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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
____________, 1997
between
FREEPORT-McMoRan SULPHUR INC.
and
MELLON SECURITIES TRUST COMPANY,
as Rights Agent
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
Page
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ARTICLE I. CERTAIN DEFINITIONS
1.1 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II. THE RIGHTS
2.1 Summary of Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Legend on Common Stock Certificates. . . . . . . . . . . . . . . . . . . . . . 9
2.3 Exercise of Rights; Separation of Rights . . . . . . . . . . . . . . . . . . . 10
2.4 Adjustments to Exercise Price; Number of Rights. . . . . . . . . . . . . . . . 13
2.5 Date on Which Exercise is Effective. . . . . . . . . . . . . . . . . . . . . . 15
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates. . . . . 15
2.7 Registration, Registration of Transfer and Exchange. . . . . . . . . . . . . . 16
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. . . . . . . . . . . 17
2.9 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.10 Delivery and Cancellation of Certificates. . . . . . . . . . . . . . . . . . . 18
2.11 Agreement of Rights Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE III. ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.2 Flip-over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV. THE RIGHTS AGENT
4.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2 Merger or Consolidation or Change of Name of Rights Agent. . . . . . . . . . . 25
4.3 Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.4 Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE V. MISCELLANEOUS
5.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2 Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.3 Issuance of New Rights Certificates. . . . . . . . . . . . . . . . . . . . . . 31
5.4 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.5 Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.6 Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.7 Holder of Rights Not Deemed a Stockholder. . . . . . . . . . . . . . . . . . . 33
5.8 Notice of Proposed Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 33
5.9 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.10 Suspension of Exercisability . . . . . . . . . . . . . . . . . . . . . . . . . 35
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5.11 Costs of Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.12 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.13 Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5.14 Determination and Actions by the Board of Directors, etc.. . . . . . . . . . . 36
5.15 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.16 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.17 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5.18 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
this "Agreement"), dated as of ____________, 1997, between Freeport-McMoRan
Sulphur Inc., a Delaware corporation (the "Company"), and MELLON SECURITIES
TRUST COMPANY, a NEW YORK corporation, as Rights Agent (the "Rights Agent",
which term shall include any successor Rights Agent hereunder).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
____________, 1997 (the "Record Time") and (b) authorized the issuance of one
Right in respect of each share of Common Stock issued after the Record Time and
prior to the Separation Time (as hereinafter defined) and, to the extent
provided in Section 5.3, each share of Common Stock issued after the Separation
Time;
WHEREAS, subject to the terms hereof, each Right entitles the holder
thereof, after the Separation Time, to purchase securities of the Company (or,
in certain cases, of certain other entities) pursuant to the terms and subject
to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
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ARTICLE I
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner
of 15% or more of the outstanding shares of Common Stock; PROVIDED, HOWEVER,
that the term "Acquiring Person" shall not include (i) any Person who shall
become the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock solely as a result of an acquisition by the Company of shares of
Common Stock, until such time thereafter as such Person shall become the
Beneficial Owner (other than by means of a stock dividend or stock split) of
any additional shares of Common Stock, (ii) any Person who shall become the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock but
who acquired shares of Common Stock without any plan or intention to seek or
affect control of the Company, if such Person promptly thereafter enters into
and delivers to the Company an irrevocable commitment promptly to divest, and
thereafter promptly divests (without exercising or retaining any power,
including voting, with respect to such shares), sufficient shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock or (iii) any Person who
Beneficially Owns shares of Common Stock consisting solely of one or more of
(A) shares of Common Stock Beneficially Owned pursuant to the grant or
exercise of an option granted to such Person by the Company in connection
with an agreement to merge with, or acquire, the Company at a time at which
there is no Acquiring Person, (B) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock)
Beneficially Owned by such Person or its Affiliates or Associates at the time
of grant of such option or (C) shares of Common Stock (or securities
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convertible into, exchangeable into or exercisable for Common Stock) acquired
by Affiliates or Associates of such Person after the time of such grant
which, in the aggregate, amount to less than 1% of the outstanding shares of
Common Stock. In addition, the Company, any wholly-owned Subsidiary of the
Company and any employee benefit plan of the Company or a wholly-owned
Subsidiary of the Company shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner," and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities as to
which such Person or any of such Person's Affiliates or Associates is or may
be deemed to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5
under the Securities Exchange Act of 1934, as such Rules are in effect on the
date of this Agreement, as well as any securities as to which such Person or
any of such Person's Affiliates or Associates has the right to become
Beneficial Owner (whether such right is exercisable immediately or only after
the passage of time or the occurrence of conditions) pursuant to any
agreement, arrangement or understanding, 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," or to have "Beneficial Ownership" of, or to "Beneficially
Own," any security (i) solely because such security has been tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange or (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct
the voting of such security pursuant to a revocable proxy given in response
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to a public proxy or consent solicitation made to more than ten holders of
shares of a class of stock of the Company registered under Section 12 of the
Securities Exchange Act of 1934 and pursuant to, and in accordance with, the
applicable rules and regulations under the Securities Exchange Act of 1934,
except if such power (or the arrangements relating thereto) is then
reportable under Item 6 of Schedule 13D under the Securities Exchange Act of
1934 (or any similar provision of a comparable or successor report). For
purposes of this Agreement, in determining the percentage of the outstanding
shares of Common Stock with respect to which a Person is the Beneficial
Owner, all shares as to which such Person is deemed the Beneficial Owner
shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in New York, New York are generally
authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 p.m. New York,
New York time on such date (or, if such date is not a Business Day, 5:00 p.m.
