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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
UNION PACIFIC RESOURCES GROUP INC.
(Exact name of registrant as specified in its charter)
Utah 13-2647483
(State of incorporation or organization) (I.R.S. Employer Identification No.)
801 Cherry Street
Fort Worth, Texas 76102
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A(c)(1), please check the
following box. / /
If this Form relates to the registration of a class of debt securities and is
to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A(c)(2), please check the following box. / /
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Preferred Stock Purchase Rights New York Stock Exchange Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of class)
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Item 1. Description of Registrant's Securities to be Registered.
On October 28, 1996 the Board of Directors of Union Pacific
Resources Group Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Common Stock (each, a "Common Share"), of
the Company to shareholders of record at the close of business on November 7,
1996. Each Right entitles the registered holder to purchase from the Company a
unit consisting of one one-hundredth of a share (a "Unit") of the Series A
Junior Participating Preferred Stock, par value $.01 per share, of the Company
(the "Preferred Shares"), or a combination of securities and assets of
equivalent value, at a Purchase Price of $135 per Unit, subject to adjustment.
The Purchase Price may be paid, at the option of the holder, in cash or Common
Shares having a value at the time of exercise equal to the Purchase Price. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Harris Trust and Savings Bank, as
Rights Agent.
Initially, ownership of the Rights will be evidenced by the
Common Share certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) ten
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Shares (the "Stock Acquisition Date"), or (ii) within ten
business days (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) following the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 15% or more of the outstanding Common Shares. Until the Distribution
Date, (i) the Rights will be evidenced by the Common Share certificates and
will be transferred with and only with such Common Share certificates, (ii) new
Common Share certificates issued after November 7, 1996 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on October 28, 2006, unless earlier
redeemed by the Company as described below or unless a transaction under
Section 13(d) of the Rights Agreement has occurred.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, and except in connection with the exercise of employee
stock options or stock appreciation rights or under any other benefit plan for
employees or directors or in connection with the exercise of warrants or
conversion of convertible securities, only Common Shares issued after November
7, 1996 and prior to the Distribution Date will be issued with Rights.
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Except in the circumstances described below, after the
Distribution Date each Right will be exercisable into one one-hundredth of a
Preferred Share (a "Preferred Share Fraction"). Each Preferred Share Fraction
carries voting and dividend rights that are intended to produce the equivalent
of one Common Share. The voting and dividend rights of the Preferred Shares are
subject to adjustment in the event of dividends, subdivisions and combinations
with respect to the Common Shares of the Company. In lieu of issuing
certificates for Preferred Share Fractions which are less than an integral
multiple of one Preferred Share (i.e. 100 Preferred Share Fractions), the
Company may pay cash representing the current market value of the Preferred
Share Fractions.
In the event that at any time following the Stock Acquisition
Date, (i) the Company is the surviving corporation in a merger with an
Acquiring Person and its Common Shares remain outstanding, (ii) a Person
becomes the beneficial owner of more than 15% of the then outstanding Common
Shares other than pursuant to a tender offer, share exchange or exchange offer
that provides fair value to all shareholders, (iii) an Acquiring Person engages
in one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person an event
occurs that results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., a reverse stock split), each holder of a Right
will thereafter have the right to receive, upon exercise, Common Shares (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right. In lieu of
requiring payment of the Purchase Price upon exercise of the Rights following
any such event, the Company may permit the holders simply to surrender the
Rights, in which event they will be entitled to receive Common Shares (and
other property, as the case may be) with a value of 50% of what could be
purchased by payment of the full Purchase Price. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in clauses
(i), (ii), (iii) or (iv) of this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person who was involved in the transaction giving rise
to any such event will be null and void. However, Rights are not exercisable
following the occurrence of any of the events set forth above until such time
as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $135 per Right, each
Right not otherwise voided following an event set forth in the preceding
paragraph would entitle its holder to purchase $270 worth of Common Shares (or
other consideration, as noted above) for $135. Assuming that the Common Shares
had a per share value of $27 at such time, the holder of each valid Right would
be entitled to purchase ten Common Shares for $135. Alternatively, the Company
could permit the holder to surrender each Right in exchange for stock or cash
equivalent to five Common Shares (with a value of $135) without the payment of
any consideration other than the surrender of the Right.
In the event that, at any time following the Stock
Acquisition Date, (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 that is described in, or that follows a tender
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offer, share exchange or exchange offer described in, the second preceding
paragraph), or (ii) 50% or more of the Company's assets or earning power is sold
or transferred, each holder of a Right (except Rights that previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common shares of the acquiring company having a value equal to two
times the exercise price of the Right. Again, provision is made to permit
surrender of the Rights in exchange for one-half of the value otherwise
purchasable. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Shares or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) if holders of the Preferred
Shares are granted certain rights or warrants to subscribe for Preferred Shares
or convertible securities at less than the current market price of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular quarterly
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price
of $.01 per Right. That ten day redemption period may be extended by the Board
of Directors so long as the Rights are still redeemable. Under certain
circumstances set forth in the Rights Agreement, the decision to redeem will
require the concurrence of a majority of the Continuing Directors. Immediately
upon the action of the Board of Directors ordering redemption of the Rights,
with, where required, the concurrence of the Continuing Directors, the Rights
will terminate and the only right of the holders of Rights will be to receive
the $.01 redemption price.
The term "Continuing Directors" means any member of the Board
of Directors of the Company who was a member of the Board prior to the date of
the Rights Agreement, and any person who is subsequently elected to the Board
if such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Preferred Shares (or other consideration) of
the Company or for common shares of the acquiring company as set forth above.
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Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may
be amended by the Board in order to cure any ambiguity, to make changes that do
not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable. Under certain circumstances set forth in the Rights Agreement,
amendments will require the concurrence of a majority of the Continuing
Directors.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to this Registration Statement
on Form 8-A. 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.
Item 2. Exhibits.
1. Rights Agreement, dated as of October 28, 1996, between Union
Pacific Resources Group Inc. and Harris Trust and Savings
Bank, as Rights Agent, which includes, as Exhibit A thereto,
the Resolution of the Board of Directors with respect to
Series A Junior Participating Preferred Stock, as Exhibit B
thereto, the form of Rights Certificate and as Exhibit C
thereto the form of Summary of Rights.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
UNION PACIFIC RESOURCES GROUP INC.
By: /s/ Joseph A. LaSala, Jr.
____________________________________
Name: Joseph A. LaSala, Jr.
Title: Vice President & General
Counsel
Dated: November 1, 1996
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Exhibit Index
Exhibit Sequentially
Number Description Numbered Page
1. Rights Agreement, dated as of October 28, 1996,
between Union Pacific Resources Group Inc. and
Harris Trust and Savings Bank, as Rights Agent,
which includes, as Exhibit A thereto, the
Resolution of the Board of Directors with
respect to Series A Junior Participating
Preferred Stock, as Exhibit B thereto, the form
of Rights Certificate and as Exhibit C thereto
the form of Summary of Rights.
