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As filed with the Securities and Exchange Commission on December 11, 1996
Registration No. 333-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
Sponsored by
SOUTHWEST GAS CORPORATION
(Exact name of Registrant as specified in its charter)
CALIFORNIA 88-0085720
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
(702) 876-7237
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
--------------------
GEORGE C. BIEHL
Senior Vice President, Chief Financial Officer and Corporate Secretary
Southwest Gas Corporation
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
(702) 876-7237
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------------
Approximate date of commencement of proposed sale to the public: From time to
time
--------------------
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
-------------------------------
Amount Proposed maximum Proposed maximum Amount of
to be offering price per aggregate registration
Title of securities being registered registered share* offering price* fee
- ------------------------------------ ---------- ------------------ ---------------- ------------
<S> <C> <C> <C> <C>
Common Stock ($1 par value). . . . . . . 800,000 shares $19.00 $15,200,000 $4,606.06
</TABLE>
* Estimated on the basis of the aggregate number of shares which could be
sold during the two-year period after the effective date, solely for the
purpose of determining the registration fee pursuant to Rule 457. It is
not known how many shares will be purchased under the Plan or at what
prices such shares will be purchased. The average of the high and low
composite prices of the Common Stock as reported by the Consolidated Tape
Association on December 9, 1996 was $19.00 per share.
--------------------
As permitted by Rule 429, the Prospectus included in this Registration
Statement also relates to Registrant's Registration Statement on Form S-3 (No.
33-58137).
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933, or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
===============================================================================<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
Subject to Completion
Dated December 11, 1996
PROSPECTUS
===============================================================================
[SWG LOGO]
SOUTHWEST GAS CORPORATION
Dividend Reinvestment and Stock Purchase Plan
800,000 Shares of Common Stock, $1 Par Value
The Company is offering its shareholders, natural gas customers, and
employees an opportunity to purchase through the Company shares of its Common
Stock and to reinvest their Common Stock dividends automatically into shares of
Common Stock through a Dividend Reinvestment and Stock Purchase Plan (the Plan).
A summary of the Plan begins on page 3 of this Prospectus, which should be
retained for future reference. Holders of the Company's Common Stock who choose
not to participate in the Plan will receive cash dividends, as declared, in the
usual manner.
Shares of Common Stock acquired through the Plan will be purchased either
directly from the Company or the open market. The price of shares of Common
Stock purchased by participants in the Plan with reinvested dividends, initial
investments or optional payments will be (i) in the case of the purchase of
authorized but unissued shares of Common Stock from the Company, the composite
closing price of the stock on the "Investment Date" as reported on the
consolidated tape for New York Stock Exchange listed securities administered
by the Consolidated Tape Association (or, if no trading in the Common Stock
occurs on such date, the composite closing price on the next preceding date on
which trading occurred) or the weighted average composite closing price as
reported on the consolidated tape for the stock purchased during the
"Investment Period," and (ii) in the case of the purchase of shares of
Common Stock in the open market, the weighted average price (excluding
brokerage commissions) paid to obtain them during the "Investment Period."
The Common Stock is listed on both the New York and Pacific Stock
Exchanges. The annual expenses payable by the Company in connection with the
operation of the Plan are approximately $20,000.
_________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
_________________
The date of this Prospectus is ______________ , 199_<PAGE>
<PAGE>
AVAILABLE INFORMATION
Southwest Gas Corporation (the "Company") is subject to the informational
requirements of the Securities Exchange Act of 1934 (the "Exchange Act") and,
in accordance therewith, files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). The reports,
proxy statements and other information filed by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; 75 Park
Place, New York, New York 10007; and 230 South Dearborn Street, Room 3190,
Chicago, Illinois 60604. Copies of such material may also be obtained at
prescribed rates from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
such material may be inspected at the offices of the New York Stock Exchange
or the Pacific Stock Exchange.
This Prospectus does not contain all the information set forth in the
Registration Statement and exhibits thereto which the Company has filed with
the Commission under the Securities Act of 1933, and reference is hereby made
to such Registration Statement, including the exhibits thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Incorporated by reference in this Prospectus are the following documents
filed by the Company with the Commission:
1. Annual Report on Form 10-K for the year ended December 31, 1995.
2. Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996; June 30, 1996; and September 30, 1996.
3. Current Reports on Form 8-K dated January 8, 1996; February 14,
1996; March 5, 1996; May 2, 1996; July 19, 1996; July 26, 1996; July
31, 1996; and November 4, 1996.
4. Descriptions of the Company's Common Stock contained in Form 8-A
filed pursuant to Section 12 of the Exchange Act.
5. All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date
of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of the Prospectus has been delivered, upon
the written or oral request of such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in this
Prospectus by reference, other than certain exhibits to such documents.
Written or oral requests for such copies should be directed to: Shareholder
Services, Southwest Gas Corporation, P.O. Box 98511, Las Vegas, Nevada
89193-8511, (800) 331-1119 or (702) 876-7280.
2<PAGE>
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THE COMPANY
The registrant, Southwest Gas Corporation, is incorporated under the laws
of the State of California effective March 1931. The Company is a natural
gas utility serving over 1 million customers in Arizona, California and
Nevada.
The executive offices of the Company are located at 5241 Spring Mountain
Road, P.O. Box 98510, Las Vegas, Nevada 89193-8510, telephone number (702)
876-7237.
USE OF PROCEEDS
To the extent that authorized but unissued shares of Common Stock are
purchased under the Plan from the Company, the net proceeds from their sale
will be used in connection with the Company's construction program, to pay for
additional capital improvements to the Company's facilities, and for other
corporate purposes. Pending disbursement for this purpose, such proceeds may
be used to reduce the amount of the Company's short-term indebtedness. The
Company cannot predict how many shares of Common Stock will be sold under the
Plan and, therefore, cannot estimate the amount of net proceeds that it will
receive.
DESCRIPTION OF THE DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company is offering its shareholders, natural gas customers,
employees and residents of Arizona, California and Nevada an opportunity to
purchase shares of its Common Stock directly through the Company and to
reinvest their Common Stock dividends automatically into shares of Common
Stock through the Plan.
The following is a detailed description, in question and answer form, of
the Plan. For additional information concerning the Plan, you may telephone
the Company at (800) 331-1119 or (702) 876-7280.
PURPOSE
1. What is the purpose of the Plan?
The purpose of the Plan is to provide to Company shareholders, natural
gas customers and employees and residents of Arizona, California and Nevada a
simple and convenient method of investing in shares of the Company's Common
Stock. Shares purchased under the Plan will be either, (i) authorized but
unissued shares purchased from the Company ("Original Issue Shares") or (ii)
outstanding shares purchased in the open market or through negotiated
transactions ("Open Market Shares"). The decision to purchase shares on the
open market will depend upon the relationship of the purchase price of the
shares of Common Stock and book value of such stock. To the extent shares
will be purchased directly from the Company, the Company will use the proceeds
for its continuing construction program and for other corporate purposes.
FEATURES
2. What are the features of the Plan?
A natural gas customer, employee of the Company or a resident of Arizona,
California or Nevada, who is not already a shareholder, may make an initial
investment in shares of the Company's Common Stock by making a minimum payment
of $100. Thereafter, a participant may invest in additional shares of Common
Stock by making optional payments of no less than $25; provided that the
participant's initial investment and/or optional payments in aggregate do not
exceed $50,000 per calendar year.
Participants must reinvest all of their cash dividends automatically in
additional shares of Common Stock of the Company when the total shares owned
by a participant are less than 250 shares. Participants with 250 or more
3<PAGE>
<PAGE>
shares have the option of receiving one-half of their dividends in cash, while
participants who deposit and maintain all of their shares with the Plan for
safekeeping purposes only will have the option of receiving all of their
dividends in cash.
The Company will pay any brokerage commissions or service fees for
purchases of Common Stock under the Plan and it will pay all costs for
administration of the Plan.
Full investment of funds is possible under the Plan because fractions of
shares, as well as full shares, will be credited to participants' accounts.
In addition, dividends on such fractions, as well as full shares, will be
credited to participants' accounts. Regular statements of account will
provide simplified record keeping.
ADMINISTRATION
3. Who administers the Plan for Participants?
The Company administers the Plan, maintains records, sends statements of
account to participants and performs other duties relating to the Plan. The
Company will appoint an independent agent ("Agent") to act for Plan
participants in purchasing and selling shares in the open market through
negotiated transactions and, under limited circumstances, from the Company.
Subject to the objective of obtaining the lowest overall cost of shares
purchased, the Agent will have full discretion as to all matters relating to
purchases and sale of such shares. Shares of Common Stock purchased by a
participant under the Plan will be registered in the name of a nominee of the
Company and will be held by the nominee for participants' accounts until the
Company is otherwise instructed by the participant.
4. Where should correspondence regarding the Plan be directed?
All correspondence concerning the Plan should be addressed to:
Shareholder Services
Southwest Gas Corporation
P.O. Box 98511
Las Vegas, NV 89193-8511
PARTICIPATION
5. Who may participate in the Plan?
All shareholders of Common Stock, natural gas customers, employees and
residents of Arizona, California and Nevada are eligible to participate in the
Plan.
An account may be opened in the participant's own name, in the joint name
of the participant and another person, or in the participant's name as
custodian for a minor or as trustee for another person by completing the
Enrollment and Authorization Form ("Enrollment Form") in the proper manner.
6. How does an eligible individual join the Plan?
* If you are a shareholder of record, you may join the Plan by
completing and returning an Enrollment Form. If you are a beneficial
shareholder (i.e., the record shareholder is your nominee), evidence
acceptable to the Company regarding your ownership of the Company's Common
Stock will have to accompany the Enrollment Form.
* If you are a natural gas customer, you may join the Plan by
completing an Enrollment Form and returning it to the Company along with a
minimum initial investment of $100.
4<PAGE>
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* If you are an employee of the Company and participate in the
Company's EIP, you may join the Plan by completing and returning an Enrollment
Form. If you are an employee of the Company and do not participate in the
Company's EIP, you may join the Plan by completing an Enrollment Form and
returning it along with a minimum initial investment of $100 to the Company.
* If you are a resident of Arizona, California or Nevada and do not
otherwise qualify to participate in the Plan, you may join the Plan by
completing an Enrollment Form and returning it along with a minimum initial
investment of $100 to the Company.
Enrollment Forms will be furnished to you at any time upon request to
Shareholder Services, Southwest Gas Corporation, P.O. Box 98511, Las Vegas,
Nevada 89193-8511, or by telephoning the Company at (800) 331-1119 or
(702) 876-7280.
7. When can an eligible individual join the Plan?
A shareholder and an employee who is participating in the Company's EIP
may join the Plan at any time. If an Enrollment Form is received on or before
the record date for a dividend payment, reinvestment of dividends will begin
with that dividend. If the Enrollment Form is received after the record date,
reinvestment of dividends will begin with the next dividend payment date.
(See Question 10.)
Natural gas customers, employees and residents of Arizona, California and
Nevada who are not already shareholders will join the Plan once their initial
investment of $100 has been used to purchase Common Stock. An initial
investment of $100 received during any month will be invested as of the next
Investment Date or during the next Investment Period. (See Question 9.) With
the purchase of Common Stock, such customers or employees will become Plan
participants.
8. What does the Enrollment Form provide?
The Enrollment Form authorizes the Company to do the following:
Initial Investment -- Upon receipt of a minimum initial investment
payment of $100 from a natural gas customer, employee or resident of Arizona,
California and Nevada who is not already a shareholder, the Company or the
Agent will purchase Common Stock for the account of the new participant on the
next Investment Date or during the next Investment Period. (See Question 9.)
Optional Payments -- Upon receipt of optional payments from a minimum of
$25 up to a maximum of $50,000 per calendar year, the Company or the Agent
will purchase Common Stock for the participant's account on the next
Investment Date or during the next Investment Period. (See Question 11.)
Dividend Reinvestment -- The Company or the Agent will automatically
reinvest dividends on all shares of Common Stock held in Plan accounts on the
Investment Date or during the next Investment Period that coincides with the
payment of dividends for shares of Common Stock. (See Question 10.) The
Company or the Agent will also automatically reinvest dividends on all of the
shares of Common Stock held of record by a participant outside the Plan.
Participants with a total of 250 or more shares of Common Stock will have the
option of receiving one-half of their dividends in cash. Participants who
deposit and maintain all of their shares with the Plan for safekeeping
purposes only will have the option of receiving all of their dividends in
cash.
5<PAGE>
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INITIAL INVESTMENTS
9. When will initial investment payments be invested?
The timing for the investment of the initial payments depends upon
whether the Common Stock will be purchased by the Company or the Agent. If
the purchases are made by the Company of Original Issue Shares, the purchases
will occur twice during the month. If the purchases are made by the Agent of
Original Issue or Open Market Shares, the purchases will occur once each
month. No interest will be paid on payments received and held by the Company
prior to investment.
Company Purchases -- Initial investment payments received by the Company
by the 10th day of any month (or the first business day following the 10th, if
such day is not a business day) will be invested in Original Issue Shares on
the first business day following the 14th day of the month. Initial
investment payments received by the Company after the 10th and on or before
the 25th day of any month (or the first business day following the 25th, if
such day is not a business day) will be invested in Original Issue Shares on
the first business day of the following month. Such dates are the "Investment
Date(s)" for purposes of the Plan. The Company may delay or authorize the
Agent to make such purchases during periods when the Plan is being marketed or
during other distributions of Common Stock.
Agent Purchases -- Initial investment payments received by the 25th day
of any month will be invested in Original Issue or Open Market Shares by the
Agent during the 30-day period commencing on the 26th day of the month. Such
period is the "Investment Period" for the purposes of the Plan.
Upon written request received by the Company on or before the Investment
Date or the day before the start of the Investment Period in which the initial
investment payment is being held by the Company, a participant may, without
withdrawing from the Plan, receive the return of a portion of the initial
investment payment, provided that a minimum of $100 is maintained in the Plan.
REINVESTED DIVIDENDS
10. When will dividends be reinvested?
Any dividends on Common Stock to be reinvested will be reinvested on the
Investment Date or Investment Period coinciding with the payment of a dividend
for shares of Common Stock. Common Stock dividends have ordinarily been paid
on the first business day of March, June, September, and December, but no
assurance can be given that the Company will continue to pay dividends on this
basis.
Instructions regarding the automatic reinvestment of dividends on shares
of record will be effective on the next dividend payment date if the
shareholder's Enrollment Form is received by the Company by the record date
(which is normally the 15th calendar day of the month preceding the month in
which a dividend is paid) established for a dividend payment. Instructions
received after the record date for a dividend will not be effective until the
next dividend payment date following the dividend payment date on which the
instructions would otherwise have been effective.
OPTIONAL PAYMENTS
11. Who is eligible to make optional payments?
A participant is eligible to make optional cash payments of at least $25
at any time. An optional cash payment may be made when joining the Plan by
enclosing the payment with the Enrollment Form. Thereafter, optional cash
payments should be accompanied by the form provided with your statement of
account.
Optional cash payments can not be less than $25 and can not exceed
$50,000 per calendar year per participant. Optional cash payments shall be
made by check or money order payable to: Southwest Gas Corporation DRSPP, P.O.
