SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of October 5, 1995
earliest event reported)
SHOWBOAT, INC.
(Exact name of Registrant as specified in charter)
Nevada
(State or other jurisdiction of incorporation)
1-7123 88-0090766
(Commission File (IRS Employee
Number) Identification No.)
2800 Fremont Street, Las Vegas, Nevada 89104
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, 702/385-9141
including area code
<PAGE>
Item 5. OTHER EVENTS
ADOPTION OF STOCKHOLDER RIGHTS PLAN
On October 5, 1995, the Board of Directors of the
Company declared a dividend of one Preferred Stock Purchase Right
(the "Right(s)") for each outstanding share of Common Stock, par
value $1.00 per share (the "Common Stock"), of the Company. The
dividend is payable as of October 16, 1995 to stockholders of
record on that date. Each Right entitles the registered holder
to purchase from the Company one one-hundredth (1/100) of a share
of a new series of preferred shares of the Company, designated as
Series A Junior Preferred Stock ("Preferred Stock"), at a price
of $120.00 per one one-hundredth (1/100) of a share (the
"Exercise Price"), subject to certain adjustments. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and
American Stock Transfer and Trust Company, as Rights Agent
("Rights Agent"), dated as of October 5, 1995.
Initially the Rights will not be exercisable,
certificates will not be sent to stockholders, and the Rights
will automatically trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of
Directors, become exercisable upon the close of business on the
day (the "Distribution Date") which is the earlier of (i) the
tenth day following a public announcement that a person or group
of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Company (an "Acquiring
Person") and (ii) the tenth business day (or such later date as
may be determined by the Board of Directors prior to such time as
any person or group of affiliated or associated persons becomes
an Acquiring Person) after the date of the commencement or
announcement of a person's or group's intention to commence a
tender or exchange offer the consummation of which would result
in the ownership of 30% or more of the Company's outstanding
<PAGE>
voting stock (even if no shares are actually purchased pursuant
to such offer); prior thereto, the Rights would not be
exercisable, would not be represented by a separate certificate,
and would not be transferable apart from the Company's Common
Stock, but will instead be evidenced, with respect to any of the
Common Stock certificates outstanding as of October 16, 1995, by
such Common Stock certificate with a copy of this Summary of
Rights attached thereto. An Acquiring Person does not include
(A) the Company, (B) any subsidiary of the Company, (C) any
employee benefit plan or employee stock plan of the Company or of
any subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Common Stock for or
pursuant to the terms of any such plan or (D) any person or group
whose ownership of 15% or more of the shares of voting stock of
the Company then outstanding results solely from (i) any action
or transaction or transactions approved by the Board of Directors
before such person or group became an Acquiring Person or (ii) a
reduction in the number of issued and outstanding shares of
voting stock of the Company pursuant to a transaction or
transactions approved by the Board of Directors (provided that
any person or group that does not become an Acquiring Person by
reason of clause (i) or (ii) above shall become an Acquiring
Person upon acquisition of an additional 1% of the Company's
voting stock unless such acquisition of additional voting stock
will not result in such person or group becoming an Acquiring
Person by reason of such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued
<PAGE>
after October 16, 1995 will contain a legend incorporating the
Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Company's Common Stock certificates
outstanding as of October 16, 1995 with or without a copy of the
Summary of Rights attached, will also constitute the transfer of
the Rights associated with the Common Stock 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
Company's Common Stock as of the close of business on the
Distribution Date and such separate certificates alone will
evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on
October 5, 2005, unless earlier redeemed by the Company as
described below.
The Preferred Stock is non-redeemable and, unless
otherwise provided in connection with the creation of a
subsequent series of preferred stock, subordinate to any other
series of the Company's preferred stock. The Preferred Stock may
not be issued except upon exercise of Rights. Each share of
Preferred Stock will be entitled to receive when, as and if
declared, a quarterly dividend in an amount equal to the greater
of $120.00 per share and 100 times the cash dividends declared on
the Company's Common Stock. In addition, the Preferred Stock is
entitled to 100 times any non-cash dividends (other than
dividends payable in equity securities) declared on the Common
Stock, in like kind. In the event of liquidation, the holders of
Preferred Stock will be entitled to receive for each share of
Series A Preferred Stock, a liquidation payment in an amount
equal to the greater of $12,000.00 or 100 times the payment made
per share of Common Stock. Each share of Preferred Stock will
have 100 votes, voting together with the Common Stock. In the
event of any merger, consolidation or other transaction in
which Common Stock is exchanged, each share of Preferred
Stock will be entitled to
<PAGE>
receive 100 times the amount received per share of Common Stock.
The rights of Preferred Stock as to dividends, liquidation and
voting are protected by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon
exercise of the Rights is subject to certain adjustments from
time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise
Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders
of Common Stock.
Unless the Rights are earlier redeemed or the
transaction is approved by the Board of Directors and the
Continuing Directors, in the event that, after the time that the
Rights become exercisable, the Company were to be acquired in a
merger or other business combination (in which any shares of the
Company's Common Stock are changed into or exchanged for other
securities or assets) or more than 50% of the assets or earning
power of the Company and its subsidiaries (taken as a whole) were
to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision
will be made so that each holder of record of a Right will from
and after such date have the right to receive, upon payment of
the Exercise Price, that number of shares of common stock of the
acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price. In addition,
unless the Rights are earlier redeemed, if a person or group
(with certain exceptions) becomes the beneficial owner of 15% or
more of the Company's voting stock (other than pursuant to a
tender or exchange offer (a "Qualifying Tender Offer") for all
outstanding shares of Common Stock that is approved by the Board
of Directors, after taking into account the long-term value of
the Company and all other factors they consider relevant in
the circumstances), the Rights Agreement
<PAGE>
provides that proper provision will be made so that each holder
of record of a Right, other than the Acquiring Person (whose
Rights will thereupon become null and void), will thereafter have
the right to receive, upon payment of the Exercise Price, that
number of shares of the Company's Preferred Stock having a market
value at the time of the transaction equal to two times the
Exercise Price (such market value to be determined with reference
to the market value of the Company's Common Stock as provided in
the Rights Agreement).
Fractions of shares of Preferred Stock (other than
fractions that are integral multiples of one one-hundredth
(1/100) of a share) may, at the election of the Company, be
evidenced by depositary receipts. The Company may also issue
cash in lieu of fractional shares which are not integral
multiples of one one-hundredth (1/100) of a share.
At any time on or prior to the close of business on the
tenth day after the time that a person has become an Acquiring
Person (or such later date as a majority of the Board of
Directors and a majority of the Continuing Directors (as defined
in the Rights Agreement) may determine), the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per
Right ("Redemption Price"). The Rights may be redeemed after the
time that any Person has become an Acquiring Person only if
approved by a majority of the Continuing Directors. Immediately
upon the effective time of the action of the Board of Directors
of the Company authorizing redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of the Rights will be to receive the Redemption Price.
<PAGE>
For as long as the Rights are then redeemable, the
Company may, except with respect to the redemption price or date
of expiration of the Rights, amend the Rights in any manner,
including an amendment to extend the time period in which the
Rights may be redeemed. At any time when the Rights are not then
redeemable, the Company may amend the Rights in any manner that
does not materially adversely affect the interests of holders of
the Rights as such. Amendments to the Rights Agreement from and
after the time that any Person becomes an Acquiring Person
requires the approval of a majority of the Continuing Directors
(as provided in the Rights Agreement).
Until a Right is exercised, the holder, as such, will
have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
As of September 30, 1995 there were 15,541,215 shares
of Common Stock issued and outstanding (and approximately
2,900,000 shares reserved for issuance under the Company's
existing stock option plans). 200,000 shares of Preferred Stock
have been reserved for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group who
attempts to acquire the Company on terms not approved by the
Company's Board of Directors. The Rights should not interfere
with any merger or other business combination approved by the
Board since they may be redeemed by the Company at $.01 per Right
at any time until the close of business on the tenth day (or such
later date as described above) after a person or group has
obtained beneficial ownership of 15% or more of the voting stock.
The form of Rights Agreement between the Company and
American Stock Transfer and Trust Company as rights agent,
specifying the terms of the Rights, which includes as Exhibit A
the form of Summary of Rights to Purchase Series A Junior
Preferred Stock, as Exhibit B the form of Right Certificate and
as Exhibit C the form of Certificate of Designations of the
Company setting forth the terms of the Preferred Stock are
attached hereto as exhibits and incorporated herein by reference.
The foregoing description of the Rights is qualified by reference
to such exhibits.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
(c) Exhibits.
4.01 Rights Agreement dated as of October 5, 1995 between
Showboat, Inc. and American Stock Transfer and Trust
Company as Rights agent. The Rights Agreement includes
as Exhibit B the form of Right Certificate and as
Exhibit C the form of Certificate of Designations.
28.01 Press Release, dated October 6, 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
SHOWBOAT, INC.
By: /s/________________________
Name: Leann Schneider
Title: Vice President Finance,
Treasurer and Chief
Financial Officer
October 12, 1995
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
NO.
4.01 Rights Agreement dated as of October 5, 1995
between Showboat, Inc. and American Stock
Transfer and Trust Company as Rights agent. The
Rights Agreement includes as Exhibit B the form
of Right Certificate and as Exhibit C the form of
Certificate of Designations.
28.01 Press Release, dated October 6, 1995.
EXHIBIT 4.01
RIGHTS AGREEMENT
<PAGE>
RIGHTS AGREEMENT
by and between
SHOWBOAT, INC.
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY,
as Rights Agent
_______________
Dated as of
October 5, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS 1
SECTION 2. APPOINTMENT OF RIGHTS AGENT 6
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES 6
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 8
SECTION 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF
RIGHTS 9
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES 11
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED
STOCK 11
SECTION 10. PREFERRED STOCK RECORD DATE 12
SECTION 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES 12
SECTION 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER OF
SHARES 16
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER 16
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 19
SECTION 15. RIGHTS OF ACTION 20
SECTION 16. AGREEMENT OF RIGHT HOLDERS 20
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER 21
SECTION 18. CONCERNING THE RIGHTS AGENT 21
SECTION 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF, THE
RIGHTS AGENT 22
<PAGE>
SECTION 20. DUTIES OF RIGHTS AGENT 22
SECTION 21. CHANGE OF RIGHTS AGENT 24
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES 24
SECTION 23. REDEMPTION 25
SECTION 24. NOTICE OF PROPOSED ACTIONS 26
SECTION 25. NOTICES 26
SECTION 26. SUPPLEMENTS AND AMENDMENTS 27
SECTION 27. SUCCESSORS 28
SECTION 28. BENEFITS OF THIS RIGHTS AGREEMENT 28
SECTION 29. NEVADA CONTRACT 28
SECTION 30. COUNTERPARTS 28
SECTION 31. DESCRIPTIVE HEADINGS 28
SECTION 32. SEVERABILITY 28
<PAGE>
AGREEMENT
Agreement, dated as of Ocotober 5, 1995, by and between
SHOWBOAT, INC., a Nevada corporation (the "Company"), and
American Stock Transferer and Trust Company, a New York
corporation (the "Rights Agent").