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UNION PACIFIC RESOURCES GROUP INC.
and
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent
RIGHTS AGREEMENT
Dated as of October 28, 1996
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Table of Contents
Section Page
1. Certain Definitions. ..................................................2
2. Appointment of Rights Agent. ..........................................5
3. Issue of Rights Certificates. .........................................6
4. Form of Rights Certificates. ..........................................8
5. Countersignature and Registration......................................9
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates...............9
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........10
8. Cancellation and Destruction of Rights Certificates. .................13
9. Reservation and Availability of Capital Stock; Registration of
Securities............................................................13
10. Capital Stock Record Date. ..........................................14
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. ...................................................15
12. Certificate of Adjusted Purchase Price or Number of Shares. .........25
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power................................................................26
14. Fractional Rights and Fractional Shares..............................29
15. Rights of Action. ...................................................30
16. Agreement of Rights Holders. ........................................30
17. Rights Certificate Holder Not Deemed a Shareholder. ................31
18. Concerning the Rights Agent..........................................32
19. Merger or Consolidation or Change of Name of Rights Agent............32
20. Duties of Rights Agent. .............................................33
21. Change of Rights Agent. .............................................35
23. Redemption and Termination...........................................37
24. Notice of Certain Events.............................................39
25. Notices. ............................................................39
26. Supplements and Amendments...........................................40
27. Successors. .........................................................41
28. Determinations and Actions by the Board of Directors, etc. ..........41
29. Benefits of this Agreement. .........................................42
30. Severability. .......................................................42
31. Governing Law. ......................................................43
32. Counterparts. .......................................................43
33. Descriptive Headings. ...............................................43
Exhibit A Resolution of the Board of Directors with respect to
Series A Junior Participating Preferred Shares
Exhibit B Form of Rights Certificate
Exhibit C Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of October 28, 1996 (the
"Agreement"), between UNION PACIFIC RESOURCES GROUP INC., a Utah corporation
(the "Company"), and HARRIS TRUST AND SAVINGS BANK (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on October 28, 1996 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each Common Share (as
hereinafter defined) of the Company outstanding at the close of business on
November 7, 1996 (the "Record Date") (which for these purposes shall include
all Common Shares presently entitled to receive dividends) and has authorized
the issuance of one Right (as such number may hereafter be adjusted pursuant to
the provisions of Section 11(p) hereof) for each Common Share of the Company
issued between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter defined), each
Right initially representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined) of the Company having the rights,
powers and preferences set forth in the form of the Resolution of the Board of
Directors attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"); and
WHEREAS, the Rights will be held by the Rights Agent under
this Agreement as trustee for the shareholders of the Company until the
Distribution Date; and
WHEREAS, the Board of Directors of the Company has considered
whether approval of this Agreement and the distribution of the Rights is in the
best interests of the Company and all other pertinent factors; and
WHEREAS, the Board of Directors of the Company has concluded
that approval of this Agreement and the distribution of the Rights is in the
best interests of the Company because the existence of the Rights will help (i)
reduce the risk of coercive two-tiered, front-end loaded or partial offers that
may not offer fair value to all shareholders, (ii) mitigate against market
accumulators who through open market and/or private purchases may achieve a
position of substantial influence or control without paying to selling or
remaining shareholders a fair control premium, (iii) deter market accumulators
who are simply interested in putting the Company into "play," (iv) restrict
self-dealing by a substantial shareholder, and (v) preserve the Board of
Directors' bargaining power and flexibility to deal with third-party acquirors,
to pursue the business strategies of the Company and to otherwise seek to
maximize values for all shareholders.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, and intending to be legally bound hereby,
the parties hereby agree as follows:
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Section 1. Certain Definitions.
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Shares then outstanding, but shall
not include the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by the
Company which, by reducing the number of Common Shares outstanding, increases
the proportionate number of Common Shares beneficially owned by such Person to
15% or more of the Common Shares then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of 15% or more of the then outstanding
Common Shares by reason of Common Shares purchased by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of any
additional Common Shares, then such Person shall be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if a majority of the Continuing
Directors then in office determines in good faith that a Person who would
otherwise be an "Acquiring Person", as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an Acquiring Person, as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended and in
effect on the date hereof (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has 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
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender offer or exchange offer made by such
Person or any of such Person's Affiliates or
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Associates until such tendered securities are accepted for payment,
purchase or exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or
(C) securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including without limitation pursuant to any agreement,
arrangement or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (ii) as
a result of an oral or written agreement, arrangement or understanding
to vote such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding (whether
or not in writing), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (c)) or disposing of any voting
securities of the Company,
provided, however, that nothing in this paragraph (c) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or
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executive order to close.
(e) "Close of business" on any given date shall mean
5:00 P.M., New York, New York, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., New York, New York time, on
the next succeeding Business Day.
(f) "Common Share" shall mean a share of Common
Stock of the Company and, to the extent that there are not a sufficient number
of Common Shares authorized to permit the full exercise of the Rights, shares
of any other class or series of the Company designated for such purpose
containing terms substantially similar to the terms of the Common Shares,
except that "Common Share" when used with reference to any Person other than
the Company shall mean the shares of capital stock of such Person with the
greatest voting power, or the equity securities or other equity interest having
power to control or direct the management, of such Person.
(g) "Continuing Director" shall mean (i) any member
of the Board of Directors of the Company, while such Person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of any such
Affiliate or Associate, and was a member of the Board prior to the date of this
Agreement, or (ii) any Person who subsequently becomes a member of the Board,
while such Person is a member of the Board, who is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended or approved by a
majority of the Continuing Directors.
(h) "Distribution Date" shall have the meaning set
forth in Section 3 hereof.
(i) "Expiration Date" shall have the meaning set
forth in Section 7(a).
(j) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(k) "Preferred Share" shall mean a share of Series
A Junior Participating Preferred Stock, par value $.01 per share, of the
Company and, to the extent that there are not a sufficient number of shares of
Series A Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, shares of any other series of Series Preferred Stock
of the Company designated for such purpose containing terms substantially
similar to the terms of the Series A Junior Participating Preferred Stock.
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(l) "Preferred Share Fraction" shall mean one
one-hundredth of a Preferred Share.
(m) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) (A), (B) or (C) hereof.
(n) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(o) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.
(p) "Subsidiary" shall have the meaning ascribed to
such term in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
(q) "Trading Day" shall have the meaning set forth
in Section 11(d)(i) hereof.
(r) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13
Event.
Unless otherwise specified, where reference is made in this Agreement to
sections of, and the General Rules and Regulations under, the Exchange Act, such
reference shall mean such sections and rules as amended from time to time and
any successor provisions thereto.
Section 2. Appointment of Rights Agent.
(a) The Company hereby appoints the Rights Agent to
act as agent for the Company and trustee for the beneficial owners of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.
(b) On the Record Date, the Company will deliver a
Rights Certificate to the Rights Agent, registered in the name of the Rights
Agent as trustee for the beneficial owners
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of the Rights represented thereby, for that number of Rights equal to the number
of Common Shares issued and outstanding on the Record Date, and the Rights Agent
shall hold the Rights represented thereby in trust for the beneficial owners in
accordance with the provisions of this Agreement.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business
on the tenth Business Day after a Stock Acquisition Date involving an Acquiring
Person that has become such in a transaction as to which the Board of Directors
has not made the determination referred to in Section 11(a)(ii)(B) hereof, or
(ii) within ten (10) Business Days (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date that a tender or exchange offer by any person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be the Beneficial
Owner of 15% or more of the Common Shares then outstanding (the earlier of (i)
and (ii) being herein referred to as the "Distribution Date"), (x) beneficial
interests in the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for the Common Shares
registered in the names of the holders of the Common Shares (which certificates
for Common Shares shall be deemed also to be certificates for beneficial
interests in the Rights) and not by separate certificates, and (y) the Rights
and beneficial interests therein will be transferable only in connection with
the transfer of the underlying Common Shares (including a transfer to the
Company). As soon as practicable after the Distribution Date, the Rights Agent
will send by first-class, insured, postage prepaid mail, to each record holder
of the Common Shares as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per Common Share has been made pursuant to Section 11(p) hereof, at the
time of distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates. Upon the distribution of the Rights Certificates as
provided in this subsection (a), the trust created hereby shall cease.