Box 98511, Las Vegas, Nevada 89193-8511, Attention: Shareholder Services.
Your Plan account number should be included on all checks.
6<PAGE>
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12. When will optional payments be invested and when will dividends be paid
on shares purchased with optional payments?
The timing for the investment of optional payments depends upon whether
the Common Stock will be purchased by the Company or the Agent. If the
purchases are made by the Company of Original Issue Shares, the purchases will
occur twice during the month. If the purchases are made by the Agent of
Original Issue or Open Market Shares, the purchases will occur once each
month. No interest will be paid on payments received and held by the Company
prior to investment.
Company Purchases -- Optional payments received by the Company by the
10th day of any month (or the first business day following the 10th, if such
day is not a business day) will be invested in Original Issue Shares on the
first business day following the 14th day of the month. Optional payments
received by the Company after the 10th and on or before the 25th day of any
month (or the first business day following the 25th, if such day is not a
business day) will be invested in Original Issue Shares on the first business
day of the following month. The Company may delay or authorize the Agent to
make such purchases during periods when the Plan is being marketed or during
other distributions of Common Stock.
Agent Purchases -- Optional payments received by the 25th day of any
month will be invested in Original Issue or Open Market Shares by the Agent
during the Investment Period, the 30-day period commencing on the 26th day of
the month.
Any dividends on Common Stock purchased with optional payments will be
reinvested on the Investment Date coinciding with the payment of a dividend
when Original Issue Shares are purchased directly by the Company. Common
Stock dividend payment dates are ordinarily the first business day of March,
June, September, and December. No assurance can be given that the Company
will continue to pay dividends on this basis. When Original Issue or Open
Market Shares are purchased by the Agent, the Investment Period will be the
30-day period beginning on the 26th day of the month preceding the dividend
date.
A participant may, without withdrawing from the Plan, have returned any
optional payment upon written request received by the Company on or before the
Investment Date or the day before the start of the Investment Period for any
payment being held by the Company.
13. How do participants make payments?
The amount of the optional payment made each time may vary. However,
participants are encouraged to set an investment goal and then send a fixed
amount every month or quarter. A payment may be made by enclosing a check or
money order payable to Southwest Gas Corporation DRSPP with the Enrollment
Form or on the optional payment form provided with your statement. In
addition, electronic transfers from shareholder checking or savings accounts
are available. A payment to be invested must not be included in a check or
money order submitted for payment of gas service.
EXPENSES
14. Are there any expenses charged to participants in connection with
participation in the Plan?
There are no expenses charged to participants in connection with
purchases of Common Stock under the Plan. All costs of administration of the
Plan and any brokerage commissions or service fees incurred in purchasing
Common Stock will be paid by the Company. However, if a participant requests
that the Company sell his or her shares of Common Stock, any related brokerage
commissions or service fees incurred by the Company will be deducted from the
proceeds remitted to the participant.
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PRICING AND PURCHASING OF SHARES
15. How many shares of Common Stock will be purchased for a participant?
The number of shares to be purchased for each participant on any
Investment Date or during the Investment Period will depend upon the amount of
the optional payments received since the last investment in the Plan, the
amount of the participant's dividends to be reinvested and the price of the
Company's Common Stock on the Investment Date or during the Investment Period.
On each Investment Date or at the end of each Investment Period, each
participant's account will be credited with that number of shares, including
fractional shares computed to four decimal points, equal to the total amount
to be invested and reinvested on the participant's behalf, divided by the
price of the Common Stock on the Investment Date or during the Investment
Period. Fractional shares will earn proportionate dividends as declared.
16. How is the price of new shares determined?
When Original Issues Shares are purchased by the Company, the price of
the shares will be the composite closing price of the Common Stock as reported
on the consolidated tape for New York Stock Exchange listed securities
administered by the Consolidated Tape Association on the Investment Date or,
if no trading in the Common Stock occurs on such date, the composite closing
price on the next preceding date on which trading occurred. When Original
Issue Shares are purchased by the Agent, the price of the shares will be the
weighted average composite closing price of the Common Stock, as reported on
the consolidated tape for the New York Stock Exchange listed securities
administered by the Consolidated Tape Association, acquired during the
Investment Period. When Open Market Shares are purchased by the Agent, the
price of the shares will be the weighted average price of the Common Stock
acquired during the Investment Period.
PARTICIPANTS' ACCOUNTS AND RECORDS
17. What records and accounts will be maintained by the Company for
Participants?
The Company will maintain an account for each participant. All shares
purchased for a participant under the Plan will be credited to his account and
held for him. When certificates for shares are issued to a participant or
shares are sold for his account pursuant to the Plan, such shares will be
withdrawn from his Plan account.
18. What reports will be sent to Participants in the Plan?
Each participant in the Plan will receive a statement of his or her
account after each dividend and after other account activity. THESE
STATEMENTS ARE A PARTICIPANT'S CONTINUING RECORD OF THE COST OF HIS PURCHASES
AND SHOULD BE RETAINED FOR INCOME TAX PURPOSES. In addition, participants
will receive each amended Prospectus for the Plan and copies of all
communications sent to all other holders of the Company's Common Stock,
including the Company's quarterly reports to shareholders, the annual report
to shareholders, notice of annual meeting and proxy statement and tax
information with respect to dividends paid. A participant is entitled to vote
all shares, including fractional shares, held in his or her Plan account and
will receive a Plan proxy enabling him to vote his or her shares.
WITHDRAWAL AND TERMINATION
19. When may a participant withdraw from the Plan?
A participant may withdraw from the Plan by providing a written request
to the Company. Such requests will be processed upon receipt except during
the periods commencing three business days prior to the ex-dividend date for a
particular dividend through the payment date for that dividend. During that
period, such a request will be processed depending upon the time the request
is received by the Company. If the request is received within three business
days of the ex-dividend date for a particular dividend and on or before the
record date for that dividend, the request will be processed after the record
date. If the request is received after the record date and on or before the
Investment Date or Investment Period for that dividend, the request will not
be processed until that dividend is reinvested in the participant's account.
(See Question 22.)
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20. How does a participant withdraw from the Plan?
In order to withdraw from the Plan, a participant must notify the Company
in writing and instruct the Company to either issue the whole shares in the
participant's account to the participant or deliver the proceeds of sale to
the participant. Fractional shares will be sold in all cases. The
participant must have a certified tax identification number on file with the
Company on or prior to requesting the sale of shares.
21. Can the Company terminate a participant?
Yes. The administrative costs to the Company for each customer account
do not justify an inactive account. The Company reserves the right to
terminate the account of any participant who has not invested and/or
reinvested a minimum of $100 in any twelve month period. In addition, the
Company reserves the right to terminate the account of any participant if a
participant's checks or other form of remittance have not been honored.
22. What happens upon withdrawal, termination or discontinuance?
When a participant withdraws from the Plan or when the Company terminates
the account of a participant, or upon discontinuance of the Plan by the
Company, certificates for all shares credited to the participant's account
will be issued and a cash payment will be made for fractional shares.
Fractional shares will be sold through the Agent and any brokerage commissions
or service fees will be deducted from the proceeds before the cash payment is
made.
In the alternative, a participant may request that all of the shares,
both whole and fractional, credited to his or her Plan account be sold. If a
participant requests a sale, the sale will be made for the account of the
participant by the Agent. If the request is received within three business
days of the ex-dividend date for a particular dividend and on or before the
record date for that dividend, the request will be processed after the record
date. If the request is received after the record date and on or before the
Investment Date or Investment Period for that dividend, the request will not
be processed until that dividend is reinvested in the participant's account.
The participant will be charged any related brokerage commissions or service
fees, and will receive the proceeds of the sale less these amounts.
If the withdrawal request of a participant is received by the Company on
or before the record date for a particular dividend, that dividend and all
subsequent dividends upon shares registered in the participant's name will be
paid directly to the participant. If the request is received after the record
date, the withdrawal request will not be processed until that dividend is
reinvested in the participant's account. Once the request is processed, all
subsequent dividends upon shares registered in the participant's name will be
paid directly to the participant.
If the withdrawal request of a participant is received by the Company on
or before the Investment Date or the day before the start of the next
Investment Period, any payment being held by the Company will be returned. If
the request is received after such dates, any payment being held will be
reinvested.
23. Will certificates be issued for shares of Common Stock purchased under
the Plan?
Certificates for shares of Common Stock purchased under the Plan will be
issued to participants upon their written request to the Company. Upon
receipt of such request, certificates for any number of whole shares credited
to a participant's Plan account may be withdrawn from the account and issued
to the participant. Any remaining full and fractional shares will continue to
be credited to the participant's account. Certificates for shares issued to a
participant will be registered in the same name or names in which the
participant's Plan account is maintained. Dividends on all of the
participant's shares, including those shares for which certificates have been
issued, will either be reinvested or paid in cash as provided for in the Plan.
(See Question 8.) Certificates for fractional shares will not be issued under
any circumstances.
24. May a portion of the shares held in the Plan be sold?
Yes. Upon receipt of a written request, the Company will withdraw and
sell, through the Agent, any number of whole shares credited to that
participant's Plan account; provided, the participant maintains a minimum of
9<PAGE>
<PAGE>
100 shares in his or her account. The participant will be charged any related
brokerage commissions or service fees and will receive the proceeds of the
sale less these amounts.
If the partial withdrawal request is received within three business days
of the ex-dividend date for a particular dividend or between such date and the
record date for that dividend, it will be processed after the record date.
Dividends on the shares to be withdrawn will either be reinvested or paid in
cash as provided for in the Plan. (See Question 8.) The participant must
have a certified tax identification number on file with the Company on or
prior to requesting the sale of shares.
25. May shares in a Plan account be pledged or assigned?
Shares credited to the account of a participant may not be assigned or
pledged. A participant who wishes to assign or pledge shares must request
that certificates for the shares be issued in his or her name.
OTHER INFORMATION
26. How will participants' shares be voted at meetings of shareholders?
Participants will receive Plan proxy cards covering total full and
fractional shares held under the Plan, enabling them to vote their shares. If
a proxy card is returned to the Company properly signed and marked for voting,
all the shares covered by such proxy card will be voted as marked. If no
instructions are indicated on a properly signed and returned proxy card, the
participant's shares credited to his account will be voted in accordance with
the recommendations of the Company.
27. What is the responsibility of the Company and the Agent under the Plan?
The Plan provides that the Company and any Agent appointed by the Company
in administering the Plan will not be liable for any act done in good faith or
for any good faith omission to act, including, without limitation, any claim
of liability arising out of failure to terminate a participant's Plan
participation upon such participant's death prior to receipt of legally
sufficient instructions with respect thereto.
PARTICIPANTS SHOULD RECOGNIZE THAT NEITHER THE COMPANY NOR THE AGENT CAN
ASSURE PARTICIPANTS OF PROFITS OR PROTECT PARTICIPANTS AGAINST LOSSES IN THE
VALUE OF THE SHARES PURCHASED UNDER THE PLAN OR ASSURE THE PARTICIPANT OF
FUTURE DIVIDENDS.
28. May the Plan be changed or discontinued?
The Company reserves the right to suspend, modify or discontinue the Plan
at any time and to interpret and regulate the Plan as it deems necessary or
desirable in connection with the operation of the Plan. All participants will
receive notice of any suspension, modification or termination. The notices
will be mailed to the participants at the addresses shown on the Company's
record.
29. What happens if the Company makes a rights offering?
As shareholders, participants will be notified by the Company of a rights
offering. Upon receiving such notification that such rights are exercisable,
participants should instruct the Company, before such rights expire, to
exercise such rights. If the Company does not receive such instructions, the
Agent will sell the unexercised rights on the open market and proportionally
credit participant accounts to the extent such rights are not exercised with
the proceeds for investment on the next Investment Date or Investment Period.
On March 5, 1996, the Board of Directors of the Company adopted a
Shareholder Rights Plan (the "Rights Plan") pursuant to which the Company will
distribute one right ("Right") for each share of Common Stock issued pursuant
to the Plan as of the close of business on April 15, 1996 (the "Record Date").
In addition, the Board of Directors authorized the distribution of one Right
10<PAGE>
<PAGE>
for each share of Common Stock issued after the Record Date, but prior to the
date the Rights become exercisable, are redeemed or expire.
Each full Right, if it becomes exercisable, initially entitles the holder
to purchase from the Company a unit of one one-hundredth of a share of Junior
Participating Preference Stock, par value $20.00 per share, at a purchase
price of $45.00 per unit, subject to adjustment. The Rights will expire at
the close of business on April 15, 2006 unless redeemed earlier. The Rights
may not be exercised, and will not detach or trade separately from the Common
Stock except as described below.
The Rights will detach from the Common Stock and may be exercised only if
a person or group becomes the beneficial owner of 20% or more of the Common
Stock (a "Stock Acquisition"). If a Stock Acquisition occurs (except pursuant
to an offer for all outstanding shares of Common Stock which the Company's
independent directors determine is adequate and otherwise in the best
interests of the Company and its shareholders), the Rights "flip-in" and, each
Right not owned by such person will entitle the holder to purchase, at the
Right's then-current exercise price, the Common Stock or, if the number of
shares of the authorized Common Stock is insufficient to permit the full
exercise of the Rights, capital stock or other securities of the Company
having an equivalent value equal to twice the Right's exercise price. In
addition, if at any time following a Stock Acquisition, (i) the Company is
acquired in a merger or other business combination transaction in which the
Company is not the surviving corporation (other than a merger which follows an
offer at the same price and for the same consideration as the offer approved
by the Board of Directors of the Company as described in the immediately
preceding sentence), or (ii) 50% or more of the Company's assets or earnings
power is sold or transferred, the Rights "flip-over" and each unexercised
Right will entitle its holder to purchase, at the Right's then-current
exercise price, common shares of the other person having an equivalent value
equal to twice the Right's exercise price. The Rights may be redeemed by the
Company at any time prior to ten business days following the date of a Stock
Acquisition (which period may be extended by the Company's Board of Directors
at any time while the Rights are still redeemable). Upon the occurrence of a
"flip-in" or "flip-over" event, if the Rights are not redeemed, the Rights
would result in substantial dilution to any person who has acquired 20% or
more of the outstanding Common Stock or who attempts to merge or consolidate
with the Company. As a result, the Rights may deter potential attempts to
acquire control of the Company without the approval of the Company's Board of
Directors.
A copy of the Rights Plan is available free of charge from the Company.
30. What happens if the Company declares a stock split or issues a stock
dividend?
In the event of a stock split or stock dividend, the Company will
proportionally credit to each participant's Plan account the additional shares
attributable to his or her interest in the Plan.
31. Can a complete text of the Plan be obtained?
Yes, it can be obtained upon request to Shareholder Services.
FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN
The Company believes the following is an accurate summary of the tax
consequences of participation in the Plan as of the date of this Prospectus.
This summary may not reflect every possible situation that could result from
participation in the Plan, and, therefore, participants in the Plan are
advised to consult their own tax advisors with respect to the tax consequences
(including federal, state, local and other tax laws and U.S. tax withholding
laws) applicable to their particular situations.
