RIGHTS AGREEMENT
dated as of
May 3, 2000
between
FREEPORT-McMoRan COPPER & GOLD INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
TABLE OF CONTENTS
Page
Section 1. Definitions 1
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Right Certificates 6
Section 4. Form of Right Certificates 8
Section 5. Countersignature and Registration 8
Section 6. Transfer and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights 10
Section 8. Cancellation and Destruction of Right Certificates 11
Section 9. Reservation and Availability of Capital Stock 12
Section 10. Preferred Stock Record Date 13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights 13
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares 22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 23
Section 14. Fractional Rights and Fractional Shares 25
Section 15. Rights of Action 27
Section 16. Agreement of Right Holders 27
Section 17. Right Certificate Holder Not Deemed a Stockholder 28
Section 18. Concerning the Rights Agent 28
Section 19. Merger or Consolidation or Change of Name of Rights
Agents 29
Section 20. Duties of Rights Agent 29
Section 21. Change of Rights Agent 32
Section 22. Issuance of New Right Certificates 33
Section 23. Redemption 33
Section 24. Exchange 34
Section 25. Notice of Proposed Actions 35
Section 26. Notices 36
Section 27. Supplements and Amendments 36
Section 28. Successors 37
Section 29. Determinations and Actions by the Board, etc 37
Section 30. Benefits of this Agreement 37
Section 31. Severability 37
Section 32. Governing Law 37
Section 33. Counterparts 38
Section 34. Descriptive Headings 38
Exhibit A Form of Certificate of Designations of Preferred Stock
Exhibit B Form of Right Certificate
Exhibit C Summary Description of the Stockholder Rights Plan
RIGHTS AGREEMENT
AGREEMENT dated as of May 3, 2000 between Freeport-McMoRan Copper & Gold
Inc., a Delaware corporation (the "Company"), and ChaseMellon Shareholder
Services, L.L.C., a New Jersey limited liability company, as Rights Agent (the
"Rights Agent"),
W I T N E S S E T H
WHEREAS, on May 2, 2000 the Board of Directors of the Company authorized and
declared a dividend of one preferred stock purchase right (a "Right") for each
share of Common Stock (as hereinafter defined) outstanding at the Close of
Business on May 16, 2000 (the "Record Date") and has authorized the issuance,
upon the terms and subject to the conditions hereinafter set forth, of one Right
(subject to adjustment) in respect of each share of Common Stock issued after
the Record Date, each Right representing the right to purchase, upon the terms
and subject to the conditions hereinafter set forth, one one-hundredth (subject
to adjustment) of a share of Preferred Stock (as hereinafter defined);
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definitions. The following terms, as used herein, have the
following meanings:
"Acquiring Person" means any Person who, together with all Affiliates and
Associates of such Person, is the Beneficial Owner of the Threshold Percentage,
but shall not include an Exempt Person; provided, however, that (a) if the Board
determines in good faith that a Person who would otherwise be an "Acquiring
Person" has become the Beneficial Owner of a number of shares of Common Stock,
Class A Common Stock or Class B Common Stock such that the Person would
otherwise qualify as an "Acquiring Person" inadvertently (including, without
limitation, because (i) such Person was unaware that it beneficially owned a
percentage of Common Stock, Class A Common Stock or Class B Common Stock that
would otherwise cause such Person to be an "Acquiring Person" or (ii) such
Person was aware of the extent of its Beneficial Ownership of Common Stock,
Class A Common Stock or Class B Common Stock but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement) and without any
intention of changing, exercising or influencing control of the Company, then
such Person shall not be deemed to be or to have become an "Acquiring Person"
for any purposes of this Agreement unless and until such Person shall have
failed to divest itself, as soon as practicable (as determined, in good faith,
by the Board of Directors of the Company), of Beneficial Ownership of a
sufficient number of shares of Common Stock, Class A Common Stock or Class B
Common Stock so that such Person would no longer otherwise qualify as an
"Acquiring Person;" and (b) no Person shall become an "Acquiring Person" as the
result of any acquisition of shares of Common Stock, Class A Common Stock or
Class B Common Stock by the Company which, by reducing the number of shares of
Common Stock, Class A Common Stock or Class B Common Stock outstanding,
increases the proportionate number of shares of Common Stock, Class A Common
Stock or Class B Common Stock beneficially owned by such Person to the Threshold
Percentage; provided, however, that if a Person shall become the Beneficial
Owner of the Threshold Percentage by reason of such share acquisition by the
Company and shall thereafter become the Beneficial Owner of any additional
shares of Common Stock, Class A Common Stock or Class B Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock, Class A Common Stock or Class B Common Stock or
pursuant to a split or subdivision of the outstanding Common Stock, Class A
Common Stock or Class B Common Stock), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial Owner of such additional
shares of Common Stock, Class A Common Stock or Class B Common Stock such Person
does not beneficially own the Threshold Percentage.
"Affiliate" and "Associate" have the respective meanings ascribed to such terms
in Rule 12b-2 under the Exchange Act as in effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to have
"Beneficial Ownership" of and to "beneficially own," any securities:
(a) that such Person or any of its Affiliates or Associates,
directly or indirectly, beneficially owns (as determined pursuant to Rule 13d-3
under the Exchange Act as in effect on the date hereof);
(b) that such Person or any of its Affiliates or Associates,
directly or indirectly, has
(i) the right to acquire (whether such right is exercisable
immediately or only upon the occurrence of certain events or the passage of time
or both) pursuant to any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights, 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 or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase, (B) securities that such Person has a right to acquire upon the
exercise of Rights at any time prior to the time that any Person becomes an
Acquiring Person or (C) securities issuable upon the exercise of Rights from and
after the time that any Person becomes an Acquiring Person if such 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
("Original Rights") or pursuant to Section 11(i) or Section 11(p) with respect
to an adjustment to Original Rights; or
(ii) the right to vote (whether such right is exercisable
immediately or only upon the occurrence of certain events or the passage of time
or both) pursuant to any agreement, arrangement or understanding (whether or not
in writing) or otherwise; provided that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", any security under this clause
(ii) as a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding (A) arises solely from
a revocable proxy or consent given in response to a public proxy or consent
solicitation made pursuant to the applicable 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
(c) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) and with respect to which
such Person or any of its Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in subparagraph (b)(ii)
immediately above) or disposing of any such securities;
provided, however, that no Person who is an officer, director or employee
of an Exempt Person shall be deemed, solely by reason of such Person's status or
authority as such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are "beneficially
owned," including, without limitation, in a fiduciary capacity, by an Exempt
Person or by any other such officer, director or employee of an Exempt Person.
"Board" means the Board of Directors of the Company.
"Business Day" means any day other than a Saturday, Sunday or a day on which
banking institutions in the States of New Jersey or Texas are authorized or
obligated by law or executive order to close.
"Class A Common Stock" means the Class A Common Stock, par value $0.10 per
share, of the Company.
"Class B Common Stock" means the Class B Common Stock, par value $0.10 per
share, of the Company.
"Close of Business" on any given date means 5:00 P.M., Central time, on such
date; provided that if such date is not a Business Day "Close of Business" means
5:00 P.M., Central time, on the next succeeding Business Day.
"Common Stock" means the Class A Common Stock, the Class B Common Stock and any
other common stock of the Company, except that, when used with reference to any
Person other than the Company, "Common Stock" means the 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.
"Company Voting Stock" means any capital stock of the Company which is then
entitled to vote for the election of directors.
"Distribution Date" means the earlier of (a) the Close of Business on the tenth
day after the Stock Acquisition Date and (b) the Close of Business on the tenth
Business Day (or such later day as may be designated prior to the occurrence of
a Section 11(a)(ii) Event by action of the Board) after the date of the
commencement of a tender or exchange offer by any Person if, upon consummation
thereof, such Person would be an Acquiring Person; provided, however, that if
either of such dates occurs after the date of this Agreement and on or prior to
the Record Date, then the Distribution Date shall be the Record Date.