W I T N E S S E T H :
Whereas, on October 5, 1995, the Board of Directors of
the Company authorized the issuance of, and declared a dividend
payable in, one right (a "Right") for each share of Common Stock,
$1.00 par value per share, of the Company outstanding as of the
close of business on October 16, 1995 (the "Record Date"), each
such Right representing the right to purchase one one-hundredth
of a share of Series A Junior Preferred Stock of the Company
("Preferred Stock") having the rights and preferences set forth
in the form of Certificate of Designations attached hereto as
Exhibit C authorized by the Board of Directors on October 5,
1995, upon the terms and subject to the conditions hereinafter
set forth; and
Whereas, the Board of Directors of the Company further
authorized the issuance of one Right (subject to adjustment) with
respect to each share of Common Stock which may be issued between
the Record Date and the earlier to occur of the Expiration Date
or the Final Expiration Date (as such terms are hereinafter
defined);
Now, Therefore, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree
as follows:
Section 1. Certain Definitions
For purposes of this Agreement, the following terms
shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such
term is hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the Voting Stock of the Company then outstanding;
PROVIDED, that, an Acquiring Person shall not include (i) an
Exempt Person (as such term is hereinafter defined) or (ii) any
Person, together with all Affiliates and Associates of such
Person, who or which would be an Acquiring Person solely by
reason of (A) being the Beneficial Owner of shares of Voting
Stock of the Company, the Beneficial Ownership of which was
acquired by such Person pursuant to any action or transaction or
series of related actions or transactions approved by the Board
of Directors before such Person otherwise became an Acquiring
Person or (B) a reduction in the number of issued and outstanding
shares of Voting Stock of the Company pursuant to a transaction
or a series of related transactions approved by the Board of
Directors of the Company; PROVIDED, FURTHER, that in the event
such Person described in this clause (ii) does not become an
Acquiring Person by reason of subclause (A) or (B) of this clause
(ii), such Person nonetheless shall become an Acquiring Person in
<PAGE>
the event such Person thereafter acquires Beneficial Ownership of
an additional 1% of the Voting Stock of the Company, unless the
acquisition of such additional Voting Stock would not result in
such Person becoming an Acquiring Person by reason of subclause
(A) or (B) of this clause (ii). Notwithstanding the foregoing,
if the Board of Directors of the Company determines in good faith
(but only if at the time of such determination by the Board of
Directors there are then in office not less than two Continuing
Directors and such action is approved by a majority of the
Continuing Directors then in office) that a Person who would
otherwise be an "Acquiring Person" as defined pursuant to the
foregoing provisions of this paragraph (a) has become such
inadvertently, and such Person divests as promptly as practicable
a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person" as defined pursuant to
the foregoing provisions of this paragraph (a), then such Person
shall not be deemed an "Acquiring Person" for any purposes of
this Rights Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in
Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended ("Exchange Act"), as
in effect on the date of this Rights Agreement.
(c) "Associate" of a Person (as such term is hereinafter
defined) shall mean (i) with respect to a corporation, any
officer or director thereof or of any Subsidiary (as such term is
hereinafter defined) thereof, or any Beneficial Owner (as such
term is hereinafter defined) of 10% or more of any class of
equity security thereof, (ii) with respect to an association, any
officer or director thereof or of a Subsidiary thereof, (iii)
with respect to a partnership, any general partner thereof or any
limited partner thereof who is, directly or indirectly, the
Beneficial Owner of a 10% ownership interest therein, (iv) with
respect to a business trust, any officer or trustee thereof or of
any Subsidiary thereof, (v) with respect to any other trust or an
estate, any trustee, executor or similar fiduciary or any Person
who has a [15%] or greater interest as a beneficiary in the
income from or principal of such trust or estate, (vi) with
respect to a natural person, any relative or spouse of such
person, or any relative of such spouse, who has the same home as
such person, and (vii) any Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities (and correlative terms shall
have correlative meanings):
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act and Regulations 13D
and 13G thereunder (or any comparable or successor law or
regulation), in each case as in effect on the date hereof; or
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or the
fulfillment of a condition or both) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, other rights (other than these Rights),
warrants or options, or otherwise; PROVIDED, HOWEVER, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own", securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's
<PAGE>
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (B) the right to vote, alone
or in concert with others, pursuant to any agreement, arrangement
or understanding (whether or not in writing); PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of, or
to "Beneficially Own", any securities if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to a
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act
and (2) is not at the time reportable by such Person on a
Schedule 13D report under the Exchange Act (or any comparable or
successor report), other than by reference to a proxy or consent
solicitation being conducted by such Person; or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement
or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except as described in clause (B) of
subparagraph (ii) of this paragraph (d)) or disposing of any
securities of the Company; PROVIDED, HOWEVER, that for purposes
of determining Beneficial Ownership of securities under this
Rights Agreement, officers and directors of the Company solely by
reason of their status as such shall not constitute a group
(notwithstanding that they may be Associates of one another or
may be deemed to constitute a group for purposes of Section 13(d)
the Exchange Act) and shall not be deemed to own shares owned by
another officer or director of the Company.
Notwithstanding anything in this paragraph (d) to the
contrary, a Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own," any security beneficially owned by
another Person solely by reason of an agreement, arrangement or
understanding with such other Person for the purposes of: (x)
soliciting the Company's stockholders for the election of
director nominees or any other stockholder resolution, the
formation of and membership on any committee for the purpose of
promoting or opposing any stockholder resolution or for electing
a slate of nominees to the Company's Board of Directors, service
on such a slate of nominees, or agreement to a slate of director
nominees, PROVIDED, that such other Person retains the right at
any time to withdraw as a nominee or member of any such
committee, and to withhold or revoke any vote or proxy for or
against any such stockholder resolution or for such slate of
nominees; (y) entering into revocable voting agreements or the
granting or solicitation of revocable proxies with respect to any
of the matters described in the foregoing clause (x); or (z) the
sharing of expenses and the indemnification against expenses and
liabilities by any such other Person with respect to expenses
incurred or conduct occurring during the time such other Person
is a nominee or a member of any such committee described in the
foregoing clause (x). Further, notwithstanding anything in this
paragraph (d) to the contrary, a Person engaged in the business
of underwriting securities shall not be deemed the "Beneficial
Owner" of, or to "Beneficially Own," any securities acquired in
good faith in a firm commitment underwriting until the expiration
of forty days after the date of such acquisition.
<PAGE>
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of
Nevada are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Nevada time, on such date; PROVIDED, HOWEVER, that if such date
is not a Business Day it shall mean 5:00 P.M., Nevada time, on
the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company shall
collectively mean the Common Stock, $1.00 par value, of the
Company. "Common Stock" when used with reference to any Person
other than the Company which shall be organized in corporate form
shall mean the capital stock or other equity security with the
greatest per share voting power of such Person. "Common Stock"
when used with reference to any Person other than the Company
which shall not be organized in corporate form shall mean units
of beneficial interest which shall represent the right to
participate in profits, losses, deductions and credits of such
Person and which shall be entitled to exercise the greatest
voting power per unit of such Person.
(h) "Continuing Director" shall mean any member of the Board of
Directors, while such person is a member of the Board of
Directors, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative or nominee
of an Acquiring Person or of any such Affiliate or Associate, and
who either (i) was a member of the Board of Directors prior to
the time that any Person became an Acquiring Person (other than
pursuant to a Qualifying Tender Offer) or (ii) subsequently
became a member of the Board of Directors, and whose nomination
for election or election to the Board of Directors was
recommended or approved by a majority of the Continuing Directors
then on the Board of Directors.
(i) "Distribution Date" shall have the meaning set forth in
Section 3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in Section
1(b) hereof.
(k) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company or (iii) any employee benefit plan or
employee stock plan of the Company or any Subsidiary of the
Company, or any trust or other entity organized, appointed,
established or holding Common Stock for or pursuant to the terms
of any such plan.
(l) "Exercise Price" shall have the meaning set forth in
Sections 4 and 7(b) hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Fair Market Value" of any property shall mean the fair
market value of such property as determined in accordance with
Section 11(b) hereof.
(o) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(p) "Person" shall mean any individual, firm, corporation or
other entity.
(q) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
<PAGE>
(r) "Qualifying Tender Offer" shall mean a tender or exchange
offer for all outstanding shares of Common Stock of the Company
approved by a majority of the Board of Directors (PROVIDED, that
at the time of such approval of the Board of Directors there are
then in office not less than two Continuing Directors and such
offer is approved by a majority of the Continuing Directors then
in office), after taking into account the potential long-term
value of the Company and all other factors that they consider
relevant.
(s) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(t) "Right Certificate" shall have the meaning set forth in
Section 3(d) hereof.
(u) "Stock Acquisition Date" shall mean the first date on which
there shall be a public announcement by the Company or an
Acquiring Person that an Acquiring Person has become such (which,
for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) or such earlier date as a majority of the
Continuing Directors shall become aware of the existence of an
Acquiring Person.
(v) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having
voting power sufficient to elect a majority of the board of
directors or other persons performing similar functions are
beneficially owned, directly or indirectly, by such Person or by
any corporation or other entity that is otherwise controlled by
such Person.
(w) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(x) "Trading Day" shall have the meaning set forth in Section
11(b) hereof.
(y) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental
or regulatory authority in respect of any transfer of any
security, instrument or right, including Rights, shares of Common
Stock and shares of Preferred Stock.
(z) "Voting Stock" shall mean (i) the Common Stock of the
Company and (ii) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or
entitled to vote together with the Common Stock in respect of any
merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up. For
purposes of this Agreement, a stated percentage of the Voting
Stock shall mean a number of shares of the Voting Stock as shall
equal in voting power that stated percentage of the total voting
power of the then outstanding shares of Voting Stock in the
election of a majority of the Board of Directors or in respect of
any merger, consolidation, sale of all or substantially all of
the Company's assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board of
Directors of the Company for purposes of applying the definitions
contained in this Section 1 shall be made by the Board of
Directors in its good faith judgment, which determination shall
be binding on the Rights Agent and the holders of the Rights.
<PAGE>
Section 2. Appointment of Rights Agent
The Company hereby appoints the Rights Agent to act as
agent for the Company and the holders of the Rights in accordance
with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issuance of Right Certificates
(a) On the Record Date (or as soon as practicable thereafter),
the Company or the Rights Agent shall send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit A
(the "Summary of Rights"), by first class mail, postage prepaid,
to each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown
on the records of the Company.
(b) Until the close of business on the day which is the earlier
of (i) the tenth day after the Stock Acquisition Date or (ii) the
tenth business day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement
by any Person (other than an Exempt Person) of, or the first
public announcement of the intent of any Person (other than an
Exempt Person) to commence, a tender or exchange offer upon the
successful consummation of which such Person, together with its
Affiliates and Associates, would be the Beneficial Owner of 30%
or more of the then outstanding shares of Voting Stock of the
Company (irrespective of whether any shares are actually
purchased pursuant to any such offer) (the earlier of such dates
being herein referred to as the "Distribution Date"), (x) the
Rights shall be evidenced by the certificates for Common Stock
registered in the name of the holders of Common Stock (together
with, in the case of certificates for Common Stock outstanding as
of the Record Date, the Summary of Rights) and not by separate
Right certificates and the record holders of such certificates
for Common Stock shall be the record holders of the Rights
represented thereby and (y) each Right shall be transferable only
simultaneously and together with the transfer of a share of
Common Stock (subject to adjustment as hereinafter provided).
