________________
Authorized Signatory
Name:
Title:
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<PAGE>
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)
__________ Rights represented by this Right Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint _____________________ Attorney, to transfer said Rights on the books of
the within-named Corporation, with full power of substitution.
Dated: ___________________________ ______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution participating in a recognized signature guarantee
medallion program.
CERTIFICATE
The undersigned hereby certifies, by checking the appropriate boxes and
signing below, that:
(1) The Rights evidenced by this Right Certificate _____ are _____ are not
being sold, assigned or transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Right Agreement); and
(2) After due inquiry and to the best knowledge of the undersigned, the
undersigned _____ did _____ did not acquire the Rights evidenced by
this Right Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).
Dated:___________________________ ______________________________
Signature
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder
if such holder desires to exercise Rights
represented by the Right Certificate.)
To HOME-STAKE OIL & GAS COMPANY:
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase the Preferred Shares,
Common Shares or other securities issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares, Common Shares or other
securities be issued in the name of and delivered to:
Please insert social security
or other identifying number_____________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number_____________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated:____________________________
_________________________________
Signature
0343k9.12.wpd
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<PAGE>
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker, dealer
or other eligible institution participating in a recognized signature guarantee
medallion program.
CERTIFICATE
The undersigned hereby certifies, by checking the appropriate boxes and
signing below, that:
(1) The Rights evidenced by this Right Certificate _____ are _____ are not
being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement); and
(2) After due inquiry and to the best knowledge of the undersigned, the
undersigned _____ did _____ did not acquire the Rights evidenced by
this Rights Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).
Dated:_____________________________ _________________________
Signature
NOTICE
The signature on the foregoing Forms of Assignment and Election to
Purchase and certificates 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 Corporation 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 such terms are defined in the Rights
Agreement) and such Assignment or Election to Purchase will not be honored.
0343k9.12.wpd
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<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES OF
HOME-STAKE OIL & GAS COMPANY
On November 4, 1999, the Board of Directors of Home-Stake Oil & Gas
Company (the "Corporation") declared a dividend distribution of one preferred
share purchase right (a "Right") for each outstanding share of Common Stock, par
value $.01 per share (the "Common Shares"), of the Corporation. The dividend is
payable to the shareholders of record of the Corporation on January 3, 2000 (the
"Record Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to Common Shares issued after the Distribution Date. Except as set forth below,
each Right, when it becomes exercisable, entitles the registered holder to
purchase from the Corporation one one-thousandth of a share of Series A Junior
Participating Preferred Stock, with a par value of $1.00 per share, of the
Corporation (the "Preferred Shares") at a price of $22.00 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement, as the
same may be amended from time to time (the "Rights Agreement"), between the
Corporation and UMB Bank, N.A., as Rights Agent, dated as of January 3, 2000.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates will be
distributed. The Rights will separate from the Common Shares upon the earlier to
occur of (i) the first date of public announcement of a person or group of
affiliated or associated persons having acquired beneficial ownership of 15% or
more of the outstanding Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 days (or such later date as the Board of
Directors of the Corporation (the "Board") may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the earlier of such dates
being called the "Distribution Date"). A person or group whose acquisition of
Common Shares causes a Distribution Date pursuant to clause (i) above is an
"Acquiring Person." The first date of public announcement that a person or group
has become an Acquiring Person is the "Shares Acquisition Date."
The Rights Agreement provides that, until the Distribution Date, 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 associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
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<PAGE>
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
to each initial record holder of certain Common Shares issued after the
Distribution Date), and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on January 3, 2010, unless earlier redeemed or
exchanged by the Corporation as described below.
In the event that any person or group becomes an Acquiring Person
(except pursuant to a tender or exchange offer which is for all outstanding
Common Shares at a price and on terms which a majority of certain members of the
Board determines to be adequate and in the best interests of the Corporation,
its shareholders and other relevant constituencies, other than such Acquiring
Person, its affiliates and associates (a "Permitted Offer")), each holder of a
Right will thereafter have the right (the "Flip-In Right") to receive upon
exercise, in lieu of Preferred Shares, the number of Common Shares (or, in the
discretion of the Board, one one-thousandths of a Preferred Share or, in certain
circumstances, other securities of the Corporation) having a value (immediately
prior to such triggering event) equal to two times the exercise price of the
Right. Notwithstanding the foregoing, following the occurrence of the event
described above, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void.
In the event that, at any time following the Shares Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, or (ii) more than 50% of the
Corporation's assets or earning power is sold or transferred, then each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right (the "Flip-Over Right") to receive, upon
exercise, common shares of the acquiring company having a value equal to two
times the exercise price of the Right. The holder of a Right will continue to
have the Flip-Over Right whether or not such holder exercises or surrenders the
Flip-In Right.
The Purchase Price payable, and the number of Preferred Shares, Common
Shares or other securities 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 Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
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The Purchase Price and number of outstanding Rights 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.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $10.00 per share but, if greater, will be entitled
to an aggregate dividend per share of 1,000 times the dividend declared per
Common Share. In the event of liquidation, the holders of the Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1,000 per
share; thereafter, and after the holders of the Common Shares receive a
liquidation payment of $1.00 per share, the holders of the Preferred Shares and
the holders of the Common Shares will share the remaining assets in the ratio of
1,000 to 1 (as adjusted) for each Preferred Share and Common Share so held,
respectively. Each Preferred Share will have 1,000 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 Preferred Share will be
entitled to receive 1,000 times the amount received per Common Share. These
rights are protected by customary antidilution provisions. In the event that the
amount of accrued and unpaid dividends on the Preferred Shares is equivalent to
six full quarterly dividends or more, the holders of the Preferred Shares shall
have the right, voting as a class, to elect two directors in addition to the
directors elected by the holders of the Common Shares until all cumulative
dividends on the Preferred Shares have been paid through the last quarterly
dividend payment date or until non-cumulative dividends have been paid regularly
for at least one year.
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 Preferred Shares will be issued (other than
fractions which are one one-thousandth or integral multiples of one
one-thousandth of a Preferred Share, which may, at the election of the Board, be
evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, and under certain other
circumstances, the Corporation may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (the "Redemption Price") which redemption shall be
effective upon the action of the Board. Additionally, following the Shares
Acquisition Date, the Corporation may redeem the then outstanding Rights in
whole, but not in part, at the Redemption Price, provided that such redemption
is in connection with a merger or other business combination transaction or
series of transactions involving the Corporation in which all holders of Common
Shares are treated alike but not involving an Acquiring Person or its affiliates
or associates.
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 may exchange the Rights (other than Rights
owned by the Acquiring Person, which will have
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<PAGE>
become void), in whole or in part, at an exchange ratio of one Common Share, or
one one-thousandth of a Preferred Share (or of a share of a class or series of
the Corporation's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
All of the provisions of the Rights Agreement may be amended by the
Board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board only in order to
cure any ambiguity, defect or inconsistency, to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or, subject to certain limitations, to shorten or
lengthen any time period under the Rights Agreement.
Until a Right is exercised or exchanged, the holder thereof, as such,
will have no right to vote or receive dividends and will have no other rights as
a shareholder of the Corporation. While the distribution of the Rights will not
be taxable to shareholders of the Corporation, shareholders may, depending upon
the circumstances, recognize taxable income should the Rights become exercisable
or upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Corporation's Registration Statement on
Form 8-A dated December __, 1999. A copy of the Rights Agreement is available
free of charge from the Corporation. This summary description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
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