"Exempt Person" shall mean the Company or any Subsidiary of the Company, in each
case including, without limitation, in its fiduciary capacity, or any employee
benefit plan of the Company or of any Subsidiary of the Company, or any entity
or trustee holding Common Stock for or pursuant to the terms of any such plan or
for the purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" means the earlier of (a) the Final Expiration Date and (b) the
time at which all Rights are redeemed as provided in Section 23 or exchanged as
provided in Section 24.
"Final Expiration Date" means the Close of Business on May 16, 2010.
"Majority Shares" means the number of shares of Company Voting Stock as will
elect a majority of the directors of the Company.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust or any other entity or organization.
"Preferred Stock" means the Series A Participating Cumulative Preferred Stock,
par value $0.10 per share, of the Company, having the terms set forth in the
form of certificate of designations attached hereto as Exhibit A.
"Purchase Price" means the price (subject to adjustment as provided herein) at
which a holder of a Right may purchase one one-hundredth of a share of Preferred
Stock (subject to adjustment as provided herein) (or, in accordance with Section
11(a)(ii), may purchase the Adjustment Shares (as defined therein)) upon
exercise of a Right, which price shall initially be $60.00.
"Section 11(a)(ii) Event" means any event described in the first clause of
Section 11(a)(ii).
"Section 13 Event" means any event described in clauses (x), (y) or (z) of
Section 13(a).
"Securities Act" means the Securities Act of 1933, as amended.
"Stock Acquisition Date" means the date of the first public announcement
(including through the filing of a report on Schedule 13D under the Exchange Act
(or any comparable or successor report)) by the Company or an Acquiring Person
indicating that an Acquiring Person has become such.
"Subsidiary" of any Person means any other Person of which securities or other
ownership interests having ordinary voting power, in the absence of
contingencies, to elect a majority of the board of directors or other Persons
performing similar functions are at the time directly or indirectly owned by
such first Person.
"Threshold Percentage", as of any date of determination, means (i) as long as
that certain Agreement dated as of May 2, 1995, by and between the Company and
Rio Tinto Indonesia Limited ("Rio Tinto") remains in effect, with respect to Rio
Tinto and its Affiliates and Associates, that percentage of Class A Common
Stock, Class B Common Stock or Common Stock that would result in Rio Tinto and
its Affiliates and Associates having Beneficial Ownership of shares of Company
Voting Stock equal to or greater than the Majority Shares; provided that, solely
for purposes of such calculation, the shares of Company Voting Stock, issuable
upon exercise of warrants, options or other rights, or upon conversion or
exchange of convertible or exchangeable securities, owned by Rio Tinto and its
Affiliates and Associates, shall be treated as outstanding Company Voting Stock;
and (ii) with respect to any other Person and its Affiliates and Associates, (a)
20% of all then-outstanding Common Stock, (b) 20% of all then-outstanding Class
A Common Stock or (c) 20% of all then-outstanding Class B Common Stock.
"Trading Day" means a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is open for
the transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a Business Day.
"Triggering Event" means any Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company 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 (each, a "Co-Rights
Agent") as it may deem necessary or desirable. If the Company appoints one or
more Co-Rights Agents, the respective duties of the Rights Agent and any Co-
Rights Agents shall be as the Company shall determine, and references herein to
the "Rights Agent" shall be deemed to refer to the Rights Agent and/or the Co-
Rights Agent, as applicable. The Rights Agent shall have no duty to supervise,
and in no event shall be liable for, the acts or omissions of any such Co-Rights
Agent.
Section 3. Issue of Right Certificates. (a) Prior to the Distribution Date,
(i) the Rights will be evidenced (subject to the next to the last sentence of
this Section 3(a)) by the certificates for the Common Stock and not by separate
Right Certificates (as hereinafter defined) and the registered holders of the
Common Stock shall be deemed to be the registered holders of the associated
Rights, and (ii) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock. As soon as practicable after
the Record Date, the Company will send a copy of the Summary of Rights
substantially in the form of Exhibit C hereto, by first-class mail, postage
prepaid, to each record holder of the Common Stock as of the Close of Business
on the Record Date at the address of such holder shown on the records of the
Company. With respect to certificates for Common Stock outstanding as of the
Record Date, prior to the Distribution Date, the Rights will be evidenced by
such certificates registered in the names of the holders thereof with or without
a copy of the Summary of Rights. Prior to the Distribution Date (or, if
earlier, the Expiration Date), the surrender for transfer of any certificate for
Common Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby.
(b) As soon as practicable after the Company has notified the Rights
Agent of the occurrence of the Distribution Date and has provided the Rights
Agent with a list of the holders of the Company's Common Stock, the Rights Agent
will send, by first-class, insured mail, postage prepaid, to each record holder
of the Common Stock as of the Close of Business on the Distribution Date (other
than any Acquiring Person or any Affiliate or Associate thereof), at the address
of such holder shown on the records of the Company, one or more Right
Certificates evidencing one Right (subject to adjustment as provided herein) for
each share of Common Stock so held. If an adjustment in the number of Rights
per share of Common Stock has been made pursuant to Section 11 the Company
shall, at the time of distribution of the Right Certificates, make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)) so that
Right Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. From and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
outstanding as of the Record Date or issued (on original issuance or out of
treasury) after the Record Date but prior to the earlier of the Distribution
Date and the Expiration Date. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
Expiration Date, the Company (i) shall, with respect to shares of Common Stock
so issued or sold (x) pursuant to the exercise of stock options or under any
employee plan or arrangement or (y) upon the exercise, conversion or exchange of
other securities issued by the Company prior to the Distribution Date and (ii)
may, in any other case, if deemed necessary or appropriate by the Board, issue
Right Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided that no such Right Certificate shall be
issued if, and to the extent that, (i) 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 Right Certificate would
be issued or (ii) appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
(d) Certificates issued for Common Stock after the Record Date but prior
to the earlier of the Distribution Date and the Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences certain Rights as set forth in a
Rights Agreement between Freeport-McMoRan Copper & Gold Inc. and ChaseMellon
Shareholder Services, L.L.C. dated as of May 3, 2000 and as amended from time to
time (the "Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal executive offices
of the Company. The Company will mail to the holder of this certificate a copy
of the Rights Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be evidenced by separate certificates and no longer
be evidenced by this certificate, may be redeemed or exchanged or may expire.
As set forth in the Rights Agreement, Rights issued to or held by any Person who
is, was or becomes an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may be null and void.
Section 4. Form of Right Certificates. The certificates evidencing the Rights
(and the forms of assignment, election to purchase and certificates to be
printed on the reverse thereof) (the "Right Certificates") shall be
substantially in the form of 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 and which do not affect the rights, duties
or responsibilities of the Rights Agent, or as may be required to comply with
any applicable law, rule or regulation 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. The Right Certificates, whenever distributed, shall be dated
as of the Record Date.
Section 5. Countersignature and Registration. (a) The Right Certificates
shall be executed on behalf of the Company by its Chief Executive Officer, its
President, any Executive Vice President or any Senior 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 Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company whose manual or facsimile signature is affixed to the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may, nevertheless, be countersigned by the Rights Agent
and issued and delivered with the same force and effect as though the Person who
signed such Right Certificates had not ceased to be such officer of the Company.
Any Right Certificate may be signed on behalf of the Company by any Person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
all relevant information, the Rights Agent will keep or cause to be kept, at its
office designated as the place for surrender of Right Certificates upon
exercise, transfer or exchange, books for registration and transfer of the Right
Certificates. Such books shall show with respect to each Right Certificate the
name and address of the registered holder thereof, the number of Rights
indicated on the certificate and the certificate number.