Until the Distribution Date (or, if earlier, the Expiration Date
or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for
transfer of the Right or Rights associated with the Common Stock
evidenced thereby, whether or not accompanied by a copy of the
Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to
the earlier of the Distribution Date, the Expiration Date or the
Final Expiration Date and, in certain circumstances provided in
Section 22 hereof, may be issued in respect of shares of Common
Stock that become outstanding after the Distribution Date.
Certificates for Common Stock (including, without limitation,
certificates issued upon original issuance, disposition from the
Company's treasury or transfer or exchange of Common Stock) after
the Record Date but prior to the earliest of the Distribution
Date, the Expiration Date, or the Final Expiration Date (or, in
certain circumstances as provided in Section 22 hereof, after the
Distribution Date) shall have impressed, printed, written or
stamped thereon or otherwise affixed thereto the following
legend:
This certificate also evidences and entitles the holder
hereof to the same number of Rights (subject to adjustment) as
the number of shares of Common Stock represented by this
<PAGE>
certificate, such Rights being on the terms provided under the
Rights Agreement between Showboat, Inc. and American Stock
Transfer and Trust Company (the "Rights Agent"), dated as of
October 5, 1995, as it may be amended from time to time (the
"Rights Agreement"), the terms of which are incorporated herein
by reference and a copy of which is on file at the principal
executive offices of Showboat, Inc. Under certain circumstances,
as set forth in the Rights Agreement, such Rights shall be
evidenced by separate certificates and shall no longer be
evidenced by this certificate. Showboat, Inc. shall mail to the
registered holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a
written request therefor. UNDER CERTAIN CIRCUMSTANCES AS
PROVIDED IN SECTION 7(E) OF THE RIGHTS AGREEMENT, RIGHTS ISSUED
TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES
OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID
AND MAY NOT BE TRANSFERRED TO ANY PERSON.
(d) As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and
the Rights Agent will, if requested, send), by first class mail,
postage prepaid, to each record holder of the Common Stock as of
the close of business on the Distribution Date, as shown by the
records of the Company, at the address of such holder shown on
such records, a certificate in the form provided by Section 4
hereof (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each share of Common Stock so
held. As of and after the Distribution Date, the Rights shall be
evidenced solely by Right Certificates and may be transferred by
the transfer of the Right Certificate as permitted hereby,
separately and apart from any transfer of one or more shares of
Common Stock.
Section 4. Form of Right Certificates
The Right Certificates (and the forms of election to
purchase shares, certificate and assignment to be printed on the
reverse thereof), when, as and if issued, 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 may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Common Stock or the Rights may from time to time be
listed or as the Company may deem appropriate to conform to usage
or otherwise and as are not inconsistent with the provisions of
this Rights Agreement. Subject to the provisions of Section 22
hereof, Right Certificates evidencing Rights whenever issued, (i)
shall be dated as of the date of issuance of the Rights they
represent and (ii) subject to adjustment from time to time as
provided herein, on their face shall entitle the holders thereof
to purchase such number of shares (including fractional shares
which are integral multiples of one-hundredth of a share) of
Preferred Stock as shall be set forth therein at the price
payable upon exercise of a Right provided by Section 7(b) hereof
as the same may from time to time be adjusted as provided herein
(the "Exercise Price").
<PAGE>
Section 5. Countersignature and Registration
(a) Each Right Certificate shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice
President, either manually or by facsimile signature, and have
affixed thereto the Company's seal or a facsimile thereof which
shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. Each
Right Certificate shall be countersigned by the Rights Agent
either manually or by facsimile signature and shall not be valid
for any purpose unless so countersigned. In case any officer of
the Company who shall have signed any Right Certificate shall
cease to be such officer of the Company before countersignature
by the Rights Agent and issuance and delivery of the certificate
by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with
the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the
Company. Any Right Certificate may be signed on behalf of the
Company by any person who, on the date of the execution of such
Right Certificate, shall be a proper officer of the Company to
sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or one or more
offices designated as the appropriate place for surrender of
Right Certificates upon exercise or transfer, and in such other
locations as may be required by law, 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 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 Section 7(e), 7(f) 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 Expiration Date or the Final Expiration Date,
any Right Certificate, may be (i) transferred or (ii) split up,
combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of
shares of Preferred Stock as the Right Certificate or Rights
Certificates surrendered then entitled such holder to purchase.
Any registered holder desiring to transfer any Right Certificate
shall surrender the Right Certificate at the office of the Rights
Agent designated for the surrender of Right Certificates with the
form of certificate and assignment on the reverse side thereof
duly endorsed (or enclosed with such Right Certificate a written
instrument of transfer in form satisfactory to the Company and
the Rights Agent), duly executed by the registered holder thereof
or his attorney duly authorized in writing, and with such
signature duly guaranteed. Any registered holder desiring to
split up, combine or exchange any Right Certificate shall make
such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate to be split up, combined or
exchanged at the office of the Rights Agent designated therefor.
Thereupon, the Rights Agent shall countersign and deliver to the
person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any Transfer Tax
that may be imposed in connection with any transfer, split up,
combination or exchange of any Right Certificates.
<PAGE>
(b) Subject to the provisions of Section 7(e), 7(f) and 14
hereof, upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, or upon surrender to the
Rights Agent and cancellation of the Right Certificate if
mutilated, the Company shall issue and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration
Date of Rights.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided
herein, including, without limitation, the restrictions on
exercisability set forth in Section 7(e) and 23(a) hereof).
Except as otherwise provided herein, the Rights may be exercised,
in whole or in part, at any time commencing with the Distribution
Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof
duly executed (with signatures duly guaranteed), to the Rights
Agent at the principal office of the Rights Agent in 40 Wall
Street, New York, New York, 10005, together with payment of the
Exercise Price for each Right exercised, subject to adjustment as
hereinafter provided, at or prior to the Close of Business on the
earlier of (i) October 5, 2005 (the "Final Expiration Date") or
(ii) the date on which the Rights are redeemed as provided in
Section 23 hereof (such earlier date being herein referred to as
the "Expiration Date").
(b) The Exercise Price shall initially be $120.00 for each one
one-hundredth (1/100) of a share of Preferred Stock issued
pursuant to the exercise of a Right. The Exercise Price and the
number of shares of Preferred Stock or other securities to be
acquired upon exercise of a Right shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof. The
Exercise Price shall be payable in lawful money of the United
States of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form
of election to purchase duly executed, accompanied by payment by
certified check, cashier's check, bank draft or money order
payable to the Company or the Rights Agent of the Exercise Price
for the shares to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of the
Right Certificate in accordance with Section 9(e) hereof, the
Rights Agent shall thereupon promptly (i) requisition from any
transfer agent of the Preferred Stock of the Company one or more
certificates representing the number of shares of Preferred Stock
to be so purchased, and the Company hereby authorizes and directs
such transfer agent to comply with all such requests, (ii) as
provided in Section 14(b), at the election of the Company, cause
depositary receipts to be issued in lieu of fractional shares of
Preferred Stock, (iii) if the election provided for in the
immediately preceding clause (ii) has not been made, requisition
from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with Section 14(b)
hereof, (iv) after receipt of such Preferred Stock certificates
and, if applicable, depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be
designated by such holder and (v) when appropriate, after
receipt, promptly deliver such cash to or upon the order of the
<PAGE>
registered holder of such Right Certificate; PROVIDED, HOWEVER,
that in the case of a purchase of securities, other than
Preferred Stock, pursuant to Section 13 hereof, the Rights Agent
shall promptly take the appropriate actions corresponding in such
case to that referred to in the foregoing clauses (i) through (v)
of this Section 7(c). Notwithstanding the foregoing provisions
of this Section 7(c), the Company may suspend the issuance of
shares of Preferred Stock upon exercise of a Right for a
reasonable period, not in excess of 90 days, during which the
Company seeks to register under the Securities Act of 1933, as
amended (the "Act"), and any applicable securities law of any
other jurisdiction, the shares of Preferred Stock to be issued
pursuant to the Rights; PROVIDED, HOWEVER, that nothing contained
in this Section 7(c) shall relieve the Company of its obligations
under Section 9(c) 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 his assign, subject to the
provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to
the contrary, from and after the time (the "invalidation time")
when any Person first becomes an Acquiring Person, other than
pursuant to a Qualifying Tender Offer, any Rights that are
beneficially owned by (x) such Acquiring Person (or any Associate
or Affiliate of such Acquiring Person), (y) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes
a transferee after the invalidation time or (z) a transferee of
such Acquiring Person (or any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the
invalidation time pursuant to either (I) a transfer from the
Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (II) a transfer
which the Board of Directors has determined is part of a plan,
arrangement or understanding which has the purpose or effect of
avoiding the provisions of this Section 7(e), and subsequent
transferees of such Persons referred to in clause (y) and (z)
above, shall be void without any further action and any holder of
such Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this Rights
Agreement. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) are complied
with, but shall have no liability to any holder of Right
Certificates or any other Person as a result of its failure to
make any determination with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. No Right
Certificate shall be issued pursuant to Section 3 hereof that
represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the provisions of this Section
7(e) or any Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the
provisions of this Section 7(e) or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the provisions of this Section 7(e) shall be
cancelled.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section
7 unless such registered holder shall have (i) completed and
signed the certificate following the form of election to purchase
set forth on the reverse side of the Right Certificate
<PAGE>
surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered
to the Rights Agent for cancellation or in cancelled form, or, if
surrendered to the Rights Agent, shall 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 Rights
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall cancel
and retire, any Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the
Company, or shall, at the written request of the Company, destroy
such cancelled Right Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of
Preferred Stock
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
shares of Preferred Stock or out of authorized and issued shares
of Preferred Stock held in its treasury, such number of shares of
Preferred Stock as will from time to time be sufficient to permit
the exercise in full of all outstanding Rights.
(b) The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of
Preferred Stock issued or reserved for issuance in accordance
with this Rights Agreement to be listed, upon official notice of
issuance, upon the principal national securities exchange, if
any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities
exchange, to be eligible for quotation in the National
Association of Securities Dealers' Automated Quotation System or
any successor thereto or other comparable quotation system.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred
Stock delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment
of the Exercise Price in respect thereof), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as soon
as practicable following the occurrence of the event described in
Section 11(a)(ii), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement
under the Act, with respect to the shares of Preferred Stock
purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable
for Preferred Stock, and (b) the date of the expiration of the
Rights. The Company may temporarily suspend, for a period of
time not to exceed ninety days, the issuance of shares of
Preferred Stock upon exercise of a Right in order to prepare and
file a registration statement under the Act and permit it to
<PAGE>
become effective. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and
until a registration statement under the Act (if required) shall
have been declared effective.
(e) The Company covenants and agrees that it will pay when due
and payable any and all federal and state Transfer Taxes which
may be payable in respect of the issuance or delivery of the
Right Certificates or of any shares of Preferred Stock issued or
delivered upon the exercise of Rights. The Company shall not,
however, be required to pay any Transfer Tax which may be payable
in respect of any transfer or delivery of a Right Certificate to
a Person other than, or the issuance or delivery of certificates
for Preferred Stock upon exercise of Rights in a name other than
that of, the registered holder of the Right Certificate, and the
Company shall not be required to issue or deliver a Right
Certificate or certificate for Preferred Stock to a Person other
than such registered holder until any such Transfer Tax shall
have been paid (any such Transfer Tax being payable by the holder
of such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such
Transfer Tax is due.