New York, New York time on the next succeeding Business Day) or such other
time at which the New York, New York office of the transfer agent for the
Common Stock (or, after the Separation Time, the New York, New York office of
the Rights Agent) is closed to the public.
"Common Stock" shall mean the shares of Common Stock, $.01 par
value, of the Company.
"Exchange Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 3.1(c) hereof.
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"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise
Price shall equal $_____.
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) the close of business on the tenth-year
anniversary of the Record Time and (iv) upon the merger of the Company into
another corporation pursuant to an agreement entered into when there is no
Acquiring Person.
"Flip-in Date" shall mean the tenth business day after any Stock
Acquisition Date which is not the result of a Flip-over Transaction or Event.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i) in
the case of a Flip-over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii)
in the case of a Flip-over Transaction or Event referred to in clause (ii) of
the definition thereof, the Person receiving the greatest portion of the
assets or earning power being transferred in such Flip-over Transaction or
Event; provided in all cases that if such Person is a subsidiary of a
corporation, the parent corporation shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the
business and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series
of transactions after the time when an Acquiring Person has become such in
which, directly or indirectly, (i) the Company shall consolidate or merge or
participate in a share exchange with any other Person if, at the time of the
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consolidation, merger or share exchange or at the time the Company enters
into any agreement with respect to any such consolidation, merger or share
exchange, the Acquiring Person controls the Board of Directors of the Company
and any term of or arrangement concerning the treatment of shares of capital
stock in such consolidation, merger or share exchange relating to the
Acquiring Person is not identical to the terms and arrangements relating to
other holders of the Common Stock or (ii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) or (B) generating more than 50% of
the operating income or cash flow, of the Company and its Subsidiaries (taken
as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert, if, at the time of
the entry by the Company (or any such Subsidiary) into an agreement with
respect to such sale or transfer of assets, the Acquiring Person controls the
Board of Directors of the Company.
"Market Price" per share of any securities on any date shall mean
the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date;
PROVIDED, HOWEVER, that if an event of a type analogous to any of the events
described in Section 2.4 hereof shall have caused the closing prices used to
determine the Market Price on any Trading Days during such period of 20
Trading Days not to be fully comparable with the closing price on such date,
each such closing price so used shall be appropriately adjusted in order to
make it fully comparable with the closing price on such date. The closing
price per share of any securities on any date shall be the last reported sale
price, regular way, or, in case no such sale takes place or is quoted on such
date, the average of the closing bid and asked prices, regular way, for each
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share of such securities, 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, Inc. or, if the
securities are not listed on such exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the securities are
listed or admitted to trading or, if on any such date the securities 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
securities 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 securities as selected by the Board of Directors of
the Company; PROVIDED, HOWEVER, that if on any such date the securities are
not listed or admitted to trading on a national securities exchange or quoted
by NASDAQ and no such market maker is making a market in the securities, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered
to the Rights Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act
of 1934, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"Preferred Stock" shall mean the series of Participating Preferred
Stock, $.01 par value, of the Company created by Articles of Amendment in
substantially the form set forth in Exhibit B hereto appropriately completed.