In general, the amount of cash dividends paid by the Company is
includable in income even though reinvested under the Plan. Under this
general rule, the cost basis for federal income tax purposes of any shares
acquired through the Plan will be the price at which the shares are credited
to the account of the participant as described in the section entitled Pricing
and Purchasing of Shares. In connection with open market purchases, brokerage
commissions paid by the Company on a participant's behalf are to be treated as
distributions subject to income tax in the same manner as dividends. The
11<PAGE>
<PAGE>
amounts paid for brokerage commissions are, however, includable in the cost
basis of shares purchased. The information return sent to participants and
the IRS at year-end, if so required, will show such amounts paid on their
behalf.
A U.S. shareholder electing to participate in the Plan must provide his
Taxpayer Identification Number (generally, an individual's Social Security
Number) or certify that they are exempt from backup withholdings. Failure to
provide a correct Taxpayer Identification Number will result in backup
withholdings of 31 percent. Withholding may also occur upon notification from
the Internal Revenue Service directing the Plan to institute backup
withholdings.
A foreign shareholder who is a participant and whose dividends are
subject to United States income tax withholding will have the amount of the
tax to be withheld deducted from such dividends before reinvestment in
additional shares for such participant's Plan account. The statements
confirming purchases made for a foreign participant will indicate that tax has
been withheld.
The final statement received from the Company during any calendar year
will include information for that year regarding total dividends paid on Plan
shares. In addition, the Company will send each participant an IRS Form 1099-
Dividend at year-end showing total dividends paid on shares held of record.
Both statements should be retained for tax reporting purposes.
INTERESTS OF NAMED EXPERTS AND COUNSEL
Robert M. Johnson, Esq., Associate General Counsel for the Company, has
given an opinion to the Commission upon the validity of the shares of Common
Stock being registered. Mr. Johnson is employed by the Company on a full-time
basis.
The financial statements incorporated by reference in this Registration
Statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report included in the Annual Report on
Form 10-K for the year ended December 31, 1995, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
DISCLOSURE OF SECURITIES AND EXCHANGE COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 317 of California's General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnification to
directors, officers and other agents in terms sufficiently broad to permit
indemnification under certain circumstances for liabilities, including
expenses, arising in connection with the Securities Act of 1933, as amended.
Pursuant to the Articles of Incorporation and the Bylaws of the Company,
and in accordance with applicable law, directors and officers of the Company
are generally indemnified against judgments, expenses and other amounts
actually and reasonably incurred by or imposed upon them in connection with or
arising out of any action in which they were or are parties or are threatened
to be made parties by reason of their being or having been a director or
officer of the Company. In addition, the Company has entered into
indemnification agreements with certain officers and directors which provide
for indemnification to the full extent permitted by California law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company, the Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
12<PAGE>
<PAGE>
====================================== ======================================
No dealer, salesperson or other
individual has been authorized to give
any information or to make any
representations other than those
contained or incorporated by reference
in this Prospectus in connection with
the offer made by this Prospectus and,
if given or made, such information or
representations must not be relied
upon as having been authorized by the [SWG LOGO]
Company or any agent, dealer or
underwriter. Neither the delivery of
this Prospectus nor any sale made
hereunder shall under any circumstances
create an implication that there has
been no change in the affairs of the
Company since the date hereof. This
Prospectus does not constitute an offer
or solicitation by anyone in any state
in which such offer or solicitation is
not authorized or in which the person
making such offer or solicitation is not
qualified to do so or to anyone to whom SOUTHWEST GAS CORPORATION
it is unlawful to make such offer or
solicitation.
_________________ 800,000 Shares
COMMON STOCK
TABLE OF CONTENTS
Page
----
Prospectus
Available Information . . . . . . . 2 ------------------
Incorporation of Certain Documents PROSPECTUS
by Reference. . . . . . . . . . . 2 ------------------
The Company . . . . . . . . . . . . 3
Use of Proceeds . . . . . . . . . . 3
Description of the Dividend
Reinvestment and Stock
Purchase Plan . . . . . . . . . . 3
Purpose . . . . . . . . . . . . . 3
Features. . . . . . . . . . . . . 3
Administration. . . . . . . . . . 4
Participation . . . . . . . . . . 4
Initial Investments . . . . . . . 6
Reinvested Dividends. . . . . . . 6
Optional Payments . . . . . . . . 6 DIVIDEND REINVESTMENT
Expenses . . . . . . . . . . . . 7
Pricing and Purchasing AND
of Shares . . . . . . . . . . . 8
Participants' Accounts STOCK PURCHASE PLAN
and Records . . . . . . . . . . 8
Withdrawal and Termination . . . 8
Other Information . . . . . . . . 10
Federal Income Tax Consequences
of the Plan . . . . . . . . . . . 11
Interests of Named Experts
and Counsel . . . . . . . . . . . 12
Disclosure of Securities and
Exchange Commission Position
on Indemnification for Securities
Act Liabilities. . . . . . . . . 12
====================================== ======================================<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution*
SEC registration fee . . . . . . . . . . . . $ 4,606.06
* Stock exchange listing fees . . . . . . . . 3,000.00
* Printing expenses . . . . . . . . . . . . . 20,000.00
* Accounting fees and expenses . . . . . . . . 4,000.00
* Legal fees . . . . . . . . . . . . . . . . . 3,000.00
* Miscellaneous . . . . . . . . . . . . . . . 40,000.00
-----------
TOTAL . . . . . . . . . . . . . . . . . . $ 74,606.06
===========
___________________________
* Estimated.
Other than the expenses listed above and annual administration costs of
approximately $20,000, no other significant expenses of issuance and
distribution are expected to arise since the purchase of the 800,000 shares of
the Company's Common Stock, $1 par value, will be made directly from the
Company with no underwriting discounts or commissions payable.
Item 15. Indemnification of Directors and Officers
Section 317 of the General Corporation Law of California provides that a
corporation has the power, and in some cases is required, to indemnify an
agent, including a director or officer, who was or is a party or is threatened
to be made a party to any proceeding, against certain expenses, judgments,
fines, settlements and other amounts under certain circumstances. Article
VIII of the Registrant's Bylaws provides for the indemnification of directors,
officers and agents as allowed by statute. In addition, the Registrant has
purchased directors and officers insurance policies which provide insurance
against certain liabilities for directors and officers of the Company.
Item 16. Exhibits.
Exhibit
Number Description of Exhibit
- ------- ----------------------
4.1 Company's Amended and Restated Dividend Reinvestment and Stock
Purchase Plan
5.1 Opinion of Counsel of the Company regarding legality of the
securities to be registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Counsel of the Company (included in his opinion filed
as Exhibit 5.1 to this Registration Statement)
24.1 Powers of Attorney (included on pages II-3 and II-4 of this
Registration Statement)
II-1<PAGE>
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a posteffective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, unless the information required to be
included in such posteffective amendment is contained in a periodic
report filed by Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 and incorporated herein by
reference;
(ii) To reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent posteffective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement, unless the information required to be
included in such posteffective amendment is contained in a periodic
report filed by Registrant pursuant to Section 13 or Section 15(d) of
the Securities Act of 1934 and incorporated herein by reference;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such posteffective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) To remove from registration by means of a posteffective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the Registration Statement shall be deemed to
be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-2<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Las Vegas, State of Nevada, on
the 9th day of December, 1996.
SOUTHWEST GAS CORPORATION
By /s/ MICHAEL O. MAFFIE
-------------------------------------
Michael O. Maffie
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below authorizes Michael O. Maffie
and George C. Biehl, and each of them, as attorneys-in-fact, to sign any
amendment, including posteffective amendments, to this Registration Statement
on his or her behalf, individually and in each capacity stated below, and to
file any such amendment.
Signature Title Date
--------- ----- ----
/s/ MICHAEL O. MAFFIE Director, President and December 9, 1996
- ------------------------------ Chief Executive Officer
(Michael O. Maffie) (Principal Executive Officer)
/s/ GEORGE C. BIEHL Senior Vice President and December 9, 1996
- ------------------------------ Chief Financial Officer
(George C. Biehl) (Principal Financial Officer)
/s/ EDWARD A. JANOV Vice President, Controller December 9, 1996
- ------------------------------ and Chief Accounting Officer
(Edward A. Janov) (Principal Accounting Officer)
/s/ RALPH C. BATASTINI Director December 9, 1996
- ------------------------------
(Ralph C. Batastini)
/s/ MANUEL J. CORTEZ Director December 9, 1996
- ------------------------------
(Manuel J. Cortez)
/s/ LLOYD T. DYER Director December 9, 1996
- ------------------------------
(Lloyd T. Dyer)
II-3<PAGE>
<PAGE>
Signature Title Date
--------- ----- ----
/s/ KENNY C. GUINN Chairman of the Board December 9, 1996
- ------------------------------ of Directors
(Kenny C. Guinn)
/s/ THOMAS Y. HARTLEY Director December 9, 1996
- ------------------------------
(Thomas Y. Hartley)
/s/ MICHAEL B. JAGER Director December 9, 1996
- ------------------------------
(Michael B. Jager)
/s/ LEONARD R. JUDD Director December 9, 1996
- ------------------------------
(Leonard R. Judd)
/s/ JAMES R. LINCICOME Director December 9, 1996
- ------------------------------
(James R. Lincicome)
/s/ CAROLYN M. SPARKS Director December 9, 1996
- ------------------------------
(Carolyn M. Sparks)
/s/ ROBERT S. SUNDT Director December 9, 1996
- ------------------------------
(Robert S. Sundt)
II-4
<PAGE>
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- ----------------------------------------------------------------
4.1 Southwest Gas Corporation Amended and Restated Dividend
Reinvestment and Stock Purchase Plan
5.1 Opinion of Counsel of the Company regarding legality of the
securities to be registered
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Counsel of the Company (included in his opinion filed
as Exhibit 5.1)
<PAGE> 1 EXHIBIT 4.1
SOUTHWEST GAS CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Amended and Restated March 7, 1995
Amended and Restated November 19, 1996<PAGE>
<PAGE> 2
TABLE OF CONTENTS
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3. Plan Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
4. Investment of Initial and Optional Payments . . . . . . . . . . . . . . .2
5. Reinvestment of Dividends . . . . . . . . . . . . . . . . . . . . . . . .4
6. Pricing and Purchasing of Shares. . . . . . . . . . . . . . . . . . . . .5
7. Partial Plan Withdrawal . . . . . . . . . . . . . . . . . . . . . . . . .5
8. Plan Withdrawal or Termination. . . . . . . . . . . . . . . . . . . . . .6
9. Plan Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
10. Participant's Accounts and Records. . . . . . . . . . . . . . . . . . . .8
11. Custody of Shares and Shareholder Voting. . . . . . . . . . . . . . . . .8
12. Rights Offering, Stock Dividends and Stock Splits . . . . . . . . . . . .9
13. Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
14. Amendment, Termination and Suspension of the Plan . . . . . . . . . . . 10
15. Responsibility of the Company and Agent . . . . . . . . . . . . . . . . 10
16. Tax Withholdings on Dividends . . . . . . . . . . . . . . . . . . . . . 10
17. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11<PAGE>
<PAGE> 3
SOUTHWEST GAS CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
---------------------------------------------
1. Purpose
-------
The purpose of the Plan is to provide shareholders, natural gas customers,
residents of Arizona, California and Nevada ("Residents"), and employees of
the Company a simple and convenient method of investing in shares of the
Company's Common Stock ("Common Stock"). Shares purchased under the Plan
will be either, (i) authorized but unissued shares purchased from the
Company ("Original Issue Shares") or (ii) outstanding shares purchased in
the open market or through negotiated transactions ("Open Market Shares").
The decision to purchase Open Market Shares will depend upon the
relationship of the market price and book value of the Common Stock. To
the extent Original Issue Shares are purchased, the Company will use the
proceeds for its continuing construction program and for other corporate
purposes.
2. Participation
-------------
2.1 Company shareholders, natural gas customers, Residents, and employees
of the Company are eligible to participate in the Plan. Beneficial
owners whose shares are held by brokers in street names (or otherwise
registered in names other than their own), are eligible to participate
in the Plan, by providing evidence acceptable to the Company of their
shareholder position. Employees whose shares are held by the
Company's Employees' Investment Plan ("EIP") may also participate in
the Plan.
2.2 An account may be opened in the participant's own name, in the joint
name of the participant and another person, or in the participant's
name as custodian for a minor or as trustee for another person by
completing the enrollment/authorization Form ("Enrollment Form") in
the proper manner.
2.3 Enrollment Forms will be furnished to potential participants at any
time upon request to Shareholder Services, Southwest Gas Corporation,
P.O. Box 98511, Las Vegas, Nevada 89193-8511, or by telephoning the
Company at (702) 876-7280 or (800) 331-1119.
1<PAGE>
<PAGE> 4
3. Plan Enrollment
---------------
3.1 Shareholders and employees who are participating in the EIP may join
the Plan at any time by completing and returning an Enrollment Form.
Natural gas customers, Residents, and non-EIP participating employees
may join the Plan at any time by completing an Enrollment Form and
returning it along with a minimum initial investment of $100 to the
Company.
3.2 The Enrollment Form authorizes the Company to do the following:
(a) INITIAL INVESTMENT -- Upon receipt of a minimum initial
investment payment of $100 from a natural gas customer,
Residents, or a non-EIP participating employee of the Company,
the Company or the Agent (defined below) will purchase Common
Stock for the participant's account on the next Investment Date
or during the next Investment Period.
(b) OPTIONAL PAYMENTS -- Upon receipt of optional payments from a
participant of $25 up to a maximum of $50,000 per calendar year,
the Company or the Agent will purchase Common Stock for the
participant's account on the next Investment Date or during the
next Investment Period.
(c) DIVIDEND REINVESTMENT -- The Company or the Agent will
automatically reinvest dividends on all shares of Common Stock
held in Plan accounts on the Investment Date or during the
Investment Period that coincides with the payment of dividends
for shares of Common Stock. The Company or the Agent will also
automatically reinvest dividends on all of the shares of Common
Stock held of record by a participant outside of the Plan.
Participants with a total of 250 or more shares of Common Stock
will have the option of receiving one-half of their dividends in
cash.
(d) DIRECT REGISTRATION -- Participants will have the option of
depositing all of their outstanding shares of Common Stock with
the Plan. Participants selecting this option will have the
opportunity to receive up to 100% of their dividends in cash.
4. Investment of Initial and Optional Payments
-------------------------------------------
4.1 The timing for the investment of the initial and optional payments
depends upon whether the Common Stock will be Original Issue Shares or
2<PAGE>
<PAGE> 5
Open Market Shares. During periods in which the payments will be
invested in Original Issue Shares except as provided for in Section
4.3, purchases will occur twice during the month. During periods in
which the payments will be invested in shares purchased in the open
market, purchases will occur once each month.
4.2 ORIGINAL ISSUE SHARES -- Subject to the provisions of Section 4.3,
initial and optional payments received by the 10th day of any month
(or the first business day following the 10th, if such day is not a
business day) will be invested on the first business day following the
14th day of the month. Initial investment payments received by the
Company after the 10th and on or before the 25th day of any month (or
the first business day following the 25th, if such day is not a
business day) will be invested as of the first business day of the
following month. Such dates are the "Investment Date(s)" for purposes
of the Plan.