Section 10. Preferred Stock Record Date
(a) Each Person in whose name any certificate for shares of
Preferred Stock is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the
Preferred Stock represented thereby on, and such certificate
shall be dated as of, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the
Exercise Price (and any applicable Transfer Taxes) was made;
PROVIDED, HOWEVER, that, if the date of such surrender and
payment is a date upon which the Preferred Stock transfer books
of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate
shall be dated as of, the next succeeding Business Day on which
the Preferred Stock transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder
of a Right Certificate, as such, shall not be entitled to any
rights of a stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Exercise Price or Number of Shares
The Exercise Price and the number of shares of
Preferred Stock which may be purchased upon exercise of a Right
are subject to adjustment from time to time as provided in this
Section 11.
(a)
(i) In the event the Company shall at any time after the date of
this Rights Agreement (A) declare or pay any dividend on Common
Stock payable in shares of Common Stock, (B) subdivide or split
the outstanding shares of Common Stock into a greater number of
<PAGE>
shares or (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a reverse
split of the outstanding shares of Common Stock, then and in each
such event the number of shares of Preferred Stock issuable upon
the exercise of a Right after the record date for such event (if
one shall have been established or, if not, after the date of
such event) shall be the number of shares of Preferred Stock
issuable immediately prior to such event multiplied by a fraction
the numerator of which is the number of Rights outstanding
immediately prior to such event and the denominator of which is
the number of Rights outstanding immediately after such event and
the Exercise Price after such event shall be the Exercise Price
in effect immediately prior to such event multiplied by such
fraction. 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).
(ii) In the event that any Person (other than an Exempt Person),
alone or together with its Affiliates and Associates, shall
become an Acquiring Person, except pursuant to a Qualifying
Tender Offer, then, subject to the last sentence of Section 23(a)
and except as otherwise provided in this Section 11, each holder
of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive upon exercise of such Right
in accordance with the terms of this Rights Agreement and payment
of the Exercise Price, the greater of (1) the number of one one-
hundredths of a share of Preferred Stock for which such Right was
exercisable immediately prior to the first occurrence of the
event described in this Section 11(a)(ii) or (2) such number of
one one-hundredths of a share of Preferred Stock, based on the
per share Fair Market Value of the Preferred Stock (determined
pursuant to Section 11(b) hereof) on the date of such first
occurrence, having a value equal to twice the Exercise Price;
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).
(iii)In the event that the Company does not have available sufficient
authorized but unissued Preferred Stock to permit the
adjustments required pursuant to the foregoing subparagraph (i)
or the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii), the Company shall take all such
action as may be necessary to authorize and reserve for issuance
such number of additional shares of Preferred Stock as may from
time to time be required to be issued upon the exercise in full
of all Rights from time to time outstanding and, if necessary,
shall use its best efforts to obtain stockholder approval
thereof. In lieu of issuing shares of Preferred Stock in
<PAGE>
accordance with the foregoing subparagraphs (i) and (ii), the
Company may, if the Board of Directors determines (but only if at
the time of such determination by the Board of Directors there
are then in office not less than two Continuing Directors and
such action is approved by a majority of the Continuing Directors
then in office) that such action is necessary or appropriate and
not contrary to the interests of holders of Rights, elect to
issue or pay, upon the exercise of the Rights, cash, property,
shares of Preferred or Common Stock, or any combination thereof,
having an aggregate Fair Market Value equal to the Fair Market
Value of the shares of Preferred Stock which otherwise would have
been issuable pursuant to Section 11(a)(ii), which Fair Market
Value shall be determined by an investment banking firm selected
by the Board of Directors (but only if at the time of such
selection there are then in office not less than two Continuing
Directors and such selection is approved by a majority of the
Continuing Directors then in office). For purposes of the
preceding sentence, the Fair Market Value of the Preferred Stock
shall be as determined pursuant to Section 11(b). Subject to
Section 23 hereof, any such election by the Board of Directors of
the Company must be made and publicly announced within thirty
(30) days after the date on which the event described in Section
11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market
Value" of any share of Preferred Stock, Common Stock or any other
stock or any Right or other security or any other property on any
date shall be determined as provided in this Section 11(b). In
the case of a publicly-traded stock or other security, the Fair
Market Value on any date shall be deemed to be the average of the
daily closing prices per share of such stock or per unit of such
other security for the 30 consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date; PROVIDED,
HOWEVER, that in the event that the Fair Market Value per share
of any share of Common Stock is determined during a period which
includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on such stock
payable in shares of Common Stock or securities convertible into
shares of Common Stock, or (ii) the effective date of any
subdivision, split, combination, consolidation, reverse stock
split or reclassification of such stock, then, and in each such
case, the Fair Market Value shall be appropriately adjusted by
the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. 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 applicable transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange), or, if the securities are not listed or
admitted to trading on the New York Stock Exchange, as reported
in the applicable transaction reporting system with respect to
securities listed on the principal national securities exchange
on which such security is listed or admitted to trading; or, if
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 no bids for such security are quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Company. The
<PAGE>
term "Trading Day" shall mean a day on which the principal
national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business or,
if such security is not listed or admitted to trading on any
national securities exchange, a Business Day. If a security is
not publicly held or not so listed or traded, "Fair Market Value"
shall mean the fair value per share of stock or per other unit of
such other security, as determined by an independent investment
banking firm experienced in the valuation of securities selected
in good faith by the Board of Directors of the Company, or, if no
such investment banking firm is, in the good faith judgment of
the Board of Directors, available to make such determination, in
good faith by the Board of Directors of the Company; PROVIDED,
HOWEVER, that for purposes of making the adjustment provided for
by Section 11(a)(ii) hereof, the Fair Market Value of a share of
Preferred Stock shall not be less than 100% of the product of the
Fair Market Value of a share of Common Stock multiplied by the
higher of the then Dividend Multiple or Vote Multiple applicable
to the Preferred Stock (as defined in the Certificate of
Designations relating to the Preferred Stock) and shall not
exceed 105% of the product of the then Fair Market Value of a
share of Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the Preferred
Stock. In the case of property other than securities, the "Fair
Market Value" thereof shall be determined in good faith by the
Board of Directors of the Company based upon such appraisals or
valuation reports of such independent experts as the Board of
Directors of the Company shall in good faith determine to be
appropriate in accordance with good business practices and the
interests of the holders of Rights. Any such determination of
Fair Market Value shall be described in a statement filed with
the Rights Agent and shall be binding upon the Rights Agent.
(c) All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-hundredth of a share, as
the case may be.
(d) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Exercise Price
and the number of shares to be issued upon exercise of the Rights
as in the initial Right Certificates issued hereunder but,
nevertheless, shall represent the Rights as so adjusted.
(e) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock
upon exercise of the Rights below the then par value, if any, of
the shares of Preferred Stock, the Company shall use its best
efforts to take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of such
Preferred Stock at such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary notwithstanding,
in the event of any reclassification of stock of the Company or
any recapitalization, reorganization or partial liquidation of
the Company or similar transaction, the Company shall be entitled
to make such further adjustments in the number of shares of
Preferred Stock which may be acquired upon exercise of the
Rights, and such adjustments in the Exercise Price therefor, in
addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the
Company shall determine to be necessary or appropriate in order
for the holders of the Rights in such event to be treated
equitably and in accordance with the purpose and intent of this
Rights Agreement or in order that any such event shall not, but
<PAGE>
for such adjustment, in the opinion of counsel to the Company,
result in the stockholders of the Company being subject to any
United States federal income tax liability by reason thereof.
(g) In the event the Company shall at any time after the Record
Date make any distribution on the shares of Common Stock of the
Company, whether by way of a dividend or a reclassification of
stock, a recapitalization, reorganization or partial liquidation
of the Company or otherwise, in cash or any debt security, debt
instrument, real or personal property or any other property
(other than any shares of Common Stock or other capital stock of
the Company and other than any right or warrant to acquire any
such shares, including any debt security convertible into or
exchangeable for any such share, at less than the Fair Market
Value of such shares) and the amount of such cash dividend or the
Fair Market Value of such debt security, debt instrument or
property exceeds 150% of the aggregate amount of the cash
dividends declared or paid on the Common Stock of the Company in
the 15-month period immediately preceding such distribution, then
and in each such event, unless such distribution is part of or is
made in connection with a transaction to which Section 11(a)(ii)
or Section 13 hereof applies, the Exercise Price shall be reduced
by an amount equal to the cash or the Fair Market Value of such
distribution, as the case may be, per share of Common Stock of
the Company. For purposes hereof, the Fair Market Value of any
property distributed to the holders of shares of Common Stock of
the Company shall be the Fair Market Value of such property as
determined by an independent investment banking firm experienced
in the valuation of securities or the other property so
distributed, as the case may be, selected in good faith by the
Board of Directors of the Company, or, if no such investment
banking firm is in the good faith judgment of the Board of
Directors available to make such determination, in good faith by
the Board of Directors of the Company, whose determination shall
be final and binding on the Company, the Rights Agent and the
holders of Rights.
Section 12. Certification of Adjusted Exercise Price or Number
of Shares
Whenever an adjustment is made as provided in Section
11, 13 or 23(c), the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement
of the facts giving rise to such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in
accordance with Section 25. Notwithstanding the foregoing
sentence, the failure of the Company to make such certification
or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment. Any adjustment
to be made pursuant to Section 11, 13 or 23(c) of this Rights
Agreement shall be effective as of the date of the event giving
rise to such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have
knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power
(a) Except for any transaction approved by the Board of
Directors (but only if at the time of such approval by the Board
of Directors there are then in office not less than two
Continuing Directors and such action is approved by a majority of
the Continuing Directors then in office), in the event that, at
any time on or after the Distribution Date, (x) the Company
shall, directly or indirectly, consolidate with, or merge with
and into, any other Person or Persons (other than an Exempt
<PAGE>
Person) and the Company shall not be the surviving or continuing
corporation of such consolidation or merger, or (y) any Person or
Persons (other than an Exempt Person) shall, directly or
indirectly, consolidate with, or merge with and into, the
Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection
with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person (other than an
Exempt Person) or of the Company or cash or any other property,
or (z) the Company or one or more of its Subsidiaries shall,
directly or indirectly, sell or otherwise transfer to any other
Person or any Affiliate or Associate of such Person, in one or
more transactions, or the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any Persons in
one or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole), then, on the
first occurrence of any such event, proper provision shall be
made so that (i) each holder of record of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right
to receive, upon the exercise thereof and payment of the Exercise
Price in accordance with the terms of this Rights Agreement, such
number of shares of validly issued, fully paid, non-assessable
and freely tradeable Common Stock of the Principal Party (as
defined herein), not subject to any liens, encumbrances, rights
of first refusal or other adverse claims, as shall, based on the
Fair Market Value of the Common Stock of the Principal Party on
the date of the Consummation of such consolidation, merger, sale
or transfer, equal twice the Exercise Price; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue
of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Rights
Agreement; (iii) the term "Company" for all purposes of this
Rights Agreement shall thereafter be deemed to refer to such
Principal Party; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock in accordance with the
provisions of Section 9 hereof applicable to the reservation of
Preferred Stock) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter
be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise
of the Rights; PROVIDED, HOWEVER, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization,
reclassification of shares, reorganization or other extraordinary
transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Exercise Price, such cash, shares,
rights, warrants and other property which such holder would have
been entitled to receive had it, at the time of such transaction,
owned the shares of Common Stock of the Principal Party
purchasable upon the exercise of a Right, and such Principal
Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other property
and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in clause
(x), (y) or (z) above of this Section 13(a).
