RIGHTS AGREEMENT
AGREEMENT, dated as of October 29, 1996, between CILCORP Inc.,
an Illinois corporation (the "Company"), and Continental Stock
Transfer & Trust Company (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on October 29, 1996, the Board of Directors of the
Company (i) authorized and declared a dividend of one right (a
"Right") for each share of the common stock, without par value, of
the Company (the "Common Stock") outstanding as of the close of
business on November 12, 1996 (the "Record Date"), each Right
representing the right to purchase, on the terms and conditions
contained herein, one one-hundredth of a share (subject to
adjustment) of Series R Preferred Stock, without par value, of the
Company (the "Series R Preferred Stock") having the rights and
preferences set forth on Exhibit A attached hereto, and (ii)
further authorized the issuance of one Right (subject to
adjustment) with respect to each share of Common Stock of the
Company that shall become outstanding (whether originally issued or
delivered from the Company's treasury) between the Record Date and
the Distribution Date (as such term is hereinafter defined) and in
certain circumstances thereafter;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the shares of Common Stock of the Company then outstanding,
but an "Acquiring Person" shall not include an Exempt Person (as
such term is hereinafter defined). Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" as the result of an
acquisition of shares of Common Stock by (i) the Company which, by
reducing the number of such shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to
15% or more of the Common Stock of the Company then outstanding;
provided, however, that if a Person (other than an Exempt Person)
and any Affiliate or Associate of such Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock of
the Company then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company,
become the Beneficial Owner of any additional shares of Common
Stock of the Company, then such Person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors determines in good faith that a Person who would
otherwise be an "Acquiring Person", as defined pursuant to the
foregoing provisions, has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an
"Acquiring Person", then such Person shall not be deemed an
"Acquiring Person" for any purposes of this Agreement unless and
until such Person shall again become an "Acquiring Person".
1.2 "Adjustment Shares" shall have the meaning set forth
in subsection 11.1(b) hereof.
1.3 "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date of
this Agreement.
1.4 A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(a) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(b) which such Person or any of such Person's
Affiliates or Associates has (i) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a
tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, payment or
exchange; or (ii) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this clause (ii) if the
agreement, arrangement or understanding to vote such
security: (A) arises solely from a revocable proxy or
consent given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of 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) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in
clause (b)(ii) of this subsection 1.4) or disposing of
any securities of the Company.
Notwithstanding anything in this subsection 1.4 to the contrary, a
Person engaged in the business of underwriting securities shall not
be deemed the "Beneficial Owner" of, or to "beneficially own," any
securities acquired in good faith in a bona fide firm commitment
underwriting of such securities pursuant to an underwriting
agreement with the Company until the expiration of such period of
time as shall be determined by the Board of Directors.
1.5 "Board of Directors" shall mean the Board of
Directors of the Company.
1.6 "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
States of New York or Illinois are authorized or obligated by law
or executive order to close.
1.7 "close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
New York City time, on the next succeeding Business Day.
1.8 "Common Stock" when used with reference to the
Company shall mean the common stock, without par value per share,
of the Company. "Common Stock" when used with reference to any
Person other than the Company which is organized in corporate form
shall mean the capital stock or other equity security with the
greatest per share voting power of such Person. "Common Stock"
when used with reference to any Person which is not organized in
corporate form shall mean units of beneficial interest which
represent the right to participate in profits, losses, deductions
and credits of such Person and which shall be entitled to exercise
the greatest voting power per unit of such Person.
1.9 "Common Stock equivalents" shall have the meaning
set forth in subsection 11.1(c) hereof.
1.10 "Current Market Price" shall have the meaning set
forth in subsection 11.4 hereof.
1.11 "Current Value" shall have the meaning set forth in
subsection 11.1(c) hereof.
1.12 "Distribution Date" shall have the meaning set forth
in subsection 3.1 hereof.
1.13 "equivalent Series R Preferred Stock" shall have the
meaning set forth in subsection 11.2 hereof.
1.14 "Exchange Act" shall have the meaning set forth in
subsection 1.3 hereof.
1.15 "Exchange Ratio" shall have the meaning set forth in
subsection 23.2(a) hereof.
1.16 "Exempt Person" shall mean the Company, any
Subsidiary of the Company, any employee benefit plan (including any
employee stock plan) of the Company or of any Subsidiary of the
Company, or any person or entity organized, appointed, established
or holding Common Stock of the Company for or pursuant to the terms
of any such plan.
1.17 "Expiration Date" shall have the meaning set forth
in subsection 7.1 hereof.
1.18 "Person" shall mean any individual, firm,
corporation, partnership or other entity.
1.19 "Principal Party" shall have the meaning set forth
in subsection 13.2 hereof.
1.20 "Purchase Price" shall have the meaning set forth in
subsection 4.1 hereof.
1.21 "Redemption Price" shall have the meaning set forth
in subsection 23.1(a) hereof.
1.22 "Securities Act" shall mean the Securities Act of
1933, as amended.
1.23 "Stock Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such.
1.24 "Subsection 11.1(b) Event" shall mean any event
described in subsection 11.1(b) hereof.
1.25 "Subsection 11.1(b) Trigger Date" shall have the
meaning set forth in subsection 11.1(c) hereof.
1.26 "Subsection 13.1 Event" shall mean any event
described in clause (a), (b) or (c) of subsection 13.1 hereof.
1.27 "Subsidiary" of any Person shall mean any
corporation or other entity (a) of which securities or other
ownership interest having ordinary voting power to elect a majority
of the board of directors or other Persons performing similar
functions are at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such
Person, or by such Person and one or more Subsidiaries of such
Person, or (b) the power to control or direct the management of
which is exercised or exercisable, directly or indirectly, by such
Person.
1.28 "Substitution Period" shall have the meaning set
forth in subsection 11.1(c) hereof.
1.29 "Trading Day" shall have the meaning set forth in
subsection 11.4(a) hereof.
1.30 "Triggering Event" shall mean any Subsection 11.1(b)
Event or Subsection 13.1 Event.
Any determination required by the definitions contained in
this Section 1 shall be made by the Board of Directors in its good
faith judgment, and any such determination shall be final and
binding on the Rights Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Distribution Date also be the holders of
the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it
may deem necessary or desirable.
Section 3. Issue of Right Certificates.
3.1 Until the close of business on the date (the
"Distribution Date") which is the earlier of:
(a) the tenth day after the Stock Acquisition
Date, or
(b) the tenth Business Day (or such later date
as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement of, or the
first public announcement of the intent to commence, a
tender or exchange offer by any Person (other than an
Exempt Person), if upon successful consummation thereof,
such Person would be the Beneficial Owner of 15% or more
of the shares of Common Stock of the Company then
outstanding, (including any such date which is after the
date of this Agreement and prior to the issuance of the
Rights),
(i) the Rights will be evidenced (subject to the provisions of
subsection 3.2 hereof) by the certificates for the Common Stock
registered in the names of the holders thereof (which certificates
for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (ii) each Right will
be transferable only in connection with the transfer of an
underlying share (subject to adjustment as hereinafter provided) of
Common Stock (including a transfer to the Company); provided that
if the Distribution Date would be prior to the Record Date, the
Record Date shall be the Distribution Date, and provided, further,
that if a tender or exchange offer referred to in clause (b) above
is canceled or withdrawn prior to the Distribution Date, such offer
shall be deemed, for purposes of this Agreement, never to have been
made. As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the
close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, a right certificate, in
substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each share of Common Stock so held. In
the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to subsection 11.16 hereof, at
the time of distribution of the Rights Certificates, the Company
shall make the necessary and appropriate rounding adjustments (in
accordance with subsection 14.1 hereof) so that Right Certificates
representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
3.2 As soon as practicable following the Record Date,
the Company will send a copy of a Summary of Rights to Purchase
Series R Preferred Stock, in substantially the form attached hereto
as Exhibit C (the "Summary of Rights"), by first-class, postage
prepaid mail, 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, until the
Distribution Date (or, if earlier, the Expiration Date), the Rights
will be evidenced by such Common Stock certificates registered in
the names of the holders thereof. Until 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 surrender for transfer of the Rights associated with the Common
Stock represented thereby.