4.3 LIMITATIONS ON ISSUANCE OF ORIGINAL ISSUE SHARES -- No Original Issue
Shares will be purchased by the Company for the Plan during: (i) the
period commencing two business days prior to the initial dissemination
of announcements regarding the Plan and ending 30 calendar days after
such initial dissemination; (ii) the period commencing two business
days before any subsequent general dissemination of announcements
regarding the Plan and ending 15 calendar days after such
dissemination; or (iii) other distributions of Common Stock. Initial
and optional payments received by the Company during such periods will
be used to purchase Original Issue Shares on the first business after
the end of the applicable limitation period or by the Agent during
such periods.
4.4 OPEN MARKET SHARES -- Initial and optional payments received by the
25th day of any month will be invested by the Agent during the 30-day
period commencing on the 26th day of the month. Such period is the
"Investment Period" for the purposes of the Plan.
4.5 Common Stock acquired with initial and optional payments will be
Original Issue Shares, so long as the market price of the Common Stock
exceeds seventy-five percent (75%) of the book value of the Common
Stock, determined quarterly. Movement between Original Issue Shares
and Open Market Shares will not occur more than once in any 12 month
period.
4.6 Upon written request received by the Company five business days
preceding the next Investment Date or the day before the start of the
next Investment Period in which the initial payment is being held by
the Company, a customer or an employee may receive the return of the
3<PAGE>
<PAGE> 6
initial payment and become a participant in the Plan, provided that a
minimum of $100 is maintained in the Plan. If the customer or
employee requests the entire return of the initial payment, the
payment will be returned and the individual will no longer be eligible
to participate in the plan.
4.7 Upon written request received by the Company on or before the next
Investment Date or the day before the start of the next Investment
Period in which the optional payment is being held by the Company, a
participant may, without withdrawing from the Plan, receive the return
of all or part of the optional payment.
4.8 No interest will be paid on payments received and held by the Company
before investment and such payments will be returned to the
participant if the purchases of Common Stock have not commenced within
35 days of their receipt.
5. Reinvestment of Dividends
-------------------------
5.1 Dividends on Common Stock held by a Plan participant, including
proportionate dividends on fractional shares, will be reinvested on
the Investment Date or Investment Period coinciding with the payment
of a dividend for such shares. Common Stock dividends have ordinarily
been paid on the first business day of March, June, September and
December but no assurance can be given that the Company will continue
to pay dividends on this basis. When Open Market Shares are purchased
with reinvested dividends, the Investment Period will be the 30-day
period beginning on the 26th day of the month preceding the dividend
date.
5.2 Common Stock acquired with reinvested dividends will be Original Issue
Shares, so long as the market price of the Common Stock exceeds
seventy-five percent (75%) of the book value of the Common Stock,
determined quarterly. Movement between Original Issue Shares and Open
Market Shares will not occur more than once in any 12 month period.
5.3 Dividends on shares of record will be reinvested effective on the next
dividend payment date if the shareholder's Enrollment Form is received
by the Company by the record date (which is normally the 15th calendar
day of the month preceding the month in which a dividend is paid)
established for a dividend payment. Instructions received after the
record date for a dividend will not be effective until the next
dividend payment date following the dividend payment date.
4<PAGE>
<PAGE> 7
5.4 Participants must reinvest all of their dividends automatically in
additional shares of Common Stock when the total shares owned by such
participants is less than 250 shares. Participants with 250 or more
shares of Common Stock have the option of receiving one-half of the
quarterly dividends in cash. Participants who have selected the
direct registration option may receive up to 100 percent of their
dividends in cash.
5.5 Dividends will be paid to the participants if the purchase of Common
Stock with the dividends has not commenced within 30 days of their
declaration.
6. Pricing and Purchasing of Shares
--------------------------------
6.1 The number of shares to be purchased for each participant on any
Investment Date or during the Investment Period will depend upon the
amount paid by the participant preceding the Investment Date, the
amount of the participant's dividends to be reinvested and the price
of the Company's Common Stock on the Investment Date or during the
Investment Period. On each Investment Date or at the end of each
Investment Period, each participant's account will be credited with
that number of shares, including fractional shares computed to four
decimal points, equal to the total amount to be invested and
reinvested on the participant's behalf, divided by the price of the
Common Stock on the Investment Date or during the Investment Period.
6.2 When purchasing Original Issue Shares, the price of the shares will be
the composite closing price of the Common Stock as reported on the
consolidated tape for New York Stock Exchange listed securities
administered by the Consolidated Tape Association on the Investment
Date or, if no trading in the Common Stock occurs on such date, the
composite closing price on the next preceding date on which trading
occurred.
6.3 When purchasing Open Market Shares, the price of the shares will be
the weighted average price of all Common Stock acquired by the Agent
during the Investment Period.
7. Partial Plan Withdrawal
-----------------------
7.1 Certificates for shares of Common Stock purchased under the Plan will
be issued to participants upon their written request to the Company.
Upon receipt of such request, certificates for any number of whole
shares credited to a participant's Plan account may be withdrawn from
5<PAGE>
<PAGE> 8
the account and issued to the participant within 30 days of such
request. Any remaining full and fractional shares will continue to be
credited to the participant's account. Certificates for shares issued
to a participant will be registered in the same name or names in which
the participant's Plan account is maintained. Dividends on all of the
participant's shares, including those shares for which certificates
have been issued, will either be reinvested or paid in cash as
provided for in the Plan. Certificates for fractional shares will not
be issued under any circumstances.
7.2 Upon receipt of a written request, the Company will withdraw and sell,
through the Agent, any number of whole shares credited to that
participant's Plan account; provided, the participant maintains a
minimum of 100 shares in his account. The participant will be charged
any related brokerage commissions or service fees and will receive the
proceeds of the sale less these amounts.
7.3 If the partial withdrawal request is received within three business
days of the ex-dividend date for a particular dividend or between such
date and the record date for that dividend, it will be processed after
the record date. Dividends on the shares to be withdrawn will either
be reinvested or paid in cash as provided for in the Plan. The
participant must have a certified tax identification number on file
with the Company before the shares will be sold.
7.4 Shares credited to the account of a participant may not be assigned or
pledged. A participant who wishes to assign or pledge shares must
withdraw such shares from the Plan.
8. Plan Withdrawal or Termination
------------------------------
8.1 A participant may withdraw from the Plan by providing a written
request to the Company. Such requests will be processed upon receipt
except during the periods commencing three business days prior to the
ex-dividend date for a particular dividend through the payment date
for that dividend. During that period, such a request will be
processed depending upon the time the request is received by the
Company. If the request is received within three business days of the
ex-dividend date for a particular dividend and on or before the record
date for that dividend, the request will be processed after the record
date. If the request is received after the record date and on or
before the Investment Date or Investment Period for that dividend, the
request will not be processed until that dividend is reinvested in the
participant's account.
6<PAGE>
<PAGE> 9
8.2 When a participant withdraws from the Plan or when the Company
terminates the account of a participant, or upon discontinuance of the
Plan by the Company, certificates for all shares credited to the
participant's account will be issued within 30 days of such event and
a cash payment will be made for fractional shares. Fractional shares
will be sold through the Agent and any brokerage commissions or
service fees will be deducted from the proceeds before the cash
payment is made.
8.3 A participant may request that all of the shares, both whole and
fractional, credited to his Plan account be sold. If a participant
requests a sale, the sale will be made for the account of the
participant by the Agent. A sale request will be processed as
provided for in Section 8.1 above. The participant will be charged
any related brokerage commissions or service fees, and will receive
the proceeds of the sale less these amounts.
8.4 If the withdrawal request of a participant is received by the Company
on or before record date for a particular dividend, that dividend and
all subsequent dividends upon shares registered in the participant's
name will be paid directly to the participant. If the request is
received after record date, the withdrawal request will not be
processed until that dividend is reinvested in the participant's
account. Once the request is processed, all subsequent dividends upon
shares registered in the participant's name will be paid directly to
the participant.
8.5 If the withdrawal request of a participant is received by the Company
on or before the next Investment Date or the day before the start of
the next Investment Period, any payment being held by the Company will
be returned. If the request is received after such dates, any payment
being held will be reinvested under the Plan.
8.6 The Company reserves the right to terminate the account of any
participant who has not invested and/or reinvested a minimum of $100
in any twelve month period. In addition, the Company reserves the
right to terminate the account of any participant if a participant's
checks or other form of remittance have not been honored.
9. Plan Expenses
-------------
There are no expenses charged to participants in connection with purchases
of Common Stock under the Plan. All costs of administration of the Plan
and any brokerage commissions or service fees incurred in purchasing shares
of Common Stock will be paid by the Company.
7<PAGE>
<PAGE> 10
However, if a participant requests that the Company sell his shares of
Common Stock, any related brokerage commissions or service fees incurred by
the Company will be deducted from the proceeds remitted to the participant.
10. Participants' Accounts and Records
----------------------------------
10.1 The Company will maintain an account for each participant. All shares
purchased for a participant under the Plan will be credited to his
account and held for him. When certificates for shares are issued to
a participant or shares are sold for his account pursuant to the Plan,
such shares will be withdrawn from his Plan account.
10.2 Each participant in the Plan will receive a quarterly statement of his
account. Additional monthly statements will be provided to
participants to reflect optional cash purchases or other account
transactions. Such statements are a participant's continuing record
of the cost of his purchases and should be retained for income tax
purposes.
10.3 In addition, participants will receive each amended Prospectus for the
Plan and copies of all communications sent to all other holders of the
Company's Common Stock, including the Company's quarterly reports to
shareholders, the annual report to shareholders, notice of annual
meeting and proxy statement and tax information with respect to
dividends paid.
11. Custody of Shares and Shareholder Voting
----------------------------------------
11.1 Shares of Common Stock purchased by a participant under or deposited
with the Plan will be registered in the name of a nominee of the
Company for participants, and will be held by the nominee for
participants' accounts until the Company is otherwise instructed by
the participant.
11.2 Shares credited to a participant's account, including fractional
shares, will be voted as the participant directs. Participants will
receive Plan proxy cards covering total full and fractional shares
held under the Plan, enabling them to vote their shares in connection
with any annual or special meeting of shareholders. If a proxy card
is returned to the Company properly signed and marked for voting, all
the shares covered by such proxy card will be voted as marked.
11.3 If no instructions are indicated on a properly signed and returned
proxy card, all of the participant's shares credited to his Plan
8<PAGE>
<PAGE> 11
account will be voted in accordance with the recommendations of the
Company. If the Plan proxy card is not returned, a participant's
shares may be voted only if the participant or a duly appointed
representative votes in person at the meeting.
12. Rights Offering, Stock Dividends and Stock Splits
-------------------------------------------------
12.1 As shareholders of record, participants will be notified by the
Company of a rights offering, including the Rights Plan attached
hereto as Appendix A and incorporated herein. Upon receiving such
notification, participants should instruct the Company, on or before
the record date established for the rights offering, to issue
certificates for those shares for which they wish to exercise rights.
If the Company does not receive such instructions, the Agent will sell
on the open market the unexercised rights and proportionally credit
participant accounts to the extent such rights are not exercised with
the proceeds for investment on the next Investment Date or Investment
Period.
12.2 In the event of a stock split or stock dividend, the Company will
proportionally credit to each participant's Plan account the
additional shares attributable to his interest in the Plan.
13. Administration
--------------
13.1 The Plan shall be administered by the Company's Board of Directors.
The Board will have full power to administer the Plan and shall
determine questions of interpretation or policy. Further, the Board
has the authority to delegate its responsibilities under the Plan to
individual officers of the Company, who may, in turn, delegate the
day-to-day administration of the Plan to the Shareholder Services
department of the Company.
13.2 The Board will appoint an independent agent ("Agent") to act as the
agent for the Plan participants in purchasing and selling shares for
participants in the open market and in purchasing Original Issue
Shares when directed by the Company. The Agent will have full
discretion, subject to the objective of obtaining the lowest overall
cost of shares purchased, as to all matters relating to the purchase
and sale of such shares.
13.3 An escrow account will be maintained by the Company to deposit all
initial and optional payments. Dividends will also be deposited in
such account during periods of time when Open Market Shares are being
purchased for the Plan. Such account will be maintained with an
independent broker-dealer or bank, as defined in the Securities
Exchange Act of 1934, as amended.
9<PAGE>
<PAGE> 12
14. Amendment, Termination and Suspension of the Plan
-------------------------------------------------
14.1 The Board of Directors have the right at any time and from time to
time to adopt written amendments, amending in whole or in part, any
provision of the Plan. The Board also has the right to adopt a
written amendment to suspend or terminate the Plan in whole or in part
at any time. All Participants will receive notice of any amendment,
suspension or termination of the Plan. The notices will be mailed to
the participants at the addresses shown on the Company's record.
14.2 If the Plan is terminated, shares in the Plan accounts will be issued
or sold as provided for in Section 8 above.
15. Responsibility of the Company and Agent
---------------------------------------
15.1 The Plan provides that the Company and any Agent appointed by the
Company in administering the Plan will not be liable for any act done
in good faith or for any good faith omission to act, including,
without limitation, any claim of liability: (i) arising out of failure
to terminate a participant's Plan participation upon such
participant's death prior to receipt of legally sufficient
instructions with respect thereto; (ii) with respect to the prices at
which shares of Common Stock are purchased or sold for the
participant's account and the times when such purchases or sales are
made; or (iii) with respect to any fluctuation in the market value
after the purchase or sale of shares.
15.2 Participants should recognize that neither the Company nor the Agent
can assure participants of profits, protect participants against
losses in the value of the shares purchased under the Plans or assure
participants of future dividends.
16. Tax Withholdings on Dividends
-----------------------------
16.1 A U.S. shareholder electing to participate in the Plan must provide
his Taxpayer Identification Number (generally, an individual's Social
Security Number) or certify that they are exempt from backup
withholdings. Failure to provide a correct Taxpayer Identification
Number could result in backup withholdings of 31 percent of a
participant's dividends before reinvestment in additional shares for
such participant's Plan account. Withholding may also occur upon
notification from the Internal Revenue Service directing the Plan to
institute backup withholdings.
10<PAGE>
<PAGE> 13
16.2 A foreign shareholder who is a participant and whose dividends are
subject to United States income tax withholding will have the amount
of the tax to be withheld deducted from such dividends before
reinvestment in additional shares for such participant's Plan account.
The statements confirming purchases made for a foreign participant
will indicate that tax has been withheld.
16.3 The final statement received from the Company during any calendar year
will include information for that year regarding total dividends paid
on Plan shares. In addition, the Company will send each participant
an IRS Form 1099-Dividend at year-end showing total dividends paid on
shares held of record. Both statements should be retained for tax
reporting purposes.
17. Miscellaneous
-------------
17.1 This Plan is purely voluntary on the part of the Company. Neither the
Plan's establishment nor any amendment nor the creation of any Plan
account will be construed as giving participants any legal or
equitable rights against the Company or the Agent unless specifically
provided for in the Plan or conferred by affirmative action of the
Company or the Agent according to the terms and provisions of the
Plan. Such actions will not be construed as giving any employee the
right to be retained in the service of the Company.
17.2 Whenever any words are used herein in the masculine gender, they will
be construed as though they were also used in the feminine gender in
all cases where they would apply, and vice versa. Whenever any words
are used herein in the singular form, they will be construed as though
they were also used in the plural form in all cases where they would
apply, and vice versa.