(b) "Principal Party" shall mean
(i)in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a) hereof: (A) the Person that
is the issuer of the securities into which shares of Common Stock
of the Company are changed or otherwise exchanged or converted in
such merger or consolidation, or, if there is more than one such
issuer, the issuer of the Common Stock of which has the greatest
<PAGE>
market value or (B) if no securities are so issued, (x) the
Person that is the other party to the merger or consolidation and
that survives such merger or consolidation, or, if there is more
than one such Person, the Person the Common Stock of which has
the greatest market value or (y) if the Person that is the other
party to the merger or consolidation does not survive the merger
or consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person
that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons as
is the issuer of Common Stock having the greatest market value of
shares outstanding; PROVIDED, HOWEVER, that in any such case, if
the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, the term "Principal Party"
shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of all of which are and have been so registered,
the term "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger
or sale or transfer of assets or earning power referred to in
Section 13(a) unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock that have not
been issued or reserved for issuance to permit exercise in full
of all Rights in accordance with this Section 13 and unless prior
thereto the Company and the Principal Party involved therein
shall have executed and delivered to the Rights Agent an
agreement confirming that the Principal Party shall, upon
consummation of such consolidation, merger or sale or transfer of
assets or earning power, assume this Rights Agreement in
accordance with Section 13(a) hereof and that all rights of first
refusal or preemptive rights in respect of the issuance of shares
of Common Stock of the Principal Party upon exercise of
outstanding Rights have been waived and that such transaction
shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as
practicable after the date of any consolidation, merger or sale
or transfer of assets or earning power referred to in Section
13(a) hereof, the Principal Party will:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective
<PAGE>
as soon as practicable after such filing and use its best efforts
to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the date of expiration of the Rights, and similarly comply
with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the
Rights on a national securities exchange or to meet the
eligibility requirements for quotation on Nasdaq;
(iii)and 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 (or any
successor form) under the Exchange Act. In the event that any of
the transactions described in Section 13(a) hereof shall occur at
any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore
been exercised shall, subject to the provisions of Section 7(e)
hereof, thereafter be exercisable in the manner described in
Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any
of its authorized securities or in its Certificate of
Incorporation or By-laws or other instrument governing its
corporate affairs, which provision would have the effect of
(i) causing such Principal Party to issue, in connection with, or
as a consequence of, the consummation of a transaction referred
to in this Section 13, shares of Common Stock of such Principal
Party at less than the then Fair Market Value per share
(determined pursuant to Section 11(b) hereof) or securities
exercisable for, or convertible into, Common Stock of such
Principal Party at less than such then Fair Market Value (other
than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special tax or similar payment in connection
with the issuance to any holder of a Right of Common Stock of
such Principal Party pursuant to the provisions of this Section
13, then, in such event, the Company shall not consummate any
such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived
or amended, or that the authorized securities shall be redeemed,
so that the applicable provision will have no effect in
connection with, or as a consequence of, the consummation of the
proposed transaction.
Section 14. Fractional Rights and Fractional Shares
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence
fractional Rights (I.E., Rights to acquire less than one one-
hundredth of a share of Preferred Stock), unless such fractional
Rights result from a transaction referred to in Section 11(a)(i)
hereof. If the Company shall determine not to issue such
fractional Rights, then, in lieu of such fractional Rights, there
shall be paid to the holders of record 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
Fair Market Value of a whole Right.
<PAGE>
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are
integral multiples of one-hundredth of a share) upon exercise of
the Rights or to distribute certificates which evidence
fractional shares (other than fractions which are integral
multiples of one-hundredth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its
election, issue depositary receipts evidencing fractions of
shares pursuant to an appropriate agreement between the Company
and a depositary selected by it, PROVIDED that such agreement
shall provide that the holders of such depositary receipts shall
have all of the rights, privileges and preferences to which they
would be entitled as owners of the Preferred Stock. With
respect to fractional shares that are not integral multiples of
one-hundredth of a share, if the Company does not issue such
fractional shares or depositary receipts in lieu thereof, there
shall be paid to the holders of record of Right Certificates at
the time such Right Certificates are exercised as herein provided
an amount in cash equal to the same fraction of the Fair Market
Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any
fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth of a share) upon
exercise of a Right.
Section 15. Rights of Action
All rights of action in respect of this Rights
Agreement, except the rights of action given to the Rights Agent
in Section 18 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution
Date, the holders of record of the Common Stock); and any holder
of record of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in his own
behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Rights Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Rights Agreement and 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 Rights Agreement.
Section 16. Agreement of Right Holders
Each holder of a Right, by accepting the same, consents
and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for Common Stock registered in the
name of the holders of Common Stock (together, as applicable,
with the Summary of Rights), which certificates for Common Stock
shall also constitute certificates for Rights, and not by
separate Right Certificates, and each Right shall be transferable
only simultaneously and together with the transfer of shares of
Common Stock;
(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
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder
No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of Preferred Stock or any other securities which may
at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof
(except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in
Section 7(f) hereof), or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Rights Agreement and the
exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted to be done by
the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and
expenses of defending against any claim of liability relating to
the Rights or this Rights Agreement.
(b) The Rights Agent shall be protected against, and shall incur
no liability for or in respect of, any action taken, suffered or
omitted by it in connection with its administration of this
Rights Agreement in reliance upon any Right Certificate or
certificate for Preferred Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
<PAGE>
Section 19. Merger or Consolidation of, or Change in Name of,
the Rights Agent
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate trust or
stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Rights 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 Rights
Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent
and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all
such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights 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; 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; in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent
The Rights Agent undertakes the duties and obligations
imposed by this Rights Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right
Certificates by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by the Chairman of the
Board, the President or any Vice President and by the Treasurer
or the Secretary of the Company and delivered to the Rights
Agent. Any such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Rights Agreement in reliance upon
such certificate.
<PAGE>
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Rights
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution
and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in
any Right Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or 13
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
receipt of a certificate describing 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 shares of Preferred Stock to be issued pursuant to this
Rights Agreement or any Right Certificate or as to whether any
shares of Preferred Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of the Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President or any
Vice President or the Secretary or the Treasurer of the Company,
and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the
Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
<PAGE>
Section 21. Change of Rights Agent
The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company
and to each transfer agent of the Common Stock and the Preferred
Stock by registered or certified mail. The Company may remove
the Rights Agent or any successor Rights Agent (with or without
cause) upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and the Preferred Stock by
registered or certified mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent.
Notwithstanding the foregoing provisions of this Section 21, in
no event shall the resignation or removal of a Rights Agent be
effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company
shall fail to make such appointment within a period of 30 days
after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by
the Company), then the incumbent Rights Agent or the holder of
record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state
thereof, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject
to supervision or examination in the conduct of its corporate
trust or stock transfer business by federal or state authorities
and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000 or (b) an
Affiliate controlled by a corporation described in clause (a) of
this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights
Agent without further act or deed, but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provisions, in the event of
resignation, removal or incapacity of the Rights Agent, the
Company shall have the authority to act as the Rights Agent until
a successor Rights Agent shall have assumed the duties of the
Rights Agent hereunder.
Section 22. Issuance of New Right Certificates
Notwithstanding any of the provisions of this Rights
Agreement or of the Rights to the contrary, the Company may, at
its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Exercise Price per share and the
number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in
accordance with the provisions of this Rights Agreement.
<PAGE>
Section 23. Redemption
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than
all of the then outstanding Rights, at any time prior to the
Close of Business on the earlier of (i) the tenth day following
the Stock Acquisition Date (subject to extension by the Company
as provided in Section 26 hereof) or (ii) the Final Expiration
Date, at a redemption price of $.01 per Right, subject to
adjustments as provided in subsection (c) below (the "Redemption
Price"); PROVIDED, HOWEVER, that from and after the time that any
Person shall become an Acquiring Person (other than pursuant to a
Qualifying Tender Offer), the Company may redeem the Rights only
if at the time of the action of the Board of Directors there are
then in office not less than two Continuing Directors and such
redemption is approved by a majority of the Continuing Directors
then in office. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the
Company's right of redemption hereunder.
(b) Without any further action and without any notice, the right
to exercise the Rights will terminate effective at the time of
the action of the Board of Directors ordering the redemption of
the Rights and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within 10 days after
the effective time of the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each notice of
redemption will state the method by which the payment of the
Redemption Price will be made. At the option of the Board of
Directors, the Redemption Price may be paid in cash to each
Rights holder or by the issuance of shares (and, at the Company's
election pursuant to Section 14(b) hereof, cash or depositary
receipts in lieu of fractions of shares other than fractions
which are integral multiples of one one-hundredth (1/100) of a
share) of Preferred Stock having a Fair Market Value equal to
such cash payment.
(c) In the event the Company shall at any time after the date of
this Rights Agreement (A) pay any dividend on Common Stock in
shares of Common Stock, (B) subdivide or split the outstanding
shares of Common Stock into a greater number of shares or (C)
combine or consolidate the outstanding shares of Common Stock
into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then, and in each such event,
the Redemption Price shall be adjusted so that the Redemption
Price after such event shall equal the Redemption Price
immediately prior to such event multiplied 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 outstanding
immediately prior to such event; PROVIDED, HOWEVER, that in each
case such adjustment to the Redemption Price shall be made only
if the amount of the Redemption Price shall be reduced or
increased by $.01 per Right.
<PAGE>
Section 24. Notice of Proposed Actions
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in
Section 11(a)(i) or 11(g) or (ii) to offer to the holders of
record of its Common Stock options, warrants, or other rights to
subscribe for or to purchase shares of Common Stock (including
any security convertible into or exchangeable for Common Stock)
or shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights,
or (iii) to effect any reclassification of its Preferred Stock or
Common Stock or any recapitalization or reorganization of the
Company, or (iv) to effect any consolidation or merger with or
into, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of
record of a Right Certificate, in accordance with Section 25,
notice of such proposed action, which shall specify the record
date for the purposes of such transaction referred to in Section
11(a)(i) or such dividend or distribution, or the date on which
such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date
for determining participation therein by the holders of record of
Common Stock or Preferred Stock, if any such date is to be fixed,
and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of record of the Preferred
Stock for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of
such proposed action or the date of participation therein by the
holders of record of Common Stock or Preferred Stock, whichever
shall be the earlier. The failure to give notice required by
this Section 24 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the
vote upon any such action.
(b) In case any of the transactions referred to in Section
11(a)(i), 11(g) or 13 of this Rights Agreement are proposed,
then, in any such case, the Company shall give to each holder of
Rights, in accordance with Section 25 hereof, notice of the
proposal of such transaction at least 10 days prior to
consummating such transaction, which notice shall specify the
proposed event and the consequences of the event to holders of
Rights under Section 11(a)(i), 11(g) or 13 hereof, as the case
may be, and, upon consummating such transaction, shall similarly
give notice thereof to each holder of Rights.