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(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in substantially the
form of Exhibit C hereto (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of the Common Shares as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Shares outstanding
as of the Record Date, until the Distribution Date, beneficial interests in the
Rights will be evidenced by such certificates for the Common Shares and the
registered holders of the Common Shares shall also be the registered holders of
the beneficial interests in the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in Section 7
hereof), the transfer of any certificates representing Common Shares in respect
of which Rights have been issued shall also constitute the transfer of the
Rights associated with such Common Shares. Certificates issued after the Record
Date upon the transfer of Common Shares outstanding on the Record Date shall
bear the legend set forth in subsection (c).
(c) Except as provided in Section 22 hereof, Rights
shall be issued in respect of all Common Shares that are issued (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date or the Expiration Date.
Certificates representing such Common Shares shall also be deemed to be
certificates for beneficial interests in the associated Rights, and shall bear
the following legend:
"This certificate also evidences a beneficial
interest in and entitles the holder hereof to certain Rights as set
forth in the Rights Agreement between Union Pacific Resources Group
(the "Company") and Harris Trust and Savings Bank (the "Rights Agent")
dated as of October 28, 1996 (the "Rights Agreement"), and as the same
may be amended from time to time, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and beneficial interests therein will no longer
be evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is, was
or becomes an Acquiring Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement), whether currently
held by or on behalf of such Person or by any subsequent holder, may
become null and void."
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, beneficial
interests in the Rights associated with the
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Common Shares represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Shares shall also be the
registered holders of beneficial interests in the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of
beneficial interests in the Rights associated with the Common Shares represented
by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall entitle the holders thereof to purchase such number
of Preferred Share Fractions as shall be set forth therein at the price set
forth therein (such exercise price per Preferred Share Fraction, the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights that the Company knows
are beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an 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 oral or written
plan, agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer that the Board of Directors of the Company has determined is
part of an oral or written plan, agreement, arrangement or understanding that
has as a primary purpose or effect avoidance of Section 7(e) hereof, and any
Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned
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by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement."
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates, the Certificate
number and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of Preferred Share
Fractions (or, following a Triggering Event, Common Shares or other securities,
cash or other assets, as the case may be, as the Rights Certificate or
Certificates surrendered then entitled such holder or former holder in the case
of a
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<PAGE>
transfer to purchase). Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
at the principal office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights 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. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to subsection (e), the registered holder
of any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price (except as
provided in Section 11(q) hereof) with respect to the total number of Preferred
Share Fractions (or Common Shares, other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then exercisable
(except as provided in Section 11(q) hereof), at or prior to the earliest of
(i) the close of business on October 28, 2006 (the "Final Expiration Date"),
(ii) the consummation of a transaction contemplated by Section 13(d) hereof,
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<PAGE>
or (iii) the time at which the Rights are redeemed or terminated as provided in
Section 23 hereof (the earlier of (i), (ii) and (iii) being herein referred to
as the "Expiration Date").
(b) The Purchase Price for each Preferred Share
Fraction pursuant to the exercise of a Right shall initially be $135, and shall
be subject to adjustment from time to time as provided in Sections 11 and 13(a)
hereof and shall be payable in accordance with subsection (c).
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per Preferred Share Fraction (or Common
Shares, other securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Section 20(k) and Section 14(b) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares (or make available, if the Rights Agent is the transfer agent for such
Shares) certificates for the total number of Preferred Shares to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company shall have elected to deposit some or
all of the total number of Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of Preferred Share Fractions as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) may be made, at the election of the holder of the Rights
Certificate, (x) in cash or by certified bank check or money order payable to
the order of the Company or (y) delivery of Rights if and to the extent
authorized by Section 11(q) hereof. In the event that the Company is obligated
to issue other securities of the Company (including Common Shares) pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
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the order of, the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an 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 the Acquiring Person has any continuing oral or written
plan, agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer which the Board of Directors of the Company has determined is
part of an oral or written plan, agreement, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise; provided, however, that the Rights
held by an Acquiring Person, an Affiliate or Associate of an Acquiring Person
or the transferees of such persons referred to above shall not be voided unless
the Acquiring Person in question or an Affiliate or Associate of such Acquiring
Person shall be involved in the transaction giving rise to the Section
11(a)(ii) Event. The Company shall use all reasonable efforts to insure that
the provisions of this Section 7(e) and Section 4(b) hereof are complied with,
but neither the Company nor the Rights Agent shall have any liability to any
holder of Rights Certificates or other Person as a result of the Company's
failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) 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.
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<PAGE>
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be cancelled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of 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 Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital
Stock; Registration of Securities.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available for issuance upon the exercise of
outstanding Rights as many of its authorized and unissued Preferred Shares
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued Common Shares and/or other securities or out of its authorized and
issued shares held in its treasury), which together shall at all times after
the Distribution Date be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on any
national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares and other
securities reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
or statements under the Securities Act of 1933 (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form or
forms, (ii) cause such registration statement or statements to become effective
as soon as practicable after such filing, and (iii) cause such registration
statement or statements to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such
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<PAGE>
securities, and (B) the date of the expiration of the Rights. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this subsection (c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all Preferred Shares
(and, following a Triggering Event, Common Shares or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and, with respect to
Preferred Shares, Common Shares or other shares of capital stock, fully paid
and nonassessable.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer taxes and
charges that may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of Preferred Share
Fractions (or Common Shares or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax that may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of Preferred Share Fractions (or Common Shares or other securities, as
the case may be) in respect of a name other than that of the registered holder
of the Rights Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of Preferred Share Fractions (or
Common Shares or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Capital Stock Record Date. Each person in whose
name any certificate for a number of Preferred Share Fractions (or Common Shares
or other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such
Preferred Share Fractions (or Common Shares or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date
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upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the applicable transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding Business
Day on which the applicable transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights 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, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
and 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 a dividend on any
security of the Company payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding Preferred
Shares into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred Shares (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of Preferred
Shares or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment
of the adjusted Purchase Price, the aggregate number and kind of
Preferred Shares or capital stock, as the case may be, that, if such
Right had been exercised immediately prior to such date and at a time
when the Preferred Share transfer books were open, such holder would
have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
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(ii) In the event:
(A) any Acquiring Person or any Associate
or Affiliate of any Acquiring Person, at any time after the
Stock Acquisition Date, directly or indirectly, (1) shall
merge into the Company or otherwise combine with the Company
and the Company shall be the continuing or surviving
corporation of such merger or combination and the Common
Shares of the Company or other equity securities of the
Company shall remain outstanding, (2) shall, in one
transaction or a series of transactions, transfer any assets
to the Company or to any of its Subsidiaries in exchange (in
whole or in part) for Common Shares, for shares of other
equity securities of the Company, or for securities
exercisable for or convertible into shares of equity
securities of the Company (Common Shares or otherwise) or
otherwise obtain from the Company, with or without
consideration, any additional shares of such equity
securities or securities exercisable for or convertible into
shares of such equity securities (other than pursuant to a
pro rata distribution to all holders of Common Shares), (3)
shall sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise acquire or dispose of assets in one
transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of its Subsidiaries, on
terms and conditions less favorable to the Company than the
Company would be able to obtain in arm's-length negotiation
with an unaffiliated third party, other than pursuant to a
Section 13 Event, (4) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of
assets having an aggregate fair market value of more than
$5,000,000 in one transaction or a series of transactions,
to, from or with (as the case may be) the Company or any of
the Company's Subsidiaries (other than incidental to the
lines of business, if any, engaged in as of the date hereof
between the Company and such Acquiring Person or Associate or
Affiliate), other than pursuant to a Section 13 Event, (5)
shall receive any compensation from the Company or any of the
Company's Subsidiaries other than compensation for full-time
employment as a regular employee at rates in accordance with
the Company's (or its Subsidiaries') past practices, or (6)
shall receive the benefit, directly or indirectly (except
proportionately as a shareholder and except if resulting from
a requirement of law or governmental regulation), of any
loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage provided
by the Company or any of its Subsidiaries, or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the
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Company for or pursuant to the terms of any such plan), alone
or together with its Affiliates and Associates, shall, at any
time after the Rights Dividend Declaration Date, become the
Beneficial Owner of 15% or more of the Common Shares then
outstanding, unless the event causing the 15% threshold to be
crossed is a Section 13 Event, or is an acquisition of Common
Shares pursuant to a tender offer, share exchange or an
exchange offer for all outstanding Common Shares at a price
and on terms that provide fair value to all shareholders, as
determined by at least a majority of the continuing Directors,
after taking into consideration all factors that such members
of the Board of Directors deem relevant, including, without
limitation, the long-term prospects and value of the Company
and the prices and terms that such members of the Board of
Directors believe, in good faith, could reasonably be achieved
if the Company or its assets were sold on an orderly basis
designed to realize maximum value, or
(C) during 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 transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a Section 13
Event or series of such Events (whether or not with or into
or otherwise involving an Acquiring Person) that has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its
Subsidiaries that is directly or indirectly beneficially
owned by any Acquiring Person or any Associate or Affiliate
of any Acquiring Person,
then, promptly following the first occurrence of a Section 11(a)(ii)
Event, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in lieu
of a number of Preferred Share Fractions, such number of Common Shares
of the Company as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of Preferred Share
Fractions for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per Common Share on the
date of such first occurrence (such number of shares, the "Adjustment
Shares").