17.3 The Plan will be governed by and construed according to the federal
laws governing dividend reinvestment and stock purchase plans and
according to the laws of the State of California where such laws are
not in conflict with the aforementioned federal laws.
11<PAGE>
<PAGE> 14
IN WITNESS WHEREOF, Southwest Gas Corporation adopted this amended and
restated Plan, effective November 19, 1996.
SOUTHWEST GAS CORPORATION
By: /s/ George C. Biehl
--------------------------------------------------
Title: Senior Vice President, Chief Financial Officer
and Corporate Secretary
12<PAGE>
<PAGE> 15 APPENDIX A
- -------------------------------------------------------------------------------
SOUTHWEST GAS CORPORATION,
a California corporation
and
HARRIS TRUST COMPANY OF CALIFORNIA,
Rights Agent
______________________
RIGHTS AGREEMENT
Dated as of March 5, 1996
- -------------------------------------------------------------------------------<PAGE>
<PAGE> 16
TABLE OF CONTENTS
Page
Section 1. CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . 1
Section 2. APPOINTMENT OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . 5
Section 3. ISSUANCE OF RIGHT CERTIFICATES . . . . . . . . . . . . . . . . 5
Section 4. FORM OF RIGHT CERTIFICATES . . . . . . . . . . . . . . . . . . 7
Section 5. COUNTERSIGNATURE AND REGISTRATION. . . . . . . . . . . . . . . 8
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS. 9
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES . . . . . . 12
Section 9. RESERVATION AND AVAILABILITY OF SHARES; REGISTRATION . . . . . 12
Section 10. RECORD DATE . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 12. CERTIFICATION OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. 21
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES . . . . . . . . . . . 25
Section 15. RIGHTS OF ACTION. . . . . . . . . . . . . . . . . . . . . . . 26
Section 16. AGREEMENT OF RIGHT HOLDERS. . . . . . . . . . . . . . . . . . 26
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER . . . . . . 27
Section 18. CONCERNING THE RIGHTS AGENT . . . . . . . . . . . . . . . . . 27
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT . . 28
Section 20. DUTIES OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . . 29
i<PAGE>
<PAGE> 17
Section 21. CHANGE OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . . 30
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. . . . . . . . . . . . . . 31
Section 23. REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 24. NOTICE OF PROPOSED ACTIONS. . . . . . . . . . . . . . . . . . 32
Section 25. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 26. SUPPLEMENTS AND AMENDMENTS. . . . . . . . . . . . . . . . . . 34
Section 27. EXCHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 28. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 29. DETERMINATION AND ACTIONS TAKEN BY THE BOARD OF DIRECTORS . . 35
Section 30. CONDITIONS TO THE AGREEMENT . . . . . . . . . . . . . . . . . 36
Section 31. BENEFITS OF THIS AGREEMENT. . . . . . . . . . . . . . . . . . 36
Section 32. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 33. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 34. SECTION HEADINGS. . . . . . . . . . . . . . . . . . . . . . . 36
Section 35. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . . 37
Exhibit A Form of Right Certificate. . . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Summary of Rights. . . . . . . . . . . . . . . . . . . B-1
Exhibit C Certificate re Junior Participating Preference Stock . . . . . C-1
ii<PAGE>
<PAGE> 18
RIGHTS AGREEMENT
AGREEMENT, dated as of March 5, 1996 between Southwest Gas
Corporation, a California corporation (the "Company"), and Harris Trust
Company of California, as Rights Agent.
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized and
declared the distribution of one right for (i) each share of Common Stock of
the Company ("Common Stock") outstanding at the Close of Business (as
hereinafter defined) on April 15, 1996 (the "Rights Record Date"), each right
representing the right to purchase one Unit consisting, initially, of one one-
hundredth of a share of Junior Participating Preference Stock, and (ii) each
additional share of Common Stock which shall become outstanding between the
Rights Record Date and the earliest of the Distribution Date, the Expiration
Date (as such terms are hereinafter defined) and the date, if any, on which
such rights may be redeemed, all upon the terms and subject to the conditions
hereinafter set forth (each such right being hereinafter referred to as a
"Right");
NOW, THEREFORE, the parties agree as follows:
Section 1. CERTAIN DEFINITIONS.
-------------------
(a) For purposes of this Agreement, the following terms have the
meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner (within the meaning of Section 1(b)) of a Substantial
Block of Voting Stock, but shall not include (i) an Exempt Person or
(ii) any Person who or which acquires a Substantial Block of Voting Stock
in connection with a transaction or series of transactions approved prior
to such transaction or transactions by the Board of Directors of the
Company; provided that no person shall become an Acquiring Person solely
as a result of a reduction in the number of shares of Voting Stock
outstanding, unless and until such Person shall thereafter become the
Beneficial Owner of additional shares constituting 1% or more of the
general voting power of the Company.
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect as of the date hereof.
1<PAGE>
<PAGE> 19
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday
or day on which banking institutions in the States of California, New
York or Nevada are authorized or obligated by law or executive order to
close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., Las
Vegas time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 p.m., Las Vegas time, on the next
succeeding Business Day.
"COMMON STOCK" shall have the meaning assigned to it in the
preamble; and "COMMON STOCK" when used with reference to Persons other
than the Company shall mean: (i) in the case of Persons organized in
corporate form, the capital stock or equity security with the greatest
voting power of such Person or, if such Person is a Subsidiary of another
Person, of the Person or Persons which ultimately control such first-
mentioned Person; and (ii) in the case of Persons not organized in
corporate form, the units of beneficial interest which (A) represent the
right to participate generally in the profits and losses of such Person
(including without limitation any flow-through tax benefits resulting
from an ownership interest in such Person) and (B) are entitled to
exercise the greatest voting power of such Person or, in the case of a
limited partnership, shall have the power to remove the general partner
or partners.
"CONTINUING DIRECTOR" shall mean any member of the Board of
Directors of the Company (while such Person is a member of the Board) who
(i) is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any
such Affiliate or Associate, and (ii) either (A) was a member of the
Board of Directors prior to the time any Person became an Acquiring
Person, or (B) became a member of the Board of Directors subsequent to
the time any Person became an Acquiring Person, if such Person's
nomination for election, or re-election, to the Board was recommended, or
approved, by a majority of the Continuing Directors then in office.
"DISTRIBUTION DATE" shall have the meaning assigned to it in
Section 3(a).
"EQUIVALENT STOCK" shall have the meaning assigned to it in
Section 7(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"EXEMPT PERSON" shall mean the Company, any Subsidiary of the
Company and any employee benefit plan or employee stock plan of the
Company or of any Subsidiary of the Company, or any trust or other entity
2<PAGE>
<PAGE> 20
organized, established or holding shares of Common Stock by, for or
pursuant to, the terms of any such plan.
"EXPIRATION DATE" shall have the meaning assigned to it in
Section 7(a).
"OFFER DATE" shall have the meaning assigned to it in Section
3(a).
"PERSON" shall mean any individual, firm, corporation,
partnership, limited liability company, association, group (as such term
is used in Rule 13d-5 promulgated under the Exchange Act as in effect on
the date hereof), trust or other entity and shall include any successor
by merger (or otherwise) of any of the foregoing.
"PRINCIPAL PARTY" shall have the meaning assigned to it in
Section 13(b).
"Purchase Price" shall mean the price payable for one Unit upon
exercise of a Right.
"QUALIFIED OFFER" shall mean a tender or exchange offer for all
outstanding Common Stock at a price and on terms determined to be
adequate and otherwise in the best interests of the Company and its
shareholders (other than the Person or an Affiliate or Associate thereof
on whose behalf the offer is made) by at least a majority of the
Continuing Directors who are not representatives of or affiliated with
the Person making such offer or any Affiliate or Associate of such
Person.
"REDEMPTION PRICE" shall have the meaning assigned to it in
Section 23(a).
"RIGHT" shall have the meaning assigned to it in the preamble.
"RIGHTS RECORD DATE" shall have the meaning assigned to it in
the preamble.
"SUBJECT SHARES" shall mean the class or series of shares then
issuable on exercise of the Rights.
"STOCK ACQUISITION DATE" shall mean the date of the first
public announcement by the Company or an Acquiring Person (which, for
purposes of this definition, shall include, without limitation, a report
filed pursuant to Section 13(d) under the Exchange Act) that an Acquiring
Person has become such.
"SUBSIDIARY" shall mean, with respect to any Person, a
corporation or other entity the securities or other ownership interests
of which having ordinary voting power sufficient to elect a majority of
3<PAGE>
<PAGE> 21
the board of directors or other persons performing similar functions are
at the time directly or indirectly owned by such Person and any Affiliate
of such Person.
"SUBSTANTIAL BLOCK" shall mean a number of shares of Voting
Stock having in the aggregate 20 percent or more of the general voting
power.
"TRADING DAY" shall have the meaning assigned to it in Section
11(d).
"UNIT" shall mean the shares or other securities issuable upon
exercise of one Right, initially one one-hundredth of a share of Junior
Participating Preference Stock of the Company having the rights and
preferences set forth in Exhibit C, before any adjustment pursuant to
Section 11(a)(ii) or Section 13.
"VOTING STOCK" shall mean shares of the Company's capital stock
the holders of which have general voting power.
(b) For purposes of this Agreement, a Person shall be deemed the
"BENEFICIAL OWNER" of any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, (whether or not in writing)
or upon the exercise of any conversion, exchange or purchase rights
(other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for payment or exchange; or
(B) the right to vote or to direct the voting of, pursuant to any
agreement, arrangement or understanding (whether or not in writing); or
(C) the right to dispose or to direct the disposition of, pursuant to any
agreement, arrangement or understanding (whether or not in writing); 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
for the purpose of acquiring, holding, voting or disposing of any
securities of the Company;
4<PAGE>
<PAGE> 22
provided, however, that a Person shall not be deemed the Beneficial Owner of,
or to Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (1) arises solely from the grant of a
revocable proxy or consent given to such Person in connection with a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act, and (2) is not also
then reportable on Schedule 13D (or any comparable or successor report) under
the Exchange Act; provided, further, that a Person engaged in business as an
underwriter of securities shall not be deemed the "Beneficial Owner" of
securities acquired through such person's participation in good faith in a
firm commitment underwriting until the expiration of the 40-day period
immediately following the date of such acquisition.
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 Agent or Agents as it may deem necessary or desirable
and determine the respective duties of the Rights Agent and the Co-Rights
Agents.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
------------------------------
(a) Until the Close of Business on the earlier of (i) the tenth
Business Day after a Stock Acquisition Date or (ii) the tenth Business Day (or
such later date as the Company's Board of Directors shall determine) after the
date of the commencement by any Person (other than an Exempt Person) of, or
the date of the first public announcement (such commencement date or
announcement date being herein referred to as the "Offer Date") 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 20 percent or more
of the then outstanding Voting Stock (irrespective of whether any shares are
actually purchased pursuant to such offer) (the tenth Business Day after the
first to occur of a Stock Acquisition Date or an Offer Date being herein
referred to as the "Distribution Date"),
(i) the Rights will automatically attach to, and be evidenced
by, the certificates for Common Stock registered in the names of the
holders of Common Stock (which certificates for Common Stock shall be
deemed also to be Right Certificates) and not by separate Right
Certificates, and
(ii) each Right will be transferable only in connection with
the transfer of the underlying shares of Common Stock.
5<PAGE>
<PAGE> 23
As soon as practicable after the Distribution Date, the Rights Agent
will mail, by first-class, insured, postage prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date,
as shown by the records of the Company at the Close of Business on the
Distribution Date, at the address of such holder shown on such records, a
Right Certificate, in substantially the form of Exhibit A hereto, evidencing
one Right for each share of Common Stock so held.
(b) As soon as practicable after the Rights Record Date, the
Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B, by first-class mail, postage prepaid, to each
record holder of Common Stock as of the Close of Business on the Rights Record
Date, at the address of such holder shown on the records of the Company.
(c) The Company will cause certificates for Common Stock issued
after the Rights Record Date (including replacement certificates for shares of
Common Stock outstanding on or prior to the Rights Record Date), but prior to
the earliest of (i) the Distribution Date, (ii) the Expiration Date and
(iii) the date, if any, on which the Rights may be redeemed, to have impressed
on, printed on, written on or otherwise affixed to them the following legend:
This certificate also entitles the holder hereof to certain Rights
as set forth in the Rights Agreement between the Company and Harris
Trust Company of California, as Rights Agent, as the same shall be
amended from time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Rights
issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement) or certain transferees of
any thereof, whether currently held by or on behalf of such Person
or by any subsequent holder, may be limited as provided in Section
7(f) of the Rights Agreement.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
6<PAGE>
<PAGE> 24
for transfer of any such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
(d) Until the Distribution Date, the surrender for transfer of any
of the certificates for Common Stock outstanding on or after the Rights Record
Date, with or without a copy of the Summary of Rights attached thereto and
with or without the legend set forth in subsection (c) above, shall also
constitute the transfer of the Rights associated with such Common Stock.
After the Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
Section 4. FORM OF RIGHT CERTIFICATES.
--------------------------
(a) The Right Certificates (and the forms of assignment and
certification and of election to purchase shares to be printed on the reverse
thereof) shall be in substantially the form of Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Rights may from
time to time be listed, or to conform to usage.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 that represents Rights Beneficially Owned by: (i) an Acquiring
Person or any Associate or Affiliate of any Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights, or (B) a transfer which the Board of Direc-
tors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of Section
7(f), and any Right Certificate issued pursuant to Section 6 or Section 11
upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain (to the extent
feasible and reasonably identifiable as such) the following legend:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement) or certain transferees thereof. Accordingly, under
certain circumstances as provided in the Rights Agreement, this Right
7<PAGE>
<PAGE> 25
Certificate and the Rights represented hereby may be limited as provided
in Section 7(f) of such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
---------------------------------
(a) The Right Certificates shall be executed on behalf of the
Company by its President or any of its Vice Presidents, 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. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by the Rights Agent, 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; and
any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer (as specified above) of the Company to sign such Right Certifi-
cate, 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 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 Right Certificate, the date of each Right Certificate and
the number of each Right Certificate.
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 4(b), Section 7(f) and
Section 14, at any time after the Close of Business on the Distribution Date,
and prior to the Close of Business on the Expiration Date or the day prior to
the day, if any, on which the Rights are to be redeemed pursuant to Section
23, any Right Certificate or Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase such number of Units as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate(s) to be
transferred, split up, combined or exchanged, with the form of assignment on
the reverse side(s) thereof duly completed and executed, at the stock transfer
8<PAGE>
<PAGE> 26
office of the Rights Agent. Thereupon the Rights Agent shall countersign and
deliver to the persons entitled thereto the Right Certificate(s) requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates. Notwithstanding the
foregoing, neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered
Right Certificate unless and until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate, if mutilated, the Company will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
------------------------------------------------------
RIGHTS.