Section 25. Notices
Notices or demands authorized by this Rights Agreement
to be given or made by the Rights Agent or by the holder of
record of any Right Certificate or Right to or on the Company
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Showboat, Inc.
2800 Fremont Street
Las Vegas, Nevada 89104
Attention: Corporate Secretary
<PAGE>
Subject to the provisions of Section 21, any notice or demand
authorized by this Rights Agreement to be given or made by the
Company or by the holder of record of any Right Certificate or
Right to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as
follows:
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attention: Executive Vice President
Notices or demands authorized by this Rights Agreement to be
given or made by the Company or the Rights Agent to the holder of
record of any Right Certificate or Right shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 26. Supplements and Amendments
For as long as the Rights are then redeemable and
except as provided in the last sentence of this Section 26, the
Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders
of the Rights. At any time when the Rights are not then
redeemable and except as provided in the last sentence of this
Section 26, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend this Rights Agreement
without the approval of any holders of Right Certificates (i) to
cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provisions herein or (iii) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable, provided that no such supplement or
amendment pursuant to this clause (iii) shall materially
adversely affect the interest of the holders of Right
Certificates. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or
amendment. This Agreement may be amended or supplemented at any
time with the approval of a majority of the registered holders of
the Right Certificates (and, prior to the Distribution Date, the
Common Stock). Notwithstanding anything contained in this Rights
Agreement to the contrary, no supplement or amendment shall be
made which changes the Redemption Price or the Final Expiration
Date and supplements or amendments may be made after the time
that any Person becomes an Acquiring Person (other than pursuant
to a Qualifying Tender Offer) only if at the time of the action
of the Board of Directors approving such supplement or amendment
there are then in office not less than two Continuing Directors
and such supplement or amendment is approved by a majority of the
Continuing Directors then in office.
<PAGE>
Section 27. Successors
All of the covenants and provisions of this Rights
Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 28. Benefits of this Rights Agreement
Nothing in this Rights Agreement shall be construed to
give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights) any legal or
equitable right, remedy or claim under this Rights Agreement; but
this Rights Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the holders of record of the
Right Certificates (and, prior to the Distribution Date, the
holders of Common Stock in their capacity as holders of the
Rights).
Section 29. Nevada Contract
This Rights Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of
the State of Nevada and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state
applicable to contracts to be made and performed entirely within
such state.
Section 30. Counterparts
This Rights Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 31. Descriptive Headings
Descriptive headings of the several Sections of this
Rights Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the
provisions hereof.
Section 32. Severability
If any term, provision, covenant or restriction of this
Rights Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of
this Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
<PAGE>
In Witness Whereof, the parties hereto have caused
this Rights Agreement to be duly executed, all as of the day and
year first above written.
SHOWBOAT, INC.
Attest: By:
(SEAL) Name:
Title:
American Stock Transfer and
Trust Company
Attest: By:
(SEAL) Name:
<PAGE>
EXHIBIT A
<PAGE>
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE
RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS
ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE TRANSFERRED TO ANY PERSON.
SHOWBOAT, INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On October 5, 1995, the Board of Directors of Showboat,
Inc. (the "Company") declared a dividend distribution of one
Preferred Stock Purchase Right for each outstanding share of
Common Stock, par value $1.00 per share (the "Common Stock"), of
the Company. The distribution is payable as of October 16, 1995
to stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one one-hundredth
(1/100) of a share of preferred stock of the Company, designated
as Series A Junior Preferred Stock (the "Preferred Stock") at a
price of $120.00 per one one-hundredth (1/100) of a share
("Exercise Price"). The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between
the Company and American Stock Transfer and Trust Company, as
Rights Agent (the "Rights Agent").
AS DISCUSSED BELOW, INITIALLY THE RIGHTS WILL NOT BE
EXERCISABLE, CERTIFICATES WILL NOT BE SENT TO STOCKHOLDERS AND
THE RIGHTS WILL AUTOMATICALLY TRADE WITH THE COMMON STOCK.
The Rights, unless earlier redeemed by the Board of
Directors, become exercisable upon the close of business on the
day (the "Distribution Date") which is the earlier of (i) the
tenth day following a public announcement that a person or group
of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Company (an "Acquiring
Person") and (ii) the tenth business day (or such later date as
may be determined by the Board of Directors prior to such time as
any person or group of affiliated or associated persons becomes
an Acquiring Person) after the date of the commencement or
announcement of a person's or group's intention to commence a
tender or exchange offer the consummation of which would result
in the ownership of 30% or more of the Company's outstanding
voting stock (even if no shares are actually purchased pursuant
to such offer); prior thereto, the Rights would not be
exercisable, would not be represented by a separate certificate,
and would not be transferable apart from the Company's Common
Stock, but will instead be evidenced, with respect to any of the
Common Stock certificates outstanding as of October 16, 1995, by
such Common Stock certificate with a copy of this Summary of
Rights attached thereto. An Acquiring Person does not include
(A) the Company, (B) any subsidiary of the Company, (C) any
employee benefit plan or employee stock plan of the Company or of
any subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Common Stock for
or pursuant to the terms of any such
<PAGE>
plan or (D) any person or group whose ownership of 15% or more of
the shares of voting stock of the Company then outstanding
results solely from (i) any action or transaction or transactions
approved by the Board of Directors before such person or group
became an Acquiring Person or (ii) a reduction in the number of
issued and outstanding shares of voting stock of the Company
pursuant to a transaction or transactions approved by the Board
of Directors (provided that any person or group that does not
become an Acquiring Person by reason of clause (i) or (ii) above
shall become an Acquiring Person upon acquisition of an
additional 1% of the Company's voting stock unless such
acquisition of additional voting stock will not result in such
person or group becoming an Acquiring Person by reason of such
clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued
after October 16, 1995 will contain a legend incorporating the
Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender
for transfer of any of the Common Stock certificates outstanding
as of October 16, 1995, with or without a copy of this Summary of
Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Stock 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
Stock as of the close of business on the Distribution Date and
such separate certificates alone will evidence the Rights from
and after the Distribution Date.
The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on October
5, 2005, unless earlier redeemed by the Company as described
below.
The Preferred Stock is nonredeemable and, unless
otherwise provided in connection with the creation of a
subsequent series of preferred stock, subordinate to any other
series of the Company's preferred stock. The Preferred Stock may
not be issued except upon exercise of Rights. Each share of
Preferred Stock will be entitled to receive when, as and if
declared, a quarterly dividend in an amount equal to the greater
of $120.00 per share or 100 times the cash dividends declared on
the Company's Common Stock. In addition, Preferred Stock is
entitled to 100 times any non-cash dividends (other than
dividends payable in equity securities) declared on the Common
Stock, in like kind. In the event of the liquidation of the
Company, the holders of Preferred Stock will be entitled to
receive, for each share of Preferred Stock, a payment in an
amount equal to the greater of $12,000.00 or 100 times the
payment made per share of Common Stock. Each share of Preferred
Stock will have 100 votes, voting together with the Common Stock.
In the event of any merger, consolidation or other transaction in
which Common Stock is exchanged, each share of Preferred Stock
will be entitled to receive 100 times the amount received per
share of Common Stock. The rights of Preferred Stock as to
dividends, liquidation and voting are protected by anti-dilution
provisions.
The number of shares of Preferred Stock issuable upon
exercise of the Rights is subject to certain adjustments from
time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise
Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders
of Common Stock.
<PAGE>
Unless the Rights are earlier redeemed or the
transaction is approved by the Board of Directors and the
Continuing Directors, if the Company at any time after the
Distribution Date were to be acquired in a merger or other
business combination (in which any shares of Common Stock are
changed into or exchanged for other securities or assets) or more
than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) were to be sold or transferred in
one or a series of related transactions, the Rights Agreement
provides that proper provision will be made so that each holder
of record of a Right will from and after such date have the right
to receive, upon payment of the Exercise Price, that number of
shares of common stock of the acquiring company having a market
value at the time of such transaction equal to two times the
Exercise Price. In addition, unless the Rights are earlier
redeemed, in the event that a person or group becomes the
beneficial owner of 15% or more of the Company's voting stock
(other than pursuant to a tender or exchange offer (a "Qualifying
Tender Offer") for all outstanding shares of Common Stock that is
approved by the Board of Directors, after taking into account the
long-term value of the Company and all other factors they
consider relevant in the circumstances), the Rights Agreement
provides that proper provisions will be made so that each holder
of record of a Right, other than the Acquiring Person (whose
Rights will thereupon become null and void), will thereafter have
the right to receive, upon payment of the Exercise Price, that
number of shares of the Preferred Stock having a market value at
the time of the transaction equal to two times the Exercise Price
(such market value to be determined with reference to the market
value of the Company's Common Stock as provided in the Rights
Agreement).
Fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a
share) may, at the election of the Company, be evidenced by
depositary receipts. The Company may also issue cash in lieu of
fractional shares which are not integral multiples of one one-
hundredth of a share.
At any time on or prior to the close of business on the
earlier of (i) the tenth day after the time that a person has
become an Acquiring Person (or such later date as a majority of
the Board of Directors and a majority of the Continuing Directors
(as defined in the Rights Agreement) may determine) or
(ii) October 5, 2005, the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption
Price"). The Rights may be redeemed after the time that any
Person has become an Acquiring Person only if approved by a
majority of the Continuing Directors. Immediately upon the
effective time of the action of the Board of Directors of the
Company authorizing redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the
Company may, except with respect to the redemption price or date
of expiration of the Rights, amend the Rights in any manner,
including an amendment to extend the time period in which the
Rights may be redeemed. At any time when the Rights are not then
redeemable, the Company may amend the Rights in any manner that
does not materially adversely affect the interests of holders of
the Rights as such. Amendments to the Rights Agreement from and
after the time that any Person becomes an Acquiring Person
requires the approval of a majority of the Continuing Directors
(as provided in the Rights Agreement).
Until a Right is exercised, the holder, as such, will
have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
<PAGE>
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current
Report on Form 8-K dated October 12, 1995. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement which is incorporated in this summary description
herein by reference.
<PAGE>
EXHIBIT B
<PAGE>
FORM OF RIGHT CERTIFICATE
Certificate No. W- ______ Rights
NOT EXERCISABLE AFTER OCTOBER 5, 2005 OR EARLIER IF
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY AND UNDER CERTAIN OTHER
CIRCUMSTANCES, AT $.01 PER RIGHT (SUBJECT TO
ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS
PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO
BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID
AND MAY NOT BE TRANSFERRED TO ANY PERSON.
RIGHT CERTIFICATE
SHOWBOAT, INC.
This certifies that ____________________, or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement
dated as of October 5, 1995 (the "Rights Agreement") between
Showboat, Inc., a Nevada corporation (the "Company"), and
American Stock Transfer and Trust Company, a New York
corporation, (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 P.M. (Nevada time) on
October 16, 2005 at the office of the Rights Agent designated in
the Rights Agreement for such purpose, or its successor as Rights
Agent, in New York, New York, one one-hundredth (1/100) of a
fully paid nonassessable share of Series A Junior Preferred Stock
(the "Preferred Stock") of the Company at a purchase price of
$120.00, as the same may from time to time be adjusted in
accordance with the Rights Agreement (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price
and the number of shares of Preferred Stock 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 and, upon the happening of certain
events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced
by this Right Certificate, as provided in the Rights Agreement.