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(iii) In the event that the number of Common Shares
that are authorized by the Company's Amended and Restated Articles of
Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company shall:
(A) determine the excess of the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value") over the
Purchase Price (such excess, the "Spread"), and (B) with respect to
each Right, make adequate provision to substitute for the Adjustment
Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Shares of the same or a
different class or other equity securities of the Company (including,
without limitation, preferred shares or units of preferred shares that
a majority of the Continuing Directors in office at the time has
deemed (based, among other things, on the dividend and liquidation
rights of such preferred shares) to have substantially the same
economic value as Common Shares (such preferred shares, hereinafter
referred to as "common share equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by a majority of the
Continuing Directors in office at the time after considering the
advice of a nationally recognized investment banking firm selected by
the Board of Directors of the Company; provided, however, if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Common
Shares (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the
Board of Directors of the Company shall determine in good faith that
it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the
thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such period,
as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the Company
shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. The Company
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<PAGE>
shall make a public announcement when the exercisability of the Rights
has been temporarily suspended, and again when such suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the value
of the Common Shares shall be the current market price (as determined
pursuant to Section 11(d) hereof) per Common Share on the Section
11(a)(ii) Trigger Date and the value of any "common share equivalent"
shall be deemed to have the same value as the Common Shares on such
date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to holders of any security of the
Company entitling them to subscribe for or purchase (for a period expiring
within forty-five (45) calendar days after such record date) Preferred Shares
(or shares having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred Share or per
equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares) less
than the current market price (as determined pursuant to Section 11(d) hereof)
per Preferred Share on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date,
plus the number of Preferred Shares that the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of Preferred Shares outstanding on
such record date, plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Company, the Rights Agent and the holders of
the Rights. Preferred 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 that would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for
a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly dividend out of the earnings or retained
earnings
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<PAGE>
of the Company), assets (other than a regular quarterly dividend referred to
above or dividend payable in Preferred Shares, but including any dividend
payable in stock other than Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined pursuant to
Section 11(d) hereof) per Preferred Share on such record date, less the then
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a Preferred Share and the
denominator of which shall be such current market price (as determined pursuant
to Section 11(d) hereof) per Preferred Share. 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 be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation
hereunder, other than computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per Common Share on any date shall
be deemed to be the average of the daily closing prices per Common
Share for the thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per Common Share on any date shall be deemed to
be the average of the daily closing prices per Common Share for the
ten (10) consecutive Trading Days immediately following such date;
provided, however, that in the event that the current market price per
Common Share is determined during a period following the announcement
by the issuer of such Common Share of (A) a dividend or distribution
on such Common Share payable in Common Shares or securities
convertible into Common Shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Shares,
and prior to the expiration of the requisite thirty (30) Trading Day
or ten (10) Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in
each such case, the "current market price" shall be properly adjusted
to take into account ex-dividend trading. The closing price for each
Trading 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 Common Shares are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system
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<PAGE>
with respect to securities listed on the principal national securities
exchange on which the Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("Nasdaq") or such
other system then in use, or, if on any such date the Common Shares are
not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the Common Shares selected by the Board of Directors of the
Company. If on any such date no market maker is making a market in the
Common Shares, the fair value of such shares on such date as determined
in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Shares are not publicly held or
not so listed or traded, "current market price" per share shall mean
the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder,
the "current market price" per Preferred Share shall be determined in
the same manner as set forth above for the Common Shares in clause (i)
of this Section 11(d) (other than the last sentence thereof). If the
current market price per Preferred Share cannot be determined in the
manner provided above or if the Preferred Shares are not publicly held
or listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per Preferred Share shall be
conclusively deemed to be an amount equal to one hundred (as such
number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalization with respect to the Common Shares
occurring after the date of this Agreement) multiplied by the current
market price per Common Share. If neither the Common Shares nor the
Preferred Shares are publicly held or so listed or traded, "current
market price" per Preferred Share shall mean the fair value per share
as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of a Preferred
Share Fraction shall be equal to the "current market price" of one
Preferred Share divided by 100.
(e) Anything herein to the contrary notwithstanding,
no adjustment in the
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<PAGE>
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one one-hundredth of a Common Share or one
one-hundred millionth of a Preferred Share, as the case may be. Notwithstanding
the first sentence of this subsection (e), any adjustment required by this
Section 11 shall be made no later than the earlier of (i) three (3) years from
the date of the transaction that mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Preferred Shares, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (m) and (q), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
Preferred Share Fractions 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 subsections (b) and (c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of Preferred Share Fractions (calculated to the nearest one one-hundred
millionth of a Preferred Share) obtained by (i) multiplying (x) the number of
Preferred Share Fractions covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of Preferred Share Fractions purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of Preferred Share
Fractions for which a Right was exercisable immediately prior to such
adjustment.
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<PAGE>
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-hundreth of a
Preferred Share) 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. The record date for the adjustment may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of Preferred Share Fractions issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per Preferred Share Fraction
and the number of Preferred Share Fractions that were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated or par value, if
any, of the number of Preferred Share Fractions issuable upon exercise of the
Rights, the Company shall take any corporate action that may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue such number of fully paid and nonassessable Preferred Share Fractions at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of
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<PAGE>
Preferred Share Fractions and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of Preferred Share
Fractions and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for
cash of any Preferred Shares at less than the current market price, (iii)
issuance wholly for cash for Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Shares
shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other person or persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect that would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the shareholders of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.
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<PAGE>
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares, or (iii) combine the outstanding
Common Shares into a smaller number of shares, the number of Rights associated
with each Common Share then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each Common Share following any
such event shall equal the result obtained by multiplying the number of Rights
associated with each Common Share immediately prior to such event by a fraction
the numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following
the occurrence of such event.