Section 6. Transfer and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates. (a) At any time after the Distribution Date
and prior to the Expiration Date, any Right Certificate or Certificates may,
upon the terms and subject to the conditions set forth in this Agreement, be
transferred or exchanged for another Right Certificate or Certificates
evidencing a like number of Rights as the Right Certificate or Certificates
surrendered. Any registered holder desiring to transfer or exchange any Right
Certificate or Certificates shall surrender such Right Certificate or
Certificates (with, in the case of a transfer, the form of assignment and
certificate on the reverse side thereof duly executed) to the Rights Agent at
the office 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 Right Certificate or
Certificates until the registered holder of the Rights has complied with the
requirements of Section 7(e). Upon satisfaction of the foregoing requirements,
the Rights Agent shall, subject to Sections 7(d), 14 and 24, countersign and
deliver to the Person entitled thereto a Right Certificate or Certificates as so
requested. The Company may require payment of a sum sufficient to cover any
transfer tax or other governmental charge that may be imposed in connection with
any transfer or exchange of any Right Certificate or Certificates. The Rights
Agent shall have no duty or obligation under this Section 6 unless and until it
is satisfied that all such taxes and/or charges have been paid in full.
(b) Upon receipt by the Company and the Rights Agent of evidence
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Company's request, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Company will issue and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. (a)
The registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein, including Sections 7(d), 7(e),
9(c), 11(a), 23 and 24) in whole or in part at any time after the Distribution
Date and prior to the Expiration Date upon surrender of the Right Certificate,
with the form of election to purchase and the certificate on the reverse side
thereof duly and properly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment (in lawful money
of the United States of America by certified check or bank draft payable to the
order of the Company) of the aggregate Purchase Price with respect to the Rights
then to be exercised and an amount equal to any applicable transfer tax or other
governmental charge.
(b) Upon satisfaction of the requirements of Section 7(a) and subject to
Section 20(k), the Rights Agent shall thereupon promptly (i) (A) requisition
from any transfer agent of the Preferred Stock (or make available, if the Rights
Agent is the transfer agent therefor) certificates for the total number of one
one-hundredths of a share of Preferred Stock 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 the shares of
Preferred Stock issuable upon exercise of the Rights with a depositary agent,
requisition from the depositary agent depositary receipts representing interests
in such number of one one-hundredths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
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 issuance of fractional shares in accordance with Section
14 and (iii) after receipt of such certificates or depositary receipts and cash,
if any, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate (with such certificates or receipts registered
in such name or names as may be designated by such holder). If the Company is
obligated to deliver Common Stock, other securities or assets pursuant to this
Agreement, the Company will make all arrangements necessary so that such other
securities and assets are available for delivery by the Rights Agent, if and
when necessary to comply with this Agreement.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing the number of Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the registered holder of
such Right Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Sections 6 and 14.
(d) 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 (or any such
Associate or Affiliate) to holders of equity interests in such Acquiring Person
(or in any such Associate or Affiliate) or to any Person with whom the Acquiring
Person (or any such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which is part of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(d) shall become null and void
without any further action, and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall notify the Rights Agent when this
Section 7(d) applies and shall use all reasonable efforts to insure that the
provisions of this Section 7(d) are complied with, but neither the Company nor
the Rights Agent shall have any liability to any holder of Right 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 and Associates or any
transferee of any of them hereunder.
(e) 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 of Rights upon the occurrence of any purported
transfer pursuant to Section 6 or exercise pursuant to this Section 7 unless
such registered holder (i) shall have properly completed and signed the
certificate contained in the form of assignment or election to purchase, as the
case may be, set forth on the reverse side of the Right Certificate surrendered
for such transfer or exercise, as the case may be, (ii) shall not have indicated
an affirmative response to clause 1 or 2 thereof and (iii) shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for exercise, transfer or exchange shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation, and the Rights Agent shall cancel,
any other Right Certificate purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The Company
covenants and agrees that it will cause to be reserved and kept available a
number of shares of Preferred Stock that are authorized but not outstanding or
otherwise reserved for issuance sufficient to permit the exercise in full of all
outstanding Rights as provided in this Agreement.
(b) So long as the Preferred Stock issuable upon the exercise of 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 securities reserved for such issuance to be listed on any such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the occurrence of a Section
11(a)(ii) Event as of which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act with respect
to the securities issuable upon exercise of the Rights, (ii) to cause such
registration statement to become effective as soon as practicable after such
filing and (iii) to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities and (B) the Expiration Date. 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 90 days after the date set forth in Section 9(c)(i), 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
promptly notify the Rights Agent thereof and issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement (with prompt notice thereof to the Rights Agent) at such
time as the suspension is no longer in effect. Notwithstanding any such
provision of this Agreement to the contrary, the Rights shall not be exercisable
for securities in any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, such exercise therefor shall not be
permitted under applicable law or a registration statement in respect of such
securities shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all one one-hundredths of a share of
Preferred Stock issuable upon exercise of Rights shall, at the time of delivery
of the certificates for such securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and 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 other governmental
charges that may be payable in respect of the issuance or delivery of the Right
Certificates and of any certificates for Preferred Stock upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax or
other governmental charge that may be payable in respect of any transfer
involved in the issuance or delivery of any Right Certificates or of any
certificates for Preferred Stock to a Person other than the registered holder of
the applicable Right Certificate, and prior to any such transfer, issuance or
delivery any such tax or other governmental charge shall have been paid by the
holder of such Right Certificate or it shall have been established to the
Company's satisfaction that no such tax or other governmental charge is due.
Section 10. Preferred Stock Record Date. Each Person (other than the
Company) in whose name any certificate for Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such Preferred Stock represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any transfer taxes
or other governmental charges) was made; provided that if the date of such
surrender and payment is a date upon which the transfer books of the Company
relating to the Preferred Stock are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the applicable transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including 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. (a) (i) If the Company shall at any time after the date of this
Agreement (A) pay a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred Stock into a greater
number of shares, (C) combine the outstanding Preferred Stock into a smaller
number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger involving the Company), the Purchase
Price in effect immediately prior to the record date for such dividend or the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or other capital stock issuable on
such date shall be proportionately adjusted so that each holder of a Right shall
(except as otherwise provided herein, including Section 7(d)) thereafter be
entitled to receive, upon exercise thereof at the Purchase Price in effect
immediately prior to such date, the aggregate number and kind of shares of
Preferred Stock or other capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and at a time when the
applicable transfer books of the Company were open, such holder would have been
entitled to receive upon such exercise and by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs that requires
an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person, alone or together with its Affiliates and Associates,
shall, at any time after the date of this Agreement, become an Acquiring Person,
then each holder of a Right shall (except as otherwise provided herein,
including Section 7(d)) thereafter be entitled to receive, upon exercise thereof
at the Purchase Price in effect immediately prior to the first occurrence of a
Section 11(a)(ii) Event, in lieu of Preferred Stock, such number of duly
authorized, validly issued, fully paid and nonassessable shares of Class B
Common Stock of the Company or, if there are no longer separate classes of
Common Stock, shares of Common Stock of the Company (such shares being referred
to herein as the "Adjustment Shares") as shall be equal to the result obtained
by dividing
(x) the product obtained by multiplying the Purchase Price in
effect immediately prior to the first occurrence of a Section 11(a)(ii) Event by
the number of one one-hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such first occurrence (such product being
thereafter referred to as the "Purchase Price" for each Right) by
(y) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of Class B Common Stock or Common Stock, as the case
may be, on the date of such first occurrence;
provided, however, that the Purchase Price (as so adjusted pursuant this
clause (ii) and the number of Adjustment Shares so receivable upon exercise of a
Right shall, following the occurrence of such Section 11(a)(ii) Event, be
subject to further adjustment as appropriate in accordance with Section 11(f).
From and after the occurrence of a Section 13 Event, any Rights that theretofore
have not been exercised pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only in accordance with Section 13 and not pursuant to this Section
11(a)(ii).