<PAGE>
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are 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 of the Rights Agent,
the Company and the holders of record of Right Certificates.
Copies of the Rights Agreement are on file at the principal
executive office of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent
designated in the Rights Agreement for such purpose, may be
exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred
Stock 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 may be redeemed by the
Company at its option or under certain other circumstances at a
redemption price of $.01 per Right.
No fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth
(1/100) of a share) are required to be issued upon the exercise
of any Right or Rights evidenced hereby, and in lieu thereof the
Company may cause depositary receipts to be issued and/or a cash
payment may be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of Preferred Stock or of any other securities
of the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a stockholder of the Company or any right to
vote for the election of directors or upon any matter submitted
to stockholders at meeting thereof, or to give or withhold
consent to any corporate action or to receive notice of meetings
or other actions affecting stockholders (except as provided in
the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of
_____________, 199_.
ATTEST: SHOWBOAT, INC.
By:
Secretary Title:
Countersigned:
[Rights Agent]
By:
Authorized Signature
<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 Certificates.)
FOR VALUE RECEIVED ______________________________
hereby sells, assigns and transfers unto
_________________________________________________________________
_________________________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Right Certificate, together
with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ______________________________
Attorney to transfer the within Right Certificate on the books of
the within-named Company, with full power of substitution.
Dated: ________________, 199__
Signature
Signature Guaranteed:
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
1. this Right Certificate [ ] is [ ] is not
being sold, assigned or transferred by or on behalf of a Person
who is or was an Acquiring Person or an Associate or an Affiliate
thereof (as such terms are defined in the Rights Agreement); and
2. after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement).
Dated: ______________________, 199__
Signature
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to exercise the
Right Certificate.)
TO SHOWBOAT, INC.:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to
purchase the shares of Preferred Stock issuable upon the exercise
of such Rights and requests that certificates for such share(s)
be issued in the following name:
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:
<PAGE>
Please insert social security or other identifying
number: _________________________________________________________
_________________________________________________________________
(Please print name and address)
Dated: _____________, 199__
Signature
(Signature must conform in all
respects to name of holder as
specified on the fact of this
Right Certificate)
Signature Guaranteed:
<PAGE>
EXHIBIT C
<PAGE>
CERTIFICATE
OF
DESIGNATION
OF
RIGHTS AND PREFERENCES
OF
SERIES A JUNIOR PREFERRED STOCK
OF
SHOWBOAT, INC.
(PURSUANT TO N.R.S. 78.195(6))
The undersigned, being the President and Secretary,
respectively, of Showboat, Inc., a Nevada corporation, hereby
certify that (a) the following resolution was duly adopted on
October 5, 1995, by the Board of Directors of such corporation,
for the purposes of establishing a separate series of such
corporation's authorized preferred stock and fixing the relative
rights and preferences of such series of preferred stock, and (b)
such resolution has not been subsequently modified or rescinded:
"RESOLVED, that in accordance with the provisions of ARTICLE
IV of the Amended and Restated Articles of Incorporation of the
Company, a series of Preferred Stock of the Company be, and
hereby is, created, and the voting powers, designations,
preferences, limitations, restrictions and relative,
participating, optional or other special rights of the shares of
such series, and the qualifications, limitations or restrictions
thereof, be, and hereby are, as follows:
1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such
series shall be 200,000.
2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the provisions for adjustment hereinafter set
forth, the holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, (i)
cash dividends in an amount per share (rounded to the nearest
cent) equal to 100 times the aggregate per share amount of all
cash dividends declared or paid on the Common Stock, $1.00 par
value per share, of the Company (the "Common Stock") and (ii) a
preferential cash dividend (the "Preferential Dividends"), if
any, in preference to the holders of Common Stock, on the first
day of February, May, August and November of each year (each 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, payable
in an amount (except in the case of the first Quarterly Dividend
Payment if the date of the first issuance of Series A Preferred
Stock is a date other than a Quarterly Dividend Payment date, in
which case such payment shall be a prorated amount of such
amount) equal to $120.00 per share of Series A Preferred Stock
<PAGE>
less the per share amount of all cash dividends declared on the
Series A Preferred Stock pursuant to clause (i) of this sentence
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 Company shall, at any
time after the issuance of any share or fraction of a share of
Series A Preferred Stock, make any distribution on the shares of
Common Stock of the Company, whether by way of a dividend or a
reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Company or otherwise, which is payable
in cash or any debt security, debt instrument, real or personal
property or any other property (other than cash dividends subject
to the immediately preceding sentence, a distribution of shares
of Common Stock or other capital stock of the Company or a
distribution of rights or warrants to acquire any such share,
including any debt security convertible into or exchangeable for
any such share, at a price less than the Fair Market Value (as
hereinafter defined) of such share), then, and in each such
event, the Company shall simultaneously pay on each then
outstanding share of Series A Preferred Stock of the Company a
distribution, in like kind, of 100 times such distribution paid
on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and
distributions on the Series A Preferred Stock to which holders
thereof are entitled pursuant to clause (i) of the first sentence
of this paragraph and pursuant to the second sentence of this
paragraph are hereinafter referred to as "Dividends" and the
multiple of such cash and non-cash dividends on the Common Stock
applicable to the determination of the Dividends, which shall be
100 initially but shall be adjusted from time to time as
hereinafter provided, is hereinafter referred to as the "Dividend
Multiple". In the event the Company shall at any time after
October 16, 1995 declare or pay any dividend or make any
distribution on Common Stock payable in shares of Common Stock,
or effect a subdivision or split or a combination, consolidation
or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then in each
such case the Dividend Multiple thereafter applicable to the
determination of the amount of Dividends which holders of shares
of Series A Preferred Stock shall be entitled to receive shall be
the Dividend Multiple applicable immediately prior to such event
multiplied 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 Company shall declare each Dividend at the same time
it declares any cash or non-cash dividend or distribution on the
Common Stock in respect of which a Dividend is required to be
paid. No cash or non-cash dividend or distribution on the Common
Stock in respect of which a Dividend is required to be paid shall
be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the
Common Stock shall be simultaneously paid, or set aside for
payment, on the Series A Preferred Stock.
(C) Preferential Dividends shall begin to accrue on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issuance of any
shares of Series A Preferred Stock. Accrued but unpaid Preferential
Dividends shall cumulate but shall not bear interest.
Preferential 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.
<PAGE>
3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a
vote of the holders of the Common Stock. The number of votes
which a holder of Series A Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Vote Multiple".
In the event the Company shall at any time after October 16,
1995 declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding
shares of Common Stock into a greater or lesser number of shares
of Common Stock, then in each such case the Vote Multiple
thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series A Preferred Stock
shall be entitled after such event shall be the Vote Multiple
immediately prior to such event multiplied by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Amended and
Restated Articles of Incorporation or Restated By-laws, 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 stockholders of the Company.
(C) In the event that the Preferential Dividends accrued on
the Series A Preferred Stock for four or more quarterly dividend
periods, whether consecutive or not, shall not have been declared
and paid or irrevocably set aside for payment, the holders of
record of Preferred Stock of the Company of all series (including
the Series A Preferred Stock), other than any series in respect
of which such right is expressly withheld by the Amended and
Restated Articles of Incorporation or the authorizing resolutions
included in any Certificate of Designations therefor, shall have
the right, at the next meeting of stockholders called for the
election of directors, to elect two members to the Board of
Directors, which directors shall be in addition to the number
required by the Restated By-laws prior to such event, to serve
until the next Annual Meeting and until their successors are
elected and qualified or their earlier resignation, removal or
incapacity or until such earlier time as all accrued and unpaid
Preferential Dividends upon the outstanding shares of Series A
Preferred Stock shall have been paid (or irrevocably set aside
for payment) in full. The holders of shares of Series A
Preferred Stock shall continue to have the right to elect
directors as provided by the immediately preceding sentence until
all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series A Preferred Stock shall have been
paid (or set aside for payment) in full. Such directors may be
removed and replaced by such stockholders, and vacancies in such
directorships may be filled only by such stockholders (or by the
remaining director elected by such stockholders, if there be one)
in the manner permitted by law; provided, however, that any such
action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.
(D) Except as otherwise required by the Amended and Restated
Articles of Incorporation or Restated By-laws or set forth
herein, holders of Series A Preferred Stock shall have no other
<PAGE>
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for the taking of any corporate
action.
4. CERTAIN RESTRICTIONS.
(A) Whenever Preferential Dividends or Dividends are in
arrears or the Company shall be in default of payment thereof,
thereafter and until all accrued and unpaid Preferential
Dividends and Dividends, whether or not declared, on shares
of Series A Preferred Stock outstanding shall have been paid
or set irrevocably aside for payment in full, and in addition to
any and all other rights which any holder of shares of Series A
Preferred Stock may have in such circumstances, the Company
shall not, except as required by Article XII or otherwise,
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration,
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity as to dividends with
the Series A Preferred Stock, unless dividends are 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 if the full dividends accrued thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 4(A), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, provided that the Company may at
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Company
ranking junior (both as to dividends and upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock (either as to dividends
or upon liquidation, dissolution or winding up), except in
accordance with a purchase offer made 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 Company shall not permit any Subsidiary (as
hereinafter defined) of the Company to purchase or otherwise
acquire for consideration any shares of stock of the Company
unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire
<PAGE>
such shares at such time and in such manner. A "Subsidiary" of
the Company shall mean any corporation or other entity of
which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of
directors of such corporation or other entity or other persons
performing similar functions are beneficially owned, directly
or indirectly, by the Company or by any corporation or other
entity that is otherwise controlled by the Company.
(C) The Company shall not issue any shares of Series A Preferred
Stock except upon exercise of Rights issued pursuant to that
certain Rights Agreement dated as of October 5, 1995 between the
Company and American Stock Transfer and Trust Company, as Rights
Agent, a copy of which is on file with the Secretary of the
Company at its principal executive office and shall be made
available to stockholders of record without charge upon written
request therefor addressed to said Secretary. Notwithstanding
the foregoing sentence, nothing contained in the provisions
hereof shall prohibit or restrict the Company from issuing for
any purpose any series of Preferred Stock with rights and
privileges similar to, different from, or greater than, those of
the Series A Preferred Stock.