3.3 Rights shall be issued in respect of all shares of
Common Stock that become outstanding after the Record Date but
prior to the earlier of the Distribution Date or the Expiration
Date and, in certain circumstances provided for in Section 22
hereof, may be issued in respect of shares of Common Stock that
become outstanding after the Distribution Date. Common Stock
certificates issued after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date (or, in certain
circumstances as provided in Section 22 hereof, after the
Distribution Date), shall bear the following legend:
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in a Rights Agreement dated as of
October 29, 1996 between CILCORP Inc. and
Continental Stock Transfer & Trust Company as
Rights Agent (as such Agreement may be amended
from time to time, the "Rights Agreement"),
the terms of which are hereby incorporated
herein by reference and a copy of which is on
file at the principal executive offices of
CILCORP Inc. Under certain circumstances, as
set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and
will no longer be evidenced by this
certificate. CILCORP Inc. will mail or cause
to be mailed to the holder of this certificate
a copy of the Rights Agreement without charge
after receipt of a written request therefor.
Under certain circumstances as provided in the
Rights Agreement, Rights issued to or
beneficially owned by Acquiring Persons or
their Affiliates or Associates (as such terms
are defined in the Rights Agreement) or any
subsequent holder of such Rights may become
null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of the Distribution Date or the Expiration Date,
the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also
constitute the surrender for transfer of the Rights associated with
the Common Stock represented thereby. In the event that the
Company purchases or acquires any shares of Common Stock after the
Record Date but prior to the Distribution Date (or, in certain
circumstances provided in Section 22 hereof, after the Distribution
Date), any Rights associated with such shares of Common Stock shall
be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the shares of
Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates.
4.1 The Right Certificates (and the forms of election to
exercise and of assignment to be printed on the reverse thereof),
when, as and if issued, shall each be substantially in the form
attached hereto as Exhibit B and may have such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time
to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates,
whenever issued, shall be dated as of the Record Date, and on their
face shall entitle the holders thereof to purchase one one-
hundredth (1/100) of one share of Series R Preferred Stock, or
other securities or property as provided herein, as the same may
from time to time be adjusted as provided herein, at the price per
one one-hundredth of a share set forth therein, as the same may
from time to time be adjusted as provided herein (the "Purchase
Price").
4.2 Notwithstanding any other provision of this
Agreement, any Right Certificate that represents Rights
beneficially owned by: (a) an Acquiring Person or any 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) 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 pursuant to either (i) a
transfer (whether or not for consideration) from the Acquiring
Person to or on behalf of holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person
has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (ii) a transfer (whether or not
for consideration) which the Board of Directors has determined is
part of a plan, arrangement or understanding which has the purpose
or effect of avoiding the provisions of subsection 7.5 hereof, and
any Right Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall bear
(to the extent feasible and reasonably identifiable as such) the
following legend:
The Rights represented by this Right
Certificate are or were beneficially owned by
a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the
Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby
may become void in the circumstances specified
in subsection 7.5 of the Rights Agreement.
Section 5. Countersignature and Registration.
5.1 The Right Certificates shall be executed on behalf
of the Company by its Chief Executive Officer, its President, any
Vice President, or its Treasurer, 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 who shall
have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued
and delivered by the Company with the same force and effect as
though the person who signed such Right Certificate had not ceased
to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual
date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at
the date of the execution of this Agreement any such person was not
such an officer.
5.2 Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates, the
certificate number and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
6.1 Subject to the provisions of Section 14 hereof, at
any time after the close of business on the Distribution Date and
at or prior to the close of business on the Expiration Date, any
Right Certificate or Right Certificates may be transferred, split
up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like
number of one one-hundredths of a share of Series R Preferred Stock
as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Right Certificate or
Right Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or
exchanged at the shareholder services office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates,
as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
6.2 Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, 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 execute and deliver a new Right Certificate of like tenor to
the Rights Agent for countersignature and delivery to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
7.1 The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election
to exercise on the reverse side thereof duly executed, to the
Rights Agent at its principal office, together with payment of the
aggregate Purchase Price with respect to the number of one one-
hundredths of a share of Series R Preferred Stock as to which the
surrendered Rights are then being exercised, at or prior to the
time (the "Expiration Date") which is the earlier of (a) the close
of business on November 12, 2006 or (b) the time at which the
Rights are redeemed or exchanged as provided in Section 23 hereof.
7.2 The Purchase Price for each one one-hundredth
(1/100) of a share of Series R Preferred Stock issued pursuant to
the exercise of a Right shall initially be $100.00. The Purchase
Price and the number of one one-hundredths of a share of Series R
Preferred Stock or other securities to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof. The Purchase Price shall be
payable in lawful money of the United States of America in
accordance with subsection 7.3 below.
7.3 Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to exercise duly
executed, accompanied by payment (in cash, or by certified or
official bank check or money order payable to the order of the
Company) of the aggregate Purchase Price for the number of one one-
hundredths of a share of Series R Preferred Stock to be purchased
and an amount equal to any applicable transfer tax, the Rights
Agent shall thereupon promptly (a)(i) requisition from any transfer
agent for the Series R Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such Stock) certificates for
the number of shares of Series R Preferred Stock so elected to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (ii)
requisition from the depositary agent depositary receipts
representing such number of one one-hundredths of a share of Series
R Preferred Stock as are to be purchased (in which case
certificates for the shares of Series R Preferred Stock represented
by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary
agent to comply with such request, (b) when appropriate,
requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14
hereof, (c) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, and (d) when
appropriate, after receipt, deliver such cash to or upon the order
of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to
subsection 11.1 or 13.1 hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or
property are available for distribution by the Rights Agent, if and
when appropriate.
7.4 In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
7.5 Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Subsection 11.1(b)
Event, any Rights beneficially owned by (a) the Acquiring Person to
which such Subsection 11.1(b) Event relates or an Associate or
Affiliate of such Acquiring Person, (b) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes
a transferee after such Acquiring Person becomes such, and (c) a
transferee of such Acquiring Person (or any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
such Acquiring Person becoming such pursuant to either (i) a
transfer (whether or not for consideration) from such Acquiring
Person to or on behalf of holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person
has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (ii) a transfer which the Board
of Directors has determined is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the
provisions of this subsection 7.5, shall be null and void without
any further action, and any holder of such Rights shall thereafter
have no rights whatsoever with respect to such Rights under any
provision of this Agreement or otherwise. The Company shall use
all reasonable efforts to ensure that the provisions of this
subsection 7.5 and subsection 4.2 hereof are complied with, but
shall have no liability to any holder of Rights or other Person as
a result of its failure to make any determinations with respect to
an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an
Acquiring Person whose Rights would be void pursuant to this
subsection or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant
to this subsection or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate; and any
Right Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to this
subsection shall be canceled.
7.6 Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to exercise set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose
of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or 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 any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other 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 Series R
Preferred Stock.
9.1 The Company covenants and agrees that at all times
it will cause to be reserved and kept available, out of its
authorized and unissued shares of Series R Preferred Stock not
reserved for another purpose (and, following the occurrence of a
Triggering Event, shares of Common Stock and other securities) or
any authorized and issued shares of Series R Preferred Stock (and,
following the occurrence of a Triggering Event, shares of Common
Stock and other securities) held in its treasury, the number of
shares of Series R Preferred Stock (and, following the occurrence
of a Triggering Event, shares of Common Stock and other securities)
that, as provided in this Agreement (including subsection 11.1(c)
hereof), will be sufficient to permit the exercise in full of all
outstanding Rights, provided that the Company shall not be required
to reserve and keep available shares of Common Stock or other
securities sufficient to permit the exercise in full of all
outstanding Rights pursuant to the adjustments set forth in
subsection 11.1(b), subsection 11.1(c) or Section 13 hereof unless
the Rights become exercisable pursuant to such adjustments, and
then only to the extent the Rights become exercisable pursuant to
such adjustments.
9.2 So long as the shares of Series R Preferred Stock
(and, following the occurrence of a Triggering Event, shares of
Common Stock and other securities) issuable and deliverable 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 shares
reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
9.3 The Company shall use its best efforts, if then
necessary to permit the offer and issuance of shares of Series R
Preferred Stock (and, following the occurrence of a Triggering
Event, shares of Common Stock and other securities) upon the
exercise of Rights, to register and qualify such shares of Series
R Preferred Stock (and, following the occurrence of a Triggering
Event, shares of Common Stock and other securities) under the
Securities Act and any applicable state securities or "blue sky"
laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective
as soon as possible after such filing and keep such registration
and qualifications effective until the earlier of (a) the date as
of which the Rights are no longer exercisable for such securities
and (b) the Expiration Date of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90)
days, the exercisability of the Rights in order to prepare and file
a registration statement under the Securities Act and permit it to
become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been
obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.