------
(a) Subject to Section 7(f), and unless earlier redeemed as
provided in Section 23, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate, with the form
of election to purchase on the reverse side thereof duly completed and
executed, to the Rights Agent at the stock transfer office of the Rights
Agent, together with payment of the Purchase Price for each Unit as to which
the Rights are exercised, at or prior to the Close of Business on the tenth
anniversary of the Rights Record Date or such other date to which the Rights
may be extended as provided in this Agreement (the latest of such dates being
herein referred to as the "Expiration Date"). If at any time after the
Distribution Date but prior to the Expiration Date the Company is unable,
under its Articles of Incorporation, to issue the number and class of shares
required to be issued upon the exercise of all of the outstanding Rights, the
Company may issue upon exercise of any of the Rights shares of capital stock
or other securities of the Company of equivalent value to the shares so
required to be issued ("Equivalent Stock"), as determined by the Board of
Directors.
9<PAGE>
<PAGE> 27
(b) The Purchase Price for each Unit pursuant to the exercise of a
Right shall initially be $45.00, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 and shall be payable in lawful money of
the United States of America.
(c) Upon receipt of a Right Certificate, with the form of election
to purchase duly executed, accompanied by payment of the Purchase Price for
the Units to be purchased and an amount equal to any applicable transfer tax
in cash, or by certified check, bank draft or money order payable to the order
of the Company, the Rights Agent shall thereupon promptly (i) requisition from
the Company or any transfer agent of the Company a certificate for the number
of shares to be purchased and the Company will comply, and hereby irrevocably
authorizes its transfer agent to comply, with all such requests, (ii) requisi-
tion from the Company the amount of cash to be paid in lieu of issuance of a
fractional share, when appropriate, in accordance with Section 14, and
(iii) promptly after receipt of such certificate from any such transfer agent,
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, when appropriate, after receipt promptly
deliver such cash in lieu of a fractional share to or upon the order of the
registered holder of such Right Certificate; provided, however, that in the
case of the purchase, in connection with the exercise of a Right, of
securities other than shares of stock, the Rights Agent shall promptly take
the appropriate actions with respect thereto as shall as nearly as practicable
correspond to the actions described in the foregoing clauses (i) through
(iii).
(d) The Company shall not be required to pay any transfer tax which
may be payable in respect of any transfer involved in the transfer or delivery
of Right Certificates, or the issuance or delivery of certificates in a name
other than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise, or to issue or deliver any certificates upon
the exercise of any Rights, until any such tax shall have been paid (any such
tax being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
(e) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14.
(f) Notwithstanding any provision of this Agreement to the
contrary, upon the occurrence of any of the events described in any of clauses
10<PAGE>
<PAGE> 28
(A), (B), (C) or (D) of Section 11(a)(ii), the adjustment provided for under
Section 11(a)(ii) shall not apply with respect to any Rights that are at the
time of the occurrence of such event Beneficially Owned by (i) an Acquiring
Person or by any Associate or Affiliate of such Acquiring Person (which
Acquiring Person or Affiliate or Associate engages in, or realizes the benefit
of, one or more of the transactions described in clause (A) or clause (B) of
Section 11(a)(ii), realizes the benefits set forth in clause (C) of Section
11(a)(ii) or, alone or together, become the Beneficial Owner(s) of a number of
shares of Voting Stock which equals or exceeds the percentage of the general
voting power as provided in clause (D) of Section 11(a)(ii), as the case may
be), or (ii) a transferee of an Acquiring Person or of any Associate or
Affiliate of such Acquiring Person (which Acquiring Person or Associate or
Affiliate engages in, or realizes the benefit of, one or more of the
transactions described in clause (A) or clause (B) of Section 11(a)(ii),
realizes the benefits set forth in clause (C) of Section 11(a)(ii) or, alone
or together with such Acquiring Person or any such Associate or Affiliate,
become the Beneficial Owner(s) of a number of shares of Voting Stock which
equals or exceeds the percentage of the general voting power as provided in
clause (D) of Section 11(a)(ii), as the case may be) (A) who becomes a
transferee after the Acquiring Person becomes such, or (B) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (1) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (2) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(f). Upon the
exercise of such Rights, the holders thereof shall be entitled to receive,
upon payment of the Purchase Price, the number of Units issuable upon exercise
of such Rights without giving effect to the adjustment provided for under
Section 11(a)(ii). The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(f) and Section 4(b) are complied with,
but shall have no liability to any holder of Right Certificates or other
Person as a result of its making or failing to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(g) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such additional
11<PAGE>
<PAGE> 29
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 this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such can-celled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES; REGISTRATION.
----------------------------------------------------
(a) The Company covenants and agrees that it shall (i) on or prior
to the Rights Record Date, take all such action as shall be necessary to cause
to be reserved and kept available out of its authorized and unissued capital
stock, the number, class and series of shares that will be sufficient to
permit the exercise in full of all Rights to be outstanding as of the Rights
Record Date, (ii) no later than promptly following the Distribution Date, take
all such action as shall be necessary to cause to be reserved and kept
available out of its authorized and unissued capital stock, the number of
additional shares that will, from time to time, be sufficient to permit the
exercise in full of all Rights from time to time outstanding, (iii) take all
such action as may be necessary to insure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable, and (iv) pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any shares upon the exercise of Rights (except as otherwise provided in
Section 7(d)).
(b) The Company agrees to take all such action, from and after the
Distribution Date, as may be necessary or appropriate to permit the issuance
of shares in connection with the exercise of the Rights, including any
required registration under (i) the Securities Act of 1933, as amended from
time to time (the "Securities Act"), and (ii) the securities or "blue sky"
laws of the various states and obtaining any necessary approvals of the
California Public Utilities Commission and any other governmental agency as
shall be required by law. The Company may temporarily suspend, for a period
12<PAGE>
<PAGE> 30
of time not to exceed 120 days, the exercisability of the Rights in order to
prepare and file a registration statement or statements for the purpose of
effecting any such registration and permit such statement(s) to become
effective and to prepare and file any application or applications for the
purpose of obtaining any such approvals and permit such approvals to be
obtained. At the commencement and termination of any such suspension, the
Company shall issue a public announcement and shall provide written notice to
the Rights Agent, stating that the exercisability of the Rights has been
temporarily suspended, or that such suspension has terminated, as the case may
be.
(c) If and so long as the stock issuable upon the exercise of
Rights is listed on any national securities exchange, the Company shall use
its reasonable efforts to cause all shares reserved for issuance upon exercise
of Rights to be listed on such exchange upon official notice of issuance upon
such exercise.
Section 10. RECORD DATE. Each Person in whose name any stock
certificate is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the shares represented thereby
on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a shareholder of the Company with
respect to shares for which the Rights shall be exercisable, including without
limitation the right to vote or to receive dividends or other distributions,
and such holder shall not be entitled to receive any notice of any proceedings
of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other
securities covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare and pay a dividend on the shares which are
subject to the Rights ("Subject Shares") payable in shares of stock of
the Company, (B) subdivide or split the Subject Shares, (C) combine or
consolidate the Subject Shares into a smaller number of shares or effect
a reverse stock split of the Subject Shares or (D) issue any shares of
its capital stock in a reclassification of the Subject Shares (including
any such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), then, and
in each such event, except as otherwise provided in this Section 11(a),
13<PAGE>
<PAGE> 31
the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, split, reverse
split, combination, consolidation or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the transfer books of
the Company were open, he would have received upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, split,
reverse split, combination, consolidation or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) In the event that at any time after the date of this
Agreement
(A) any Acquiring Person, or any Associate or Affiliate
of any Acquiring Person, directly or indirectly (1) shall merge into
the Company or any of its Subsidiaries or otherwise combine with the
Company or any of its Subsidiaries and the Company or such
Subsidiary shall be the continuing or surviving corporation of such
merger or combination and the Common Stock shall remain outstanding
and the outstanding shares thereof shall not be changed into or
exchanged for stock or other securities of the Company or of any
other Person or cash or any other property, or (2) shall sell or
otherwise transfer in one or more transactions, assets to the
Company or any of its Subsidiaries in exchange for 25 percent or
more of the shares of any class of capital stock of the Company or
any of its Subsidiaries, and the Common Stock shall remain
outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any
Associate or Affiliate of any Acquiring Person, shall (1) in one or
more transactions, transfer any assets to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of any
class of capital stock of the Company or any of its Subsidiaries or
for securities exercisable for or convertible into shares of any
14<PAGE>
<PAGE> 32
class of capital stock of the Company or any of its Subsidiaries or
otherwise obtain from the Company or any of its Subsidiaries, with
or without consideration, any additional shares of any class of
capital stock of the Company or any of its Subsidiaries or other
securities exercisable for or convertible into shares of any class
of capital stock of the Company or any of its Subsidiaries (other
than as part of a PRO RATA distribution by the Company or such
Subsidiary to all holders of Common Stock), (2) sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise dispose (in
one or more transactions), to, from or with, as the case may be, the
Company or any of its Subsidiaries, assets on terms and conditions
less favorable to the Company or such Subsidiary than the Company or
such Subsidiary would be able to obtain in arm's-length negotiation
with an unaffiliated third party, (3) receive any compensation from
the Company or any of the Company's Subsidiaries other than
compensation for full-time employment as a regular employee, or fees
for serving as director, at rates in accordance with the Company's
(or its Subsidiaries') past practices, or (4) receive the benefit,
directly or indirectly (except proportionately as a shareholder), of
any loans, advances, guarantees, pledges or other financial
assistance provided by the Company or any of its Subsidiaries, on
terms and conditions less favorable to the Company or such
Subsidiary than the Company or such Subsidiary would be able to
obtain in arm's-length negotiation with an unaffiliated third party,
or
(C) during any such time as there is an Acquiring Person,
there shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or any
merger or consolidation of the Company with any of its Subsidiaries
or any other similar transaction or series of transactions involving
the Company or any of its Subsidiaries (whether or not with or into
or otherwise involving an Acquiring Person or any Affiliate or
Associate of such Acquiring Person) which has the effect, directly
or indirectly, of increasing by more than one percent the
proportionate share of the outstanding shares of any class of equity
securities, or of securities exercisable for or convertible into
equity securities, of the Company or any of its Subsidiaries which
is directly or indirectly owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise
than pursuant to a Qualified Offer,
then, and in each such case, but subject to the provisions of Section 27,
proper provision shall be made so that each holder of a Right, except as
provided below and in Section 7(f), shall, on and after the later of (I) the
date of the occurrence of an event described in clause (A), (B), (C) or (D) of
this Section 11(a)(ii), or (II) the date of the expiration of the period
within which the Rights may be redeemed pursuant to Section 23 (as the same
15<PAGE>
<PAGE> 33
may have been amended as provided in Section 26), have the right to receive,
upon exercise thereof at the then current Purchase Price, such number of
shares of Common Stock as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of Units for which a Right
is then exercisable and dividing that product by (y) 50 percent of the current
market price per share of Common Stock (determined in accordance with Section
11(d)) on the date of the occurrence of the relevant event listed above in
clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED, HOWEVER, that
if the transaction that would otherwise give rise to the foregoing adjustment
is also subject to the provisions of Section 13, then only the provisions of
Section 13 shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii). The Company shall not consummate any such merger,
combination, transfer or transaction referred to in any of such clauses (A),
(B) and (C) unless prior thereto there shall be sufficient authorized but
unissued Common Stock to permit the exercise in full of the Rights in
accordance with the foregoing sentence, unless the Board of Directors has
determined to issue Equivalent Stock in accordance with Section 7(a);
PROVIDED, HOWEVER, that in no case may the Company consummate any such merger,
combination, transfer or transaction if at the time of or immediately after
such transaction there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
In the event that the Company issues Equivalent Stock upon the
exercise of any Rights pursuant to the immediately preceding paragraph, then,
upon any such exercise, proper provision shall be made so that the holder of a
Right (except as provided in Section 7(f)) shall have the right to receive,
upon such exercise at the then current Purchase Price, such number of shares
or other units of Equivalent Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
Units for which a Right is then exercisable and dividing that product by
(y) 50 percent of the current market price per share or other unit of the
Equivalent Stock of the Company (determined on substantially the same basis as
is prescribed by Section 11(d) with respect to the valuation of Common Stock)
on the date of occurrence of the relevant event listed above in clause (A),
(B), (C) or (D) of this subparagraph (ii). In the event that at any time the
Company should be prohibited by law, by any provision of its Articles of
Incorporation, or by any instrument or agreement to which the Company is a
party or by which it is bound, from issuing, or should be unable under its
Articles of Incorporation to issue, sufficient Equivalent Stock to permit the
exercise of all outstanding Rights in accordance with the foregoing sentence,
then, in lieu of issuing such Equivalent Stock upon such exercise, the Company
shall pay to each holder of a Right (except as provided in Section 7(f)) upon
16<PAGE>
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surrender of the Right as provided herein but without payment of the Purchase
Price, an amount in cash for each Right equal to the Purchase Price.
(b) In case the Company shall at any time after the Rights Record
Date fix a record date for the issuance of rights or warrants to all holders
of Common Stock or Subject Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase Common
Stock or Subject Shares or securities convertible into Common Stock or Subject
Shares at a price per share (or having a conversion price per share, if a
security convertible into Common Stock) less than the current market price per
share (determined in accordance with Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the total number of shares of
Common Stock and Subject Shares outstanding on such record date plus the
number of shares of Common Stock which the aggregate offering price of the
total number of shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and of which the denominator shall be
the total number of shares of Common Stock and Subject Shares outstanding on
such record date plus the number of additional shares to be offered for
subscription or purchase (or into which the convertible securities to be
offered are initially convertible). In case such subscription or purchase
price may be paid, in whole or in part, in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall at any time after the Rights Record
Date fix a record date for the making of a distribution on the shares of
Common Stock or the Subject Shares, whether by way of a dividend,
distribution, reclassification of stock, recapitalization, reorganization or
partial liquidation of the Company or otherwise (and including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation), of subscription rights or warrants
(excluding those referred to in Section 11(b)), evidences of indebtedness or
other assets (other than (i) regular periodic cash dividends, (ii) a dividend
payable in Common Stock or (iii) a distribution which is part of or is made in
connection with a transaction to which Section 11(a)(ii) or Section 13
applies), the Purchase Price to be in effect after such record date shall be
17<PAGE>
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determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the current
market price per share of Common Stock (determined in accordance with Section
11(d)) on such record date, less the fair market value applicable to one share
of Common Stock (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of such assets or evidences of indebtedness or of such
subscription rights or warrants so to be distributed, and of which the denomi-
nator shall be such current market price per share of Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
market price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days immediately prior to such date; PROVIDED, HOWEVER,
that in the event that the current market price per share of Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of Common
Stock (other than the Rights), and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, then, and in
each such case, the current market price shall be appropriately adjusted to
reflect the current market price per share of Common Stock in connection with
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the average
of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc., Automated
Quotation System ("NASDAQ"). If on any such date the shares of Common Stock
are not quoted by any such organization, the fair market value of such shares
on such date as determined in good faith by the Board of Directors of the
issuer of such Common Stock shall be used. Any such determination of current
market price shall be described in a statement filed with the Rights Agent.
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<PAGE> 36
For the purpose of any computation hereunder, the "current market
price" of a Unit shall be deemed to be equal to the current market price per
share of Common Stock, and the "current market price" of a Subject Share shall
be deemed to be equal to the current market price per share of Common Stock
divided by the number of Subject Shares which comprise a Unit.