(q) In the event that the Rights become exercisable
following a Section 11(a)(ii) Event, the Company, by action of a majority of
the Continuing Directors in office at the time, may authorize that the Rights,
subject to Section 7(e) hereof, either (i) will only be, or (ii) may, at the
option of the holder entitled to exercise the Rights be, exercisable for, in
either case, 50% of the Common Shares (or cash or other securities or assets to
be substituted for the Adjustment Shares pursuant to subsection (a)(iii)) that
would otherwise be purchasable under subsection (a)(ii), in consideration of
the surrender to the Company of the Rights so exercised and without other
payment of the Purchase Price. Rights exercised under this subsection (q) shall
be deemed to have been exercised in full and shall be cancelled.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 and Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Shares and the Common Shares, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing Common Shares) in accordance with Section 25 hereof.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such a certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)
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<PAGE>
hereof), and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding
Common Shares shall be changed into or exchanged for stock or other securities
of any other Person or cash or any other property, or (z) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, and in
each such case and except as contemplated by subsection (d), proper provision
shall be made so that:
(i) each holder of a Right, except as provided in
Section 7(e) hereof or subsection (e), shall thereafter have the right
to receive, upon the exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non assessable and freely
tradeable Common Shares of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the
number of Preferred Share Fractions for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if
a Section 11(a)(ii) Event has occurred prior to the first occurrence of
a Section 13 Event, multiplying the number of such shares for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately
prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the current market price (determined pursuant
to Section 11(d)(i) hereof) per Common Share of such Principal Party on
the date of consummation of such Section 13 Event,
(ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event;
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<PAGE>
(iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of its Common Shares) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in
relation to its Common Shares thereafter deliverable upon the exercise
of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall
be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of subsection (a), the
Person that is the issuer of any securities into which Common Shares of
the Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction
described in clause (z) of the first sentence of subsection (a), the
Person that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person, and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Shares that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any Section 13 event, the Principal Party will
(i) prepare and file a registration
statement under the Act, with
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<PAGE> respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights that have not theretofore been exercised shall thereafter
become exercisable solely in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 (other than this subsection (d)) shall not be
applicable to, and the term "Section 13 Event" shall not include, a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i) such transaction
is consummated with a Person, or Persons who acquired Common Shares pursuant to
a tender offer, share exchange or exchange offer for all outstanding Common
Shares that complies with the provisions of Section 11(a)(ii)(B) hereof (or a
wholly owned Subsidiary of any such Person or Persons), (ii) the price per
Common Share offered in such transaction is not less than the price per Common
Share paid to all holders of Common Shares whose shares were purchased pursuant
to such tender offer, share exchange or exchange offer and (iii) the form of
consideration being offered to the remaining holders of Common Shares pursuant
to such transaction is the same as the form of consideration paid pursuant to
such tender offer, share exchange or exchange offer. Upon consummation of any
such transaction contemplated by this subsection (d), all Rights hereunder
shall expire.
(e) In the event that the Rights become exercisable
under subsection (a) (except as provided in subsection (d)), the Company, by
action of a majority of the Continuing Directors in office at the time, may
authorize that the Rights either (i) will only be, or (ii) may, at the option
of the Principal Party be, exercisable for, 50% of the Common Shares of the
Principal Party that would otherwise be purchasable under subsection (a), in
consideration of the surrender to the Principal Party, as the successor to the
Company under subsection (a)(ii), of the Rights so exercised and without other
payment of the Purchase Price. Rights exercised under this subsection (e) shall
be deemed to have been exercised in full and shall be canceled.
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates that evidence
fractional Rights. In lieu of such fractional Rights, there shall be paid to
the registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of
this subsection (a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable. The closing
price of the Rights for any day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading, or if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is making a market in
the Rights the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares, except in each case
for fractions which are integral multiples of Preferred Shares. In lieu of
fractional Preferred Shares that are not integral multiples of Preferred
Shares, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of a Preferred Share. For
purposes of this subsection (b), the current market value of one Preferred
Share shall be the closing price of a Preferred Share (as determined pursuant
to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of Common Shares upon
exercise of the Rights or to distribute certificates that evidence fractional
Common Shares. In lieu of fractional Common Shares, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
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exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this subsection (c),
the current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right or a beneficial interest
in a Right by the acceptance thereof expressly waives his right to receive any
fractional Rights or any fractional Common Shares upon exercise of a Right,
except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights or beneficial interests
therein, it is specifically acknowledged that the holders of Rights or
beneficial interests therein would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right or a beneficial interest in a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other such holder
that:
(a) prior to the Distribution Date, beneficial
interests in the Rights will be transferable only in connection with the
transfer of Common Shares;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent designated
for such purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof,
the Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Share certificate) is registered as the absolute owner
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thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Share
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent, subject to
the last sentence of Section 7(e) hereof, shall be required to be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or a beneficial interest in a Right or other Person as
a result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a
Shareholder. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
Preferred Share Fractions or any other securities of the Company (including the
Common Shares) that may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a 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 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions 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 disbursements 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
and its directors, officers, employees and agents, for and to hold each of them
harmless against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent or any such
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indemnified party in connection with the acceptance or administration of
this Agreement or the exercise of its duties hereunder, 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 or in the exercise of
its duties hereunder in reliance upon any Rights Certificate or certificate for
Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency and trust created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of a predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates 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 Rights Certificates shall have
been countersigned but not delivered the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
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Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates or beneficial interests in the Rights, 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 written opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any Acquiring
Person and the determination of "current market price") be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant 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 Rights Certificates or be required to verify the same (except as to
its countersignature on such Rights Certificates), 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 any provision of this Agreement or
the execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall
it be responsible for any change in the exercisability of the Rights or any
adjustment required under the provisions of this Agreement or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after actual notice
of any such adjustment); nor shall it by any act hereunder be deemed to make
any
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representation or warranty as to the authorization or reservation of any
Common Shares to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any Common Shares or Preferred Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on or after which such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not the Rights Agent under this Agreement and none of such actions shall
constitute a breach of trust. 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
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such act, default, neglect or misconduct; provided, however, that the Rights
Agent was not grossly negligent in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first consulting
with the Company.
(l) The Rights Agent undertakes only the express
duties and obligations imposed on it by this Agreement and no implied duties or
obligations shall be read into this Agreement against the Rights Agent.
(m) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits).