(iii) If the number of shares of Class B Common Stock or Common
Stock, as the case may be, that are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance other than upon
exercise of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with Section 11(a)(ii), the Company shall, with respect to
each Right, make adequate provision to substitute for the Adjustment Shares,
upon payment of the Purchase Price then in effect, (A) (to the extent available)
shares of Common Stock and then, (B) (to the extent available) such number of
one one-hundredths of a share of Preferred Stock as are then equivalent in value
to the value of the Adjustment Shares, and then, if necessary, (C) other equity
or debt securities of the Company, cash or other assets, a reduction in the
Purchase Price or any combination of the foregoing, having an aggregate value
(based upon the advice of a nationally recognized investment banking firm) equal
to the value of the Adjustment Shares; provided that (x) the Company may, and
(y) if the Company shall not have made adequate provision as required above to
deliver value within 30 days following the first occurrence of a Section
11(a)(ii) Event (the "Substitution Period"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, (1) (to the extent available) shares of Common
Stock, and then (2) (to the extent available) one-hundredths of a share of
Preferred Stock and then, if necessary, (3) other equity or debt securities of
the Company, cash or other assets or any combination of the foregoing, having an
aggregate value (based upon the advice of a nationally recognized investment
banking firm) equal to the excess of the value of the Adjustment Shares over the
Purchase Price. To the extent that the Company determines that some action is
required to be taken pursuant to the preceding sentence, the Company (x) shall
provide, subject to Section 7(d), that such action shall apply uniformly to all
outstanding Rights and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to decide the appropriate
form and value of any consideration to be delivered as referred to in the
preceding sentence. If any such suspension occurs, the Company shall promptly
notify the Rights Agent thereof and issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement (with prompt notice thereof to the Rights Agent) at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of Class B Common Stock or Common Stock shall be the current market
price per share of such Class B Common Stock or Common Stock (as determined
pursuant to Section 11(d)) on the date of the first occurrence of a Section
11(a)(ii) Event; any common stock equivalent shall be deemed to have the same
value as the Class B Common Stock or Common Stock on such date; and the value of
other securities or assets shall be determined pursuant to Section 11(d)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) Preferred Stock (or securities having the same rights,
privileges and preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into or exercisable for Preferred
Stock (or equivalent preferred stock) at a price per share of Preferred Stock
(or equivalent preferred stock) (in each case, taking account of any conversion
or exercise price) less than the current market price (as determined pursuant to
Section 11(d)) per share of Preferred Stock 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 date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock that the
aggregate price (taking account of any conversion or exercise price) of the
total number of shares of Preferred Stock (and/or equivalent preferred stock) so
to be offered would purchase at such current market price and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date plus the number of additional shares of Preferred Stock (and/or
equivalent preferred stock) so to be offered. In case such subscription price
may be paid by delivery of consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be as determined in good
faith by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. Shares of
Preferred Stock 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 if such
rights, options 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 the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger involving the Company) of
evidences of indebtedness, equity securities other than Preferred Stock, assets
(other than a regular periodic cash dividend out of the earnings or retained
earnings of the Company) or rights, options or warrants (excluding those
referred to in Section 11(b)), 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)) per
share of Preferred Stock on such record date, less the value (as determined
pursuant to Section 11(d)(iii)) of such evidences of indebtedness, equity
securities, assets, rights, options or warrants so to be distributed with
respect to one share of Preferred Stock and the denominator of which shall be
such current market price per share of Preferred Stock. Such adjustment shall
be made successively whenever such a record date is fixed, and if such
distribution is not so made, 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.
(d) (i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) or 14, the "current market
price" per share of Class B Common Stock or Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such Class B
Common Stock or Common Stock for the 30 consecutive Trading Days ending on the
last Trading Day immediately prior to such date; for purposes of computations
made pursuant to Section 11(a)(iii), the "current market price" per share of
Class B Common Stock or Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Class B Common Stock or
Common Stock for the 10 consecutive Trading Days immediately following such
date; and for purposes of computations made pursuant to Section 14, the "current
market price" per share of Class B Common Stock or Common Stock for any Trading
Day shall be deemed to be the closing price per share of such Class B Common
Stock or Common Stock for such Trading Day; provided that if the current market
price per share of such Class B Common Stock or Common Stock is determined
during a period following the announcement by the issuer of such Common Stock of
(A) a dividend or distribution on such Common Stock payable in shares of such
Common Stock or securities exercisable for or convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite 30 Trading Day or 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 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 such shares
of Class B Common Stock or Common Stock are not listed or admitted to trading on
the New York Stock Exchange, on the principal national securities exchange on
which such shares of Class B Common Stock or Common Stock are listed or admitted
to trading or, if such shares of Class B Common Stock or Common Stock 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 such shares of Class B Common Stock
or Common Stock 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 such Class B Common Stock or Common Stock selected by the Board. If
on any such date no market maker is making a market in such Class B Common Stock
or Common Stock, the fair value of such shares on such date as determined in
good faith by the Board (or, if at the time of such determination there is an
Acquiring Person, by a nationally recognized investment banking firm) shall be
used. If the Class B Common Stock or Common Stock is not publicly held or not
so listed or traded, the "current market price" per share of such Class B Common
Stock or Common Stock means the fair value per share as determined in good faith
by the Board, or, if at the time of such determination there is an Acquiring
Person, by a nationally recognized investment banking firm, which 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 share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in Section 11(d)(i) (other than
the last sentence thereof). If the current market price per share of Preferred
Stock cannot be determined in such manner, the "current market price" per share
of Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock, the Class A
Common Stock or the Class B Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share of the Class B
Common Stock (as determined pursuant to Section 11(d)(i) (other than the last
sentence thereof)). If neither the Class B Common Stock nor the Preferred Stock
is publicly held or so listed or traded, the "current market price" per share of
the Preferred Stock shall be determined in the same manner as set forth in the
last sentence of Section 11(d)i). For all purposes of this Agreement, the
"current market price" of one one-hundredth of a share of Preferred Stock shall
be equal to the "current market price" of one share of Preferred Stock divided
by 100.
(iii) For the purpose of any computation hereunder, the value
of any securities or assets other than Common Stock or Preferred Stock shall be
the fair value as determined in good faith by the Board, or, if at the time of
such determination there is an Acquiring Person, by a nationally recognized
investment banking firm which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided that any
adjustments that 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 ten-thousandth of a share of Class B Common Stock or Common Stock or
other share or one-millionth of a share of Preferred Stock, as the case may be.
(f) If at any time, as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a), the holder of any Right shall be entitled to
receive upon exercise of such Right any shares of capital stock other than
Preferred Stock, 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 Stock contained in
Section 11(a), 11(b), 11(c), 11(e), 11(g), 11(h), 11(i), 11(j), 11(k) and 11(m),
and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder shall evidence the right to purchase, at the Purchase
Price then in effect, the then applicable number of one one-hundredths of a
share of Preferred Stock and other capital stock of the Company issuable 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 Section 11(b) and 11(c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredths of a
share of Preferred Stock (calculated to the nearest one-millionth) obtained by
(i) multiplying (x) the number of one one-hundredths of a share for which a
Right was exercisable 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 one one-hundredths of a share of Preferred Stock issuable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of one one-hundredths
of a share of Preferred Stock for which such Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement and promptly notify the Rights Agent of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one one-hundredth of a share and
the number of shares that were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the par value, if any, of the number of one one-hundredths
of a share of Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable such number of one one-hundredths of a share of Preferred Stock 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 (and shall promptly notify the
Rights Agent of any such election) until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the number
of one one-hundredths of a share of Preferred Stock or other capital stock of
the Company, if any, issuable upon such exercise over and above the number of
one one-hundredths of a share of Preferred Stock or other capital stock of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, in its sole discretion, shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms
are convertible into or exercisable for Preferred Stock, stock dividends or
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to the holders of its Preferred Stock, shall not
be taxable to such stockholders.