For purposes of this Agreement, the term "Trading Day" shall mean a
day on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
in such Price; PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-hundredth
of a share, as the case may be. Notwithstanding the proviso to the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of
the transaction which gives rise to such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) In the event that at any time, as a result of an adjustment
made pursuant to Section 11(a), the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than shares of Common Stock, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions, with respect to such shares, contained in Sections 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the shares of Common Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall represent the right to
purchase, at the adjusted Purchase Price, the number of shares purchasable
from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
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that number of shares (calculated to the nearest one-hundredth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior
to such adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares purchasable upon the exercise of each
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of Units for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-hundredth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i) the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of shares issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
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(k) In any case in which this Section 11 requires that an
adjustment in the Purchase Price be made effective as of the record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the additional shares or securities of the Company, if any, issuable as a
consequence of such adjustment; PROVIDED, HOWEVER, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares or securities upon the
occurrence of such event.
(l) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such adjustments in the number of shares
which may be acquired upon exercise of the Rights, and such adjustments in the
Purchase Price, in addition to those adjustments expressly required by the
other subsections of this Section 11, as and to the extent that the Company,
in its sole discretion, shall determine to be advisable, in order that, in the
event of (i) any reclassification, consolidation or subdivision of the Common
Stock, (ii) any reorganization or partial liquidation of the Company or
similar transaction, (iii) any issuance wholly for cash of any Common Stock at
less than the current market price, (iv) any issuance wholly for cash of
Common Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, (v) any stock dividends or (vi) any issuance of
rights, options or warrants, hereafter made by the Company to holders of its
Common Stock as provided herein above in this Section 11, (x) the holders of
the Rights in any such event shall be treated equitably and in accordance with
the purpose and intent of this Agreement, and (y) to the extent reasonably
possible, such event shall not, in the opinion of counsel for the Company,
result in the shareholders of the Company being subject to any United States
federal income tax liability by reason thereof.
Section 12. CERTIFICATION OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13, the
Company shall (i) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(ii) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate, and (iii) 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 give
such notice shall not affect the validity of, or the force or effect of, the
requirement for such adjustment.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
------------------------------------------------------
EARNING POWER.
-------------
(a) In the event that, at any time after an Acquiring Person has
become such,
21<PAGE>
<PAGE> 39
(i) the Company shall consolidate with, or merge with and
into, any other Person and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(ii) any other Person(s) shall consolidate or merge with and
into the Company, the Company shall be the continuing or surviving
corporation of such merger and, in connection with such consolidation or
merger, all or part of the Common Stock shall be changed into or
exchanged for stock or other securities of the Company or of any other
Person or cash or any other property, or
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating more than 50
percent of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person, (other than a pro
rata distribution by the Company of assets (including securities) of the
Company or any of its Subsidiaries to all holders of the Company's Common
Stock),
then, on and after the later of (I) the date of the occurrence of an event
described in clause (i), (ii) or (iii) of this Section 13(a), or (II) the date
of the expiration of the period within which the Rights may be redeemed
pursuant to Section 23 (as the same may have been amended as provided in
Section 26):
(A) proper provision shall be made so that each holder of
a Right shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price, such number of
shares of common stock of the Principal Party as shall be equal to
the result obtained by (x) multiplying the then current Purchase
Price by the number of Units for which a Right is then exercisable
and dividing that product by (y) 50 percent of the current market
price per share of the common stock of the Principal Party
(determined in the same manner as the current market price of Common
Stock is determined under Section 11(d)) on the date of consummation
of such consolidation, merger, sale or transfer;
(B) the Principal Party shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to
this Agreement, and proper provision shall be made for the
foregoing, provided that the Principal Party shall, prior to the
first occurrence of an event described in clause (i), (ii) or (iii)
of this Section 13(a), have caused to be reserved out of its
22<PAGE>
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authorized and unissued shares of common stock (or its authorized
and issued shares of common stock held in its treasury), for
issuance pursuant to this Agreement, the number of shares of common
stock that will be sufficient to permit the exercise in full of the
Rights after the occurrence of such event;
(C) the term "Company" wherever used in this Agreement
shall thereafter be deemed to refer to such Principal Party; and
(D) the Principal Party shall, in addition to the
reservation of shares of its common stock as provided in the proviso
to clause (B) above, take such steps (including without limitation
compliance with the Company's other obligations as set forth in
Section 9) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the shares of its
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 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 Purchase Price, such cash,
shares, rights, warrants and other property which such holder would
have been entitled to receive had such holder, 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.
(b) For purposes of this Agreement, "Principal Party" shall mean
(i) in the case of any transaction described in clause (i) or
(ii) of Section 13(a), (A) the Person that is the issuer of the
securities into which shares of Common Stock are converted in such merger
or consolidation, or, if there is more than one such issuer, the issuer
the common stock of which has the greatest 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 said 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
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other party to the merger or consolidation does not survive the merger or
consolidation, the Person that does so survive (including the Company if
it survives); and
(ii) in the case of any transaction described in clause (iii)
of 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 is the issuer of common stock having the greatest market
value of shares outstanding;
PROVIDED, HOWEVER, that in any such case, (1) if the common stock of such
Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another corporation the common
stock of which is and has been so registered, "Principal Party" shall refer to
such other corporation; (2) if the common stock of such Person is not and has
not been so registered and such Person is not a direct or indirect Subsidiary
of another corporation the common stock of which is and has been so
registered, "Principal Party" shall refer to the corporation which ultimately
controls such Person; (3) in case such Person is a Subsidiary, directly or
indirectly, of more than one corporation, the common stocks of all of which
are and have been so registered, "Principal Party" shall refer to whichever of
such corporations is the issuer of common stock having the greatest market
value of shares held by the public; and (4) if the common stock of such Person
is not and has not been so registered and such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
clauses (1), (2) and (3) above shall apply to each of the chains of ownership
having an interest in such joint venture as if such Person were a "Subsidiary"
of both or all of such joint ventures and the Principal Party in each such
chain shall bear the obligations set forth in this Section 13 in the same
ratio as its direct or indirect interests in such Person bear to the total of
such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and the Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement making valid provision for the results described in clause (A) of
Section 13(a) and confirming that the Principal Party will perform its
obligations under this Section 13(a); PROVIDED, HOWEVER, that in no case may
the Company consummate any such consolidation, merger, sale or transfer if
(i) at the time of or immediately after such transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
24<PAGE>
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intended to be afforded by the Rights or (ii) prior to, simultaneously with or
immediately after such transaction, the shareholders of the Person which
constitutes, or would constitute, the Principal Party for purposes of this
Section 13 shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. This
Section 13 shall not be applicable to a transaction described in Subparagraphs
(i), (ii) or (iii) of Subsection (a) of this Section if (i) such transaction
is consummated with a Person or Persons who acquired Common Stock pursuant to
a Qualified Offer (or a wholly owned subsidiary of any such Person or
Persons), (ii) the price per share of Common Stock offered in such transaction
or distributable to shareholders upon conclusion of such transaction is not
less than the price per share of Common Stock paid to all holders of Common
Stock whose shares were purchased pursuant to such Qualified Offer and
(iii) the form of consideration being offered to the remaining holders of
Common Stock pursuant to such transaction or distributable to shareholders
upon conclusion of such transaction is the same as the form of consideration
paid pursuant to such Qualified Offer. Upon conclusion of any transaction
described in the foregoing sentence, all Rights shall expire.
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. If the
Company shall elect not to issue such fractional Rights, in lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such Fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the average of the high bid and low asked prices in the over-the-
25<PAGE>
<PAGE> 43
counter market, as reported by NASDAQ. If on any such date the Rights are not
quoted by any such organization, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used. Any such determination of current market value shall be described in a
statement filed with the Rights Agent.
(b) The Company shall not be required to issue fractions of shares
upon exercise of a Right or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall pay to the
registered holders 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 current market value of a share of Common Stock. For purposes of this
Section 14, the current market value of a share of Common Stock shall be the
closing price of a share of Common Stock (as determined pursuant to the second
sentence of Section 11(d)) for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Right
Certificates (and prior to the Distribution Date, the registered holders of
the Common Stock), and any registered holder of any Right Certificate (or,
prior to the Distribution Date, any registered holder 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, any other registered holder
of the Common Stock), may, on 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 Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
26<PAGE>
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(b) on and after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent and then if
surrendered at the stock transfer office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common 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 SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
---------------------------
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense incurred, without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Right Certificate or Certificate for Common Stock or for other securities of
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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, acting with reasonable
care, to be genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper person or persons.
If and for so long as the Rights are listed on the New York Stock
Exchange or the American Stock Exchange, the Rights Agent, if its principal
offices are located outside New York City, shall maintain in the New York City
area facilities for the servicing of the Rights in the area of Manhattan
located south of Chambers Street. Such facilities may consist of either an
office or agency where transactions in the Rights are serviced directly or a
"drop" where Common Stock certificates, Right Certificates, and other
instruments relating to transactions in Rights may be received for redelivery
to an office or agency outside New York City, all in accordance with the
applicable rules of the stock exchange on which the Rights are listed.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
---------------------------------------------------
AGENT.
-----
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section
21. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned, and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned, and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
28<PAGE>
<PAGE> 46
Certificates either in its prior name or in its changed name, and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the President, any Vice
President, or the Secretary of the Company and delivered to the Rights Agent,
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof), nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate,
nor shall it be responsible for any adjustment required under the provisions
of Section 11 or 13 or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment),
nor shall it by any act hereunder be deemed to make any representation or
29<PAGE>
<PAGE> 47
warranty as to the authorization or reservation of any shares of stock to be
issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of 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 performance by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
President, any Vice President or the Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company 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.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first obtaining the Company's
approval.
Section 21. CHANGE OF RIGHTS AGENT. Unless the Company and the
Rights Agent agree to a shorter time period, the Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
30<PAGE>
<PAGE> 48
upon 15 days' notice in writing mailed to the Company and to each transfer
agent of Common Stock by registered or certified mail, and to the holders of
the Right Certificates by first-class mail. Unless the Company and the Rights
Agent agree to a shorter time period, the Company may remove the Rights Agent
or any successor Rights Agent upon 15 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 15 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 registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of any state of the
United States in good standing, which is authorized under such laws to
exercise stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100,000,000. 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 Common
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.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Expiration Date, the Purchase Price per share or
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 Agreement.
31<PAGE>
<PAGE> 49
Section 23. REDEMPTION.
----------
(a) The Board of Directors of the Company may, at its option and as
provided herein, and notwithstanding the provisions of Sections 11 and 13 of
this Agreement, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or
similar transaction occurring after the date hereof (such redemption price
being herein referred to as the "Redemption Price") at any time up to the
Close of Business on the tenth Business Day after a Stock Acquisition Date;
PROVIDED, HOWEVER, the Board of Directors of the Company may authorize the
redemption of the Rights after the time that an Acquiring Person has become
such only if (i) there is at least one Continuing Director then in office and
(ii) a majority of all of the Continuing Directors then in office approves
such redemption.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, the Company shall make a public
announcement thereof, and from and after the date of such announcement,
without any further action and without any further notice, the right to
exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. As soon as
practicable after the election of the Board of Directors to redeem 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. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be
made.
Section 24. NOTICE OF PROPOSED ACTIONS. In case the Company, after
the Rights become exercisable, shall propose (i) to pay any dividend payable
in stock of any class to the holders of its Common Stock or the Subject Shares
or to make any other distribution to the holders of its Common Stock or
Subject Shares (other than a regular periodic cash dividend), or (ii) to offer
to the holders of its Common Stock or Subject Shares rights or warrants to
subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Common Stock or Subject Shares (other than
a reclassification involving only the subdivision of outstanding shares of
Common Stock) or any recapitalization or reorganization of the Company, or
(iv) to effect any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50 percent
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, or (v) to effect the liquidation, dissolution or
32<PAGE>
<PAGE> 50
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right, in accordance with Section 25, a notice of such
proposed action, which shall specify the record date for the purposes of such
dividend, distribution of rights or warrants, or the date on which such
reclassification, recapitalization, reorganization, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of Common Stock and/or
Subject Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least
twenty days prior to the record date for determining holders of the Common
Stock and/or Subject Shares for purposes of such action, and in the case of
any such other action, at least twenty days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
Common Stock and/or Subject Shares, whichever shall be the earlier. The
failure to give notice required by this Section 24 or any defect thereon shall
not affect the legality or validity of the action taken by the Company or the
vote upon any such action.
Section 25. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Harris Trust Company of California
601 South Figueroa Street, 49th Floor
Los Angeles, California 90017
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Southwest Gas Corporation
5241 Spring Mountain Road
P.O. Box 98510
Las Vegas, Nevada 89193-8510
Attention: Chief Financial Officer
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
33<PAGE>
<PAGE> 51
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the Company
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
certificates representing shares of Common Stock. From and after the Distri-
bution Date and subject to the penultimate sentence of this Section 26, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Right Certificates
in order (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, (iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, after the time that any Acquiring
Person has become such, shall be effective only if (x) there is at least one
Continuing Director then in office and (y) a majority of all of the Continuing
Directors then in office have approved of such action), or (iv) to change or
supplement the provisions hereof in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of
the holders of Right Certificates; PROVIDED, HOWEVER, this Agreement may not
be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time period,
unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the 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. Notwithstanding anything contained in this Agreement to the
contrary: (1) no supplement or amendment shall be made which changes the
Redemption Price, the Purchase Price or the number of shares or Units for
which a Right is exercisable; and (2) the duration of the Rights may not be
shortened without the written consent of the registered holders thereof (other
than by a redemption of the Rights pursuant to Section 23). Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 27. EXCHANGE.
--------
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become subject to the provisions of Section 7(f) hereof) for Common
Stock at an exchange ratio of one share of Common Stock per Right, appropri-
ately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
34<PAGE>
<PAGE> 52
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
PROVIDED, HOWEVER, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Stock
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become subject to the provisions of Section 7(f) hereof) held by each holder
of Rights.
(c) In the event that there shall not be sufficient authorized
Common Stock to permit an exchange of Rights as contemplated in accordance
with this Section, the Company shall take all such action as may be necessary
to authorize additional Common Stock or Equivalent Stock for issuance upon
exchange of the Rights.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATION AND ACTIONS TAKEN BY THE BOARD OF
DIRECTORS. For all purposes of this Agreement, any calculation of the number
of shares of Common Stock (or other applicable securities hereunder)
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock (or other
securities) of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) (as in effect on the
date of this Agreement) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise all rights
and powers specifically granted to such Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including
without limitation the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or
35<PAGE>
<PAGE> 53
not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (B) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (A) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all other
parties, and (B) not subject the Board to any liability to the holders of the
Rights.
Section 30. CONDITIONS TO THE AGREEMENT. The effectiveness of this
Agreement and each and every right and obligation obtained or incurred
pursuant hereto, including, but not limited to, the exercisability of the
Rights, is conditioned upon (a) the Company having received all necessary
approvals and consents from all local, state and federal regulatory
authorities having jurisdiction over the Company and the transactions contem-
plated by this Agreement and (b) the absence of any statute, rule, regulation,
injunction or other order (whether temporary, preliminary or permanent)
enacted, issued, promulgated, enforced or entered into by any United States,
state or local legislative body, governmental agency or commission or court of
competent jurisdiction which is in effect and has the effect of making the
distribution or exercise of the Rights illegal or otherwise prohibiting the
consummation of the transactions contemplated by this Agreement.