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' prior written notice mailed to the Company and
to each transfer agent of the Common Shares and Preferred Shares by registered
or certified mail, and to the holders of the Rights Certificates by first- class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' prior written notice mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares and Preferred Shares, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a
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corporation organized, doing business and in good standing under the laws of
the United States or of any state, having a principal office in the State of
New York or the State of Utah, that is authorized by law to exercise corporate
trust and stock transfer powers and is subject to supervision or examination by
federal or state authority and that has at the time of its appointment as
Rights Agent a combined capital and surplus adequate in the judgment of a
majority of Continuing Directors in office at the time to assure the
performance of its duties hereunder and the protection of the interests of the
Company and the holders of Rights or beneficial interests therein, or (b) an
Affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
and Preferred Shares and mail a notice thereof in writing to the registered
holders of the Rights Certificates or, prior to the Distribution Date, to the
registered holders of the Common Shares. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind
or class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance, sale or delivery of Common Shares
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to Common Shares so issued,
sold or delivered pursuant to the exercise of stock options, stock appreciation
rights, grants or awards outstanding on the Distribution Date under any benefit
plan or arrangement for employees or directors, or upon the exercise,
conversion or exchange of securities outstanding on the Record Date or
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise
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have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (i) the close of business on
the tenth day following a Stock Acquisition Date (or, if the Stock Acquisition
Date shall have occurred prior to the Record Date, the close of business on the
tenth day following the Record Date), or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price") and the Company may, at its option, pay the Redemption Price either in
Common Shares (based on the "current market price", as defined in Section
11(d)(i) hereof, of the Common Shares at the time of redemption) or cash;
provided, however, if the Board of Directors of the Company authorizes
redemption of the Rights in either of the circumstances set forth in clauses
(i) and (ii) of this proviso, then there must be Continuing Directors then in
office and such authorization shall require the concurrence of a majority of
such Continuing Directors: (i) such authorization occurs on or after the time a
Person becomes an Acquiring Person, or (ii) such authorization occurs on or
after the date of a change (resulting from a proxy or consent solicitation) in
a majority of the directors in office at the commencement of such solicitation
if any Person who is a participant in such solicitation has stated (or, if upon
the commencement of such solicitation, a majority of the Board of Directors of
the Company has determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider taking, any action
that would result in such Person becoming an Acquiring Person or that would
cause the occurrence of a Triggering Event unless, concurrent with such
solicitation, such Person (or one or more of its Affiliates or Associates) is
making a cash tender offer pursuant to a Schedule 14D-1 (or any successor form)
filed with the Securities and Exchange Commission for all outstanding Common
Shares not beneficially owned by such Person (or by its Affiliates or
Associates); provided further, however, that if, following the occurrence of a
Stock Acquisition Date and following the expiration of the right of redemption
hereunder but prior to any Triggering Event, (i) an Acquiring Person shall have
transferred or otherwise disposed of a number of Common Shares in one
transaction or series of transactions, not directly or indirectly involving the
Company or any of its Subsidiaries, which did not result in the occurrence of a
Triggering Event or the Company (with the approval of the majority of
Continuing Directors) shall have issued additional equity securities, in either
instance such that such Person is thereafter a Beneficial Owner of 15% or less
of the outstanding Common Shares, and (ii) there is no other Acquiring Person
immediately following the occurrence of the event described in clause (i), then
the right of redemption shall be reinstated and thereafter be subject to the
provisions of this Section 23. Notwithstanding anything contained in this
Agreement to the contrary, the Rights
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shall not be exercisable after the first occurrence of a Section 11(a)(ii) Event
until such time as the Company's right of redemption hereunder has expired.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for the
Common Shares. Any notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
(c) In deciding whether or not to exercise the
Company's right of redemption hereunder, the directors of the Company shall act
in good faith, in a manner they reasonably believe to be in the best interests
of the Company and with such care, including reasonable inquiry, skill and
diligence, as a person of ordinary prudence would use under similar
circumstances.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Shares or to make any other distribution to
the holders of Preferred Shares (other than a regular quarterly dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the holders
of Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (iv) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions, of
more than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each
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such case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of Preferred Shares, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least twenty (20) days prior to the record date for determining
holders of Preferred Shares for purposes of such action, and in the case of any
such other action, at least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of
Preferred Shares, whichever shall be the earlier.
(b) Upon the occurrence of a Section 11(a)(ii)
Event, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right, to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred Shares
shall be deemed thereafter to refer to Common Shares and/or, if appropriate,
other securities.
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 Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Union Pacific Resources Group
P.O. Box 7
801 Cherry Street
Fort Worth, TX 76101
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Harris Trust and Savings Bank
111 West Monroe
P.O. Box 755
Chicago, IL 60690
Attention: Corporate Trust Department
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Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date to the holder of certificates representing
Common Shares) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. Supplements and Amendments.
(a) 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
Common Shares. From and after 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 this Agreement without the
approval of any holders of Rights 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, or (iv) to change or supplement
the provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
Rights Certificates; provided, 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 that 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, (i) no supplement or amendment shall be made
that changes the Redemption Price, the Final Expiration Date, the Purchase Price
or the number of Preferred Share Fractions for which a Right is exercisable,
(ii) any supplement or amendment shall be effective only if there are Continuing
Directors and shall require the concurrence of a majority of such Continuing
Directors if: (x) such supplement or amendment occurs on or after the time a
Person becomes an Acquiring Person, or (y) such supplement or amendment occurs
on or after the date of a change (resulting from a proxy or consent
solicitation) in a majority of the directors in office at the commencement of
such solicitation if any Person who is a participant in such solicitation has
stated (or, if upon the commencement of such solicitation, a majority of the
Board of Directors of the Company has determined in good faith) that such Person
(or any of its Affiliates or Associates) intends to take, or may consider
taking, any action that would result in such Person becoming an Acquiring Person
or that would cause the occurrence of a Triggering Event unless,
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<PAGE>
concurrent with such solicitation, such Person (or one or more of its Affiliates
or Associates) is making a cash tender offer pursuant to a Schedule 14D-1 (or
any successor form) filed with the Securities and Exchange Commission for all
outstanding Common Shares not beneficially owned by such Person (or by its
Affiliates or Associates), and (iii) no supplement or amendment that changes the
rights and duties of the Rights Agent under this Agreement shall be effective
without the consent of the Rights Agent. Prior to the Distribution Date, the
interests of the beneficial owners of Rights shall be deemed coincident with the
interests of the holders of Common Shares.
(b) In deciding whether or not to supplement or
amend this Agreement, the directors of the Company shall act in good faith, in a
manner they reasonably believe to be in the best interests of the Company and
with such care, including reasonable inquiry, skill and diligence, as a person
of ordinary prudence would use under similar circumstances, and they may
consider the effects of any action upon employees, suppliers and customers of
the Company and upon communities in which offices or other establishments of the
Company are located, and all other pertinent factors.
Section 27. 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 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of the Company (with,
where specifically provided for herein, the concurrence of the Continuing
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board (with, where specifically provided for herein, the concurrence of the
Continuing Directors) 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 not redeem the Rights or to
amend or supplement the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
(with, where specifically provided for herein, the concurrence of the Continuing
Directors) in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board or the Continuing Directors to any liability to the
holders of the Rights.
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<PAGE>
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable for any purpose or under
any set of circumstances or as applied to any Person, such invalid, void or
unenforceable term, provision, covenant or restriction shall continue in effect
to the maximum extent possible for all other purposes, under all other
circumstances and as applied to all other Persons; and 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;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provisions requiring that a determination
be made by less than the entire Board (or at a time or with the concurrence of a
group of directors consisting of less than the entire Board) is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board in accordance
with applicable law and the Company's articles of incorporation and by-laws.
Section 31. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the Utah and for all purposes shall be governed by and construed in
accordance with the laws of such jurisdiction applicable to contracts made and
to be performed entirely within such jurisdiction.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or
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<PAGE>
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
UNION PACIFIC RESOURCES GROUP INC.
By_______________________________
Name:
Title:
HARRIS TRUST AND SAVINGS BANK
By_______________________________
Name:
Title:
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<PAGE>
EXHIBIT A
RESOLUTION OF THE BOARD OF DIRECTORS OF
UNION PACIFIC RESOURCES GROUP INC.
ESTABLISHING AND DESIGNATING
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
AS A SERIES OF THE SERIES PREFERRED STOCK
RESOLVED, that pursuant to the authority expressly vested in
the Board of Directors of Union Pacific Resources Group, Inc. (the
"Corporation") by Article III of the Amended and Restated Articles of
Incorporation of the Corporation, the Board of Directors hereby fixes and
determines the voting rights, designations, preferences, qualifications,
privileges, limitations, restrictions, options, conversion rights and other
special or relative rights of the first series of the Series Preferred Stock,
par value $.01 per share, which shall consist of 3,000,000 shares and shall be
designated as Series A Junior Participating Preferred Shares (the "Series A
Preferred Shares").