(n) The Company covenants and agrees that it will not at any time after
the Distribution Date (i) consolidate, merge or otherwise combine with or (ii)
sell or otherwise transfer (and/or permit any of its Subsidiaries to sell or
otherwise transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries, taken as a whole, to any other Person or
Persons if (x) at the time of or immediately after such consolidation, merger,
combination or sale there are any rights, warrants or other instruments or
securities outstanding or any agreements or arrangements 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, combination or sale, the stockholders of a Person
who constitutes, or would constitute, the "Principal Party" for the purposes of
Section 13 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 Sections 23, 24 and 27, 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 substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if at
any time after the date hereof and prior to the Distribution Date the Company
shall (i) pay a dividend on the outstanding shares of Common Stock, Class A
Common Stock or Class B Common Stock payable in shares of Common Stock, Class A
Common Stock or Class B Common Stock, (ii) subdivide the outstanding Common
Stock, Class A Common Stock or Class B Common Stock into a larger number of
shares or (iii) combine the outstanding Common Stock, Class A Common Stock or
Class B Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock, Class A Common Stock or Class B
Common Stock, as the case may be, then outstanding, or issued or delivered
thereafter as contemplated by Section 3(c), shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Common Stock,
Class A Common Stock or Class B Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each share of Common Stock, Class A Common Stock or Class B Common Stock, as
applicable, immediately prior to such event by a fraction the numerator of which
shall be the total number of shares of Common Stock, Class A Common Stock or
Class B Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock, Class A Common Stock or Class B Common Stock, as applicable, outstanding
immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 or 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief, reasonably detailed, statement of the facts and computations for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Preferred Stock and the Common Stock a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, if prior
to the Distribution Date, to each holder of a certificate representing affected
shares of Common Stock) in the manner set forth in Section 26. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained, and shall have no duty with respect to and shall
not be deemed to have knowledge of 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) If, following the occurrence of a Section 11(a)(ii) Event, directly
or indirectly,
(x) the Company shall consolidate with, merge into, or otherwise
combine with, any other Person, and the Company shall not be the continuing or
surviving corporation of such consolidation, merger or combination,
(y) any Person shall merge into, or otherwise combine with, the
Company, and the Company shall be the continuing or surviving corporation of
such merger or combination and, in connection with such merger or combination,
all or part of the outstanding shares of Common Stock or the outstanding shares
of Class A Common Stock or Class B Common Stock shall be changed into or
exchanged for other stock or securities of the Company or any other Person, cash
or any other property, or
(z) the Company and/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 other Person or
Persons, then, and in each such case, proper provision shall promptly be made so
that
(i) each holder of a Right shall thereafter be entitled to
receive, upon exercise thereof at the Purchase Price in effect immediately prior
to the first occurrence of a Section 11(a)(ii) Event, such number of duly
authorized, validly issued, fully paid and nonassessable shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined), not
subject to any rights of call or first refusal, liens, encumbrances or other
claims, as shall be equal to the result obtained by dividing
(A) the product obtained by multiplying the Purchase Price
in effect immediately prior to the first occurrence of a Section 11(a)(ii) Event
by the number of one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to such first occurrence (such product
being thereafter referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by
(B) 50% of the current market price (determined pursuant to
Section 11(d)(i)) per share of the Common Stock of such Principal Party on the
date of consummation of such consolidation, merger, combination, sale or
transfer;
provided, however, that the Purchase Price (as so adjusted pursuant to the
foregoing clause (i)(A)) and the number of shares of Common Stock of such
Principal Party so receivable upon exercise of a Right shall be subject to
further adjustment as appropriate in accordance with Section 11(f) to reflect
any events occurring in respect of the Common Stock of such Principal Party
after the occurrence of such consolidation, merger, sale or transfer;
(ii) the Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, combination, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and
(iv) such Principal Party shall take such steps (including the
authorization and reservation of a sufficient number of shares of its Common
Stock to permit exercise of all outstanding Rights in accordance with this
Section 13(a)) in connection with the consummation of any such transaction as
may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the shares of its
Common Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" means
(i) in the case of any transaction described in Section 13(a)(x)
or (y), the Person that is the issuer of any securities into which shares of
Class A Common Stock, Class B Common Stock or Common Stock of the Company are
converted in such merger, consolidation or combination, and if no securities are
so issued, the Person that survives or results from such merger, consolidation
or combination; and
(ii) in the case of any transaction described in Section 13(a)(z),
the Person that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions;
provided that in any such case, (A) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, "Principal Party" shall refer to such other Person; and
(B) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks 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 Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
combination, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which are not outstanding or
otherwise 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 Section 13(a) and
13(b) and providing that, as soon as practicable after the date of any
consolidation, merger, combination, sale or transfer mentioned in Section 13(a),
the Principal Party will:
(i) prepare and file a registration statement under the Securities
Act with respect to the securities issuable upon exercise of the Rights, and
will use its best efforts to cause such registration statement (A) to become
effective as soon as practicable after such filing and (B) to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date; and
(ii) 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.
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), or to distribute Right Certificates that
evidence fractional Rights. In lieu of fractional Rights, the Company shall pay
to the registered holders of the Right Certificates with regard to which
fractional Rights otherwise would be issuable an amount in cash equal to the
same fraction of the current market price of a whole Right. For purposes of
this Section 14(a), the current market price of a whole Right shall be the
closing price of a Right for the Trading Day immediately prior to the date on
which such fractional Rights would otherwise have been issuable. The closing
price of a Right 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, on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price, or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by the Board. If on any such date no such market maker is making a
market in the Rights, the current market price of the Rights on such date shall
be as determined in good faith by the Board, or, if at the time of such
determination there is an Acquiring Person, by a nationally recognized
investment banking firm.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are integral multiples of one one-
hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred Stock
(other than fractions that are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of any such fractional shares of Preferred
Stock, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market price of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market price
of one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of any Triggering Event or upon any
exchange pursuant to Section 24, the Company shall not be required to issue
fractions of shares of Class B Common Stock or Common Stock upon exercise of the
Rights or to distribute certificates that evidence fractional shares of such
Common Stock. In lieu of fractional shares of Class B Common Stock or Common
Stock, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market price of a share of Class
B Common Stock or Common Stock, as applicable. For purposes of this Section
14(c), the current market price of a share of Class B Common Stock or Common
Stock shall be the closing price of a share of Class B Common Stock or Common
Stock, as applicable (as determined pursuant to Section 11(d)(i)) for the
Trading Day immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional 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 Right
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of any certificate representing
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of any certificate
representing Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
(c) subject to Sections 6 and 7, the Company and the Rights Agent
may deem and treat the Person in whose name a Right Certificate (or, prior to
the Distribution Date, a certificate representing shares of Common Stock) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificate
or the certificate representing shares of Common Stock 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(d),
shall 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 other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such obligation;
provided that the Company must use its best efforts to have any such order,
decree, judgment or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the shares of capital stock that may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
preparation, delivery, execution, administration and amendment of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, (as finally determined by a court of
competent jurisdiction), for any action taken, suffered or omitted by the Rights
Agent in connection with the acceptance and administration of this Agreement or
the exercise or performance of its duties hereunder, including the costs and
expenses of defending against any claim of liability. The indemnity provided
herein shall survive the termination of this Agreement and the termination and
expiration of the Rights. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company.
(b) The Rights Agent shall be authorized to rely on, shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Agreement or the exercise or performance of its duties hereunder in reliance
upon any Right Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, instruction, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agents. (a)
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the shareholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto; provided that such
Person would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations, and only the duties and obligations, expressly imposed by this
Agreement (and no implied duties or obligations) upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent, and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any "Acquiring Person" and the
determination of "current market price") be proved or established by the Company
prior to taking, suffering or omitting any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed)
shall be deemed to be conclusively proved and established by a certificate
signed by the Chief Executive Officer, the President, any Executive Vice
President, any Senior Vice President and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
and protection to the Rights Agent and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct (as finally determined by a
court of competent jurisdiction). Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, incidental or consequential loss or damage of any kind
whatsoever (including, but not limited to, lost profits), even if the Rights
Agent has been advised of the possibility of such loss or damage.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not have any liability for, nor be
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 7(d)) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or 24,
or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Right Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when issued, be duly
authorized, validly 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
Chief Executive Officer, the President, any Executive Vice President, any
Senior Vice President, or the Secretary or any Assistant Secretary or 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 such
advice or instructions shall be full authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it in good faith in accordance with the
advice or instructions of any such officer.
(h) The Rights Agent and any stockholder, Affiliate, 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. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company, to any holders of Rights or to any other
Person resulting from any such act, default, neglect or misconduct, absent gross
negligence, bad faith or willful misconduct in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if it believes that repayment of such funds or adequate indemnification against
such risk or liability is not assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 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.
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
days' notice in writing mailed to the Company and to each transfer agent of the
Common Stock and Preferred Stock by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a Person organized and doing business under the laws of the United States or of
any state of the United States, in good standing, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate of a Person described in Section 21(a).
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and the Preferred Stock, and, subsequent to the Distribution Date, mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares of stock issuable upon exercise
of the Rights made in accordance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board may, at its option, at any time prior
to the earlier of (i) the occurrence of a Section 11(a)(ii) Event and (ii) the
Close of Business on 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"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish. The Redemption
Price shall be payable, at the option of the Company, in cash, shares of Common
Stock or such other form of consideration as the Board shall determine.
(b) Immediately upon the action of the Board electing to redeem the
Rights (or at such later time as the Board may establish for the effectiveness
of such redemption), and without any further action and without any notice, the
right to exercise the Rights will terminate and thereafter the only right of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. The Company shall promptly thereafter give notice of such redemption to
the Rights Agent and the holders of the Rights in the manner set forth in
Section 26; provided that the failure to give, or any defect in, such notice
shall not affect the validity of such redemption. 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.
Section 24. Exchange. (a) At any time after the occurrence of a Section
11(a)(ii) Event, the Board may, at its option, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to Section 7(d)) for shares of Class B Common
Stock or, if there are no longer separate classes of Common Stock, shares of
Common Stock, at an exchange ratio of one share of Class B Common Stock or
Common Stock, as the case may be, per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board shall not be empowered to
effect such exchange at any time after an Acquiring Person, together with all
Affiliates and Associates of such Acquiring Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding or 50% or more of
the shares of Class A Common Stock or Class B Common Stock then outstanding.
From and after the occurrence of a Section 13 Event, any Rights that theretofore
have not been exchanged pursuant to this Section 24(a) shall thereafter be
exercisable only in accordance with Section 13 and may not be exchanged pursuant
to this Section 24(a). The exchange of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board in
its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board
electing to exchange any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights will
terminate and thereafter the only right of the holders of such Rights shall be
to receive that number of shares of Class B Common Stock or Common Stock, as the
case may be, equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly thereafter give notice of
such exchange to the Rights Agent and the holders of the Rights to be exchanged
in the manner set forth in Section 26; provided that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. 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 exchange
will state the method by which the exchange of the shares of Class B Common
Stock or Common Stock, as the case may be, for Rights will be effected and, in
the event of any partial exchange, the number of Rights that will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights that have become void pursuant to Section 7(d)) held by each
holder of Rights.
(c) The Company may at its option substitute (and, in the event that
there shall not be sufficient shares of Class B Common Stock or Common Stock, as
the case may be, issued but not outstanding or authorized but unissued to permit
the exchange of Rights for Class B Common Stock or Common Stock ordered in
accordance with Section 24(a), the Company shall substitute to the extent of
such insufficiency), for each share of Class B Common Stock or Common Stock that
would otherwise be issuable upon exchange of a Right, a number of one one
hundredths of a share of Preferred Stock such that the current market price
(determined pursuant to Section 11(d)) of such number of one one hundredths of a
share of Preferred Stock is equal to the current market price (determined
pursuant to Section 11(d)) of one share of Class B Common Stock or Common Stock,
as the case may be, as of the date of such exchange.
Section 25. Notice of Proposed Actions. (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 Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company), or
(ii) to offer to the holders of its Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or shares
of stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of outstanding
shares of Preferred Stock) or (iv) to effect any consolidation or merger with
any other Person, or to effect and/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 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, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right, to the extent feasible, and to the Rights Agent, in
accordance with Section 26, a notice of such proposed action, which shall
specify the record date for the purposes of any such dividend, distribution or
offering of rights or warrants, or the date on which any 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
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by Section 25(a)(i) or 25(a)(ii) above at least 20
days prior to the record date for determining holders of the Preferred Stock
entitled to participate in such dividend, distribution or offering, and in the
case of any such other action, at least 20 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a public filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of
securities of the Company, including the Rights, for purposes of this Agreement
and no other notice need be given to such holders.
(c) If a Triggering Event shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each holder of a Right,
in accordance with Section 26, and to the Rights Agent, 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) or 13, as the case may
be, and (ii) all references in Section 25(a) to Preferred Stock shall be deemed
thereafter to refer to Class B Common Stock, Common Stock or other capital
stock, as the case may be.
Section 26. Notices. Notices to or demands on the Company authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
shall be sufficiently given or made if sent by first-class mail (postage
prepaid) to the address of the Company indicated on the signature page hereof or
such other address as the Company shall specify in writing to the Rights Agent.
Subject to the provisions of Section 21, any notice to or demand on the Rights
Agent authorized by this Agreement to be given or made by the Company or by the
holder of any Right shall be sufficiently given or made if sent by first-class
mail (postage prepaid) to the address of the Rights Agent indicated on the
signature page hereof or such other address as the Rights Agent shall specify in
writing to the Company. Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of any Right
Certificate (or, prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently given or
made if sent by first-class mail (postage prepaid) to the address of such holder
shown on the registry books of the Company.
Section 27. Supplements and Amendments. For so long as the Rights are then
redeemable, the Company may, and the Rights Agent shall if the Company so
directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of certificates representing shares of
Common Stock. At any time when the Rights are no longer redeemable, the Company
may, and the Rights Agent shall if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Rights; provided, however,
that no such supplement or amendment may (a) adversely affect the interests of
the holders of Rights as such (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person), (b) cause this Agreement again to become
amendable other than in accordance with this sentence, or (c) cause the Rights
again to become redeemable. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section, and provided such
supplement or amendment does not change or increase the Rights Agent's duties,
liabilities or obligations hereunder, the Rights Agent shall execute such
supplement or amendment.
Section 28. Successors. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board, etc. For all purposes of
this Agreement, any calculation of the number of shares of Common Stock, Class A
Common Stock or Class B Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Common Stock, Class A Common Stock or Class B Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in effect on
the date of this Agreement. The Board shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including 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 exchange or not to redeem or
exchange the Rights or to amend the Agreement).
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the certificates representing the shares of Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the certificates representing the shares of Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute one and the
same instrument.
Section 34. Descriptive Headings. The captions herein are included for
convenience of reference only, do not constitute a part of this Agreement and
shall be ignored in the construction and interpretation hereof
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
FREEPORT-McMoRan COPPER & GOLD INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief
Operating Officer
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Secretary
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Assistant Vice President
0000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
Attention: Relationship Manage
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PARTICIPATING CUMULATIVE
PREFERRED STOCK
OF
FREEPORT-McMoRan COPPER & GOLD INC.
Pursuant to Section 151 of the
General Corporation Law of the
State of Delaware
We, Xxxxxxx X. Xxxxxxxx, President and Chief Operating Officer, and Xxxxxxx
X. Xxxxxxxx XX, Assistant Secretary, of Freeport-McMoRan Copper & Gold Inc., a
corporation organized and existing under the General Corporation Law of the
State of Delaware ("Delaware Law"), in accordance with the provisions thereof,
DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation, the Board of Directors on May
2, 2000, duly adopted the following resolution creating a series of Preferred
Stock in the amount and having the designations, voting powers, preferences and
relative, participating, optional and other special rights and qualifications,
limitations and restrictions thereof as follows:
Section 1. Designation and Number of Shares. The shares of such series shall
be designated as "Series A Participating Cumulative Preferred Stock" (the
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 2,500,000. Such number of shares of the Series A Preferred Stock may
be increased or decreased by resolution of the Board of Directors; provided that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
issuable upon exercise or conversion of outstanding rights, options or other
securities issued by the Corporation.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable on February
1, May 1, August 1 and November 1 of each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of any share or
fraction of a share of Series A Preferred Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (i) $1.00 and (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends or other distributions and 100 times the
aggregate per share amount of all non-cash dividends or other distributions
(other than (A) a dividend payable in shares of Class A Common Stock or Class B
Common Stock of the Corporation or, if there are no longer separate classes of
common stock, shares of the Common Stock of the Corporation, in each case par
value $0.10 per share, (any such Common Stock, the "Common Stock") or (B) a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise)), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Preferred Stock. If the Corporation shall at any time after
May 16, 2000 (the "Rights Declaration Date") pay any dividend on Common Stock
payable in shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause 2(a)(ii) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph 2(a) above immediately
after it declares a dividend or distribution on the Common Stock (other than as
described in clauses 2(a)(ii)(A) and 2(a)(ii)(B) above); provided that if no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date, the period between the first issuance of any share or
fraction of a share of Series A Preferred Stock and such first Quarterly
Dividend Payment Date), a dividend of $1.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is on or before the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue and be cumulative from the date
of issue of such shares, or unless the date of issue is a date after the record
date for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and on or before such Quarterly
Dividend Payment Date, in which case dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall not be more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other voting rights required by
law, the holders of shares of Series A Preferred Stock shall have the following
voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of stockholders of the Corporation. If
the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein, or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Class B Common
Stock, or if there are no longer separate classes of Common Stock, the holders
of shares of Common Stock, shall vote together as a single class on all matters
submitted to a vote of stockholders of the Corporation.
(c) (i) If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall xxxx the beginning of a period (herein
called a "default period") which shall extend until such time as all accrued and
unpaid dividends for all previous quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A Preferred Stock then
outstanding shall have been declared and paid or set apart for payment. During
each default period, all holders of Preferred Stock and any other series of
Preferred Stock then entitled as a class to elect directors, voting together as
a single class, irrespective of series, shall have the right to elect two
Directors.
(ii) During any default period, such voting right of the
holders of Series A Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph 3(c)(iii) hereof or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders;
provided that neither such voting right nor the right of the holders of any
other series of Preferred Stock, if any, to increase, in certain cases, the
authorized number of Directors shall be exercised unless the holders of 10% in
number of shares of Preferred Stock outstanding shall be present in person or by
proxy. The absence of a quorum of holders of Common Stock shall not affect the
exercise by holders of Preferred Stock of such voting right. At any meeting at
which holders of Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a class,
to elect Directors to fill such vacancies, if any, in the Board of Directors as
may then exist up to two Directors or, if such right is exercised at an annual
meeting, to elect two Directors. If the number that may be so elected at any
special meeting does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have exercised their
right to elect Directors in any default period and during the continuance of
such period, the number of Directors shall not be increased or decreased except
by vote of the holders of Preferred Stock as herein provided or pursuant to the
rights of any equity securities ranking senior to or pari passu with the Series
A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of holders of Preferred Stock, which meeting shall
thereupon be called by the Chief Executive Officer, the President, any Executive
Vice President, any Senior Vice President or the Secretary or any Assistant
Secretary of the Corporation. Notice of such meeting and of any annual meeting
at which holders of Preferred Stock are entitled to vote pursuant to this
paragraph 3(c)(iii) shall be given to each holder of record of Preferred Stock
by mailing a copy of such notice to such holder's address as the same appears on
the books of the Corporation. Such meeting shall be called for a time not
earlier than 20 days and not later than 60 days after such order or request or
in default of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any stockholder or
stockholders owning in the aggregate not less than 10% of the total number of
shares of Preferred Stock outstanding, irrespective of series. Notwithstanding
the provisions of this paragraph 3(c)(iii), no such special meeting shall be
called during the period within 60 days immediately preceding the date fixed for
the next annual meeting of stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two Directors voting as a class,
after the exercise of which right (x) the Directors so elected by the holders of
Preferred Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in paragraph
3(c)(ii) hereof) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock that elected the
Director whose office shall have become vacant. References in this paragraph
3(c) to Directors elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the Certificate of Incorporation or Bylaws
irrespective of any increase made pursuant to the provisions of paragraph
3(c)(ii) hereof (such number being subject, however, to change thereafter in any
manner provided by law or in the certificate of incorporation or bylaws). Any
vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.
(d) The Certificate of Incorporation of the Corporation shall not
be amended in any manner (whether by merger or otherwise) so as to adversely
affect the powers, preferences or special rights of the Series A Preferred Stock
without the affirmative vote of the holders of a majority of the outstanding
shares of Series A Preferred Stock, voting separately as a class.
(e) Except as otherwise provided herein, holders of Series A
Preferred Stock shall have no special voting rights, and their consent shall not
be required for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Series A
Preferred Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such other parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem, purchase or otherwise acquire for value
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock; provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of stock of the Corporation ranking
junior (as to dividends and upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem, purchase or otherwise acquire for value any
shares of Series A Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of Series A Preferred Stock and all such other parity stock upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for value any shares of stock of
the Corporation unless the Corporation could, under paragraph 4(a), purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock without designation as to series and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors as permitted by the Certificate of Incorporation or as
otherwise permitted under Delaware Law.
Section 6. Liquidation, Dissolution and Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $0.10 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment;
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate 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, or (2) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all such other parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. If 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
or any other property, then in any such case the shares of Series A Preferred
Stock shall at the same time be similarly exchanged for or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount of stock, securities, cash or any other
property, as the case may be, into which or for which each share of Common Stock
is changed or exchanged. If the Corporation shall at any time after the Rights
Declaration Date pay any dividend on Common Stock payable in shares of Common
Stock or effect a subdivision or combination of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series A
Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The Series A Preferred Stock shall not be
redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to the Series A Preferred Stock.
Section 10. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock
IN WITNESS WHEREOF, we have executed and subscribed this Certificate this ______
day of May, 2000.
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx XX
EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
No. R- _______________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF MAY 16, 2010 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN
THE RIGHTS AGREEMENT. AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR
TRANSFERRED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY
ANY SUBSEQUENT HOLDER, MAY BE NULL AND VOID.
RIGHT CERTIFICATE
FREEPORT-McMoRan COPPER & GOLD INC.
This Right Certificate certifies that ______________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the holder (upon the terms and subject to the conditions set
forth in the Rights Agreement dated as of May 3, 2000 and as amended from time
to time (the "Rights Agreement") between Freeport-McMoRan Copper & Gold Inc., a
Delaware corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company (the "Rights Agent")) to purchase
from the Company, at any time after the Distribution Date and prior to the
Expiration Date, ___ one-hundredth[s] of a fully paid, nonassessable share of
Series A Participating Cumulative Preferred Stock (the "Preferred Stock") of the
Company at a purchase price of $60.00 per one one-hundredth of a share (the
"Purchase Price"), payable in lawful money of the United States of America, upon
surrender of this Right Certificate, with the form of election to purchase and
related certificate duly executed, and payment of the Purchase Price at an
office of the Rights Agent designated for such purpose.