9.4 The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of
Series R Preferred Stock (and, following the occurrence of a
Triggering Event, shares of Common Stock and other securities)
delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the
aggregate Purchase Price thereof), be duly and validly authorized
and issued and fully paid and nonassessable shares.
9.5 The Company further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any
certificates for shares of Series R Preferred Stock (or Common
Stock or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for
shares of Series R Preferred Stock (or Common Stock or other
securities, as the case may be) upon exercise of Rights in a name
other than that of, the registered holder of the Right Certificate,
and the Company shall not be required to issue or deliver a Right
Certificate or a certificate or depositary receipt for shares of
Series R Preferred Stock (or Common Stock or other securities, as
the case may be) to a Person other than such registered holder
until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's satisfaction that
no such tax is due.
Section 10. Series R Preferred Stock Record Date. Each
Person in whose name any certificate for shares of Series R
Preferred Stock (or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the shares of Series R
Preferred Stock (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the aggregate Purchase Price (and
any applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Series R Preferred Stock (or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on
which the Series R Preferred Stock (or other securities, as the
case may be) 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 shareholder of
the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number and
kind of shares subject to purchase upon the exercise of each Right
and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
11.1(a) In the event that the Company shall at any
time after the Record Date (i) declare or pay any dividend on
Series R Preferred Stock payable in shares of Series R Preferred
Stock, (ii) subdivide or split the outstanding shares of Series R
Preferred Stock into a greater number of shares, (iii) combine or
consolidate the outstanding shares of Series R Preferred Stock into
a smaller number of shares or effect a reverse split of the
outstanding shares of Series R Preferred Stock, or (iv) issue any
shares of its capital stock in a reclassification of the Series R
Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided
in this subsection 11.1 and in subsection 7.5 hereof, the Purchase
Price in effect immediately prior to the time of the record date
for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares
of Series R Preferred Stock or capital stock, as the case may be,
issuable upon exercise of a Right on such date, shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall be entitled to receive, upon payment of an
amount equal to (x) the Purchase Price in effect immediately prior
to the record date or effective date of such dividend, subdivision,
combination or reclassification multiplied by (y) the number of one
one-hundredths of a share of Series R Preferred Stock, or shares of
capital stock, as the case may be, as to which a Right was
exercisable immediately prior to such date, the aggregate number
and kind of shares of Series R Preferred Stock or capital stock, as
the case may be, which, if such Right had been exercised
immediately prior to such date, the holder thereof would have owned
upon such exercise and been entitled to receive, or would be deemed
to have owned, by virtue of such dividend, subdivision, combination
or reclassification. If an event occurs which would require an
adjustment under both this subsection 11.1(a) and subsection
11.1(b) hereof, the adjustment provided for in this subsection
11.1(a) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to subsection 11.1(b) hereof.
11.1(b) Subject to the provisions of subsections
23.1 and 23.2 of this Agreement, in the event at any time after the
date of this Agreement, any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, then
each holder of a Right, except as provided in subsection 7.5
hereof, shall thereafter have a right to receive, upon exercise
thereof in accordance with the terms of this Agreement and payment
of an amount equal to the then current Purchase Price multiplied by
the number of one one-hundredths of a share of Series R Preferred
Stock for which a Right was exercisable immediately prior to the
first occurrence of a Subsection 11.1(b) Event, in lieu of shares
of Series R Preferred Stock, such number of shares of Common Stock
of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Series R Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of
a Subsection 11.1(b) Event, and (y) dividing that product by 50% of
the Current Market Price per share (determined pursuant to
subsection 11.4 hereof) of the Common Stock of the Company on the
date of such first occurrence (such number of shares is herein
called the "Adjustment Shares"), provided that the number of
Adjustment Shares shall be further appropriately adjusted to
reflect any events of the type described in subsections 11.1(a),
11.2 or 11.3 hereof occurring in respect of the Common Stock after
the date of such first occurrence.
11.1(c) Subject to the provisions of subsections
23.1 and 23.2 of this Agreement, in the event that the number of
shares of Common Stock which are authorized by the Company's
Articles of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in
accordance with subsection 11.1(b) and the Rights shall become so
exercisable, the Company shall, to the extent permitted by
applicable law and not prohibited by any material agreements in
effect on the date hereof to which the Company is a party, (A)
determine the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") and (B) with respect to
each Right, upon exercise of such Right, issue shares of Common
Stock to the extent available for the exercise in full of such
Right and, to the extent shares of Common Stock are not so
available, make adequate provision to substitute for the Adjustment
Shares not received upon exercise of such Right (1) cash, (2) other
equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock which, by virtue of
having dividend, voting and liquidation rights substantially
comparable to those of the Common Stock, are deemed in good faith
by the Board of Directors to have substantially the same value as
shares of Common Stock (such shares or units of shares of preferred
stock are herein called "Common Stock equivalents")), (3) debt
securities of the Company, (4) other assets, (5) a reduction of the
Purchase Price or (6) any combination of the foregoing, having a
value which, when added to the value of the shares of Common Stock
actually issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value, where such aggregate
value has been determined in good faith by the Board of Directors
based upon the advice of an independent investment banking firm
selected in good faith by the Board of Directors, provided that if
the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty days following the date
(the "Subsection 11.1(b) Trigger Date") which is the later of (x)
the first occurrence of a Subsection 11.1(b) Event and (y) the date
on which the Company's right of redemption pursuant to subsection
23.1 expires, then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and cash have
an aggregate value equal to the excess of (x) the Current Value
over (y) the Purchase Price times the number of one one-hundredths
of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Subsection 11.1(b)
Event. If the Board of Directors shall determine in good faith that
it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the
Rights, the thirty-day period set forth above may be extended to
the extent necessary, but not more than ninety days after the
Subsection 11.1(b) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional
shares (such thirty-day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the Company
determines that some action must be taken pursuant to the first or
second sentence of this subsection 11.1(c), the Company (x) shall
provide, subject to subsection 7.5 hereof and the last sentence of
this subsection 11.1(c), 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 seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this subsection
11.1(c), the value of the Common Stock shall be the Current Market
Price per share of the Common Stock on the Subsection 11.1(b)
Trigger Date and the per share or per unit value of any "Common
Stock equivalent" shall be deemed to equal the Current Market Price
per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate
the right to receive Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this subsection 11.1(c).
11.2 In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Series R
Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within 45 days after such record date) Series R
Preferred Stock, shares having the same rights, privileges and
preferences as the Series R Preferred Stock ("equivalent Series R
Preferred Stock") or securities convertible into Series R Preferred
Stock or equivalent Series R Preferred Stock at a price per share
of Series R Preferred Stock or equivalent Series R Preferred Stock
(or having a conversion price per share, if a security convertible
into Series R Preferred Stock or equivalent Series R Preferred
Stock) less than the Current Market Price per share of Series R
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 record date
by a fraction, the numerator of which shall be the number of shares
of Series R Preferred Stock outstanding on such record date, plus
the number of shares of Series R Preferred Stock which the
aggregate offering price of the total number of shares of Series R
Preferred Stock and equivalent Series R Preferred Stock (and the
aggregate initial conversion price of the convertible securities so
to be offered, including the price required to be paid to purchase
such convertible security) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares
of Series R Preferred Stock outstanding on such record date plus
the number of additional shares of Series R Preferred Stock or
equivalent Series R Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription
price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such non-cash
consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Series R 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 in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
11.3 In case the Company shall fix a record date for a
distribution to all holders of Series R Preferred Stock (including
any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
cash dividend) assets (other than a dividend payable in Series R
Preferred Stock, but including any dividend payable in stock other
than Series R Preferred Stock) or subscription rights or warrants
(excluding those referred to in subsection 11.2 hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which
shall be the Current Market Price per one one-hundredth of a share
of Series R Preferred Stock on such record date, less the fair
market value (as determined in good faith by the Board of
Directors, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one one-hundredth of
a share of Series R Preferred Stock and the denominator of which
shall be such Current Market Price per one one-hundredth of a share
of Series R Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
11.4(a) For the purpose of any computation
hereunder (including computations pursuant to Section 14 hereof),
other than computations made pursuant to subsection 11.1(c) hereof,
the "Current Market Price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30) consecutive Trading
Days (as such term is hereinafter defined) immediately prior to
such date, and for the purpose of computations made pursuant to
subsection 11.1(c) hereof, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the Current Market Price per share
of Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of:
(i) any dividend or distribution on such
Common Stock (other than a regular quarterly cash
dividend), or
(ii) any subdivision, combination or
reclassification of such Common Stock,
and prior to the expiration of the requisite thirty Trading Day or
ten Trading Day period, as set forth above, the ex-dividend date
for such dividend or distribution, or the effective date of such
subdivision, combination or reclassification occurs, 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 the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed
or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange,
the 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 Quotations System ("NASDAQ") or such other system then in
use, or, if on any such date the shares of 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 the Common Stock selected by the Board of Directors. If
on any such date no market maker is making a market in the Common
Stock, or if the Common Stock is not publicly held or not so listed
or traded, "Current Market Price" per share shall mean the fair
value per share as determined in good faith by the Board of
Directors, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange,
a Business Day.