Special Terms of the Series A Preferred Shares
Section 1. Dividends and Distributions.
(a) The rate of dividends payable per share of Series A
Preferred Shares on the first day of January, April, July and October in each
year or such other quarterly payment date as shall be specified by the Board of
Directors (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 the Series A Preferred
Shares, shall be (rounded to the nearest cent) equal to the greater of (i)
$4.00 or (ii) subject to the provision for adjustment hereinafter set forth
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in cash, based upon the fair market value
at the time the non-cash dividend or other distribution is declared or paid as
determined in good faith by the Board of Directors) 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 of the Corporation 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 the Series A Preferred Shares. Dividends on the Series A
Preferred Shares shall be paid out of funds legally available for such purpose.
In the event the Corporation shall at any time after October 28, 1996 (the
"Rights Declaration Date") (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller number
of shares, then in each such case the amounts to which holders of Series A
Preferred Shares were entitled immediately prior to such event under clause
(ii) of the preceding sentence shall be adjusted by multiplying each such
<PAGE>
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) Dividends shall begin to accrue and be cumulative on
outstanding Series A Preferred Shares from the Quarterly Dividend Payment Date
next preceding the date of issue of such Series A Preferred 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 Series A Preferred Shares entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the Series A Preferred
Shares 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.
Section 2. Voting Rights. In addition to any other voting
rights required by law, the holders of Series A Preferred Shares shall have the
following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each Series A Preferred Share shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the shareholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of Series
A Preferred Shares were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) In the event that dividends upon the Series A Preferred
Shares shall be in arrears to an amount equal to six full quarterly dividends
thereon, the holders of such Series A Preferred Shares shall become entitled to
the extent hereinafter provided to vote noncumulatively at all elections of
directors of the Corporation, and to receive notice of all shareholders'
meetings to be held for such purpose. At such meetings, to the extent that
directors are being elected, the holders of such Series A Preferred Shares
voting as a class shall be entitled solely to elect two members of the Board of
Directors of the Corporation; and all other directors of the Corporation shall
be elected by the other shareholders of the Corporation entitled to vote in the
election of directors. Such voting rights of the holders of such Series A
Preferred Shares shall continue until all accumulated and unpaid dividends
thereon shall have been paid or funds sufficient therefor set aside, whereupon
all such voting rights of the holders of shares of such series shall cease,
subject
A-2
<PAGE>
to being again revived from time to time upon the reoccurrence of the conditions
above described as giving rise thereto.
At any time when such right to elect directors separately as
a class shall have so vested, the Corporation may, and upon the written request
of the holders of record of not less than 20% of the then outstanding total
number of shares of all the Series A Preferred Shares having the right to elect
directors in such circumstances shall, call a special meeting of holders of
such Series A Preferred Shares for the election of directors. In the case of
such a written request, such special meeting shall be held within 90 days after
the delivery of such request, and, in either case, at the place and upon the
notice provided by law and in the By-laws of the Corporation; provided, that
the Corporation shall not be required to call such a special meeting if such
request is received less than 120 days before the date fixed for the next
ensuing annual or special meeting of shareholders of the Corporation. Upon the
mailing of the notice of such special meeting to the holders of such Series A
Preferred Shares, or, if no such meeting be held, then upon the mailing of the
notice of the next annual or special meeting of shareholders for the election
of directors, the number of directors of the Corporation shall, ipso facto, be
increased to the extent, but only to the extent, necessary to provide
sufficient vacancies to enable the holders of such Series A Preferred Shares to
elect the two directors hereinabove provided for, and all such vacancies shall
be filled only by vote of the holders of such Series A Preferred Shares as
hereinabove provided. Whenever the number of directors of the Corporation shall
have been increased, the number as so increased may thereafter be further
increased or decreased in such manner as may be permitted by the By-laws and
without the vote of the holders of Series A Preferred Shares, provided that no
such action shall impair the right of the holders of Series A Preferred Shares
to elect and to be represented by two directors as herein provided.
So long as the holders of Series A Preferred Shares are
entitled hereunder to voting rights, any vacancy in the Board of Directors
caused by the death or resignation of any director elected by the holders of
Series A Preferred Shares, shall, until the next meeting of shareholder for the
election of directors, in each case be filled by the remaining director elected
by the holders of Series A Preferred Shares having the right to elect directors
in such circumstances.
Upon termination of the voting rights of the holders of any
series of Series A Preferred Shares the terms of office of all persons who
shall have been elected directors of the Corporation by vote of the holders of
Series A Preferred Shares or by a director elected by such holders shall
forthwith terminate.
(c) Except as otherwise provided herein, in the articles of
the Corporation or by law, the holders of Series A Preferred Shares and the
holders of Common Stock (and the holders of shares of any other series or class
entitled to vote thereon) shall vote together as one class on all matters
submitted to a vote of shareholders of the Corporation.
Section 3. Reacquired Shares. Any Series A Preferred Shares
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled
A-3
<PAGE>
promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued Series Preferred Stock and may be
reissued as part of a new series of Series Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
Section 4. Liquidation, Dissolution or Winding Up. In the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, the holders of Series A Preferred Shares shall be entitled to
receive the greater of (a) $100 per share, plus accrued dividends to the date
of distribution, whether or not earned or declared, or (b) an amount 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 Common
Stock. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
then in each such case the amount to which holders of Series A Preferred Shares
were entitled immediately prior to such event pursuant to 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.
Section 5. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case the Series A Preferred Shares shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of shares,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred Shares 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.
Section 6. No Redemption. The Series A Preferred Shares shall
not be redeemable.
Section 7. Ranking. The Series A Preferred Shares shall rank
junior to all other series of the Corporation's Series Preferred Stock as to
the payment of dividends and the distribution of assets, unless the terms of
any such series shall provide otherwise.
A-4
<PAGE>
Section 8. Fractional Shares. Series A Preferred Shares may
be issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Shares.
<PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER OCTOBER 28, 2006 OR AFTER EARLIER REDEMPTION BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
- ---------------
* The bracketed portion of the legend shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE>
UNION PACIFIC RESOURCES GROUP INC.
RIGHTS 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 October 28, 1996 (the "Rights
Agreement"), between Union Pacific Resources Group, Inc., a Utah corporation
(the "Company"), and Harris Trust and Savings Bank (the "Rights Agent"), to
purchase from the Company at any time prior to 5:00 P.M. (New York, New York
time) on October 28, 2006 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock (the "Preferred Share") of the Company, at a
purchase price (the "Purchase Price") of $135 per one one-hundredth of a
Preferred Share (such fraction, a "Preferred Share Fraction"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and related Certificate duly executed. Except as provided in
Sections 11(q) and 13(e) of the Rights Agreement, the Purchase Price shall be
paid, at the election of the holder, in cash or Common Stock, of the Company
(the "Common Shares") having an equivalent value. The number of Rights
evidenced by this Rights Certificate (and the number of Preferred Share
Fractions that may be purchased upon exercise thereof) set forth above, and the
Purchase Price per Preferred Share Fraction set forth above, are the number and
Purchase Price as of November 7, 1996, based on the Preferred Shares as
constituted at such date.
Except as otherwise provided in the Rights Agreement, upon
the occurrence of any Section 11(a)(ii) Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of any such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of Preferred Shares or other securities that may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain
events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of
B-2
<PAGE>
the Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of Preferred Share
Fractions as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of the
close of business on (i) the tenth day following the Stock Acquisition Date (as
such time period may be extended pursuant to the Rights Agreement), and (ii)
the Final Expiration Date. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority
of the Continuing Directors.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of a Preferred Share, which may, as the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Preferred
Shares or of any other securities of the Company (including Common Shares) that
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a 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 Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
B-3
<PAGE>
Dated as of ____________, 1996
ATTEST UNION PACIFIC RESOURCES GROUP INC.