Terms used herein and not otherwise defined herein have the meanings assigned to
them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the number and
kind of shares issuable upon exercise of each Right) and the Purchase Price set
forth above are as of May 3, 2000, and may have been or in the future be
adjusted as a result of the occurrence of certain events, as more fully provided
in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced by
this Right Certificate are beneficially owned by (a) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (b) a transferee of an Acquiring
Person (or any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (c) under certain circumstances specified in
the Rights Agreement, a transferee of an Acquiring Person (or any such Associate
or Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such, then the Rights evidenced by this Rights
Certificate shall become null and void, and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
This Right Certificate is subject to all of the terms, provisions and conditions
of the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Upon surrender at the office of the Rights Agent designated for such purpose and
subject to the terms and conditions set forth in the Rights Agreement, any
Rights Certificate or Certificates may be transferred or exchanged for another
Rights Certificate or Certificates evidencing a like number of Rights as the
Rights Certificate or Certificates surrendered.
Subject to the provisions of the Rights Agreement, the Board of Directors of the
Company may, at its option,
(a) at any time prior to the earlier of (i) the occurrence of a
Section 11(a)(ii) Event and (ii) the Final Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price of $.01 per
Right; or
(b) at any time after any Person becomes an Acquiring Person (but
before such Person becomes the Beneficial Owner of 50% or more of the shares of
Common Stock then outstanding or of 50% or more of the shares of Class A Common
Stock or Class B Common Stock then outstanding), exchange all or part of the
then outstanding Rights (other than Rights held by the Acquiring Person and
certain related Persons) for shares of Class B Common Stock at an exchange ratio
of one share of Class B Common Stock per Right. If the Rights shall be
exchanged in part, the holder of this Right Certificate shall be entitled to
receive upon surrender hereof another Right Certificate or Certificates for the
number of whole Rights not exchanged.
No fractional shares of Preferred Stock are required to be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or
Certificates for the number of whole Rights not exercised.
No holder of this Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the shares of capital stock which may
at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its corporate seal by on of its authorized officers.
Dated as of , 20__
FREEPORT-McMoRan COPPER & GOLD INC.
By:
Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By:
Authorized Signatur
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed if the registered holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________ Attorney,
to transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _____________________, 20__
Signature
Signature Guaranteed
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not
being assigned 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 in 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 Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________, 20__
Signature
The signatures to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise Rights
represented by the Right Certificate.)
To: Freeport-McMoRan Copper & Gold Inc.
The undersigned hereby irrevocably elects to exercise ____________ Rights
represented by this Right Certificate to purchase shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be issued in the name
of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance 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: ________________, 20__
Signature
Signature Guaranteed
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ___are ___are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in 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 Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ____________, 20__
Signature
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT C
AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED OR TRANSFERRED TO, OR HELD
BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BE NULL AND VOID.
SUMMARY OF RIGHTS
FREEPORT-McMoRan COPPER & GOLD INC.
STOCKHOLDER RIGHTS PLAN
dated May 3, 2000
Summary of Terms
Form of Security The Board has declared a dividend of one preferred stock
purchase right for each outstanding share of the Company's Common Stock, payable
to holders of record as of the Close of Business on May 16, 2000 (each a "Right"
and collectively, the "Rights")
Transfer Prior to the Distribution Date, the Rights generally will be
evidenced by the certificates for and will be transferred with the Common Stock,
and the registered holders of the Common Stock will be deemed to be the
registered holders of the Rights.
After the Distribution Date, the Rights Agent will mail separate
certificates evidencing the Rights to each record holder of the Common Stock as
of the close of business on the Distribution Date, and thereafter the Rights
will be transferable separately from the Common Stock.
Exercise Prior to the Distribution Date, the Rights will not be exercisable.
After the Distribution Date, prior to the occurrence of an event described
below under "Flip-In" and "Flip-Over", each Right will be exercisable to
purchase, for $60.00 (the "Purchase Price"), one one-hundredth of a share of
Series A Participating Cumulative Preferred Stock, par value $0.10 per share, of
the Company.
Flip-In If any person or group (an "Acquiring Person") becomes the
beneficial owner of the Threshold Percentage, then each Right (other than Rights
beneficially owned by the Acquiring Person and certain affiliated persons) will
entitle the holder to purchase, for the Purchase Price, a number of shares of
the Company's Class B Common Stock or, if the common stock of the Company is no
longer divided into separate classes, shares of the Company's Common Stock,
having a market value of twice the Purchase Price. "Threshold Percentage" means
(i) as long as that certain Agreement dated as of May 2, 1995, by and between
the Company and Rio Tinto Indonesia Limited ("Rio Tinto") remains in effect,
with respect to Rio Tinto and its Affiliates and Associates, that percentage of
Class A Common Stock, Class B Common Stock or Common Stock that would result in
Rio Tinto and its Affiliates and Associates having Beneficial Ownership of
shares of Company Voting Stock equal to or greater than the Majority Shares;
provided that, solely for purposes of such calculation, the shares of Company
Voting Stock issuable upon exercise of warrants, options or other rights, or
upon conversion or exchange of convertible or exchangeable securities, owned by
Rio Tinto and its Affiliates and Associates, shall be treated as outstanding
Company Voting Stock; and (ii) with respect to any other Person and its
Affiliates and Associates, (a) 20% of all then-outstanding Common Stock, (b) 20%
of all then-outstanding Class A Common Stock or (c) 20% of all then-outstanding
Class B Common Stock.
Flip-Over If, after any person has become an Acquiring Person, (1) the Company
is involved in a merger or other business combination in which the Company is
not the surviving corporation or its Common Stock is exchanged for other
securities or assets or (2) the Company and/or one or more of its subsidiaries
sell or otherwise transfer assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its subsidiaries, taken as a
whole, then each Right will entitle the holder to purchase, for the Purchase
Price, a number of shares of common stock of the other party to such business
combination or sale (or in certain circumstances, an affiliate) having a market
value of twice the Purchase Price.
Exchange At any time after any person has become an Acquiring Person (but
before any person becomes the beneficial owner of 50% or more of the Company's
Common Stock, or 50% or more of the Company's Class A Common Stock or Class B
Common Stock), the Board may exchange all or part of the Rights (other than the
Rights beneficially owned by the Acquiring Person and certain affiliated
persons) for shares of Class B Common Stock at an exchange ratio of one share of
Class B Common Stock per Right.
Redemption The Board may redeem all of the Rights at a price of $0.01 per Right
at any time prior to the time that any person becomes an Acquiring Person.
Expiration The Rights will expire on May 16, 2010, unless earlier exchanged or
redeemed.
Amendments For so long as the Rights are redeemable, the Rights Agreement may
be amended in any respect.
At any time after the Rights are no longer redeemable, the Rights
Agreement may not be amended in any respect that would adversely affect the
Rights holders (other than any Acquiring Person and certain affiliated persons)
or cause the Rights again to become redeemable.
Voting Rights A rights holder has no rights as a stockholder of the Company,
including the right to vote and to receive dividends.
Antidilution Provisions The Rights Agreement includes standard antidilution
provisions designed to protect the efficacy of the Rights.
Taxes While the dividend of the Rights will not be taxable to stockholders or to
the Company, stockholders or the Company may, depending upon the circumstances,
recognize taxable income in the event that the Rights become exercisable as set
forth above.
Legend Common Stock certificates issued after May 16, 2000 will contain a
legend referring to the Rights discussed herein. With respect to currently
outstanding Common Stock certificates, the Rights discussed herein will be
evidenced by such certificates registered in the names of the holders thereof,
with or without a copy of this Summary of Rights.
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, as amended from time to time,
the complete terms of which are hereby incorporated by reference.