5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares upon their retirement and
cancellation shall become authorized but unissued shares of
Preferred Stock, without designation as to series, and such
shares may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of
Directors.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary
or involuntary liquidation, dissolution or winding up of the
Company, no distribution shall be made (i) 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 the holders of shares of Series A Preferred Stock
shall have received for each share of Series A Preferred Stock,
subject to adjustment as hereinafter provided, (A) $12,000.00
plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment or, (B) if greater than the amount specified in
clause (i)(A) of this sentence, an amount equal to 100 times the
aggregate amount to be distributed per share to holders of Common
Stock, as the same may be adjusted as hereinafter provided and
(ii) to the holders of stock ranking on a parity upon
liquidation, dissolution or winding up with the Series A
Preferred Stock, unless simultaneously therewith distributions
are made ratably on the Series A Preferred Stock and all other
shares of such parity stock in proportion to the total amounts to
which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the
holders of such parity shares are entitled, in each case upon
such liquidation, dissolution or winding up. The amount to which
holders of Series A Preferred Stock may be entitled upon
liquidation, dissolution or winding up of the Company pursuant to
clause (i)(B) of the foregoing sentence is hereinafter referred
to as the "Participating Liquidation Amount" and the multiple of
the amount to be distributed to holders of shares of Common Stock
upon the liquidation, dissolution or winding up of the Company
applicable pursuant to said clause to the determination of the
Participating Liquidation Amount, as said multiple may be
adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Liquidation Multiple". In the
event the Company shall at any time after October 16, 1995
declare or pay any dividend on Common Stock payable in shares of
<PAGE>
Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of
Common Stock into a greater or lesser number of shares of Common
Stock, then, in each such case, the Liquidation Multiple
thereafter applicable to the determination of the Participating
Liquidation Amount to which holders of Series A Preferred Stock
shall be entitled after such event shall be the Liquidation
Multiple applicable immediately prior to such event multiplied by
a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
7. CERTAIN RECLASSIFICATIONS AND OTHER EVENTS.
(A) In the event that holders of shares of Common Stock
of the Company receive after October 16, 1995 in respect of their
shares of Common Stock any share of capital stock of the Company
(other than any share of Common Stock of the Company), whether by
way of reclassification, recapitalization, reorganization,
dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the dividend rights, voting
rights and rights upon the liquidation, dissolution or winding
up of the Company of the shares of Series A Preferred Stock shall
be adjusted so that after such event the holders of Series A
Preferred Stock shall be entitled, in respect of each share of
Series A Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately
prior to such adjustment, to (i) such additional dividends as
equal the Dividend Multiple in effect immediately prior to
such Transaction multiplied by the additional dividends which
the holder of a share of Common Stock shall be entitled to
receive by virtue of the receipt in the Transaction of such
capital stock, (ii) such additional voting rights as equal the
Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of
a share of Common Stock shall be entitled to receive by
virtue of the receipt in the Transaction of such capital
stock and (iii) such additional distributions upon
liquidation, dissolution or winding up of the Company as equal
the Liquidation Multiple in effect immediately prior to such
Transaction multiplied by the additional amount which the holder
of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company by virtue
of the receipt in the Transaction of such capital stock, as the
case may be, all as provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of
the Company receive after October 16, 1995 in respect of their
shares of Common Stock any right or warrant to purchase Common
Stock (including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Fair
Market Value of a share of Common Stock on the date of issuance
of such right or warrant, then and in each such event the
dividend rights, voting rights and rights upon the liquidation,
dissolution or winding up of the Company of the shares of Series
A Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple shall each be the product of the Dividend
Multiple, the Vote Multiple and the Liquidation Multiple, as the
case may be, in effect immediately prior to such event multiplied
by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such
issuance of rights or warrants plus the maximum number of shares
of Common Stock which could be acquired upon exercise in full of
all such rights or warrants and the denominator of which shall be
the number of shares of Common Stock outstanding
<PAGE>
immediately before such issuance of rights or warrants plus the
number of shares of Common Stock which could be purchased, at the
Fair Market Value of the Common Stock at the time of such issuance,
by the maximum aggregate consideration payable upon exercise in
full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of
the Company receive after October 16, 1995 in respect of their
shares of Common Stock any right or warrant to purchase capital
stock of the Company (other than shares of Common Stock),
including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock
of the Company (other than Common Stock), at a purchase price per
share less than the Fair Market Value of such shares of capital
stock on the date of issuance of such right or warrant, then and
in each such event the dividend rights, voting rights and rights
upon liquidation, dissolution or winding up of the Company of the
shares of Series A Preferred Stock shall each be adjusted so that
after such event each holder of a share of Series A Preferred
Stock shall be entitled, in respect of each share of Series A
Preferred Stock held, in addition to such rights in respect
thereof to which such holder was entitled immediately prior to
such event, to receive (i) such additional dividends as equal the
Dividend Multiple in effect immediately prior to such event
multiplied, first, by the additional dividends to which the
holder of a share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise and multiplied again by the
Discount Fraction (as hereinafter defined) and (ii) such
additional voting rights as equal the Vote Multiple in effect
immediately prior to such event multiplied, first, by the
additional voting rights to which the holder of a share of Common
Stock shall be entitled upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction and
(iii) such additional distributions upon liquidation, dissolution
or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such event multiplied, first, by the
additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or
winding up of the Company upon exercise of such right or warrant
by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction. For
purposes of this paragraph, the "Discount Fraction" shall be a
fraction the numerator of which shall be the difference between
the Fair Market Value of a share of the capital stock subject to
a right or warrant distributed to holders of shares of Common
Stock of the Company as contemplated by this paragraph
immediately after the distribution thereof and the purchase price
per share for such share of capital stock pursuant to such right
or warrant and the denominator of which shall be the Fair Market
Value of a share of such capital stock immediately after the
distribution of such right or warrant.
(D) For purposes of this Certificate of Designations, the
"Fair Market Value" of a share of capital stock of the Company
(including a share of Common Stock) on any date shall be deemed
to be the average of the daily closing price per share thereof
over the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that,
in the event that such Fair Market Value of any such share of
capital stock is determined during a period which includes any
date that is within 30 Trading Days after (i) the ex-dividend
date for a dividend or distribution on stock payable in shares of
such stock or securities convertible into shares of such stock,
or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or
reclassification of such stock, then, and in each such case, the
<PAGE>
Fair Market Value shall be appropriately adjusted by the Board of
Directors of the Company to take into account ex-dividend or post-
effective date trading. 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
applicable transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange), or, if the shares are not listed or admitted to
trading on the New York Stock Exchange, as reported in the
applicable transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the shares are listed or admitted to trading or, if the
shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-
counter market, as reported by Nasdaq or such other system then
in use, or if on any such date the shares are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the shares selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares are
listed or admitted to trading is open for the transaction of
business or, if the shares are not listed or admitted to trading
on any national securities exchange, on which the New York Stock
Exchange or such other national securities exchange as may be
selected by the Board of Directors of the Company is open. If
the shares are not publicly held or not so listed or traded on
any day within the period of 30 Trading Days applicable to the
determination of Fair Market Value thereof as aforesaid, "Fair
Market Value" shall mean the fair market value thereof per share
as determined in good faith by the Board of Directors of the
Company. In either case referred to in the foregoing sentence,
the determination of Fair Market Value shall be described in a
statement filed with the Secretary of the Company.
8. CONSOLIDATION, MERGER, ETC. In case the Company 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 each outstanding share of Series A
Preferred Stock shall at the same time be similarly exchanged for
or changed into the aggregate amount of stock, securities, cash
and/or other property (payable in like kind), as the case may be,
for which or into which each share of Common Stock is changed or
exchanged multiplied by the highest of the Vote Multiple, the
Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.
9. EFFECTIVE TIME OF ADJUSTMENTS.
(A) Adjustments to the Series A Preferred Stock required
by the provisions hereof shall be effective as of the time at
which the event requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect of
any adjustment to the voting rights, dividend rights or rights
upon liquidation, dissolution or winding up of the Company of
such shares required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of
or the requirement for such adjustment.
<PAGE>
10. NO REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable at the option of the Company or any holder
thereof. Notwithstanding the foregoing sentence of this Section,
the Company may acquire shares of Series A Preferred Stock in any
other manner permitted by law, the provisions hereof and the
Amended and Restated Articles of Incorporation of the Company.
11. RANKING. Unless otherwise provided in the Amended and
Restated Articles of Incorporation of the Company or a
Certificate of Designations relating to a subsequent series of
preferred stock of the Company, the Series A Preferred Stock
shall rank junior to all other series of the Company's preferred
stock as to the payment of dividends and the distribution of
assets on liquidation, dissolution or winding up and senior to
the Common Stock.
12. AMENDMENT. The provisions hereof and the Amended and
Restated Articles of Incorporation of the Company shall not be
amended in any manner which would adversely affect the rights,
privileges or powers of the Series A Preferred Stock without, in
addition to any other vote of stockholders required by law, the
affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series A Preferred Stock, voting together
as a single class.
RESOLVED, FURTHER, that the appropriate officers of this
corporation are authorized and directed to file a Certificate
containing the foregoing resolution with the Secretary of State
of Nevada in accordance with the applicable provisions of the
State if Nevada.
IN WITNESS WHEREOF, the undersigned has executed this
certificate as of the _____ day of October, 1995.
SHOWBOAT, INC.
By:
J. Kell Houssels, III,
President
By:
H. Gregory Nasky, Secretary
<PAGE>
STATE OF NEW JERSEY)
)ss
COUNTY OF ATLANTIC )
This instrument was acknowledged before me on October
__, 1995 by J. Kell Houssels, III, as President of Showboat,
Inc.
(SEAL)
(Signature of Notarial Officer)
(Title and rank)
(My commission expires: )
STATE OF NEVADA)
)ss
COUNTY OF CLARK)
This instrument was acknowledged before me on October
__, 1995 by H. Gregory Nasky, as Secretary of Showboat, Inc.
(SEAL)
(Signature of Notarial Officer)
(Title and rank)
(My commission expires: )
EXHIBIT 28.01
PRESS RELEASE
<PAGE>
Area Code 212/797-4646
FOR: SHOWBOAT, INC.
FROM: The Foristall Company, Inc.
130 Water Street, Suite 4M
New York, New York 10005
(Contacts: T.F. Curtin)
L.E. Foristall)
FOR IMMEDIATE RELEASE
LAS VEGAS, NEVADA, OCTOBER 6, 1995 .... Showboat, Inc.
(NYSE: SBO) announced today that its Board of Directors has
adopted a Rights Plan designed to protect Showboat, Inc.
shareholders in the event of a takeover action that would deny
them the full value of their investment.
Terms of the rights plan provide for a dividend distribution
of one right for each share of Common Stock of Showboat, Inc. to
holders of record at the close of business on October 16, 1995.
The rights will become exercisable only in the event, with
certain exceptions, an acquiring party accumulates 15 percent or
more of Showboat, Inc.'s voting stock, or if a party announces an
offer to acquire 30 percent or more. The rights will expire on
October 5, 2005. Each right will entitle the holder to buy one
one-hundredth of a share of a new series of preferred stock at
the price of $120.00. In addition, upon the occurrence of
certain events, holders of the rights will be entitled to
purchase either Showboat stock or shares in an "acquiring entity"
at half of market value.
Showboat, Inc. will generally be entitled to redeem the
rights at $.01 per right at any time until the tenth day
following the acquisition of a 15 percent position in its voting
stock.
<PAGE>
Commenting on the Rights Plan, J. Kell Houssels, President
and Chief Executive Officer of Showboat, Inc. said, "The Board of
Directors believes that the Rights Plan represents a sound and
reasonable means of safeguarding the interests of shareholders.
The plan is similar to those adopted by a number of other
companies."
Details of the new Rights Plan will be outlined in a letter
planned to be mailed to shareholders by the end of the month.
Showboat, Inc., through its subsidiaries, owns and operates
casino hotels in Las Vegas, Nevada, and Atlantic City, New Jersey
and partially owns and operates/manages the Sydney Harbour Casino
in Sydney, New South Wales, Australia. A gaming license
application is pending in the state of Indiana, and the Company
is also pursuing a riverboat gaming opportunity near St. Louis,
Missouri.
#########
Company Contact: M. Brad Straub, Vice President-Finance
Showboat Development Division
609/487-2018
Leann Schneider, Vice President-
Finance, Chief Financial Officer
702/385-9123