_________________________________ By_______________________________
Secretary Title:
Countersigned
HARRIS TRUST AND SAVINGS BANK
By____________________
Authorized Signature
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ________________________________________ hereby sells,
assigns and transfers unto
_________________________________________________________
(Please print name and address of transferee)
_________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________, 19 __
_______________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights 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 any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ________________, 19__ _____________________
Signature
Signature Guaranteed:
NOTICE
B-5
<PAGE>
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: UNION PACIFIC RESOURCES GROUP INC.:
The undersigned hereby irrevocably elects to exercise
________ Rights represented by this Rights Certificate to purchase the
Preferred Shares issuable upon the exercise of the Rights (or Common Shares or
such other securities of the Company or of any other person that may be
issuable upon the exercise of the Rights) and requests that certificates for
such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate for the balance
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: _____________, 19__
________________________
Signature
Signature Guaranteed:
B-7
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that
(1) the Rights evidenced by this Rights 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 any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: _____________, 19__ _________________________
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
B-8
<PAGE>
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On October 28, 1996 the Board of Directors of Union Pacific
Resources Group, Inc. (the "Company") declared a dividend distribution of one
Right for each outstanding share of Common Stock (each, a "Common Share"), of
the Company to shareholders of record at the close of business on November 7,
1996. Each Right entitles the registered holder to purchase from the Company a
unit consisting of one one-hundredth of a share (a "Unit") of the Series A
Junior Participating Preferred Stock, par value $.01 per share, of the Company
(the "Preferred Shares"), or a combination of securities and assets of
equivalent value, at a Purchase Price of $135 per Unit, subject to adjustment.
The Purchase Price may be paid, at the option of the holder, in cash or Common
Shares having a value at the time of exercise equal to the Purchase Price. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Harris Trust and Savings Bank, as
Rights Agent.
Initially, ownership of the Rights will be evidenced by the
Common Share certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. The Rights will separate from the
Common Shares and a Distribution Date will occur upon the earlier of (i) 10
business days following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Shares (the "Stock Acquisition Date"), or (ii) within ten
(10) business days (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated persons
becomes an Acquiring Person) following the commencement of a tender offer or
exchange offer that would result in a person or group beneficially owning 15%
or more of the outstanding Common Shares. Until the Distribution Date, (i) the
Rights will be evidenced by the Common Share certificates and will be
transferred with and only with such Common Share certificates, (ii) new Common
Share certificates issued after November 7, 1996 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Shares outstanding will also constitute
the transfer of the Rights associated with the Common Shares represented by
such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on October 28, 2006, unless earlier
redeemed by the Company as described below or unless a transaction under
Section 13(d) of the Rights Agreement has occurred.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Shares as of the
close of business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, and except in connection with the exercise of employee
stock options or stock appreciation rights or under any other benefit plan for
employees
<PAGE>
or directors or in connection with the exercise of warrants or
conversion of convertible securities, only Common Shares issued after November
7, 1996 and prior to the Distribution Date will be issued with Rights.
Except in the circumstances described below, after the
Distribution Date each Right will be exercisable into one one-hundredth of a
Preferred Share (a "Preferred Share Fraction"). Each Preferred Share Fraction
carries voting and dividend rights that are intended to produce the equivalent
of one Common Share. The voting and dividend rights of the Preferred Shares are
subject to adjustment in the event of dividends, subdivisions and combinations
with respect to the Common Shares of the Company. In lieu of issuing
certificates for Preferred Share Fractions which are less than an integral
multiple of one Preferred Share (i.e. 100 Preferred Share Fractions), the
Company may pay cash representing the current market value of the Preferred
Share Fractions.
In the event that at any time following the Stock Acquisition
Date, (i) the Company is the surviving corporation in a merger with an
Acquiring Person and its Common Shares remain outstanding, (ii) a Person
becomes the beneficial owner of more than 15% of the then outstanding Common
Shares other than pursuant to a tender offer, share exchange or exchange offer
that provides fair value to all shareholders, (iii) an Acquiring Person engages
in one or more "self-dealing" transactions as set forth in the Rights
Agreement, or (iv) during such time as there is an Acquiring Person an event
occurs that results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., a reverse stock split), each holder of a Right
will thereafter have the right to receive, upon exercise, Common Shares (or, in
certain circumstances, cash, property or other securities of the Company)
having a value equal to two times the exercise price of the Right. In lieu of
requiring payment of the Purchase Price upon exercise of the Rights following
any such event, the Company may permit the holders simply to surrender the
Rights, in which event they will be entitled to receive Common Shares (and
other property, as the case may be) with a value of 50% of what could be
purchased by payment of the full Purchase Price. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in clauses
(i), (ii), (iii) or (iv) of this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person who was involved in the transaction giving rise
to any such event will be null and void. However, Rights are not exercisable
following the occurrence of any of the events set forth above until such time
as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $135 per Right, each
Right not otherwise voided following an event set forth in the preceding
paragraph would entitle its holder to purchase $270 worth of Common Shares (or
other consideration, as noted above) for $135. Assuming that the Common Shares
had a per share value of $27 at such time, the holder of each valid Right would
be entitled to purchase ten Common Shares for $135. Alternatively, the Company
could permit the holder to surrender each Right in exchange for stock or cash
equivalent to five Common Shares (with a value of $135) without the payment of
any consideration other than the
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<PAGE>
surrender of the Right.
In the event that, at any time following the Stock
Acquisition Date, (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 that is described in, or that follows a tender offer,
share exchange or exchange offer described in, the second preceding paragraph),
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights that previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common shares of the acquiring company having a value equal to two
times the exercise price of the Right. Again, provision is made to permit
surrender of the Rights in exchange for one-half of the value otherwise
purchasable. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Shares or other securities or property issuable upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) if holders of the Preferred
Shares are granted certain rights or warrants to subscribe for Preferred Shares
or convertible securities at less than the current market price of the
Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular quarterly
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred
Shares on the last trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price
of $.01 per Right. That ten day redemption period may be extended by the Board
of Directors so long as the Rights are still redeemable. Under certain
circumstances set forth in the Rights Agreement, the decision to redeem will
require the concurrence of a majority of the Continuing Directors. Immediately
upon the action of the Board of Directors ordering redemption of the Rights,
with, where required, the concurrence of the Continuing Directors, the Rights
will terminate and the only right of the holders of Rights will be to receive
the $.01 redemption price.
The term "Continuing Directors" means any member of the Board
of Directors of the Company who was a member of the Board prior to the date of
the Rights Agreement, and any person who is subsequently elected to the Board
if such person is recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person, or an affiliate or
associate of an Acquiring Person, or any representative of the foregoing
entities.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a
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<PAGE>
shareholder of the Company, including, without limitation, the right to vote or
to receive dividends. While the distribution of the Rights will not be taxable
to shareholders or to the Company, shareholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Preferred Shares (or other consideration) of the Company or for
common shares of the acquiring company as set forth above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights Agreement may
be amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement may
be amended by the Board in order to cure any ambiguity, to make changes that do
not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to adjust the
time period governing redemption shall be made at such time as the Rights are
not redeemable. Under certain circumstances set forth in the Rights Agreement,
amendments will require the concurrence of a majority of the Continuing
Directors.
A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to the Current Report on Form
8-K. 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.
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