Section 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of Common Stock) any legal or equitable right,
remedy or claim under this Agreement. This Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
holders of Common Stock).
Section 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of California and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State. The rights and obligations
of the Rights Agent under this Agreement shall be governed by and construed in
accordance with the laws in effect in the State of California.
Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. SECTION HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
36<PAGE>
<PAGE> 54
Section 35. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, illegal, or unenforceable, (i) such invalid,
illegal or unenforceable term, provision, covenant or restriction shall
nevertheless be valid, legal and enforceable to the extent, if any, provided
by such court or authority, and (ii) the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
SOUTHWEST GAS CORPORATION:
By: /s/ George C. Biehl
-----------------------------------
Title: Senior Vice President/C.F.O.
HARRIS TRUST COMPANY OF CALIFORNIA:
By: /s/ Michael Goedecke
-----------------------------------
Title: Vice President
37<PAGE>
<PAGE> 55
Exhibit A
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF
REDEMPTION IS MADE. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE
AGREEMENT. IN THE EVENT THAT THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE
OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES
THEREOF, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN
LIMITATIONS IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
This certifies that _______________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of March 5, 1996 (the "Rights Agreement"),
between Southwest Gas Corporation, (the "Company"), and Harris Trust Company
of California (the "Rights Agent"), to purchase from the Company, unless the
Rights have been previously redeemed, at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to the Expiration
Date (as such term is defined in the Rights Agreement), or the date, if any,
on which the Rights evidenced by this Certificate may be redeemed, at the
stock transfer office of the Rights Agent, or its successors as Rights Agent,
one one-hundredth of a fully paid and nonassessable share of Junior
Participating Preference Stock ("Preference Shares"), at a purchase price of
$45.00 (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly completed and executed.
The number of Rights evidenced by this Right Certificate as set forth above
(and the number of shares which may be purchased upon exercise thereof), and
the Purchase Price set forth above, are the number and Purchase Price as of
the date of the Rights Agreement based on the Preference Shares as constituted
on such date.
A-1<PAGE>
<PAGE> 56
Upon the occurrence of an event described in clause (A), (B), (C) or
(D) of Section 11(a)(ii) of the Rights Agreement, the holder of any Rights
that are, or were, beneficially owned by an Acquiring Person or an Associate
or Affiliate thereof (as such terms are defined in the Rights Agreement) or
certain transferees thereof which engaged in, or realized the benefit of, an
event or transaction or transactions described in clause (A), (B), (C) or (D)
of such Section 11(a)(ii), shall not be entitled to the benefit of the
adjustment described in such Section 11(a)(ii).
As provided in the Rights Agreement, the Purchase Price and the
number and class of shares 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.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability
of such Rights under specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of
the Rights Agent and at the principal office of the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the stock transfer office of the Rights Agent set forth
above, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase such
number of shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at
a redemption price of $.01 per Right.
No fractional shares will be issued upon the exercise of any Rights
evidenced hereby, but in lieu thereof a cash payment may be made, as provided
in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares or of any
other securities of the Company which may at any time be issuable on the
A-2<PAGE>
<PAGE> 57
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 shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as provided
in the Rights Agreement), or to receive dividends or 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.
WITNESS the facsimile signatures of the proper officers of the
Company.
Dated as of ____________, ____.
SOUTHWEST GAS CORPORATION
By: _________________________
Title:
Countersigned:
HARRIS TRUST COMPANY OF
CALIFORNIA By: ______________________
Title:
By: _______________________
Authorized Signature
A-3<PAGE>
<PAGE> 58
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________________________________
hereby sells, assigns and transfers unto _____________________________________
______________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney to transfer the within Right Certificate on the books of the within-
named Corporation, with full power of substitution.
Dated: ____________, ____ ______________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) the undersigned [ ] 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 of an
Acquiring Person.
Date: ______________, ____ ______________________________
Signature
Signature Guaranteed:
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.
A-4<PAGE>
<PAGE> 59
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Southwest Gas Corporation and [Rights Agent]:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate and to purchase
the shares issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying number: _____________________________
__________________________________________________________________________
(Please print name and address)
____________________________________________________________ If such number of
Rights shall not be all the Rights evidenced by this Right Certificate, a new
Right Certificate for the balance remaining of such Rights shall be registered
in the name of and delivered to:
Please insert social security
or other identifying number: _____________________________
__________________________________________________________________________
(Please print name and address)
____________________________________________________________
Dated: ______________, ____
Signature: _____________________
(Signature must conform in all respects to name
of holder as specified on the face of this Right
Certificate)
Signature Guaranteed:
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<PAGE> 60
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best
knowledge of the undersigned) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) the undersigned [ ] 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 of an
Acquiring Person.
Date: ______________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase 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.
A-6<PAGE>
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EXHIBIT B
[Form of Summary of Rights]
On March 5, 1996, the Board of Directors of Southwest Gas
Corporation (the "Company") declared a distribution of one Right for each
outstanding share of common stock (the "Common Stock") of the Company. The
distribution is to be made as of April 15, 1996 (the "Record Date") to the
shareholders of record on that date. Each Right entitles the registered
holder to purchase from the Company, initially, one one-hundredth of a share
of Junior Participating Preference Stock ("Preference Stock") at a price of
$45.00 (the "Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement between the Company
and Harris Trust Company of California, as Rights Agent.
Shares of Preference Stock purchasable upon exercise of the Rights
will be entitled to dividends of 100 times the dividends, per share, declared
on shares of the Common Stock and in the event of liquidation will be entitled
to a minimum preferential liquidating distribution of $100 per share and an
aggregate liquidating distribution, per share, of 100 times the distribution
made per share of Common Stock. In the event no dividends are declared on
shares of Common Stock, holders of Preference Stock will be entitled to
receive at least $1.00 per share of Common Stock for each quarter that a
dividend is not declared on shares of Common Stock. The holders of Preference
Stock will vote together with holders of Common Stock and in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preference Stock will be entitled to receive 100
times the amount received per each share of Common Stock.
Because of the Preference Stock' dividend and liquidation rights,
the value when issued of the one one-hundredth interest in a share of
Preference Stock purchasable upon exercise of each Right should approximate
the value of one share of Common Stock.
Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 20% or more of
the Company's general voting power other than pursuant to a Qualified Offer
(as defined below), the date of such public announcement being called the
"Stock Acquisition Date," or (ii) 10 business days (or such later date as may
be determined by action of the Board of Directors) following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 20% or more of the Company's general voting power (the date of
B-1<PAGE>
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such earlier occurrence being called the "Distribution Date"), the Rights will
be evidenced by the certificates representing the Common Stock and will be
transferred with and only with the Common Stock. New Common Stock
certificates issued after the Record Date upon transfer or new issuance of
shares of Common Stock will contain a notation incorporating the Rights
Agreement by reference, and the surrender for transfer of any certificate for
shares of Common Stock, even without such notation or a copy of this Summary
of Rights being attached thereto, will also constitute the transfer of the
Rights associated with the shares of 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 Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on the tenth anniversary of the Record Date (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other securities
or property issuable upon exercise of the Rights, and the number of
outstanding Rights, are subject to adjustment from time to time to prevent
dilution.
A QUALIFIED OFFER is a tender offer or exchange offer for all
outstanding shares of Common Stock which is determined by the non-affiliated
continuing directors to be adequate and otherwise in the best interests of the
Company and its shareholders.
In the event that any person becomes an Acquiring Person other than
by a purchase pursuant to a QUALIFIED OFFER, proper provision shall be made so
that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will not be entitled to the benefit of such
adjustment) will thereafter have the right to receive upon exercise that
number of shares of Common Stock or Common Stock equivalents having a market
value of two times the exercise price of the Right.
In the event that, at any time after an Acquiring Person has become
such, the Company is acquired in a merger or other business combination
transaction (other than a merger which follows a QUALIFIED OFFER at the same
or a higher price) or 50% or more of its consolidated assets or earning power
are sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
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the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right.
At any time after an Acquiring Person has become such, the Board of
Directors of the Company may exchange the Rights (other than Rights owned by
such person or group), in whole or in part, at an exchange ratio of one share
of Common Stock per Right (subject to adjustment).
Up to and including the tenth business day after a Stock Acquisition
Date, the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the "Redemption Price").
Immediately upon any redemption of the Rights, the right to exercise them will
terminate and the only right of the holders will be to receive the Redemption
Price.
The terms of the Rights may be amended by the Board of Directors
without the consent of the holders of the Rights at any time prior to the
Distribution Date. Thereafter the Rights may be amended to make changes which
do not adversely affect the interests of the holders of the Rights, or which
shorten or lengthen time periods, subject to certain limitations set forth in
the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, but, not limited to, the
right to vote or to receive dividends. The exercise of the Rights is subject
to compliance with applicable legal and regulatory requirements, including,
approval of the California Public Utilities Commission.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a registration statement on Form 8-A.
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 herein by reference.
B-3<PAGE>
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Exhibit C
---------
CERTIFICATE OF DETERMINATION
of
JUNIOR PARTICIPATING PREFERENCE STOCK
of
SOUTHWEST GAS CORPORATION
The undersigned officers of Southwest Gas Corporation, a California
corporation (the "Corporation"), hereby certify that the following resolution
has been duly adopted by the Board of Directors of the Corporation:
RESOLVED, that pursuant to the authority granted to the Board of
Directors of the Corporation by the Articles of Incorporation, a series of
shares of the Preference Stock of the Corporation is hereby established and
the number of shares constituting such series and the designation thereof, and
the rights, preferences, privileges and restrictions of the shares of such
series, are fixed and established as follows:
I. DESIGNATION AND AMOUNT
----------------------
The shares of such series shall be designated as "Junior Participating
Preference Stock" (the "Junior Preference Stock"), the number of shares
constituting the Junior Preference Stock shall be 2,000,000 and the par value
shall be $20 per share. Such number of shares may be decreased by resolution
of the Board of Directors; PROVIDED, that no decrease shall reduce the number
of shares of Junior Preference Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Corporation convertible into
Junior Preference Stock.
II. DIVIDENDS AND DISTRIBUTIONS
---------------------------
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Junior Preference Stock with respect to dividends, the holders of shares of
Junior Preference Stock, in preference to the holders of Common Stock of the
Corporation, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
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dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of a
share of Junior Preference Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of Junior Preference Stock. In the event the Corporation shall at any timE
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Junior Preference Stock were entitled immediately prior
to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Junior Preference Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Junior Preference Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preference Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Junior Preference Stock entitled to
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receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and bE
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Junior
Preference Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Junior Preference Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment thereof.
III. VOTING RIGHTS
-------------
The holders of shares of Junior Preference Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Junior Preference Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the shareholders of the
Corporation.
(B) Except as otherwise provided herein, or in the Articles of
Incorporation or by law, the holders of shares of Junior Preference Stock
and the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
IV. CERTAIN RESTRICTIONS
--------------------
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Junior Preference Stock as provided in Section II are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Junior Preference Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Junior Preference Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preference
Stock, except dividends paid ratably on the Junior Preference Stock and
all such parity stock on which dividends are payable or in arrears in
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proportion to the total amounts to which the holders of all such shares
are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preference Stock, provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Junior Preference Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Junior Preference Stock, or any shares of stock ranking on a
parity with the Junior Preference Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section IV, purchase or otherwise acquire such shares at such time and in
such manner.
V. REACQUIRED SHARES
-----------------
Any shares of Junior Preference Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and cancelled
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preference Stock and may
be reissued as part of a new series of Preference Stock subject to the
conditions and restrictions on issuance set forth herein, in the Articles of
Incorporation or as otherwise required by law.
VI. LIQUIDATION, DISSOLUTION OR WINDING UP
--------------------------------------
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Junior Preference Stock unless, prior thereto, the holders of shares of
Junior Preference Stock shall have received $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, provided that the holders of shares
of Junior Preference Stock shall be entitled to receive an aggregate amount
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per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (2) to the holders of shares of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Junior Preference Stock, except distributions made ratably on the
Junior Preference Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Junior Preference Stock were entitled immedi-
ately prior to such event under the proviso in clause (1) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
VII. CONSOLIDATION, MERGER, ETC.
---------------------------
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Junior Preference Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Junior Preference Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
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VIII. REDEMPTION
----------
The shares of Junior Preference Stock shall not be redeemable.
IX. RANK
----
The Junior Preference Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's Preference Stock or Preferred Stock.
X. AMENDMENT
---------
The Articles of Incorporation of the Corporation shall not be amended
in any manner which would alter or change the powers, preferences or special
rights of the Junior Preference Stock so as to affect them adversely without
the affirmative vote of the holders of at least two-thirds of the outstanding
shares of Junior Preference Stock, voting together as a single class.
* * * *
The undersigned officers further certify that the number of shares of
Preference Stock the Corporation is authorized to issue is 2,000,000 shares,
and that the number of shares constituting the series designated Junior
Participating Preference Stock, none of which has been issued, is 2,000,000
shares.
Dated:_________________ _________________________
President
_________________________
Secretary
Each of the undersigned declares under penalty of perjury that the matters set
forth in the foregoing Certificate of Determination are true and correct.
Executed at Las Vegas, Nevada this ___________ day of ___________________,
19___.
____________________________ ____________________________
President Secretary
C-6<PAGE>
[ROBERT M. JOHNSON LETTERHEAD] EXHIBIT 5.1
<PAGE> 1
December 9, 1996
Southwest Gas Corporation
P.O. Box 98510
Las Vegas, NV 89193-8510
Ladies and Gentlemen:
As counsel for Southwest Gas Corporation (the "Company"), I have examined
the Registration Statement on Form S-3 to be filed by the Company with the
Securities and Exchange Commission in connection with the registration under
the Securities Act of 1933, as amended, of 800,000 shares of the Company's $1
par value Common Stock (the "Stock") pursuant to the provisions of the
Company's Dividend Reinvestment and Stock Purchase Plan. I also have examined
the steps taken by the Company and its Board of Directors in connection with
the authorization and proposed issuance and sale of the Stock, and I am
familiar with resolutions adopted by the Board of Directors of the Company in
connection therewith. I am also familiar with the application filed by the
Company with the California Public Utilities Commission for authority to issue
the Stock, and the order issued by said Commission authorizing the issuance of
same.
Based on the foregoing and upon such other matters as I deem relevant in
the circumstances, it is my opinion that the Company has received all required
authorizations from state regulatory agencies having jurisdiction over the
issuance of the Stock by the Company, and that, subject to the actions
authorized by the Company's Board of Directors being taken, the Stock, upon
issuance and sale thereof in the manner specified in the Registration
Statement, will be duly authorized, legally issued, fully paid and
nonassessable outstanding Stock of the Company.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and I further consent to the use of my name under the
caption "Interests of Named Experts and Counsel" in the Registration Statement
and the Prospectus which forms a part thereof.
Respectfully submitted,
Robert M. Johnson<PAGE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated February 7,
1996, included in Southwest Gas Corporation and subsidiaries' Form 10-K for the
year ended December 31, 1995 and to all references to our Firm included in this
registration statement.
ARTHUR ANDERSEN LLP
Las Vegas, Nevada
December 9, 1996<PAGE>