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"Redemption Price" shall mean an amount equal to $0.01.
"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Time" shall mean the close of business on the earlier of
(i) the tenth business day (or such later date as the Board of Directors of
the Company may from time to time fix by resolution adopted prior to the
Separation Time that would otherwise have occurred) after the date on which
any Person commences a tender or exchange offer which, if consummated, would
result in such Person's becoming an Acquiring Person and (ii) the Flip-in
Date; PROVIDED, that if the foregoing results in the Separation Time being
prior to the Record Time, the Separation Time shall be the Record Time and
PROVIDED FURTHER, that if any tender or exchange offer referred to in clause
(i) of this paragraph is cancelled, terminated or otherwise withdrawn prior
to the Separation Time without the purchase of any shares of Common Stock
pursuant thereto, such offer shall be deemed, for purposes of this paragraph,
never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has
become such.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities
or a majority of the equity interest is Beneficially Owned, directly or
indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall mean
a day on which the New York Stock Exchange, Inc. is open for the transaction
of business or, if such securities are not listed on such exchange, a day on
which the principal national securities exchange on which such securities are
listed or admitted to trading is open for the transaction of business or, if
such securities are not listed or admitted to trading on any national
securities exchange, a Business Day.
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ARTICLE II
THE RIGHTS
2.1 SUMMARY OF RIGHTS. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to
each holder of record of Common Stock as of the Record Time, at such holder's
address as shown by the records of the Company.
2.2 LEGEND ON COMMON STOCK CERTIFICATES. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time
shall evidence one Right for each share of Common Stock represented thereby
and shall have impressed on, printed on, written on or otherwise affixed to
them the following legend:
Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of
____________, 1997 (as such may be amended from time to time, the "Rights
Agreement"), between Freeport-McMoRan Sulphur Inc. (the "Company") and
MELLON SECURITIES TRUST COMPANY, as Rights Agent, the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may be exchanged for shares of Common Stock or other securities
or assets of the Company or a Subsidiary of the Company, may expire, may
become void (if they are "Beneficially Owned" by an "Acquiring Person" or
an Affiliate or Associate thereof, as such terms are defined in the Rights
Agreement, or by any transferee of any of the foregoing) or may be
evidenced by separate certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for the mailing of a copy of
the Rights Agreement to the holder of this certificate without charge
within five days after the receipt of a written request therefor.
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Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share of
Common Stock evidenced thereby notwithstanding the absence of the foregoing
legend.
2.3 EXERCISE OF RIGHTS; SEPARATION OF RIGHTS. (a) Subject to
Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth,
each Right will entitle the holder thereof, after the Separation Time and
prior to the Expiration Time, to purchase, for the Exercise Price, one
one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate for the associated share
of Common Stock (together, in the case of certificates issued prior to the
Record Time, with the letter mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to the terms hereof, after the Separation Time and
prior to the Expiration Time, the Rights (i) may be exercised and (ii) may be
transferred independent of shares of Common Stock. Promptly following the
Separation Time, the Rights Agent will mail to each holder of record of
Common Stock as of the Separation Time (other than any Person whose Rights
have become void pursuant to Section 3.1(b)), at such holder's address as
shown by the records of the Company (the Company hereby agreeing to furnish
copies of such records to the Rights Agent for this purpose), (x) a
certificate (a "Rights Certificate") in substantially the form of Exhibit A
hereto appropriately completed, representing the number of Rights held by
such holder at the Separation Time and having 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
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provisions of this Agreement, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which
the Rights may from time to time be listed or traded, or to conform to usage,
and (y) a disclosure statement describing the Rights.
(d) Subject to the terms hereof, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by
payment in cash, or by certified or official bank check or money order
payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to
cover any transfer tax or charge which may be payable in respect of any
transfer involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for shares or depositary receipts (or
both) in a name other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject
to the terms hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from the Company's transfer agent stock certificates evidencing
such number of shares or other securities to be purchased (the Company hereby
irrevocably authorizing its transfer agent to comply with all such
requisitions) and (B) if the Company elects pursuant to Section 5.5 not to
issue certificates representing fractional shares, requisition from the
depositary selected by the Company depositary receipts representing the
fractional shares to be purchased or requisition from the Company the amount
of cash to be paid in lieu of fractional shares in accordance with Section
5.5 and (ii) after receipt of such certificates, depositary receipts and/or
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cash, deliver the same to or upon the order of the registered holder of such
Rights Certificate, registered (in the case of certificates or depositary
receipts) in such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully paid and nonassessable; (ii) take
all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all federal
and state transfer taxes and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or of any shares
issued upon the exercise of Rights, provided that the Company shall not be
required to pay any transfer tax or charge which may be payable in respect of
any transfer involved in the transfer or delivery of Rights Certificates or
the issuance or delivery of certificates for shares in a name other than that
of the holder of the Rights being transferred or exercised.
2.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS. (a) In the
event the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in
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Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of shares of Common Stock,
(x) the Exercise Price in effect after such adjustment will be equal to the
Exercise Price in effect immediately prior to such adjustment divided by the
number of shares of Common Stock (the "Expansion Factor") that a holder of
one share of Common Stock immediately prior to such dividend, subdivision or
combination would hold thereafter as a result thereof and (y) each Right held
prior to such adjustment will become that number of Rights equal to the
Expansion Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to which the
original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combination, so that each
such share of Common Stock will have exactly one Right associated with it.
Each adjustment made pursuant to this paragraph shall be made as of the
payment or effective date for the applicable dividend, subdivision or
combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than
in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such
share. To the extent provided in Section 5.3, Rights shall be issued by the
Company in respect of shares of Common Stock that are issued or sold by the
Company after the Separation Time.
(b) In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other than
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pursuant to a regular periodic cash dividend or a dividend paid solely in
Common Stock) whether by dividend, in a reclassification or recapitalization
(including any such transaction involving a merger, consolidation or share
exchange), or otherwise, the Company shall make such adjustments, if any, in
the Exercise Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of the Company,
in its sole discretion, may deem to be appropriate under the circumstances in
order to adequately protect the interests of the holders of Rights generally,
and the Company and the Rights Agent shall amend this Agreement as necessary
to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.4, the Company shall
(i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate and (iii) mail a brief summary thereof to each
holder of Rights.
(d) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the securities so purchasable
which were expressed in the initial Rights Certificates issued hereunder.
2.5 DATE ON WHICH EXERCISE IS EFFECTIVE. Each person in whose name
any certificate for shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price for such Rights (and any applicable taxes and
other governmental charges payable by the exercising holder hereunder) was
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made; PROVIDED, HOWEVER, that if the date of such surrender and payment is a
date upon which the stock 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 stock transfer books of the Company are open.
2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES. (a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, President or its Treasurer, under
its corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of
such Rights Certificates.
Promptly after the Company learns of the Separation Time, the
Company will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders of
the Rights pursuant to Section 2.3(c) hereof. No Rights Certificate shall be
valid for any purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a)
After the Separation Time, the Company will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable regulations as it may
-15-
prescribe, the Company will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed "Rights Registrar" for the
purpose of maintaining the Rights Register for the Company and registering
Rights and transfers of Rights after the Separation Time as herein provided.
In the event that the Rights Agent shall cease to be the Rights Registrar,
the Rights Agent will have the right to examine the Rights Register at all
reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will
execute, and the Rights Agent will countersign and deliver, in the name of
the holder or the designated transferee or transferees, as required pursuant
to the holder's instructions, one or more new Rights Certificates evidencing
the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be
entitled to the same benefits under this Agreement as the Rights surrendered
upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights
Agent, as the case may be, duly executed by the holder thereof or such
holder's attorney duly authorized in writing. As a condition to the issuance
of any new Rights Certificate under this Section 2.7, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto.
-16-
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been redeemed or terminated under
Section 5.1.
2.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES. (a)
If any mutilated Rights Certificate is surrendered to the Rights Agent prior
to the Expiration Time, then, subject to Sections 3.1(b) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security
or indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b) and 5.1 and in the absence
of notice to the Company or the Rights Agent that such Rights Certificate has
been acquired by a BONA FIDE purchaser, the Company shall execute and upon
its request the Rights Agent shall countersign and deliver, in lieu of any
such destroyed, lost or stolen Rights Certificate, a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
-17-
evidence an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Rights Certificate shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and
any agent of the Company or the Rights Agent may deem and treat the person in
whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby for all purposes whatsoever, including the
payment of the Redemption Price and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary. As used in this Agreement,
unless the context otherwise requires, the term "holder" of any Rights shall
mean the registered holder of such Rights (or, prior to the Separation Time,
the associated shares of Common Stock).
2.10 DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled
by the Rights Agent. The Company may at any time deliver to the Rights Agent
for cancellation any Rights Certificates previously countersigned and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly
cancelled by the Rights Agent. No Rights Certificates shall be countersigned
in lieu of or in exchange for any Rights Certificates cancelled as provided
in this Section 2.10, except as expressly permitted by this Agreement. The
Rights Agent shall destroy all cancelled Rights Certificates and deliver a
certificate of destruction to the Company.
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2.11 AGREEMENT OF RIGHTS HOLDERS. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 FLIP-IN. (a) In the event that prior to the Expiration Time a
Flip-in Date shall occur, the Company shall take such action as shall be
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necessary to ensure and provide that, except as provided in this Section 3.1,
each Right shall constitute the right to purchase from the Company, upon
exercise thereof in accordance with the terms hereof (but subject to Section
5.10), that number of shares of Common Stock having an aggregate Market Price
on the Stock Acquisition Date equal to twice the Exercise Price for an amount
in cash equal to the Exercise Price (such right to be appropriately adjusted
in order to protect the interests of the holders of Rights generally in the
event that on or after such Stock Acquisition Date an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring
Person or an Affiliate or Associate thereof or by any transferee, direct or
indirect, of any of the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same will not complete the certification set forth at the end of the form
of assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and Associates)
as the Company shall reasonably request, then the Company shall be entitled
conclusively to deem the Beneficial Owner thereof to be an Acquiring Person
or an Affiliate or Associate thereof or a transferee of any of the foregoing
and accordingly will deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at
any time after a Flip-in Date and prior to the time that an Acquiring Person
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becomes the Beneficial Owner of more than 50% of the outstanding shares of
Common Stock, elect to exchange all (but not less than all) the then
outstanding Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for shares of Common Stock at
an exchange ratio of one share of Common Stock per Right, appropriately
adjusted in order to protect the interests of holders of Rights generally in
the event that after the Separation Time an event of a type analogous to any
of the events described in Section 2.4(a) or (b) shall have occurred with
respect to the Common Stock (such exchange ratio, as adjusted from time to
time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal
to the Exchange Ratio. Promptly after the action of the Board of Directors
electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in
exchange for Rights) to the Rights Agent and the holders of the Rights (other
than Rights that have become void pursuant to Section 3.1(b)) outstanding
immediately prior thereto by mailing such notice in accordance with Section
5.9.
Each Person in whose name any certificate for shares is issued upon
the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d)
shall for all purposes be deemed to have become the holder of record of the
shares represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of any applicable taxes and other governmental charges payable by
the holder was made; PROVIDED, HOWEVER, that if the date of such surrender
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and payment is a date upon which the stock 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 stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-hundredth of a share of Preferred
Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares
or authorized but unissued shares of Common Stock or Preferred Stock of the
Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call a
meeting of stockholders seeking approval to cause sufficient additional
shares to be authorized (provided that if such approval is not obtained the
Company will take the action specified in clause (ii) of this sentence) or
(ii) take such action as shall be necessary to ensure and provide, to the
extent permitted by applicable law and any agreements or instruments in
effect on the Stock Acquisition Date to which it is a party, that each Right
shall thereafter constitute the right to receive, (x) at the Company's
option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair value
equal to twice the Exercise Price, or (B) without payment of consideration
(except as otherwise required by applicable law), debt or equity securities
or other assets (or a combination thereof) having a fair value equal to the
Exercise Price, or (y) if the Board of Directors of the Company elects to
exchange the Rights in accordance with Section 3.1(c), debt or equity
securities or other assets (or a combination thereof) having a fair value
equal to the product of the Market Price of a share of Common Stock on the
Flip-in Date times the Exchange Ratio in effect on the Flip-in Date, where in
-22-
any case set forth in (x) or (y) above the fair value of such debt or equity
securities or other assets shall be as determined in good faith by the Board
of Directors of the Company, after consultation with a nationally recognized
investment banking firm.
3.2 FLIP-OVER. (a) Prior to the Expiration Time, the Company
shall not enter into any agreement with an Acquiring Person (or any of its
Affiliates or Associates) with respect to, consummate or permit to occur any
Flip-over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity, for the benefit of the
holders of the Rights, providing that, upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right shall thereafter constitute the
right to purchase from the Flip-over Entity, upon exercise thereof in
accordance with the terms hereof, that number of shares of Flip-over Stock of
the Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to
twice the Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in order to protect the interests of
the holders of Rights generally in the event that after such date of
consummation or occurrence an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Flip-over Stock) and (ii) the Flip-over Entity shall thereafter be liable
for, and shall assume, by virtue of such Flip-over Transaction or Event and
such supplemental agreement, all the obligations and duties of the Company
pursuant to this Agreement. The provisions of this Section 3.2 shall apply
to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
-23-
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements,
agreements or instruments that would eliminate or otherwise diminish in any
material respect the benefits intended to be afforded by this Rights
Agreement to the holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 GENERAL. (a) The Company hereby appoints the Rights Agent to
act as agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company
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 to
be done 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.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
-24-
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.
4.2 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. (a)
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent is a party, or any corporation succeeding to the stockholder
services business of the Rights Agent or any successor Rights Agent, will be
the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 4.4 hereof. In case
at the time such successor Rights Agent succeeds to the agency created by
this Agreement any of the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates have
not been countersigned, any successor Rights Agent may countersign such
Rights 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 Rights
Certificates will have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either in its prior
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name or in its changed name; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
4.3 DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, 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 will 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 deems it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent
to be the Chairman of the Board, the President or any Vice President and by
the Treasurer or any Assistant Treasurer or the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent; and such
certificate will 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 will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
-26-
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any certificate
for securities purchasable upon exercise of Rights or Rights Certificate
(except its countersignature thereof); nor will it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 3.1(b) hereof) or any adjustment required under the
provisions of Section 2.4, 3.1 or 3.2 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate contemplated by Section
2.4 describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any
Rights or as to whether any securities purchasable upon exercise of Rights
will, when issued, be duly and validly authorized, executed, issued and
delivered and 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.
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(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President, the Secretary or any Assistant Secretary or the Treasurer of the
Company, and to apply to such persons 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
person.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, 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 will 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.
4.4 CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the
Company and to each transfer agent of Common Stock by registered or certified
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mail, and to the holders of the Rights in accordance with Section 5.9. The
Company may remove the Rights Agent upon 30 days' notice in writing, mailed
to the Rights Agent and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Rights in accordance
with Section 5.9. If the Rights Agent should resign or be removed or
otherwise become incapable of acting, the Company will appoint a successor to
the Rights Agent. If the Company fails to make such appointment within a
period of 30 days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights
Agent or by the holder of any Rights (which holder shall, with such notice,
submit such holder's Rights Certificate for inspection by the Company), then
the holder of any Rights 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 State of New
York, in good standing, having its principal office in the State of New York,
which is authorized under such laws to exercise the powers of the Rights
Agent contemplated by this Agreement and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. After appointment, the successor Rights Agent will 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 will
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing to
the holders of the Rights. Failure to give any notice provided for in this
Section 4.4, 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.
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ARTICLE V
MISCELLANEOUS
5.1 REDEMPTION. (a) The Board of Directors of the Company may, at
its option, at any time prior to the close of business on the Flip-in Date,
elect to redeem all (but not less than all) the then outstanding Rights at
the Redemption Price and the Company, at its option, may pay the Redemption
Price either in cash or shares of Common Stock or other securities of the
Company deemed by the Board of Directors, in the exercise of its sole
discretion, to be at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not
be effective until the occurrence of a specified future time or event, upon
the occurrence of such future time or event), without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive the Redemption
Price in cash or securities, as determined by the Board of Directors.
Promptly after the Rights are redeemed, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice in accordance with Section 5.9.
5.2 EXPIRATION. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1(c), 3.1(d), 3.1(e), 3.2 or
5.1 hereof.
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5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the number or kind or class of shares of stock
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock by the Company following the Separation Time and prior
to the Redemption Time or Expiration Time pursuant to the terms of securities
convertible or redeemable into shares of Common Stock or to options, in each
case issued or granted prior to, and outstanding at, the Separation Time, the
Company shall issue to the holders of such shares of Common Stock, Rights
Certificates representing the appropriate number of Rights in connection with
the issuance or sale of such shares of Common Stock; PROVIDED, HOWEVER, in
each case, (i) no such Rights Certificate shall be issued, if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company
or to the Person to whom such Rights Certificates would be issued, (ii) no
such Rights Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof, and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an
Acquiring Person or any transferee of any of the foregoing.
5.4 SUPPLEMENTS AND AMENDMENTS. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval
of any holders of Rights (i) prior to the close of business on the Flip-in
Date, in any respect and (ii) after the close of business on the Flip-in
Date, to make any changes that the Company may deem necessary or desirable
and which shall not materially adversely affect the interests of the holders
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of Rights generally or in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be inconsistent with any
other provisions herein or otherwise defective. The Rights Agent will duly
execute and deliver any supplement or amendment hereto requested by the
Company which satisfies the terms of the preceding sentence.
5.5 FRACTIONAL SHARES. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, in the sole discretion of the
Board of Directors, either (a) evidence such fractional shares by depositary
receipts issued pursuant to an appropriate agreement between the Company and
a depositary selected by it, providing that each holder of a depositary
receipt shall have all of the rights, privileges and preferences to which
such holder would be entitled as a beneficial owner of such fractional share,
or (b) sell such shares on behalf of the holders of Right and pay to the
registered holder of such Rights the appropriate fraction of price per share
received upon such sale.
5.6 RIGHTS OF ACTION. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agreement,
other than rights of action vested solely in the Rights Agent, are vested in
the respective holders of the Rights; and any holder of any Rights, without
the consent of the Rights Agent or of the holder of any other Rights, may, on
such holder's own behalf and for such holder's own benefit and the benefit of
other holders of Rights, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights in the
manner provided in such holder's Rights 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
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have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any
Person subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as such,
of any Rights shall be entitled to vote, receive dividends or be deemed for
any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 5.8 hereof), or to receive
dividends or subscription rights, or otherwise, until such Rights shall have
been exercised or exchanged in accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS. In case the Company shall propose
after the Separation Time and prior to the Expiration Time (i) to effect or
permit (in cases where the Company's permission is required) occurrence of
any Flip-in Date or Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Right, in accordance with
Section 5.9 hereof, a notice of such proposed action, which shall specify the
Flip-in Date or the date on which such Flip-over Transaction or Event,
liquidation, dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of the taking
of such proposed action.
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5.9 NOTICES. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall be sufficiently given or made if delivered
or sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Freeport-McMoRan Sulphur Inc.
1615 Poydras Street
New Orleans, Louisiana 70112
Attention: ________________
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
MELLON SECURITIES TRUST COMPANY
85 Challenger Park
Overpeck Centre
Ridgefield Park, New Jersey 07660
Attention: ____________________
Notices or demands authorized or required by this Agreement to be given or
made by the Company or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Separation Time, on the registry books of the transfer agent for 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.
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5.10 SUSPENSION OF EXERCISABILITY. To the extent that the Company
determines in good faith that some action will need to be taken pursuant to
Section 3.1(a), (b), (d) or (e) or to comply with federal or state securities
laws, the Company may suspend the exercisability of the Rights for a period
of up to ninety (90) days following the date of the occurrence of the
Separation Time or the Flip-in Date in order to take such action or comply
with such laws. In the event of any such suspension, the Company shall issue
as promptly as practicable a public announcement stating that the
exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement shall
not affect the validity of any action taken hereunder.
5.11 COSTS OF ENFORCEMENT. The Company agrees that if the Company
or any other Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this Agreement,
then the Company or such Person will reimburse the holder of any Rights for
the costs and expenses (including legal fees) incurred by such holder in
actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
5.13 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 holders of the Rights any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the holders of the Rights.
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5.14 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. The
Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which are done or made by
the Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board of Directors of the Company to any liability to
the holders of the Rights.
5.15 DESCRIPTIVE HEADINGS. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 GOVERNING LAW. This Agreement and each Right issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with
the laws of such state applicable to contracts to be made and performed
entirely within such state.
5.17 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.
5.18 SEVERABILITY. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the
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remaining terms and provisions hereof or the application of such term or
provision to circumstances other than those as to which it is held invalid or
unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
FREEPORT-McMoRan SULPHUR INC.
By: __________________________________
Chairman of the Board
MELLON SECURITIES TRUST COMPANY
By: _____________________________________
Name:
Title: