EXHIBIT 4.1
ST. MARY LAND & EXPLORATION COMPANY
SHAREHOLDER RIGHTS PLAN
TABLE OF CONTENTS
Page
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RECITALS........................................................ 1
Section 1. Certain Definitions............................................. 1
Section 2. Rights ......................................................... 3
Section 3. Exercise of Rights; Purchase Price; Expiration Date of Rights... 4
Section 4. Company Covenants Concerning Shares and Rights.................. 4
Section 5. Record Date..................................................... 5
Section 6. Adjustment of Purchase Price, Number and Type of Shares or
Number of Rights................................................ 5
Section 7. Certificate of Adjusted Purchase Price or Number of Shares...... 11
Section 8. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power................................................... 11
Section 9. Fractional Rights and Fractional Shares......................... 13
Section 10. Agreement of Rights Holders..................................... 14
Section 11. Redemption...................................................... 14
Section 12. Notice of Certain Events........................................ 15
Section 13. Notices......................................................... 16
Section 14. Supplements and Amendments...................................... 16
Section 15. Successors; Certain Covenants................................... 16
Section 16. Severability.................................................... 16
Section 17. Governing Law................................................... 16
Section 18. Descriptive Headings............................................ 16
SHAREHOLDER RIGHTS PLAN
This Shareholder Rights Plan (the "Plan") of St. Mary Land & Exploration
Company, a Delaware corporation (the "Company"), is made effective as of the
1st day of August, 1999.
RECITALS
On July 15, 1999 the Board of Directors of the Company authorized and declared a
dividend of one right ("Right") for each share of Common Stock, $.01 par value,
of the Company (a "Common Share") outstanding as of the close of business on
August 5, 1999 (the "Record Date"), with each Right initially representing the
right to purchase one Common Share, upon the terms and subject to the conditions
hereinafter set forth, and further authorized the issuance of one Right with
respect to each Common Share issued by the Company after the Record Date but
prior to the Distribution Date (as hereinafter defined);
Section 1. Certain Definitions. For purposes of this Plan, the following terms
shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the
Company or any Related Person) who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of twenty percent or
more of the Common Shares then outstanding; provided however that (i) any Person
who or which, together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of twenty percent or more of the Common Shares then
outstanding in connection with a transaction or series of transactions approved
prior to such transaction or transactions by the Board of Directors of the
Company shall not be deemed an Acquiring Person by virtue of such transactions
or series of transactions, and (ii) a Person shall not be deemed to have become
an Acquiring Person solely as a result of a reduction in the number of Common
Shares outstanding, unless subsequent to such reduction such Person or any
Affiliate or Associate of such Person shall become the Beneficial Owner of any
additional Common Shares other than as a result of a stock dividend, stock split
or similar transaction effected by the Company in which all shareholders are
treated equally.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as in
effect on the date of this Plan.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing), or upon the exercise of conversion rights, exchange
rights, rights (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 or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of, including pursuant to any agreement, arrangement or understanding
(whether or not in writing); or
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(iii) of which any other Person is the Beneficial Owner if
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing)
with such other Person (or any of such other Person's Affiliates or
Associates) with respect to acquiring, holding, voting or disposing of
any securities of the Company other than pursuant to a revocable proxy
or a securities underwriting arrangement.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of Colorado are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 p.m.,
Mountain Time, on such date; provide however, that if such date is not a
Business Day it shall mean 5:00 p.m., Mountain Time, on the next succeeding
Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the Common Stock, $.01 par value, of the Company; provided, however, that, if
the Company is the continuing or surviving corporation in a transaction
described in Section 6(a)(ii) or Section 8(a)(ii) hereof, "Common Shares" when
used with reference to the Company shall mean the capital stock or equity
security with the greatest aggregate voting power of the Company. "Common
Shares" when used with reference to any corporation or other legal entity, other
than the Company, including an Issuer (as defined in Section 8(b) hereof), shall
mean the capital stock or equity security with the greatest aggregate voting
power of such corporation or other legal entity.
(g) "Company" shall mean St. Mary Land & Exploration Company, a
Delaware corporation.
(h) "Distribution Date" shall mean the earlier of:
(i) the Close of Business on the twentieth calendar day (or if
the Share Acquisition Date results from the consummation of a Permitted
Offer, such later date as may be determined by the Company's Board of
Directors before the Distribution Date) after the Share Acquisition
Date; or
(ii) the Close of Business on the twentieth calendar day (or
such later date as may be specified by the Board of Directors prior to
such time as any Person becomes an Acquiring Person) after the date of
the commencement of a tender or exchange offer (as determined by
reference to Rule 14d-2(a) under the Exchange Act) by any Person (other
than the Company or any Related Person), the consummation of which
could result in beneficial ownership by such Person of twenty percent
or more of the outstanding Common Shares (including any such date which
is after the date of this Plan and prior to the issuance of the
Rights).
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Expiration Date" shall mean the earlier of (i) the Close of
Business on the Final Expiration Date and (ii) the time at which the Rights are
redeemed as provided in Section 11 hereof.
(k) "Final Expiration Date" shall mean December 31, 2004.
(1) "Flip-in Event" shall mean any event described in clauses (A), (B)
or (C) of Section 6(a)(ii)hereof.
(m) "Flip-over Event" shall mean any event described in subsections
(i), (ii) or (iii) of Section 8(a) hereof.
(n) "Issuer" shall have the meaning set forth in Section 8(b) of this
Plan.
(o) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System.
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(p) "Permitted Offer" shall mean a tender offer or an exchange offer
for all outstanding shares of Common Stock at a price and on terms for all
outstanding shares of Common Stock determined by at least a majority of the
members of the Board of Directors who are not officers or employees of the
Company and who are not representatives, nominees, Affiliates or Associates of
an Acquiring Person to be (a) at a price and on terms that are fair to
shareholders (taking into account all factors that such members of the Board
deem relevant including, without limitation, prices that could reasonably be
achieved if the Company or its assets were sold on an orderly basis designed to
realize maximum value) and (b) otherwise in the best interests of the Company
and its shareholders.
(q) "Person" shall mean any individual, firm, corporation, partnership
or other legal entity, and shall include any successor (by merger or otherwise)
of such entity.
(r) "Purchase Price" shall mean initially $100.00 per share of Common
Stock and shall be subject to adjustment from time to time as provided in this
Plan.
(s) "Redemption Price" shall mean $.001 per Right, subject to
adjustment by resolution of the Board of Directors of the Company to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof.
(t) "Related Person" shall mean (i) any Subsidiary of the Company or
(ii) any employee benefit or stock ownership plan of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan.
(u) "Right" shall have the meaning set forth in the Recitals to this
Plan.
(v) "Right Certificates" shall mean certificates evidencing the Rights
as indicated in Section 2 of this Plan.
(w) "Securities Act" shall mean the Securities Act of 1933,as amended.
(x) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an Acquiring
Person has become such.
(y) "Subsidiary" of any Person shall mean any corporation or other
legal entity of which a majority of the voting power of the voting equity
securities or equity interests is owned, directly or indirectly, by such Person.
(z) "Trading Day" shall mean any day on which the principal national
securities exchange or other transaction reporting system on which the Common
Shares are listed or admitted to trading is open for the transaction of business
or, if the Common Shares are not listed or admitted to trading on any national
securities exchange or other transaction reporting system, a Business Day.
(aa)"Triggering Event" shall mean any Flip-in Event or Flip-over Event.
Section 2. Rights. (i) The Rights will be evidenced by the certificates
representing Common Shares registered in the names of the record holders thereof
(which certificates representing Common Shares shall also be deemed to be Right
Certificates) and not by separate Right Certificates, (ii) the Rights will be
transferable only in connection with the transfer of the underlying Common
Shares, and (iii) the transfer of any certificates evidencing Common Shares
shall also constitute the transfer of the Rights associated with the Common
Shares evidenced by such certificates.
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Section 3. Exercise of Rights; Purchase Price; Expiration Date Of Rights.
(a) Prior to the Expiration Date, the registered holder of any Right
may exercise such Right by written notice to the Company of such exercise
together with payment of the Purchase Price for the Common Share as to which
such Right is exercised. The Purchase Price shall be payable in lawful money of
the United States of America by certified check or bank draft payable to the
order of the Company.
(b) Subject to Section 6(a)(ii) hereof, upon the exercise of a Right
and payment as described above, the Company shall promptly (i) requisition from
any transfer agent of the Common Shares certificates representing the number of
Common Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, (ii) after receipt of such
certificates cause the same to be delivered to or upon the order of the
registered holder of such Right, registered in such name or names as may be
designated by such holder, (iii) if appropriate, deliver to or upon the order of
the registered holder of such Right the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with Section 9 hereof or in lieu of
the issuance of Common Shares in accordance with Section 6(a)(iii) hereof, and
(iv) deliver any due bill or other instrument to the registered holder of such
Right as provided by Section 6(j) hereof.
(c) Notwithstanding anything in this Plan to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification or
registration in such jurisdiction shall not have been effected or the exercise
of the Rights shall not be permitted under applicable laws, including but not
limited to the Securities Act and applicable state securities laws.
Section 4. Company Covenants Concerning Shares and Rights. The Company covenants
and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Common Shares the number of Common Shares that will be
sufficient to permit the exercise pursuant to Section 3 hereof of all
outstanding Rights.
(b) So long as the Common Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on a national
securities exchange or other transaction reporting system, it will endeavor to
cause, from and after such time as the Rights become exercisable, all shares
reserved for such issuance to be listed on such exchange or system upon official
notice of issuance.
(c) It will take all such action as may be necessary to ensure that all
Common Shares (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) delivered upon exercise of Rights, at the time
of delivery of the certificates for such shares, shall be (subject to payment of
the Purchase Price) duly and validly authorized and issued, fully paid and
nonassessable shares, free and clear of any liens, encumbrances or other adverse
claims and not subject to any rights of call or first refusal.
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(d) It will pay when due and payable any and all federal and state
transfer taxes and charges that may be payable in respect of the issuance or
delivery of the Rights or of any Common Shares (or other securities, as the case
may be) upon the exercise of Rights; provided however that it will not be
required to pay any transfer tax or charge which may be payable in respect of
any transfer, issuance or delivery of certificates representing Common Shares
(or other securities, as the case may be).
(e) It will use its best efforts to (i) file on an appropriate form, as
soon as practicable following the later to occur of a Triggering Event or the
Distribution Date, a registration statement under the Securities Act with
respect to the securities purchasable upon exercise of the Rights, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, or (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights; provided however that the Company may temporarily
suspend the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective and upon any such
suspension, the Company will 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.
(f) Notwithstanding anything in this Plan to the contrary, the Company
covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Section 11 or Section 14 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 or otherwise eliminate the benefits
intended to be afforded by the Rights.
(g) In the event that the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other property pursuant to
Sections 6 and 8 hereof, it will make all arrangements necessary so that such
other securities, cash and/or property are available for distribution, if and
when appropriate.
Section 5. Record Date. Each Person in whose name any certificate representing
Common Shares (or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Rights were duly exercised hereunder and payment of the Purchase Price (and
all applicable transfer taxes) was made. Prior to the exercise of a Right, the
holder of such Right shall not be entitled by virtue thereof to any rights of a
shareholder of the Company with respect to securities for which the Right shall
be exercisable, including without limitation the right to vote, receive
dividends or other distributions or exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company except
as provided herein.
Section 6. Adjustment of Purchase Price, Number and Type of Shares or Number of
Rights. The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 6.
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(a) (i) In the event that the Company shall at any time after the date
of this Plan (A) declare a dividend on the Common Shares payable in
Common Shares, (B) subdivide the outstanding Common Shares, (C)
combine the outstanding Common Shares into a smaller number of shares
or (D) issue any shares of its capital stock in a reclassification of
the Common Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing
or surviving corporation), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and/or the number and/or
kind of shares of capital stock issuable on such date upon exercise of
a Right, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive upon
payment of the Purchase Price then in effect the aggregate number and
kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Common
Shares transfer books of the Company were open, he or she would have
owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
6(a)(i) and Section 6(a)(ii) hereof or Section 8 hereof, the
adjustment provided for in this Section 6(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section 6(a)(ii) or Section 8 hereof.
(ii) In the event that:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Plan, directly or indirectly, shall (1) merge into the
Company or otherwise combine with the Company and the Company
shall be the continuing or surviving corporation of such
merger or combination (other than in a transaction subject to
Section 8 hereof), (2) merge or otherwise combine with any
Subsidiary of the Company, (3) in one or more transactions
(other than in connection with the exercise of Rights or the
exercise or conversion of securities exercisable or
convertible into capital stock of the Company or any of its
Subsidiaries) transfer any assets to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of
any class of capital stock of the Company or any of its
Subsidiaries or for securities exercisable for or convertible
into shares of any class of capital stock of the Company or
any of its Subsidiaries, or otherwise obtain from the Company
or any of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company
or any of its Subsidiaries or securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as part of a
pro rata distribution to all holders of such shares of any
class of capital stock of the Company, or any of its
Subsidiaries), (4) sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise dispose (in one or more
transactions) of any assets (including securities), to, from,
with or of, as the case may be, the Company or any of its
Subsidiaries (other than in a transaction subject to Section 8
hereof), (5) receive any compensation from the Company or any
of its Subsidiaries other than compensation as a director or
for full-time employment as a regular employee, in either
case, at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (6) receive the benefit,
directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries;
or
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(B) during such time as there is an Acquiring Person,
there shall be any reclassification of securities (including
any reverse stock split), or recapitalization of the Company,
or any merger or consolidation of the Company with any of its
Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries
(whether or not with or into or otherwise involving an
Acquiring Person), other than a transaction subject to Section
8 of this Plan, which has the effect, directly or indirectly,
of increasing by more than one percent the proportionate share
of the outstanding shares of any class of equity securities or
of securities exercisable for or convertible into equity
securities of the Company or any of its Subsidiaries of which
an Acquiring Person or any Associate or Affiliate of any
Acquiring Person, is the Beneficial Owner; or
(C) any Person (other than the Company or any Related
Person) who or which, together with all Affiliates and
Associates of such Person, shall at any time after the date of
this Plan, become an Acquiring Person other than through a
purchase of Common Shares pursuant to a tender offer made in
the manner prescribed by Section 14(d) of the Exchange Act and
the rules and regulations promulgated thereunder and which is
a Permitted Offer; then in each such case proper provision
shall be made so that each holder of a Right, except as
provided below, shall thereafter have a right to receive,
upon exercise thereof in accordance with the term of this
Plan at an exercise price per Right equal to the product of
the then-current Purchase Price multiplied by the number of
Common Shares for which a Right was exercisable immediately
prior to the first occurrence of such Flip-in Event (but
assuming the rights were then exercisable), such number of
Common Shares as shall equal the result obtained by
multiplying the then-current Purchase Price by the number of
Common Shares for which a Right was exercisable immediately
prior to the first occurrence of such Flip-in Event
(assuming exercisability), and dividing that product by
fifty percent of the current per share market price of a
Common Share (determined pursuant to Section 6(d) hereof) on
the date of the first occurrence of any such Flip-in Event.
Notwithstanding anything in this Plan to the contrary, from
and after the first occurrence of any such Flip-in Event,
any Rights of which any Acquiring Person or any Associate or
Affiliate of such Acquiring Person involved in such Flip-in
Event is or was at any time the Beneficial Owner after the
date upon which such Acquiring Person became such shall
become void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of
this Plan.
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(iii) In the event that there shall not be sufficient
authorized but unissued Common Shares or authorized and
issued Common Shares held in treasury to permit the exercise
in full of the Rights in accordance with the foregoing
subsection (ii), and the Company is unable to obtain the
authorization of the necessary additional Common Shares
within ninety calendar days after the occurrence of the
Flip-in Event, then, notwithstanding anything in this Plan
to the contrary, the Company shall determine the excess of
the value of the Common Shares issuable upon the exercise of
a Right over the Purchase Price (such excess being
hereinafter referred to as the "Spread") and shall be
obligated to deliver, upon the exercise of such Right and
without requiring payment of the Purchase Price, Common
Shares (to the extent available) and cash (to the extent
permitted by applicable law and any agreements or
instruments to which the Company is a party in effect
immediately prior to the first occurrence of any Flip-in
Event) in an amount equal to the Spread. To the extent that
any legal or contractual restrictions prevent the Company
from paying the full amount of cash payable in accordance
with the foregoing sentence, the Company shall pay to
holders of the Rights as to which such payments are payable
all amounts which are not then restricted on a pro rata
basis and shall continue to make payments on a pro rata
basis as funds become available until the full amount due to
each such Right holder has been paid.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or securities having
equivalent rights, privileges and preferences as the Common Shares ("equivalent
common shares")) or securities convertible into Common Shares or equivalent
common shares at a price per Common Share or equivalent common share (or having
a conversion price per share, if a security convertible into Common or
equivalent common shares) less than the current per share market price of the
Common Shares (as determined pursuant to Section 6(d) hereof) 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 Common
Shares outstanding on such record date plus the number of Common Shares which
the aggregate offering price of the total number of Common Shares and/or
equivalent common shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current per share market price and the denominator of which shall be the
number of Common Shares outstanding on such record date plus the number of
additional Common Shares and/or equivalent common shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a written
statement which shall be conclusive for all purposes. Common Shares owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights, 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.
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(c) In the event that the Company shall fix a record date for the
making of a distribution to all holders of Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend at a rate not in
excess of 125 percent of the rate of the highest regular periodic cash dividend
paid during the immediately preceding two years), assets, stock (other than a
dividend payable in Common Shares) or subscription rights, options or warrants
(excluding those referred to in Section 6(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current per share market price of the Common
Shares (as determined pursuant to Section 6(d) hereof) on such record date or,
if earlier, the date on which Common Shares begin to trade on an ex-dividend or
when-issued basis with respect to such distribution, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a written statement which shall be
conclusive for all purposes) of the portion of the cash, assets, stock or
evidences of indebtedness so to be distributed (in the case of periodic cash
dividends, only that portion in excess of 125 percent of the rate of the highest
regular periodic cash dividend paid during the immediately preceding two years)
or of such subscription rights, options or warrants applicable to Common Shares,
and the denominator of which shall be such current per share market price of the
Common Shares. Such adjustments shall be made successively whenever such a
record date is fixed; in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per
share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the
thirty consecutive Trading Days immediately prior to such date; provided however
that in the event that the current per share market price of the Common Shares
is determined during a period following the announcement by the issuer of such
Common Shares of (A) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares (other than
the Rights) or (B) any subdivision, combination or reclassification of such
Common Shares, and prior to the expiration of thirty Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to take into
account ex-dividend trading or to reflect the current per share market price per
Common Share equivalent. 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 on the principal national securities exchange on which the
Common Shares are listed or admitted to trading or, if the Common Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such date the Common Shares are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Shares
selected by the Board of Directors of the Company. If the Common Shares are not
so listed or traded, or not the subject of available bid and asked quotes,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a written statement which shall be
conclusive for all purposes.
(e) Except as set forth below, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent in such price; provided, however, that any adjustments
which by reason of this Section 6(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under Section 6 shall be made to the nearest cent or to the nearest
whole Common Share or other share, as the case may be. Notwithstanding the first
sentence of this Section 6(e), any adjustment required by Section 6 shall be
made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the Expiration Date.
9
(f) If as a result of an adjustment made pursuant to Section 8(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the Common
Shares contained in this Section 6 and the provisions of Sections 3, 4, 5, 8 and
9 hereof with respect to the Common Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided in this Plan.
(h) Upon each adjustment of the Purchase Price as a result of the
calculations made in Section 6(b) hereof and Section 6(c) hereof made with
respect to a distribution of subscription rights, options or warrants applicable
to Common Shares, 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 Common Shares (calculated to the nearest whole
Common Share) obtained by (i) multiplying the number of Common Shares covered by
a Right immediately prior to this adjustment by the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par value of the Common Shares issuable upon
exercise of the Rights, the Company shall take any corporate action which may be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Common Shares at such adjusted Purchase Price.
(j) In any case in which this Section 6 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of Common Shares or other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of Common Shares
or 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, capital stock or securities upon the occurrence of the event
requiring such adjustment.
(k) Notwithstanding anything in this Plan to the contrary, the Company
shall be entitled to make such reductions in the Purchase Price, in addition to
those adjustments expressly required by this Section 6, as and to the extent
that in their good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Common Shares, (ii) issuance wholly for cash of Common Shares at less than
the current per share market price therefor, (iii) issuance wholly for cash of
securities which by their terms are convertible into or exchangeable for Common
Shares, (iv) stock dividends, or (v) issuance of rights, options or warrants
referred to in this Section 6, hereafter made by the Company to holders of its
Common Shares shall not be taxable to such shareholders.
10
(l) Notwithstanding anything in this Plan to the contrary, in the event
that the Company shall at any time after the date of this Plan and prior to the
Distribution Date (i) declare a dividend on the outstanding Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares, (iii)
combine the outstanding Common Shares into a smaller number of shares, or (iv)
issue any shares of its capital stock in a reclassification of the outstanding
Common Shares, the number of Rights associated with each Common share then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall equal the
result obtained by multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction the numerator of which shall
be the total number of Common Shares outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of Common Shares outstanding immediately following the occurrence of such event,
provided that any resulting fractional amount shall be rounded to the nearest
whole number.
Section 7. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Section 6 or Section 8(a) hereof, the
Company shall
(a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment,
(b) promptly file with the transfer agent for the Common Shares, a copy
of such certificate, and
(c) if such adjustment is made after the Distribution Date, mail a
brief summary of such adjustment to each holder of a Right in accordance with
Section 13 hereof.
Section 8. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
(a) Except as provided in Section 8(c) of this Plan, in the event that,
following the Share Acquisition Date, directly or indirectly,
(i) the Company shall consolidate with, or merge with or into,
any other Person (other than a Related Person in a transaction which
complies with Section 4(f) hereof) and the Company shall not be the
continuing or surviving corporation of such consolidation or merger;
(ii) any Person (other than a Related Person in a transaction
which complies with Section 4(f) hereof) shall consolidate with the
Company, or merge with or into the Company and the Company shall be the
continuing or surviving corporation of such merger or consolidation
and, in connection with such merger or consolidation, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of such other Person or cash or any other property; or
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power (including without
limitation securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) representing in the aggregate
more than fifty percent of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Acquiring Person or
Persons (other than the Company or any Related Person in one or more
transactions each of which complies with Section 4(f) hereof),
11
then, and in each such case, proper provision shall be made so that
(A) except as provided below, each holder of a Right shall thereafter
have the right to receive, upon the exercise of it in accordance with
the terms of this Plan at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the number of
Common Shares for which a Right is then exercisable, in lieu of Common
Shares, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Issuer (as
such term is hereinafter defined), free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of
call or first refusal, as shall be equal to the result obtained by
multiplying the then-current Purchase Price by the number of Common
Shares for which a Right is exercisable immediately prior to the first
occurrence of any Flip-over Event (or, if a Flip-in Event has occurred
prior to the first occurrence of a Flip-over Event, multiplying the
number of Common Shares for which a Right was exercisable immediately
prior to the first occurrence of a Flip-in Event, assuming the Rights
were then exercisable by the Purchase Price in effect immediately
prior to such first occurrence), and dividing that product by fifty
percent of the current per share market price of the Common Shares of
the Issuer (determined pursuant to Section 6(d) hereof), on the date
of consummation of such Flip-over Event; (B) the Issuer shall
thereafter be liable for, and shall assume, by virtue of such
Flip-over Event, all the obligations and duties of the Company
pursuant to this Plan; (C) the term "Company" shall thereafter be
deemed to refer to the Issuer; and (D) the Issuer shall take such
steps (including without limitation the reservation of a sufficient
number of its Common Shares to permit the exercise of all outstanding
Rights) in connection with such consummation as may be necessary to
ensure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
Notwithstanding anything in this Plan to the contrary, from and after
the first occurrence of any such Flip-Over Event, any Rights of which
the Issuer or any Associate or Affiliate of the Issuer involved in
such Flip-Over Event is or was at any time the Beneficial Owner after
the date upon which the Issuer became such shall become void and any
holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Plan.
(b) For purposes of this Section 8, "Issuer" shall mean (i) in the case
of any Flip-over Event described in Sections 8(a)(i) or (ii) above, the Person
that is the continuing, surviving, resulting or acquiring Person (including the
Company as the continuing or surviving corporation of a transaction described in
Section 8(a)(ii) above), and (ii) in the case of any Flip-over Event described
in Section 8(a)(iii) above, the Person that is the party receiving the greatest
portion of the assets or earning power (including without limitation securities
creating any obligation on the part of the Company and/or any of its
Subsidiaries) transferred pursuant to such transaction or transactions; provided
however that in any such case, (A) if (1) no class of equity security of such
Person is, at the time of such merger, consolidation or transaction and has been
continuously over the preceding twelve-month period, registered pursuant to
Section 12 of the Exchange Act, and (2) such Person is a Subsidiary, directly or
indirectly, of another Person, a class of equity security of which is and has
been so registered, the term "Issuer" shall mean such other Person; and (B) in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, a class of equity security of two or more of which are and have been so
registered, the term "Issuer" shall mean whichever of such Persons is the issuer
of the equity security having the greatest aggregate market value.
Notwithstanding the foregoing, if the Issuer in any of the Flip-over Events
listed above is not a corporation or other legal entity having outstanding
equity securities, then, and in each such case, (i) if the Issuer is directly or
indirectly wholly owned by a corporation or other legal entity having
outstanding equity securities, then all references to Common Shares of the
Issuer shall be deemed to be references to the Common Shares of the corporation
or other legal entity having outstanding equity securities which ultimately
controls the Issuer, and (ii) if there is no such corporation or other legal
entity having outstanding equity securities, (Y) proper provision shall be made
so that the Issuer shall create or otherwise make available for purposes of the
exercise of the Rights in accordance with the terms of this Plan, a type or
types of security or securities having a fair market value at least equal to the
economic value of the Common Shares which each holder of a Right would have been
entitled to receive if the Issuer had been a corporation or other legal entity
having outstanding equity securities; and (Z) all other provisions of this Plan
shall apply to the issuer of such securities as if such securities were Common
Shares.
12
(c) Notwithstanding anything contained in this Plan to the contrary,
the adjustments described in Section 8(a) of this Plan shall not be made upon
the occurrence of an event described in Section 8(a)(i) or Section 8(a)(ii) if
all of the following are met:
(i) the Company shall merge or consolidate with an Acquiring
Person (or a wholly owned subsidiary of such Acquiring Person) who
became an Acquiring Person pursuant to a Permitted Offer;
(ii) the per share consideration offered in such merger or
consolidation is equal to or greater than the price per Common Share
paid to all holders of Common Stock whose shares were purchased
pursuant to such Permitted Offer; and
(iii) the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such Permitted
Offer.
(d) The Company shall not consummate any Flip-over Event unless the
Issuer shall have a sufficient number of authorized Common Shares (or other
securities as contemplated in Section 8(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 8 and unless prior to such consummation the Company and the
Issuer shall have both executed an agreement providing for the terms set forth
in subsections (a) and (b) of this Section 8 and further providing that as soon
as practicable after the consummation of any Flip-over Event, the Issuer will
(i) prepare and file on an appropriate form a registration
statement under the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights, and will use its
best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements of the Issuer and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the
Exchange Act. (e) The provisions of this Section 8 shall similarly apply
to successive mergers or consolidations or
sales or other transfers. In the event that a Flip-over Event occurs at any time
after the occurrence of a Flip-in Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
this Section 8.
Section 9. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights. In
lieu of any fractional Rights which would otherwise result from this Plan, the
number of Rights to be issued to a shareholder of the Company shall be rounded
to the nearest whole Right.
(b) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of any fractional Common Shares which would
otherwise result from this Plan, the number of Common Shares to be issued by the
Company under the Plan shall be rounded to the nearest whole Common Share.
13
Section 10. Agreement of Rights Holders. Every holder of a Right by accepting
the same consents and agrees with the Company and with every other holder of a
Right that, notwithstanding anything in this Plan to the contrary, the Company
shall not 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 Plan 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 shall use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as reasonably
possible.
Section 11. Redemption.
(a) The Board of Directors of the Company may at its option redeem all
but not less than all of the then-outstanding Rights at the Redemption Price at
any time prior to the Close of Business on the earlier of (i) the Final
Expiration Date or (ii) the tenth business day following the Share Acquisition
Date.
(b) If after the occurrence of a Share Acquisition Date and following
the expiration of the right of redemption hereunder but prior to the occurrence
of a Triggering Event, each of the following shall have occurred and remain in
effect: (i) a Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of Common Shares in a transaction, or series of
transactions, which did not result in the occurrence of any Triggering Event
such that such Person is thereafter a Beneficial Owner of fifteen percent or
less of the outstanding Common Shares, (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, and (iii) the transfer or other disposition described in
clause (i) above was other than pursuant to a transaction, or series of
transactions, which directly or indirectly involved the Company or any of its
Subsidiaries, then the right of redemption set forth in Section 11(a) shall be
reinstated and thereafter be subject to the provisions of this Section 11.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall publicly announce such action
and within ten calendar days thereafter the Company shall give notice of such
redemption to the holders of the then-outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Company or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. 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 Company may at its option pay
the Redemption Price in cash, Common Shares (based upon the current per share
market price of the Common Shares (determined pursuant to Section 6(d) hereof),
at the time of redemption) or any other form of consideration deemed appropriate
by the Board of Directors.
14
(d) The Board of Directors of the Company may at any time relinquish
any or all of the rights to redeem the Rights under Sections 11(a) or 11(b)
hereof by duly adopting a resolution to that effect. Promptly after adoption of
such a resolution, the Company shall publicly announce such action. Immediately
upon adoption of such resolution, the rights of the Board of Directors under the
portions of this Section 11 specified in such resolution shall terminate without
further action and without any notice.
Section 12. Notice of Certain Events.
(a) In case after the Distribution Date the Company shall propose (i)
to pay any dividend payable in stock of any class to the holders of Common
Shares or to make any other distribution to the holders of Common Shares (other
than a regular periodic cash dividend at a rate not in excess of 125 percent of
the rate of the highest regular periodic cash dividend paid during the
immediately preceding two years), (ii) to offer to the holders of Common Shares
rights, options or warrants to subscribe for or to purchase any additional
Common Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Common Shares (other than a
reclassification involving only the subdivision of outstanding Common Shares),
or (iv) to effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one or more transactions, of assets or earning
power (including without limitation securities creating any obligation on the
part of the Company and/or any of its Subsidiaries) representing more than fifty
percent of the assets and earning power of the Company and its Subsidiaries,
taken as a whole, to any other Person or Persons, then in each such case the
Company shall give to each holder of a Right notice in accordance with Section
13 hereof of such proposed action which shall specify the record date for the
purposes of such stock dividend, distribution or offering of rights, options or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty calendar days prior to the
record date for determining holders of the Common Shares for purposes of such
action, and in the case of any such other action at least twenty calendar days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares, whichever shall be
the earlier.
(b) In case any Triggering Event shall occur, then in each such case
the Company shall as soon as practicable thereafter give to each holder of a
Right notice in accordance with Section 13 hereof of the occurrence of such
event which shall specify the event and the consequences of the event to holders
of Rights.
Section 13. Notices.
(a) Notices or demands authorized by this Plan to be given or made by
the holder of any Right to or on the Company shall be sufficiently given or made
if sent by (i) confirmed telefax or (ii) first-class mail with postage prepaid,
addressed (until written notice of another address is given to the holders of
Rights) as follows:
St. Mary Land & Exploration Company
1776 Lincoln Street
Suite 1100
Denver, CO 80203
Telefax: (303) 861-0934
Attn: Mr. Richard C. Norris, Secretary
15
(b) Notices or demands authorized by this Plan to be given or made by
the Company to or on the holder of any Right shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 14. Supplements and Amendments. Prior to the Share Acquisition Date, the
Company shall supplement or amend any provision of this Plan in any manner which
the Company may deem desirable without the approval of any holders of Rights or
certificates representing Common Shares. Notwithstanding anything in this Plan
to the contrary, no supplement or amendment shall be made which decreases the
stated Redemption Price or the period of time remaining until the Final
Expiration Date.
Section 15. Successors; Certain Covenants. All the covenants and provisions of
this Plan by or for the benefit of the Company shall bind and inure to the
benefit of its successors and assigns hereunder.
Section 16. Severability. If any term, provision, covenant or restriction of
this Plan 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 Plan shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
Section 17. Governing Law. This Plan and each Right issued hereunder shall be
deemed to be a contract made under the internal substantive laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the internal substantive laws of such State applicable to contracts to be
made and performed entirely within such State.
Section 18. Descriptive Headings. Descriptive headings of the several sections
of this Plan are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
16
IN WITNESS WHEREOF, the Company has caused this Shareholder Rights Plan to be
duly executed on its behalf as of the date first above written.
ST. MARY LAND & EXPLORATION COMPANY
a Delaware corporation
By: /S/ MARK A. HELLERSTEIN
-----------------------
Mark A. Hellerstein, President and
Chief Executive Officer