11.4(b) For the purpose of any computation
hereunder, the "Current Market Price" per share of Series R
Preferred Stock shall be determined in the same manner as set forth
above for the Common Stock in subsection 11.4(a). If the "Current
Market Price" per share of Series R Preferred Stock cannot be
determined in the manner provided above or if the Series R
Preferred Stock is not publicly held or listed or traded in a
manner described in subsection 11.4(a), the "Current Market Price"
per share of Series R Preferred Stock shall be conclusively deemed
to be an amount equal to one hundred (100) times the "Current
Market Price" per share of Common Stock, as appropriately adjusted
for such events as stock splits, stock dividends or similar
transactions after the date of this Agreement. If neither the
Common Stock nor the Series R Preferred Stock is publicly held or
so listed or traded, "Current Market Price" per share of Series R
Preferred Stock shall mean the fair value per share as determined
in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
11.5 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 one
percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this subsection 11.5 are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one
one-millionth of a share of Series R Preferred Stock or one ten-
thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this subsection 11.5, any
adjustment required by this Section 11 shall be made no later than
the earlier of (a) three years from the date of the transaction
which required such adjustment or (b) the Expiration Date.
11.6 If as a result of an adjustment made pursuant to
subsection 11.1 or Section 13, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock other than Series R 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 applicable provisions with respect to shares of Series R
Preferred Stock contained in Sections 7, 9, 10, 13 and 14 hereof,
and such provisions shall apply on like terms to any such other
shares.
11.7 All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Purchase
Price, the number of one one-hundredths of a share of Series R
Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as
provided herein.
11.8 Unless the Company shall have exercised its election
as provided in subsection 11.9 hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in subsections
11.2 and 11.3 hereof, each Right outstanding immediately prior to
the making of such adjustment shall thereafter evidence the right
to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Series R Preferred Stock (calculated
to the nearest one-millionth) obtained by (a) multiplying (i) the
number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment, by (ii) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price,
and (b) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
11.9 The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights,
in addition to the adjustment provided in subsection 11.16 hereof,
in substitution for any adjustment in the number of shares of
Preferred Stock purchasable upon the exercise of a Right. Each of
the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for a number of one one-hundredths of a share
of Series R Preferred Stock equal to the number of one one-
hundredths of a share of Series R Preferred Stock for which a Right
was exercisable immediately prior to such adjustment multiplied by
a fraction, the numerator of which shall be the total number of
Rights outstanding immediately prior to such adjustment and the
denominator of which shall be the total number of Rights
outstanding immediately following such adjustment. The Company
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (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
subsection 11.9, 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 and subsection 7.5 hereof, the additional Rights to
which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the 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.
11.10 Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of
Series R Preferred Stock issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-
hundredths of a share which were expressed in the initial Right
Certificates issued hereunder.
11.11 Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-hundredth of
the then par value, if any, of a share of Series R Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action, including using its best efforts to obtain any
required shareholder approval, which may, in the opinion of its
counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable shares of Series R
Preferred Stock at such adjusted Purchase Price.
11.12 In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective
as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuance to the holder
of any Right exercised after such record date the shares of Series
R Preferred Stock and cash, other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the
shares of Series R Preferred Stock and cash, other capital stock or
securities of the Company, if any, issuable upon such exercise on
the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a
due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares of Series R Preferred Stock
and cash, other capital stock or securities upon the occurrence of
the event requiring such adjustment.
11.13 Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
their good faith judgment the Board of Directors shall determine to
be advisable in order that any (a) consolidation or subdivision of
the Series R Preferred Stock, (b) issuance for cash of any shares
of Series R Preferred Stock at less than the Current Market Price,
(c) issuance for cash of shares of Series R Preferred Stock or
securities which by their terms are convertible into or
exchangeable for shares of Series R Preferred Stock, (d) stock
dividends or (e) issuance of rights, options or warrants referred
to in this Section 11, hereafter made by the Company shall not be
taxable to holders of Series R Preferred Stock.
11.14 The Company covenants and agrees that it shall
not, at any time after the earlier of the Stock Acquisition Date or
the Distribution Date, (a)(i) consolidate with any other Person,
(ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with subsection
11.15 hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each
of which complies with subsection 11.15 hereof), or (b) effect any
reclassification of securities (including any reverse stock split),
or recapitalization or reorganization of the Company or other
transaction or series of transactions involving the Company which
has the effect, directly or indirectly, of increasing by more than
1% the proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its Subsidiaries
beneficially owned by any Acquiring Person or any Associate or
Affiliate thereof, if at the time of or immediately after such
consolidation, merger, sale or other transaction there are any
rights, warrants or other instruments or securities of the Company
or of such other Person outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
11.15 The Company covenants and agrees that, after
the earlier of the Stock Acquisition Date or the Distribution Date,
it will not, except as permitted by Sections 23 or 26 hereof, take
(or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
11.16 Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Record Date and prior to the Distribution Date (a)
declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (b) subdivide the outstanding
shares of Common Stock, (c) combine the outstanding shares of
Common Stock into a smaller number of shares, or (d) issue any
shares of its capital stock in a reclassification of the
outstanding Common Stock, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered
thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock
following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of 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 outstanding immediately following the occurrence of
such event.
Section 12. Certificate of Adjustments. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts giving rise thereto,
(b) promptly file with the Rights Agent and with each transfer
agent for the Series R Preferred Stock and the Common Stock a copy
of such certificate, and (c) mail a brief summary thereof to each
record holder of a Right (or, if prior to the Distribution Date, to
each record holder of Common Stock) in accordance with Section 25
hereof. Notwithstanding the foregoing sentence, the failure of the
Company to give such notice shall not affect the validity or the
force or effect of, or the requirement for, such adjustment. The
Rights Agent shall be fully protected in relying on any certificate
prepared by the Company pursuant to Sections 11 and 13 hereof and
on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
13.1 In the event that, at any time on or after the time
when any Person first becomes an Acquiring Person, directly or
indirectly,
(a) the Company shall consolidate with, or
merge with and into, any other Person or Persons (other
than a Subsidiary of the Company in a transaction which
complies with subsection 11.15 hereof), and the Company
shall not be the continuing or surviving corporation of
such consolidation or merger, or
(b) any Person or Persons shall (other than a
Subsidiary of the Company in a transaction which complies
with subsection 11.15 hereof), consolidate with, or merge
with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common
Stock of the Company shall be changed into or exchanged
for stock or other securities of any Person (including
the Company) or cash or any other property, or
(c) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any
Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions
each of which complies with subsection 11.15 hereof), in
one or more transactions, assets or earning power
aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole),
then, on the first occurrence of any such Subsection 13.1 Event,
proper provision shall be made so that: (i) each holder of a Right,
except as provided in subsection 7.5 hereof, shall thereafter have
the right to receive, upon the exercise thereof and payment of the
aggregate Purchase Price with respect to the total number of one
one-hundredths of a share of Series R Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of
such Subsection 13.1 Event (or, if earlier, the first occurrence of
a Subsection 11.1(b) Event) in accordance with the terms of this
Agreement, and in lieu of shares of Series R Preferred Stock, such
number of validly authorized and issued, fully paid, nonassessable
and freely tradeable shares of Common Stock of the Principal Party
(as hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredths of a share of Series R
Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Subsection 13.1 Event (or, if earlier,
the first occurrence of a Subsection 11.1(b) Event) and (B)
dividing that product by 50% of the Current Market Price
(determined as provided in subsection 11.4 hereof with respect to
Common Stock of the Company) per share of the Common Stock of such
Principal Party on the date of consummation of such Subsection 13.1
Event, provided that the Purchase Price and the number of shares of
Common Stock of such Principal Party issuable upon exercise of each
Right shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of the first occurrence
of a Subsection 13.1 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
Subsection 13.1 Event, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" for
all purposes of this Agreement shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply to such Principal Party
following the first occurrence of a Subsection 13.1 Event; and (iv)
such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its
Common Stock in accordance with Section 9 hereof) in connection
with the consummation of any such transaction as may be necessary
to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of
the Rights, provided that, upon the subsequent occurrence of any
merger, consolidation, sale of all or substantially all of the
assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the
Purchase Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had
he, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including,
but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
13.2 "Principal Party" shall mean
(a) in the case of any transaction described
in subsection 13.1(a) or 13.1(b), (i) the Person that is
the issuer of any securities into which shares of Common
Stock of the Company are converted in such merger or
consolidation, or (ii) if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(b) in the case of any transaction described in
subsection 13.1(c), the Person that is the party receiving the
greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, if the Common Stock of
such Person is not at such time and has not been continuously over
the preceding twelve-month period registered under Section 12 of
the Exchange Act, and (i) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has
been so registered, the term "Principal Party" shall refer to such
other Person, or (ii) if 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, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of
outstanding shares of Common Stock having the greatest aggregate
market value.
13.3 The Company shall not consummate any consolidation,
merger, sale or transfer referred to in subsection 13.1 hereof
unless the Principal Party shall have a sufficient number of shares
of authorized common stock which have not been issued or reserved
for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the
Company and the Principal Party involved therein shall have
executed and delivered to the Rights Agent an agreement confirming
that the requirements of this Section 13 shall promptly be
performed in accordance with their terms and further providing
that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:
(a) prepare and file a registration statement
under the Securities Act, if necessary, with respect to
the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its
best efforts to cause such registration statement to (i)
become effective as soon as practicable after such filing
and (ii) remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the
Expiration Date, and similarly comply with applicable
state securities laws;
(b) use its best efforts, if the Common Stock
of the Principal Party is or shall become listed on a
national securities exchange, to list (or continue the
listing of) the Rights and the securities purchasable
upon exercise of the Rights on such securities exchange
and, if the Common Stock of the Principal Party shall not
be listed on a national securities exchange, to cause the
Rights and the securities purchasable upon exercise of
the Rights to be reported by NASDAQ or such other system
then in use; and
(c) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive Subsection 13.1 Events. In the event that a Subsection
13.1 Event shall occur at any time after the occurrence of a
Subsection 11.1(b) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner
described in subsection 13.1.
Section 14. Fractional Rights and Fractional Shares.
14.1 The Company shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence
fractional Rights. If the Company shall not issue fractions of
Rights, in lieu of such fractional Rights, there shall be paid to
the holders of record of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable an amount
in cash equal to the same fraction of the then current market value
of a whole Right. For the purpose of this subsection 14.1, the then
current market value of a whole Right shall be the closing price of
the Rights for the Trading Day immediately prior to the date on
which fractional Rights would have been issuable, determined in the
same manner as the closing price of a share of Common Stock shall
be determined pursuant to subsection 11.4 hereof.
14.2 The Company shall not be required to issue fractions
of shares of Series R Preferred Stock or other securities of the
Company upon exercise of the Rights or to distribute certificates
which evidence fractional shares (other than fractions of shares of
Series R Preferred Stock which are integral multiples of one one-
hundredth of a share); provided that in lieu of issuing fractional
shares of Series R Preferred Stock, the Company may, at its
election, issue depositary receipts evidencing fractions of shares
pursuant to an appropriate agreement between the Company and a
depositary selected by it, but only if such agreement shall provide
that the holders of such depositary receipts shall have all of the
rights, privileges and preferences to which they would be entitled
as beneficial owners of the Series R Preferred Stock. With respect
to fractional shares of Series R Preferred Stock that are not
integral multiples of one one-hundredth of a share and fractional
shares of other securities of the Company, if the Company does not
issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Right
Certificates at the time such Right Certificates are exercised as
herein provided an amount in cash equal to the same fraction of the
then current market value of a share of Series R Preferred Stock or
other securities of the Company. For purposes of this subsection
14.2, the then current market value of a share of Series R
Preferred Stock or other securities of the Company shall be the
closing price thereof for the Trading Day immediately prior to the
date of such exercise, as determined pursuant to subsection 11.4
hereof.
14.3 The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any
fractional share of Series R Preferred Stock or other securities of
the Company upon exercise of a Right, except as provided 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 the Common Stock); and any
registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Stock), may, in such
holder's own behalf and for such holder's own benefit, enforce, and
may institute and maintain any suit, action or proceeding against
the Company or any other Person to enforce, or otherwise act in
respect of, such holder's 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,
accordingly, that they 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 not be evidenced by a Right Certificate and will be
transferable only in connection with the transfer of
Common Stock;
(b) after the Distribution Date, the Right
Certificates will be transferable only on the registry
books of the Rights Agent if surrendered at the
designated office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem
and treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on
the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent or the transfer agent of the Common Stock)
for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the
contrary.
(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 or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation;
provided, however, that the Company must use its best
efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No holder of a Right, as such, shall be entitled to
vote, receive dividends in respect of or be deemed for any purpose
to be the holder of Series R Preferred Stock or any other
securities of the Company which may at any time be issuable upon
the exercise of the Rights, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights in respect of any such
stock or securities, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent.
18.1 The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against
any claim of liability in the premises.
18.2 The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered or
omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate for
Series R Preferred Stock or Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or
Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
19.1 Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be party, or any corporation succeeding to the stock
transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the
successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
19.2 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 imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and
the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter
(including, without limitation, the identity of any
Acquiring Person and the determination of "Current Market
Price") be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate
signed by the Chief Executive Officer, the President, any
Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by
it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for
or by reason of any of the statements of fact or recitals
contained in this Agreement or in the Right Certificates
(except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company
only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or
in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including
the Rights becoming void pursuant to subsection 7.5
hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided
for in Section 3, 11, 13 or 23 or the ascertaining of the
existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that
such change or adjustment is required); 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 Series R Preferred Stock to be
issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Common Stock
or Series R Preferred Stock will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the
provisions of 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 Vice President, the
Treasurer or the Secretary of the Company, and to apply
to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in
accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions.
(h) The Rights Agent and any shareholder,
director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise
any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act,
default, neglect or misconduct, provided reasonable care
was exercised in the selection and continued employment
thereof.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company and to each transfer agent of the
Common Stock and Series R Preferred Stock, by registered or
certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (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 Series
R Preferred Stock, by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of
a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the
States of Illinois or New York (or of any other state of the United
States so long as such corporation is authorized to do business in
the States of Illinois or New York), in good standing, having an
office in the States of Illinois or New York, which is authorized
under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50
million. 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 Series R
Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
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 of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares of stock or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of
this Agreement. In addition, the Company may, if deemed necessary
or appropriate by the Board of Directors, issue Right Certificates
in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date,
including but not limited to, the issuance or sale of shares of
Common Stock pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or
exchange of securities of the Company.
Section 23. Redemption; Exchange.
23.1(a) The Board of Directors may, at its option,
at any time prior to 5:00 P.M., New York City time, on the earlier
of (a) the Stock Acquisition Date, or (b) November 12, 2006 redeem
all but not less than all of the then outstanding Rights at a
redemption price of $.001 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 by the Board of Directors
may be made effective at such time on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. Notwithstanding anything contained in this Agreement to
the contrary, the Rights shall not be exercisable pursuant to
subsection 11.1(b) prior to the expiration of the Company's right
of redemption hereunder.
23.1(b) Immediately upon the action of the Board
of Directors ordering the redemption of the Rights pursuant to this
subsection 23.1, and without any further action and without any
notice, but subject to any conditions established by the Board of
Directors pursuant to subsection 23.1(a), the right to exercise the
Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price, without any
interest thereon. Promptly after such action of the Board of
Directors ordering the redemption of the Rights, the Company shall
mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent of the Common
Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. The
failure to give, or any defect in, any notice required by this
subsection 23.1(b) shall not affect the legality or validity of
such redemption.
23.2(a) The Board of Directors may, at its option,
at any time after the occurrence of a Subsection 11.1(b) Event,
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to
the provisions of subsection 7.5 hereof) for shares of Common Stock
of the Company at an exchange ratio of one share of Common Stock
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 of Directors
shall not be empowered to effect such exchange at any time after
any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Stock of the Company then
outstanding.
23.2(b) Immediately upon the action of the Board
of Directors ordering the exchange of any Rights pursuant to
subsection 23.2(a) and without any further action and without any
notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by
which the exchange of shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of subsection 7.5
hereof) held by each holder of Rights.
23.2(c) In any exchange pursuant to this
subsection 23.2, the Company, at its option, may substitute shares
of Series R Preferred Stock (or equivalent Series R Preferred
Stock) for shares of Common Stock exchangeable for Rights, at the
initial rate of one one-hundredth of a share of Series R Preferred
Stock (or equivalent Series R Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect adjustments in
the voting rights of the Series R Preferred Stock pursuant to the
terms thereof, so that the fraction of a share of Series R
Preferred Stock delivered in lieu of each share of Common Stock
shall have the same voting rights as one share of Common Stock.
23.2(d) In the event that there shall not be
sufficient shares of Common Stock or Series R Preferred Stock
issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this
subsection 23.2, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock or Series
R Preferred Stock for issuance upon exchange of the Rights.
23.2(e) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which
such fractional shares of Common Stock would otherwise be issuable
an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this
subsection 23.2(e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common Stock
(as determined pursuant to the second sentence of subsection
11.4(a) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this subsection 23.2.
Section 24. Notice of Certain Events.
24.1 In case the Company shall propose, at any time after
the Distribution Date, (a) to pay any dividend payable in stock of
any class to the holders of Series R Preferred Stock or to make any
other distribution to the holders of Series R Preferred Stock
(other than a regular quarterly cash dividend), or (b) to offer to
the holders of Series R Preferred Stock options, warrants or other
rights to subscribe for or to purchase any additional shares of
Series R Preferred Stock (including any security convertible into
or exchangeable for Series R Preferred Stock) or shares of stock of
any class or any other securities, rights or options, or (c) to
effect any reclassification of the Series R Preferred Stock (other
than a reclassification involving only the subdivision or
combination of outstanding shares of Series R Preferred Stock) or
any recapitalization or reorganization of the Company, or (d) to
effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other
Person or Persons, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company
shall give to each holder of record of a Right Certificate, to the
extent feasible and in accordance with Section 25 hereof, notice of
such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of options, warrants
or other rights, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take place
and the record date for determining participation therein by the
holders of record of Series R Preferred Stock, if any such date is
to be fixed, and such notice, shall be so given in the case of any
action covered by clause (a) or (b) above at least ten (10) days
prior to the record date for determining holders of record of
Series R Preferred Stock for purposes of such action, and in the
case of any such other action, at least ten (10) days prior to the
date of the taking of such proposed action or the date of
participation therein by the holders of record of Series R
Preferred Stock, whichever shall be the earlier. The failure to
give notice required by this Section 24 or any defect therein shall
not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
24.2 In case a Subsection 11.1(b) Event shall occur, then
(a) the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of the occurrence of
such event, which shall specify the event and the consequences of
the event to holders of Rights under subsection 11.1(b) hereof, and
(b) all references in subsection 24.1 to Series R Preferred Stock
shall be deemed thereafter to refer to Common Stock or other
securities, as appropriate.
Section 25. Notices.
25.1 Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
CILCORP Inc.
300 Hamilton Boulevard
Peoria, Illinois 61602
Attention: Corporate Secretary
25.2 Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to be given or made
by the Company or by the holder of record of any Right Certificate
or Right to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
Two Broadway
New York, New York 10004
Attention: Compliance Department
25.3 Notices or demands authorized by this Agreement to
be given or made by the Company or the Rights Agent to the holder
of record of any Right Certificate or Right shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of
the Common Stock.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of, and without notice to, any
holders of certificates representing shares of Common Stock. From
and after the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company may, and the Rights Agent
shall at any time and from time to time, if the Company so directs,
supplement or amend this Agreement without the approval of, and
without notice to, any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time
period hereunder or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or
an Affiliate or Associate of any such Person); provided, however,
that this Agreement may not be supplemented or amended (A) to
lengthen a time period relating to when the Rights may be redeemed
at such time as the Rights are not then redeemable, or (B) to
lengthen any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than an
Acquiring Person or an Affiliate or Associate of any such Person).
Upon the delivery of a certificate from an appropriate officer of
the Company which states that the proposed supplement or amendment
is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement
or amendment shall be made which changes the Redemption Price, the
Expiration Date, the Purchase Price or the number of one one-
hundredth of a share of Series R Preferred Stock for which a Right
is exercisable. Prior to the Distribution Date, the interest of
the holders of Rights shall be deemed coincident with the interests
of the holders of shares of Common Stock.
Section 27. Successors. All of the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 28. 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, registered
holders of the Common Stock) any legal or equitable right, remedy
or claim under this Agreement, and 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, registered holders of the Common Stock).
Section 29. 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 30. 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 Illinois and for all
purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts made and to be performed
entirely within such State.
Section 31. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 32. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
[Remainder of Page Intentionally Left Blank. Signature Page
Follows.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
SEAL:
Attest: CILCORP INC.
By By
Name: John G. Sahn Name: Robert O. Viets
Title: Secretary Title: President and
Chief
Executive
Officer
SEAL:
Attest: CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By By
Name: Name:
Title: Title:
EXHIBIT A
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called
the "Board of Directors") in accordance with the provisions of the
Articles of Incorporation, the Board of Directors hereby creates a
series of preferred shares, without par value per share (the
"Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series R Preferred Stock:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series R Preferred Shares" (the "Series R
Preferred Stock") and the number of shares constituting the Series
R Preferred Stock shall be 500,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors;
provided that no decrease shall reduce the number of shares of
Series R Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the
Corporation convertible into Series R Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar shares)
ranking prior and superior to the Series R Preferred Stock
with respect to dividends, the holders of shares of Series R
Preferred Stock, in preference to the holders of common
shares, without par value per share (the "Common Stock"), of
the Corporation, and of any other junior shares, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a
share of Series R Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a)
$1.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series R Preferred Stock. In the
event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of
shares of Series R Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series R Preferred Stock as provided in
paragraph (A) of this Section at the same time it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the
Series R 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 R Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of
holders of shares of Series R Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of
Series R 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 R Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Series R Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series R Preferred Stock shall
entitle the holder thereof to 100 votes on all matters
submitted to a vote of the shareholders of the Corporation.
In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series R 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, in any other
Statement of Designation creating a series of Preferred Stock
or any similar shares, or by law, the holders of shares of
Series R Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the
Corporation.
(C) If at the time of any annual meeting of shareholders
for the election of directors a default in preference
dividends on the Preferred Stock of the Corporation shall
exist, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two, and
the holders of the Preferred Stock of all series shall have
the right at such meeting, voting together as a single class,
without regard to series, to the exclusion of the holders of
Common Stock, to elect two directors of the Corporation to
fill such newly created directorships. Such right shall
continue until there are no dividends in arrears upon the
Preferred Stock. Each director elected by the holders of
shares of Preferred Stock (herein called a "Preferred
Director") shall continue to serve as a Preferred Director for
the full term for which he or she shall have been elected,
notwithstanding that prior to the end of such term a default
in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed without
cause except by, the vote of the holders of record of the
outstanding shares of Preferred Stock, voting together as a
single class, without regard to series, to the exclusion of
the holders of Common Stock, at a meeting of the shareholders,
or the holders of shares of Preferred Stock, called for the
purpose. So long as a default in any preference dividends on
the Preferred Stock shall exist, any vacancy in the office of
a Preferred Director may be filled by the vote of the holders
of the outstanding shares of Preferred Stock, voting together
as a single class, without regard to series, to the exclusion
of the holders of Common Stock, at the same meeting at which
such removal shall be voted. Each director appointed as
aforesaid by the remaining Preferred Director shall be deemed,
for all purposes hereof, to be a Preferred Director. Whenever
the term of office of the Preferred Directors shall end and a
default in preference dividends shall no longer exist, the
number of directors constituting the Board of Directors shall
be reduced by two. For the purposes of this Section 3, a
"default in preference dividends" on the Preferred Stock shall
be deemed to have occurred whenever the amount of accrued
dividends upon any series of Preferred Stock shall be
equivalent to six full quarterly dividends or more and, having
so occurred, such default shall be deemed to exist thereafter
until, but only until, all accrued dividends on all shares of
Preferred Stock of each and every series then outstanding
shall have been paid to the end of the last preceding
quarterly dividend period.
(D) Except as set forth herein, or as otherwise provided
by law, holders of Series R Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series R Preferred Stock as
provided in Section 2 are in arrears for any quarter,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series R
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares ranking junior (either as to
dividends or upon liquidation, dissolution or winding up)
to the Series R Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares ranking on a parity (either
as to dividends or upon liquidation, dissolution or
winding up) with the Series R Preferred Stock, except
dividends paid ratably on the Series R Preferred Stock
and all such parity shares on which dividends are payable
or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration any shares ranking junior (either as to
dividends or upon liquidation, dissolution or winding up)
to the Series R Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise
acquire any such junior shares in exchange for shares of
the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the
Series R Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series R Preferred Stock, or
any shares ranking on a parity with the Series R
Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series R
Preferred Stock 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 and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation or in any other
Statement of Designation creating a series of Preferred Stock or
any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares ranking
junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series R Preferred Stock unless, prior thereto,
the holders of shares of Series R Preferred Stock shall have
received $10,000.00 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 R 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 shares of Common Stock, or
(2) to the holders of shares ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series R Preferred Stock, except distributions made ratably on the
Series R Preferred Stock and all such parity shares in proportion
to the total amounts to which the holders of all such shares are
entitled upon liquidation, dissolution or winding up. In the event
the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series R 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. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are
exchanged for or changed into other shares or securities, cash
and/or any other property, then in any such case each share of
Series R Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times
the aggregate amount of shares, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series R 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 outstanding immediately prior to
such event.
Section 8. No Redemption. The shares of Series R
Preferred Stock shall not be redeemable at the option of the
Corporation or any holder thereof. Notwithstanding the foregoing
sentence of this Section, the Corporation may acquire shares of
Series R Preferred Stock in any other manner permitted by law, the
provisions of this Statement of Designation and the Articles of
Incorporation.
Section 9. Ranking. Unless otherwise provided in the
Articles of Incorporation or a Statement of Designation relating to
a subsequent series of Preferred Stock of the Corporation, the
Series R Preferred Stock shall rank junior to all other series of
the Corporation's Preferred Stock as to the payment of dividends
and the distribution of assets on liquidation, dissolution or
winding up and senior to the Common Stock of the Corporation.
Section 10. Effective Time of Adjustments.
(A) Adjustments to the Series R Preferred Stock required
by the provisions hereof shall be effective as of the time at
which the event requiring such adjustments occurs.
(B) The Corporation shall give prompt written notice to
each holder of shares of Series R Preferred Stock of the
effect on any such shares of any adjustment to the dividend or
voting rights or rights upon liquidation, dissolution or
winding up of the Corporation required by the provisions
hereof. Notwithstanding the foregoing sentence, the failure
of the Corporation to give such notice shall not affect the
validity of, the force or effect of or the requirement for
such adjustment.
Section 11. Fractional Shares. Series R Preferred Stock
may be issued in fractions of a share which shall entitle the
holder thereof, in proportion to such holder's fractional shares,
to exercise voting rights, receive dividends, participate in
liquidating distributions and to have the benefit of all other
rights of holders of Series R Preferred Stock.
Section 12. Amendment. The Articles of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the rights, preferences or limitations
of the Series R Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds
of the outstanding shares of Series R Preferred Stock, voting
separately as a class, to the exclusion of the holders of Common
Stock or other Preferred Stock.
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER NOVEMBER 12, 2006 OR
EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.001 PER RIGHT (SUBJECT TO ADJUSTMENT) ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT
REFERRED TO HEREIN. IF THE RIGHTS REPRESENTED
BY THIS CERTIFICATE ARE ISSUED TO A PERSON WHO
IS AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON OR A
TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY
SUCH PERSONS, THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN
SUBSECTION 7.5 OF THE RIGHTS AGREEMENT.
Right Certificate
CILCORP INC.
This certifies that , or
registered assigns, is the registered owner of the number of Rights
set forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of that certain Rights
Agreement, dated as of October 29, 1996 (the "Rights Agreement"),
between CILCORP Inc., an Illinois corporation (the "Company"), and
Continental Stock Transfer & Trust Company (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00
P.M. (New York City time) on November 12, 2006 at the principal
office of the Rights Agent designated for such purpose, or its
successor as Rights Agent, one one-hundredth of a fully paid,
nonassessable share of Series R Preferred Stock, without par value
per share (the "Series R Preferred Stock") of the Company, at a
purchase price of $100.00 per one one-hundredth of a share, as the
same may be from time to time adjusted in accordance with the
Rights Agreement (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to
Exercise duly executed.
From and after the occurrence of a Subsection 11.1(b) Event,
if the Rights evidenced by this Right Certificate are beneficially
owned by (i) the Acquiring Person to which such Subsection 11.1(b)
Event relates or an Affiliate or Associate of such Acquiring Person
(as such terms are defined in the Rights Agreement), (ii)
transferees of such Acquiring Person, Affiliate or Associate or
(iii) under certain circumstances, transferees of persons who
became an Acquiring Person, Affiliate or Associate following such
transfer, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights, whether
under any provision of the Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a share of Series R Preferred
Stock which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the
happening of certain events, securities other than shares of Series
R Preferred Stock, or other property, may be acquired upon exercise
of the Rights evidenced by this Right Certificate, as provided in
the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, as such
agreement may be amended from to time without notice to any holders
of certificates representing shares of Common Stock or Rights
Certificates, 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 of the Rights Agent, the Company and the
holders of record of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of
such Rights under certain circumstances specified in the Rights
Agreement. Copies of the Rights Agreement are available upon
written request to the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the shareholder services office of
the Rights Agent designated for such purpose, may be exchanged for
another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase
the same aggregate number of shares of Series R Preferred Stock as
the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof, another Right
Certificate or Right Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company by
action of the Board of Directors at its option at a redemption
price of $.001 per Right (subject to adjustment as provided in the
Rights Agreement) at any time prior to the earlier of the close of
business on (i) the Stock Acquisition Date and (ii) November 12,
2006.
No fractional shares of Preferred Stock or other securities of
the Company are required to be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions of shares of
Series R Preferred Stock which are integral multiples of one one-
hundredth of a share, which may, at the election of the Company, be
evidenced by depositary receipts), and in lieu thereof, a cash
payment will be made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of
shares of Series R Preferred Stock or of any other securities of
the Company which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent
to any corporate action, or, to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of ____________________ , 1996
ATTEST: CILCORP INC.
By:
Secretary Title:
Countersigned:
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY,
as Rights Agent
By:
Authorized Officer
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder
if such holder desires to transfer the Rights
evidenced by this Right Certificate)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
__________ Rights evidenced by this Right Certificate, together
with all right, title and interest therein, and does hereby
irrevocably constitute and appoint __________________________
Attorney, to transfer this Right Certificate on the books of
CILCORP Inc., with full power of substitution.
Dated: , 19___
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best of the knowledge of the
undersigned, it
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any
Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated ___________________ , 19__
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in
every particular, without alteration, enlargement or any other
change whatsoever.
FORM OF ELECTION TO EXERCISE
(To be executed by the registered holder if that holder
desires to
exercise the Rights evidenced
by this Right Certificate)
To: CILCORP INC.:
The undersigned hereby irrevocably elects to exercise
________________ Rights represented by this Right Certificate to
purchase the shares of Series R Preferred Stock issuable upon the
exercise of those Rights (or such other securities or property of
the Company or of any other Person which may be issuable upon the
exercise of those Rights) and requests that certificates for such
share(s) be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights exercised 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: ______________, 19___
Signature
(signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are
or
[ ] are not
being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best of the knowledge
of the undersigned,
[ ] it did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any
Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated __________________ , 19__
Signature
Signature Guaranteed:
EXHIBIT C
CILCORP INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES R PREFERRED STOCK
On October 29, 1996, the Board of Directors of CILCORP Inc.
(the "Company") declared a dividend distribution of one Right for
each share of common stock of the Company (the "Common Stock")
outstanding on November 12, 1996 and for each share of Common Stock
issued thereafter until the Distribution Date (as defined below)
and, in certain circumstances, for shares issued after such Date.
Each Right entitles the registered holder to purchase from the
Company one one-hundredth (1/100) of a share of Series R Preferred
Stock (the "Preferred Stock") at a Purchase Price of $100.00. The
terms and conditions of the Rights are contained in a Rights
Agreement dated as of October 29, 1996 between the Company and
Continental Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agreement").
As discussed below, initially the Rights will not be
exercisable, certificates for the Rights will not be issued, and
the Rights will automatically trade with the Common Stock.
Until the close of business on the Distribution Date, which
will occur on the earlier of (i) the tenth day following the date
of a public announcement that a person or group of affiliated or
associated persons ("Acquiring Person") has acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Stock (the "Stock Acquisition Date") or (ii) the
tenth business day (or such later date as may be determined by the
Board of Directors prior to any person becoming an Acquiring
Person) after the commencement of a tender or exchange offer by a
Person which would result in the ownership by such Person of 15% or
more of the outstanding Common Stock, the Rights will be
represented by and transferred only with the Common Stock. Until
the Distribution Date, new certificates issued for Common Stock
will contain a legend incorporating the Rights Agreement by
reference, and the surrender for transfer of any of the Common
Stock certificates will also constitute the transfer of the Rights
associated with the Common Stock represented by those certificates.
As soon as practicable following the Distribution Date, separate
Right Certificates will be mailed to holders of record of Common
Stock at the close of business on the Distribution Date, and
thereafter the Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on November 12,
2006, unless redeemed or exchanged earlier as described below.
The Preferred Stock will be nonredeemable and, unless
otherwise provided in connection with the creation of a subsequent
Series of preferred stock, subordinate to all other series of the
Company's preferred stock. Each share of Preferred Stock will be
entitled to receive, when, as and if declared, a quarterly dividend
in an amount equal to the greater of $1.00 per share or 100 times
the quarterly cash dividend declared on the Common Stock. In
addition, the Preferred Stock is entitled to 100 times any non-cash
dividends (other than dividends payable in Common Stock) declared
on the Common Stock, in like kind. In the event of liquidation,
the holders of Preferred Stock will be entitled to receive a
liquidation payment in an amount equal to the greater of $100.00
per share or 100 times the liquidation payment made per share of
Common Stock. Each share of Preferred Stock will have 100 votes,
voting together with the Common Stock and not as a separate class
(except during a dividend default period occurring when dividends
equal to six quarterly dividends are in arrears), during which
there will be a right to elect two directors voting as a class with
any other series of preferred stock), unless otherwise required by
law or by the Company's Articles of Incorporation. In the event of
any merger, consolidation or other transaction in which shares of
Common Stock are exchanged or changed, each share of Preferred
Stock will be entitled to receive 100 times the amount received per
share of Common Stock. The rights of the Preferred Stock as to
dividends, voting rights and liquidation are protected by
antidilution provisions.
The Purchase Price payable and the number of shares of
Preferred Stock or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to time
to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends and dividends payable in Preferred
Stock) or of subscription rights or warrants.
If (i) any Person becomes an Acquiring Person, or (ii) during
such time as there is an Acquiring Person, there shall be a
reclassification of securities, recapitalization, reorganization or
other transaction involving the Company which increases the
proportionate equity share of the Acquiring Person, then in either
such event each holder of a Right, other than the Acquiring Person,
upon exercise of the Right and payment of the Purchase Price, will
have the right to receive, in lieu of Preferred Stock, a number of
shares of Common Stock ("Adjustment Shares") having a value, based
upon the market price during the period immediately preceding such
event, equal to twice the Purchase Price. To the extent that
insufficient shares of Common Stock are available for the exercise
in full of the Rights, holders of Rights will receive upon exercise
shares of Common Stock to the extent available and then cash,
property or other securities of the Company (which may be
accompanied by a reduction in the Purchase Price), in proportions
determined by the Company, so that the aggregate value received is
equal to the value of the Adjustment Shares. The Board of Directors
may, at its option up to the time an Acquiring Person beneficially
owns 50% or more of the outstanding Common Stock, exchange all or
part of the then outstanding and exercisable Rights for Common
Stock, at an exchange rate of one share of Common Stock per Right,
subject to adjustment. Rights are not exercisable following the
acquisition of shares of Common Stock by an Acquiring Person as
referred to in clause (i) of this paragraph until the expiration of
the period during which the Rights may be redeemed as described
below. Notwithstanding the foregoing, after an event described in
clause (i) or (ii) of this paragraph, Rights that are (or, under
certain circumstances, Rights that were) beneficially owned by the
Acquiring Person will be null and void.
If, after any Person becomes an Acquiring Person, unless the
Rights are redeemed earlier, (i) the Company is a party to a merger
or other business combination in which any shares of Common Stock
are changed into or exchanged for other securities or assets or
(ii) more than 50% of the assets or earning power of the Company
and its subsidiaries (taken as a whole) are sold or transferred in
one or more transactions, proper provision shall be made so that
each holder of record of a Right will from and after that time have
the right to receive, upon exercise of the Right and payment of the
Purchase Price, that number of shares of common stock of the
principal third party to the transaction which is equal to the
Purchase Price divided by one-half of the average market price of
a share of such party's common stock during the period immediately
preceding such transaction.
Fractions of shares of Preferred Stock may, at the election of
the Company, be evidenced by depositary receipts. The Company may
also issue cash in lieu of fractional shares of Preferred Stock
which are not integral multiples of one one-hundredth of a share
and in lieu of fractional shares of Common Stock or other
securities of the Company.
At any time prior to the earlier of the close of business on
(i) the Stock Acquisition Date or (ii) November 12, 2006, the Board
of Directors may cause the Company to redeem the Rights in whole,
but not in part, at a price of $.001 per Right, subject to
adjustment (the "Redemption Price"). Upon the action of the Board
of Directors authorizing redemption of the Rights, the right to
exercise the Rights will terminate, and the holders of Rights will
only be entitled to receive the Redemption Price.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company without the consent of,
and without notice to, the holders of the Rights prior to the
Distribution Date. Thereafter, the provisions of the Rights
Agreement may be amended by the Board of Directors without the
consent of, and without notice to, the holders of Rights
Certificates in order to cure any ambiguity, defect or
inconsistency, or to make changes which do not adversely affect the
interests of holders of Rights (excluding the interest of any
Acquiring Person); provided, however, that no supplement or
amendment may be made on or after the Distribution Date which
changes those provisions relating to the principal economic terms
of the Rights.
Until a Right is exercised, the holder, as such, will have no
rights as a shareholder of the Company, including without
limitation, the right to vote or to receive dividends.
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, 300 Hamilton Boulevard, Peoria,
Illinois 61602, Attention: Corporate Secretary. This summary does
not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated in this
summary by reference.
CILCORP INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as
Rights Agent
Rights Agreement
Dated as of October 29, 1996
TABLE OF CONTENTS
Section Page
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . 6
3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . 6
4. Form of Right Certificates. . . . . . . . . . . . . . . . . . . . 8
5. Countersignature and Registration . . . . . . . . . . . . . . . . 9
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates. . . . . . . . . . . . . . . . . . . . . . . . 10
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. Cancellation and Destruction of Right Certificates. . . . . . . . 13
9. Reservation and Availability of Series R Preferred Stock. . . . . 13
10. Series R Preferred Stock Record Date. . . . . . . . . . . . . . . 15
11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights . . . . . . . . . . . . . . . . . . . . . . . 16
12. Certificate of Adjustments. . . . . . . . . . . . . . . . . . . . 25
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . . . . . . . . . 26
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . 29
15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . 30
16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . 30
17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . 31
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . 32
19. Merger or Consolidation or Change of Name of Rights Agent . . . . 32
20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . 33
21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . 35
22. Issuance of New Right Certificates. . . . . . . . . . . . . . . . 36
23. Redemption; Exchange. . . . . . . . . . . . . . . . . . . . . . . 37
24. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . 39
25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
26. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . 41
27. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
28. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . 41
29. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
30. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 42
31. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
32. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . 42
Exhibit A -- Form of Statement of Designation
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights