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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
SEMPRA ENERGY
(FORMERLY NAMED MINERAL ENERGY COMPANY)
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 33-0732627
(STATE OF INCORPORATION (I.R.S. EMPLOYER
OR ORGANIZATION) IDENTIFICATION NO.)
101 ASH STREET, P.O. BOX 129400 92112-9400
SAN DIEGO, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
IF THIS FORM RELATES TO THE IF THIS FORM RELATES TO THE
REGISTRATION OF A CLASS OF REGISTRATION OF A CLASS OF
SECURITIES PURSUANT TO SECTION SECURITIES PURSUANT TO SECTION
12(B) OF THE EXCHANGE ACT AND IS 12(B) OF THE EXCHANGE ACT AND IS
EFFECTIVE PURSUANT TO GENERAL EFFECTIVE PURSUANT TO GENERAL
INSTRUCTION A.(C), PLEASE INSTRUCTION A.(D), PLEASE
CHECK THE FOLLOWING BOX. |X| CHECK THE FOLLOWING BOX. |_|
SECURITIES ACT REGISTRATION STATEMENT FILE NUMBER TO WHICH THIS FORM
RELATES: 333-21229
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
------------------- ------------------------------
COMMON STOCK PACIFIC EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS PACIFIC EXCHANGE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
Item 1. Description of Registrant's Securities to be Registered.
Sempra Energy (the "Company") is authorized by its Articles of
Incorporation to issue 750 million shares of common stock, no par value
(the "Common Stock"), and 50 million shares of preferred stock, no par
value (the "Preferred Stock"). The Preferred Stock, none of which is
outstanding, is issuable in series and the Company's Board of Directors is
authorized to fix the number of shares of each series and the designation
thereof and to determine or alter the rights, preferences, privileges and
restrictions granted to or imposed on any such series.
Common Stock
The Common Stock is entitled to receive such dividends as may
from time to time be declared by the Company's Board of Directors, subject
to any rights of holders of outstanding shares of Preferred Stock.
Except as otherwise provided by law, each holder of Common
Stock is entitled to one vote per share on each matter submitted to a vote
at a meeting of shareholders, subject to any class or series voting rights
of holders of Preferred Stock. Holders of Common Stock are not entitled to
cumulate votes for the election of directors.
In the event of any liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary, the holders of Common Stock,
subject to any rights of the holders of outstanding shares of Preferred
Stock, are entitled to receive any remaining assets of the Company after
the discharge of its liabilities.
Holders of Common Stock are not entitled to preemptive rights
to subscribe for or purchase any part of any new or additional issue of
stock or securities convertible into stock of the Company. The Common Stock
does not contain any redemption provisions or conversion rights and is not
liable to assessment or further call.
Preferred Share Purchase Rights
The Board of Directors of the Company has adopted a Preferred
Share Purchase Rights Plan providing that one preferred share purchase
right (the "Rights") will be attached to each share of Common Stock.
Each Right will entitle the registered holder thereof, after
the Rights become exercisable and until May 31, 2008 (or the earlier
redemption, exchange or termination of the Rights), to purchase from the
Company one one-hundredth (1/100th) of a share of Series A Junior
Participating Preferred Stock, no par value (the "Series A Preferred
Stock"), of the Company at a price of $ 80.00 per one one-hundredth
(1/100th) of a share of Series A Preferred Stock, subject to certain
anti-dilution adjustments (the "Purchase Price"). Until the earlier to
occur of (i) ten (10) days following a public announcement that a person or
group of affiliated or associated persons, other than certain exempt
persons, has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the Common Stock (an "Acquiring Person") or
(ii) ten (10) business days (or such later date as may be determined by
action of the Board of Directors) following the commencement or
announcement of an intention to make a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person
or group of 15% or more of the Common Stock (the earlier of (i) and (ii)
being referred to as the "Distribution Date"), the Rights will be evidenced
by certificates for the Common Stock. The Rights will be transferred with
and only with the Common Stock until the Distribution Date or earlier
redemption or expiration of the Rights. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights. The Rights will at no time
have any voting rights.
Each share of Series A Preferred Stock purchasable upon
exercise of the Rights will be entitled, when, as and if declared, to a
minimum preferential quarterly dividend payment of $1.00 per share but will
be entitled to an aggregate dividend of 100 times the dividend, if any,
declared per share of Common Stock. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Series A
Preferred Stock will be entitled to a preferential liquidation payment of
$100 per share plus any accrued but unpaid dividends but will be entitled
to an aggregate payment of 100 times the payment made per share of Common
Stock. Each share of Series A Preferred Stock will have 100 votes and will
vote together with the Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which the Common Stock is exchanged,
each share of Series A Preferred Stock will be entitled to receive 100
times the amount received per share of Common Stock. Shares of Series A
Preferred Stock will not be redeemable. These Rights are protected by
customary anti-dilution provisions. Because of the dividend, liquidation
and voting rights of Series A Preferred Stock, the value of one
one-hundredth of a share of Series A Preferred Stock purchasable upon
exercise of each Right should approximate the value of one share of Common
Stock.
In the event that a person becomes an Acquiring Person or if
the Company were to be the surviving corporation in a merger with an
Acquiring Person or any affiliate or associate of an Acquiring Person and
the Common Stock were not changed or exchanged, each holder of a Right,
other than Rights that are or were acquired or beneficially owned by the
Acquiring Person (which Rights would thereafter be void), would thereafter
have the right to receive upon exercise that number of shares of Common
Stock having a market value of two times the then current Purchase Price of
one Right. In the event that, after a person has become an Acquiring
Person, the Company were to be acquired in a merger or other business
combination transaction or more than 50% of its assets or earning power
were to be sold, proper provision would be made so that each holder of a
Right would thereafter have the right to receive, upon the exercise thereof
at the then current Purchase Price of the Right, that number of shares of
common stock of the acquiring company which at the time of such transaction
would have a market value of two times the then current Purchase Price of
one Right.
At any time after a person becomes an Acquiring Person and
prior to the earlier of one of the events described in the last sentence in
the previous paragraph or the acquisition by such Acquiring Person of 50%
or more of the then outstanding Common Stock, the Board of Directors may
cause the Company to exchange the Rights (other than Rights owned by an
Acquiring Person which would have become void), in whole or in part, for
Common Stock having an aggregate value equal to the difference between the
value of the Common Stock issuable upon the exercise of the Rights and the
Purchase Price payable upon such exercise.
The Rights may be redeemed in whole, but not in part, at a
price of $.001 per Right (the "Redemption Price") by the Board of Directors
at any time prior to the close of business on the 10th day following the
first date of public announcement that an Acquiring Person has become such.
However, the Board of Directors may postpone the termination date of such
redemption period. The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors
in its sole discretion may establish. Immediately upon any redemption of
the Rights, the right to exercise the Rights will terminate and the only
right of the holders thereof will be to receive the Redemption Price.
The Rights will expire on May 31, 2008 (unless earlier
redeemed, exchanged or terminated). First Chicago Trust Company of New York
is the Rights Agent.
The Purchase Price payable, and the number of one
one-hundredths of a share of Series A Preferred Stock or other securities
or property issuable, upon exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock dividend
on, or a subdivision, combination or reclassification of, the Series A
Preferred Stock, (ii) upon the grant to holders of the Series A Preferred
Stock of certain rights or warrants to subscribe for or purchase Series A
Preferred Stock or convertible securities at less than the current market
price of the Series A Preferred Stock or (iii) upon the distribution to
holders of the Series A Preferred Stock of evidences of indebtedness, cash,
securities or assets (excluding dividends payable in Series A Preferred
Stock (which dividends will be subject to the adjustment described in
clause (i) above) and regular periodic cash dividends at a rate not in
excess of 125% of the rate of the last regular periodic cash dividend
theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net
income per share of the Company for the four quarters ended immediately
prior to the payment of such dividend) or of subscription rights or
warrants (other than those referred to above).
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company beyond those as an existing
shareholder, including, without limitation, the right to vote or to receive
dividends.
Any of the provisions of the Rights Agreement dated as of May
26, 1998 between the Company and the Rights Agent (the "Rights Agreement")
may be amended by the Board of Directors of the Company for so long as the
Rights are then redeemable, and after the Rights are no longer redeemable,
the Company may amend or supplement the Rights Agreement in any manner that
does not adversely affect the interests of the holder of the Rights.
As long as the Rights are attached to the Common Stock, the
Company will issue one Right with each new share of Common Stock so that
all such shares will have attached Rights. The Company has agreed that,
from and after the Distribution Date, the Company will reserve 7,500,000
shares of Series A Preferred Stock initially for issuance upon exercise of
the Rights.
The Rights are designed to assure that all of the Company's
shareholders receive fair and equal treatment in the event of any proposed
takeover of the Company and to guard against partial tender offers, open
market accumulations and other abusive tactics to gain control of the
Company without paying all shareholders a control premium. The Rights will
cause substantial dilution to a person or group that acquires 15% or more
of the Company's stock on terms not approved by the Company's Board of
Directors. The Rights should not interfere with any merger or other
business combination approved by the Board of Directors at any time prior
to the first date that a person or group has become an Acquiring Person.
The foregoing description of the Rights is qualified in its entirety
by reference to the Rights Agreement which is attached as an exhibit to
this Form 8-A and incorporated herein by reference.
ITEM 2. EXHIBITS.
Exhibit
Number Exhibit Description
- ------- -------------------
1. Rights Agreement, dated as of May 26, 1998, between
Sempra Energy and First Chicago Trust Company of New York, as
Rights Agent, which includes as Exhibit B thereto the Form of
Right Certificate (the "Rights Agreement").
2. Form of Certificate of Determination of the Series A Junior
Participating Preferred Stock (attached as Exhibit A to the
Rights Agreement and incorporated by reference herein).
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
SEMPRA ENERGY
(formerly named Mineral Energy Company)
By: /s/ Richard D. Farman
------------------------------------
Name: Richard D. Farman
Title: Chairman of the Board and
Chief Executive Officer
Date: June 4, 1998
EXHIBIT INDEX
Exhibit Description
1. Rights Agreement, dated as of May 26, 1998, between
Sempra Energy and First Chicago Trust Company of New York, as
Rights Agent, which includes as Exhibit B thereto the Form of
Right Certificate (the "Rights Agreement").
2. Form of Certificate of Determination of the Series A Junior
Participating Preferred Stock (attached as Exhibit A to the
Rights Agreement and incorporated by reference herein).
EXHIBIT 1
Sempra Energy
and
First Chicago Trust Company of New York
as Rights Agent
Rights Agreement
Dated as of May 26, 1998
RIGHTS AGREEMENT
Rights Agreement, dated as of May 26, 1998 between SEMPRA
ENERGY, a California corporation (the "Company"), and FIRST CHICAGO TRUST
COMPANY OF NEW YORK, a New York corporation as Rights Agent (the "Rights
Agent").
RECITALS
WHEREAS, on May 26, 1998, the Board of Directors of the Company
adopted this Agreement, and has authorized and declared a dividend of one
preferred share purchase right (a "Right") for each Common Share (as
defined in Section 1.6) of the Company outstanding immediately prior to the
consummation of the pending business combination of Pacific Enterprises and
Enova Corporation in which such two corporations will become subsidiaries
of the Company (the "Record Date") and has authorized and directed the
issuance of one Right (subject to adjustment as provided herein) with
respect to each Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date and the Expiration
Date (as such terms are defined in Sections 3.1 and 7.1), each Right
initially representing the right to purchase one one-hundredth (subject to
adjustment) of a share of Series A Junior Participating Preferred Stock
(the "Preferred Shares") of the Company having the rights, preferences,
privileges and restrictions set forth in the form of Certificate of
Determination attached hereto as Exhibit A, upon the terms and subject to
the conditions hereinafter set forth PROVIDED, HOWEVER, that Rights may be
issued with respect to Common Shares that shall become outstanding after
the Distribution Date and prior to the Expiration Date in accordance with
Section 22.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or more
of the Common Shares of the Company then outstanding but shall not include
(i) an Exempt Person (as such term is hereinafter defined) or (ii) if, as
of the date hereof, any Person is the Beneficial Owner of 15% or more of
the Common Shares outstanding (an "Existing Holder"), such Existing Holder
shall not be or become an "Acquiring Person" unless and until such time as
such Existing Holder shall become the Beneficial Owner of one or more
additional Common Shares of the Company (other than pursuant to a dividend
or distribution paid or made by the Company on the outstanding Common
Shares in Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), unless, upon becoming the Beneficial Owner of
such additional Common Shares, such Existing Holder is not then the
Beneficial Owner of 15% or more of the Common Shares then outstanding.
Notwithstanding the foregoing, no Person shall become an "Acquiring Person"
as the result of an acquisition of Common Shares by the Company which, by
reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding; provided, however, that if a
Person shall become the Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding solely by reason of share purchases
by the Company and shall, after such share purchases by the Company, become
the Beneficial Owner of one or more additional Common Shares of the Company
(other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Shares in Common Shares or pursuant to a
split or subdivision of the outstanding Common Shares), then such Person
shall be deemed to be an "Acquiring Person" unless upon becoming the
Beneficial Owner of such additional shares of Common Shares such Person
does not beneficially own 15% or more of the shares of Common Shares then
outstanding. Notwithstanding the foregoing, if the Board of Directors of
the Company determines in good faith that a Person who would otherwise be
an "Acquiring Person," as defined pursuant to the foregoing provisions of
this Section 1.1, has become such inadvertently (including, without
limitation, because (A) such Person was unaware that it beneficially owned
a percentage of Common Shares that would otherwise cause such Person to be
an "Acquiring Person" or (B) such Person was aware of the extent of its
Beneficial Ownership of Common Shares but had no actual knowledge of the
consequences of such Beneficial Ownership under this Agreement), and
without any intention of changing or influencing control of the Company,
and such Person divests as promptly as practicable a sufficient number of
Common Shares so that such Person would no longer be an Acquiring Person,
as defined pursuant to the foregoing provisions of this Section 1.1, then
such Person shall not be deemed to be or have become an "Acquiring Person"
at any time for any purposes of this Agreement. For all purposes of this
Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
1.2 "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations, under the Exchange Act, as in effect on the date of this
Agreement.
1.3 A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
a. which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement);
b. which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately, or only after the passage
of time, compliance with regulatory requirements, fulfillment of a
condition or otherwise) pursuant to any agreement, arrangement or
understanding, whether or not in writing (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities), or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, (w) 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, (x) securities which such
Person has a right to acquire upon the exercise of Rights at any time prior
to the time that any Person becomes an Acquiring Person, (y) securities
issuable upon the exercise of Rights from and after the time that any
Person becomes an Acquiring Person if such Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3.1 or Section 22 ("Original
Rights") or pursuant to Section 11.9 or Section 11.15 with respect to an
adjustment to Original Rights or (z) securities which such Person or any of
such Person's Affiliates or Associates may acquire, does or do acquire or
may be deemed to have the right to acquire, pursuant to any merger or other
acquisition agreement between the Company and such Person (or one or more
of his Affiliates or Associates) if such agreement has been approved by the
Board of Directors of the Company prior to such Person's becoming an
Acquiring Person; or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is not also
then reportable on Schedule 13D or 13G under the Exchange Act (or any
comparable or successor report); or
c. which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) and with
respect to which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), whether
or not in writing, for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in the proviso to
Section 1.3(ii)(B)) or disposing of any securities of the Company;
PROVIDED, HOWEVER, that no Person who is an officer, director or employee
of an Exempt Person shall be deemed, solely by reason of such Person's
status or authority as such, to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of or to "beneficially own" any securities that are
"beneficially owned" (as defined in this Section 1.3), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other
such officer, director or employee of an Exempt Person.
1.4 "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
1.5 "close of business" on any given date shall mean 5:00 p.m.,
California time, on such date; PROVIDED, HOWEVER, that if such date is not
a Business Day it shall mean 5:00 p.m., California time, on the next
succeeding Business Day.
1.6 "Common Shares" when used with reference to the Company
shall mean the common stock, no par value, of the Company. "Common Shares"
when used with reference to any Person other than the Company shall mean
the capital stock with the greatest voting power, or the equity securities
or other equity interest having power to control or direct the management,
of such other Person or, if such Person is a Subsidiary (as such term is
hereinafter defined) of another Person, the Person or Persons which
ultimately control such first-mentioned Person, and which has issued and
outstanding such capital stock, equity securities or equity interest.
1.7 "Exempt Person" shall mean Enova Corporation, Pacific
Enterprises, the Company, or any Subsidiary of the foregoing, or any
employee benefit plan of the foregoing, or any entity or trustee holding
Shares of the Company for or pursuant to the terms of any such plan, or for
the purpose of funding other employee benefits for employees of any of the
foregoing.
1.8 "Person" shall mean any individual, partnership, joint
venture, limited liability company, firm, corporation, unincorporated
association, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
1.9 "Shares" shall have the meaning set forth in Section 184 of
the California General Corporation Law.
1.10 "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to Section 13(d) of the
Exchange Act or pursuant to a comparable successor statute) by the Company
or an Acquiring Person that an Acquiring Person has become such or that
discloses information which reveals the existence of an Acquiring Person or
such earlier date as a majority of the Board of Directors shall become
aware of the existence of an Acquiring Person.
1.11 "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interests is owned, of record or beneficially,
directly or indirectly, by such Person.
1.12 A "Trigger Event" shall be deemed to have occurred upon
any Person becoming an Acquiring Person.
1.13 The following terms shall have the meanings defined for
such terms in the Sections set forth below:
Term Section
---- -------
Adjustment Shares 11.1.2
common shares equivalent 11.1.3
Company Recitals
current per share market price 11.4
Current Value 11.1.3
Distribution Date 3.1
equivalent preferred shares 11.2
Exchange Act 1.1
Exchange Consideration 27.1
Existing Holder 1.1
Expiration Date 7.1
Final Expiration Date 7.1
Nasdaq 9
Original Rights 1.3
Preferred Shares Recitals
Principal Party 13.2
Purchase Price 4
Record Date Recitals
Redemption Date 7.1
Redemption Price 23.1
Right Recitals
Right Certificate 3.1
Rights Agent Preamble
Security 11.4.1
Spread 11.1.3
Substitution Period 11.1.3
Summary of Rights 3.2
Trading Day 11.4.1
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable. In the event the Company
appoints one or more co-Rights Agents, the respective duties of the Rights
Agent and any co-Rights Agent shall be as the Company shall determine.
Contemporaneously with such appointment, if any, the Company shall notify
the Rights Agent thereof.
Section 3. Issuance of Right Certificates.
3.1 Rights Evidenced by Share Certificates. Until the earlier
of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth
Business Day after the date of the commencement of, or first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer the consummation of which would result
in any Person (other than an Exempt Person) becoming the Beneficial Owner
of Common Shares aggregating 15% or more of the then outstanding Common
Shares of the Company (the earlier of (i) and (ii) being herein referred to
as the "Distribution Date"), (x) the Rights (unless earlier expired,
redeemed or terminated) will be evidenced (subject to the provisions of
Section 3.2) by the certificates for Common Shares registered in the names
of the holders thereof (which certificates for Common Shares shall also be
deemed to be Right Certificates) and not by separate certificates, and (y)
the Rights (and the right to receive certificates therefor) will be
transferable only in connection with the transfer of the underlying Common
Shares. The preceding sentence notwithstanding, prior to the occurrence of
a Distribution Date specified as a result of an event described in clause
(ii) (or such later Distribution Date as the Board of Directors of the
Company may select pursuant to this sentence), the Board of Directors may
postpone, one or more times, the Distribution Date which would occur as a
result of an event described in clause (ii) beyond the date set forth in
such clause (ii). Nothing herein shall permit such a postponement of a
Distribution Date after a Person becomes an Acquiring Person, except as a
result of the operation of the third sentence of Section 1.1 or as
permitted by Section 23.1. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will
countersign and the Company (or, if requested, the Rights Agent) will send,
by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at
the address of such holder shown on the records of the Company, one or more
certificates for Rights, in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right (subject to adjustment as
provided herein) for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
3.2 Summary of Rights. On the Record Date or as soon as
practicable thereafter, the Company will send or cause to be sent a copy of
a Summary of Rights to Purchase Preferred Shares, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the
close of business on the Record Date at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the close of business on the Record Date, until the
Distribution Date (or the earlier Expiration Date), the Rights will be
evidenced by such certificates for Common Shares registered in the names of
the holders thereof together with a copy of the Summary of Rights and the
registered holders of the Common Shares shall also be registered holders of
the associated Rights. Until the Distribution Date (or the earlier
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding at the close of business on the Record Date, with or
without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Shares represented thereby.
3.3 New Certificates After Record Date. Certificates for Common
Shares which become outstanding (whether upon issuance out of authorized
but unissued Common Shares, disposition out of treasury or transfer or
exchange of outstanding Common Shares) after the Record Date but prior to
the earliest of the Distribution Date or the Expiration Date, shall have
impressed, printed, stamped, written or otherwise affixed onto them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in an Agreement between Sempra Energy
(the "Company") and First Chicago Trust Company of New York, as
Rights Agent, as the same may be amended from time to time (the
"Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in
the Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the Agreement
without charge after receipt of a written request therefor. AS
DESCRIBED IN THE AGREEMENT, RIGHTS WHICH ARE OWNED BY, TRANSFERRED TO
OR HAVE BEEN OWNED BY ACQUIRING PERSONS OR ASSOCIATES OR AFFILIATES
THEREOF (AS DEFINED IN THE AGREEMENT) SHALL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE.
With respect to such certificates containing the foregoing legend, until
the Distribution Date (or the earlier Expiration Date), the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any
such certificates, except as otherwise provided herein, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires
any Common Shares after the Record Date but prior to the Distribution Date,
any Rights associated with such Common Shares shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Notwithstanding this Section 3.3, the omission of a legend
shall not affect the enforceability of any part of this Agreement or the
rights of any holder of the Rights.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares, certification and assignment
to be printed on the reverse thereof) shall be substantially the same as
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or trading system on which the Rights may
from time to time be listed or quoted, or to conform to usage. Subject to
the terms and conditions hereof, the Right Certificates, whenever issued,
shall be dated as of the Record Date, and shall show the date of
countersignature by the Rights Agent, and on their face shall entitle the
holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one
one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a Preferred Share and
the Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of
the Board of Directors, the Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or any Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be
countersigned, either manually or by facsimile signature, by an authorized
signatory of the Rights Agent, but it shall not be necessary for the same
signatory to countersign all of the Right Certificates hereunder. No Right
Certificate shall be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent, and issued and delivered by the Company with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may be
signed on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the
execution of this Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates, the certificate number of each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of Section 7.5, Section 11.1.2 and
Section 14, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Right Certificate or Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section 11.1.2 or
that have been exchanged pursuant to Section 27) may be transferred, split
up or combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up or combine or exchange any
Right Certificate shall make such request in writing delivered to the
Rights Agent, and shall surrender, together with any required form of
assignment and certificate duly completed, the Right Certificate or Right
Certificates to be transferred, split up or combined or exchanged at the
office of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate or Right
Certificates until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of
such Right Certificate or Right Certificates and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment from the holders of Right Certificates of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up or combination or exchange of such Right Certificates.
Subject to the provisions of Section 11.1.2 , at any time after
the Distribution Date and prior to the Expiration Date, upon receipt by the
Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in
case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company's request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
7.1 Exercise of Rights. Subject to Section 11.1.2 and except as
otherwise provided herein, the registered holder of any Right Certificate
may exercise the Rights evidenced thereby in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with
the form of election to purchase and certification on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the aggregate
Purchase Price for the total number of one one-hundredths of a Preferred
Share (or other securities, cash or other assets) as to which the Rights
are exercised, at or prior to the time (the "Expiration Date") that is the
earliest of (i) the close of business on May 31, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 (the "Redemption Date"), (iii) the closing of any
merger or other acquisition transaction involving the Company pursuant to
an agreement of the type described in Sections 1.3(ii)(A)(z) and 13.3, at
which time the Rights are deemed terminated, or (iv) the time at which the
Rights are exchanged as provided in Section 27.
7.2 Purchase Price. The Purchase Price for each one
one-hundredth of a Preferred Share pursuant to the exercise of a Right
shall be initially $80, shall be subject to adjustment from time to time as
provided in Sections 11, 13 and 26 and shall be payable in lawful money of
the United States of America in accordance with Section 7.3.
7.3 Payment Procedures. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and
certification duly executed, accompanied by payment of the aggregate
Purchase Price for the total number of one one-hundredths of a Preferred
Share to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance
with Section 9, in cash or by certified or cashier's check or money order
payable to the order of the Company, the Rights Agent shall thereupon
promptly (i)(A) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent) certificates
for the number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests,
or (B) if the Company shall have elected to deposit the total number of
Preferred Shares issuable upon exercise of the Rights hereunder with a
depository agent, requisition from the depositary agent depositary receipts
representing interests in such number of one one-hundredths of a Preferred
Share as are to be purchased (in which case certificates for the Preferred
Shares represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with Section 14 or otherwise in
accordance with Section 11.1.3, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and
(iv) when appropriate, after receipt, promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11.1.3, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights
Agent, if and when appropriate.
7.4 Partial Exercise. In case the registered holder of any
Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to
the registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14.
7.5 Full Information Concerning Ownership. Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a
registered holder of Rights upon the occurrence of any purported exercise
as set forth in this Section 7 unless the certificate contained in the form
of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise shall have been duly completed
and signed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation or
in canceled form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right Certificates to
the Company, or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares. The Company
covenants and agrees that from and after the Distribution Date it will
cause to be reserved and kept available out of its authorized and unissued
Preferred Shares (and, following the occurrence of a Trigger Event, out of
its authorized and unissued Common Shares or other securities or out of its
shares held in its treasury) the number of Preferred Shares (and, following
the occurrence of a Trigger Event, Common Shares and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.
So long as the Preferred Shares (and, following the occurrence
of a Trigger Event, Common Shares and/or other securities) issuable upon
the exercise of Rights may be listed on any national securities exchange or
traded in the over-the-counter market and quoted on the National
Association of Securities Dealers, Inc. Automated Quotation System
("Nasdaq") (including the National Market or Small Cap Market), the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed or
admitted to trading on such exchange or quoted on Nasdaq upon official
notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (and,
following the occurrence of a Trigger Event, Common Shares and/or other
securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the
issuance of Preferred Shares upon the exercise of Rights, to register and
qualify such Preferred Shares under the Securities Act and any applicable
state securities or "Blue Sky" laws (to the extent exemptions therefrom are
not available), cause such registration statement and qualifications to
become effective as soon as possible after such filing and keep such
registration and qualifications effective until the earlier of the date as
of which the Rights are no longer exercisable for such securities and the
Expiration Date. The Company may temporarily suspend, for a period of time
not to exceed 90 days, the exercisability of the Rights in order to prepare
and file a registration statement under the Securities Act and permit it to
become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.
The Company further covenants and agrees that it will pay when
due and payable any and all Federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates for the
Preferred Shares (or Common Shares and/or other securities, as the case may
be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or
deliver any certificates for Preferred Shares (or Common Shares and/or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose
name any certificate for Preferred Shares (or Common Shares and/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
Preferred Shares (or Common Shares and/or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of
such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books
of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any
rights of a holder of Preferred Shares for which the Rights shall be
exercisable, including, without limitation, the right to vote or to receive
dividends or other distributions, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares or
other securities or property purchasable upon exercise of each Right and
the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
11.1 Post-Execution Events.
11.1.1 Corporate Dividends, Reclassifications, Etc. In the
event the Company shall at any time after the date of this Agreement (A)
declare and pay a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any Shares in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11.1, the Purchase Price in
effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number
and kind of Shares issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled
to receive the aggregate number and kind of Shares which, if such Right had
been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the Shares of the Company
issuable upon exercise of one Right. If an event occurs which would require
an adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment
provided for in this Section 11.1.1 shall be in addition to, and shall be
made prior to, the adjustment required pursuant to, Section 11.1.2.
11.1.2 Acquiring Person Events; Triggering Events. Subject to
Sections 23.1 and 27, in the event that a Trigger Event occurs, then, from
and after the first occurrence of such event, each holder of a Right,
except as provided below, shall thereafter have a right to receive, upon
exercise thereof at a price per Right equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable (without giving effect to this
Section 11.1.2), in accordance with the terms of this Agreement and in lieu
of Preferred Shares, such number of Common Shares as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable (without giving effect to this Section 11.1.2) and (y) dividing
that product by 50% of the current per share market price of the Common
Shares (determined pursuant to Section 11.4) on the first of the date of
the occurrence of, or the date of the first public announcement of, a
Trigger Event (the "Adjustment Shares"); PROVIDED that the Purchase Price
and the number of Adjustment Shares shall thereafter be subject to further
adjustment as appropriate in accordance with Section 11.6; PROVIDED,
FURTHER, that nothing contained in this Section 11.1.2 shall limit or
otherwise diminish the power of the Board of Directors to postpone the
Distribution Date pursuant to Section 3.1 or to extend the period during
which the Rights may be redeemed pursuant to Section 23.1. Notwithstanding
the foregoing, upon the occurrence of a Trigger Event, any Rights that are
or were acquired or beneficially owned by (1) any Acquiring Person or any
Associate or Affiliate thereof, (2) a transferee of any Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (3) a transferee of any Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has determined
is part of a plan, arrangement or understanding which has as a primary
purpose or effect avoidance of this Section 11.1.2, and subsequent
transferees, shall become void without any further action, and any holder
(whether or not such holder is an Acquiring Person or an Associate or
Affiliate of an Acquiring Person) of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement or
otherwise. The Company shall not enter into any transaction of the type
described in this Section 11.1.2 if at the time of such transaction there
are any rights, warrants, instruments or securities outstanding or any
arrangements which, as a result of the consummation of such transaction,
would eliminate or substantially diminish the benefits intended to be
afforded by the Rights. From and after the Trigger Event, no Right
Certificate shall be issued pursuant to Section 3 or Section 6 that
represents Rights that are or have become void pursuant to the provisions
of this paragraph, and any Right Certificate delivered to the Rights Agent
that represents Rights that are or have become void pursuant to the
provisions of this paragraph shall be canceled.
The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11.1.2 are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result
of its failure to make any determinations with respect to any Acquiring
Person or its Affiliates, Associates or transferees hereunder.
From and after the occurrence of an event specified in Section
13.1, any Rights that theretofore have not been exercised pursuant to this
Section 11.1.2 shall thereafter be exercisable only in accordance with
Section 13 and not pursuant to this Section 11.1.2.
11.1.3 Insufficient Shares. The Company may at its option
substitute for a Common Share issuable upon the exercise of Rights in
accordance with the foregoing Section 11.1.2 a number of Preferred Shares
or fraction thereof such that the current per share market price of one
Preferred Share multiplied by such number or fraction is equal to the
current per share market price of one Common Share. In the event that upon
the occurrence of one or more of the events listed in Section 11.1.2 above
there shall not be sufficient Common Shares authorized but unissued, or
held by the Company as treasury shares, to permit the exercise in full of
the Rights in accordance with the foregoing Section 11.1.2, the Company
shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights, PROVIDED, HOWEVER,
that if the Company determines that it is unable to cause the authorization
of a sufficient number of additional Common Shares, then, in the event the
Rights become exercisable, the Company, with respect to each Right and to
the extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which it is a party, shall: (A)
determine the excess of (1) the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value"), over (2) the Purchase
Price (such excess, the "Spread") and (B) with respect to each Right (other
than Rights which have become void pursuant to Section 11.1.2), make
adequate provision to substitute for the Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Preferred Shares or other equity securities of the Company
(including, without limitation, shares, or fractions of shares, of
preferred shares which, by virtue of having dividend, voting and
liquidation rights substantially comparable to those of the Common Shares,
the Board of Directors of the Company has deemed in good faith to have
substantially the same value as Common Shares) (each such preferred share
or fractions of preferred share constituting a "common share equivalent")),
(4) debt securities of the Company, (5) other assets or (6) any combination
of the foregoing having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board of Directors of
the Company based upon the advice of a nationally recognized investment
banking firm selected in good faith by the Board of Directors of the
Company; PROVIDED, HOWEVER, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the first occurrence of one of the events listed
in Section 11.1.2 above, then the Company shall be obligated to deliver, to
the extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which it is a party, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and then, if
necessary, such number or fractions of Preferred Shares (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is unlikely that sufficient
additional Common Shares could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth above may be
extended and re- extended to the extent necessary, but not more than ninety
(90) days following the first occurrence of one of the events listed in
Section 11.1.2 above, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such period as
may be extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the second and/or
third sentences of this Section 11.1.3, the Company (x) shall provide that
such action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the event of
any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended as
well as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11.1.3, the value of a Common Share
shall be the current per share market price (as determined pursuant to
Section 11.4) on the date of the occurrence of a Trigger Event and the
value of any "common share equivalent" shall be deemed to have the same
value as the Common Shares on such date. The Board of Directors of the
Company may, but shall not be required to, establish procedures to allocate
the right to receive Common Shares upon the exercise of the Rights among
holders of Rights pursuant to this Section 11.1.3. Actions of the Company
pursuant to this Section 11.1.3 by the vote of a majority of the Board of
Directors (including, following a Trigger Event, a majority of the
Continuing Directions).
11.2 Dilutive Rights Offering. In case the Company shall fix a
record date for the issuance of rights, options or warrants to all holders
of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase
Preferred Shares (or securities having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares
at a price per Preferred Share or per share of equivalent preferred shares
(or having a conversion or exercise price per share, if a security
convertible into or exercisable for Preferred Shares or equivalent
preferred shares) less than the current per share market price of the
Preferred Shares (as determined pursuant to Section 11.4) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number
of Preferred Shares and shares of equivalent preferred shares outstanding
on such record date plus the number of Preferred Shares and shares of
equivalent preferred shares which the aggregate offering price of the total
number of Preferred Shares and/or shares of equivalent preferred shares 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
Preferred Shares and shares of equivalent preferred shares outstanding on
such record date plus the number of additional Preferred Shares and/or
shares of equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the Shares of the Company issuable upon exercise of
one Right. 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
statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares and shares of
equivalent preferred shares owned by or held for the account of the Company
or any Subsidiary of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that
such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
11.3 Distributions. In case the Company shall fix a record date
for the making of a distribution to all holders of the Preferred 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, securities or assets (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the
last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the
four quarters ended immediately prior to the payment of such dividend, or a
dividend payable in Preferred Shares (which dividend, for purposes of this
Agreement, shall be subject to the provisions of Section 11.1.1(A))) or
convertible securities, or subscription rights or warrants (excluding those
referred to in Section 11.2), 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 Preferred Shares (as
determined pursuant to Section 11.4) on such record date, 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 statement filed with
the Rights Agent) of the portion of the cash, assets, securities or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and the denominator of
which shall be such current per share market price of the Preferred Shares
(as determined pursuant to Section 11.4); PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the Shares of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had
not been fixed.
11.4 Current Per Share Market Value.
11.4.1 General. For the purpose of any computation hereunder,
the "current per share market price" of any security (a "Security" for the
purpose of this Section 11.4.1) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the
thirty (30) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; PROVIDED, HOWEVER, that in the event that
the current per share market price of the Security is determined during any
period following the announcement by the issuer of such Security of (i) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares or (ii) any
subdivision, combination or reclassification of such Security, and prior to
the expiration of thirty (30) 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 reflect the
current market price per share equivalent of such Security. The closing
price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Security
is not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or, if the Security
is 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 Security is 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
Security selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Security, the fair
value of the Security on such date as determined in good faith by the Board
of Directors of the Company shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day. If the Security is not
publicly held or not so listed or traded, or if on any such date the
Security is not so quoted and no such market maker is making a market in
the Security, "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.
11.4.2 Preferred Shares. Notwithstanding Section 11.4.1, for
the purpose of any computation hereunder, the "current per share market
price" of the Preferred Shares shall be determined in the same manner as
set forth above in Section 11.4.1 (other than the last sentence thereof).
If the current per share market price of the Preferred Shares cannot be
determined in the manner described in Section 11.4.1, the "current per
share market price" of the Preferred Shares shall be conclusively deemed to
be an amount equal to 100 (as such number may be appropriately adjusted for
such events as share splits, share dividends and recapitalizations with
respect to the Common Shares occurring after the date of this Agreement)
multiplied by the current per share market price of the Common Shares (as
determined pursuant to Section 11.4.1). If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or traded, (as
determined pursuant to Section 11.4.1). If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or traded, or if on any
such date neither the Common Shares nor the Preferred Shares are so quoted
and no such market maker is making a market in either the Common Shares or
the Preferred Shares, "current per share market price" of the Preferred
Shares shall mean the fair value per share as determined in good faith by
the Board of Directors of the Company. For purposes of this Agreement, the
"current per share market price" of one one-hundredth of a Preferred Share
shall be equal to the "current per share market price" of one Preferred
Share divided by 100.
11.5 Insignificant Changes. No adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price. Any adjustments which by
reason of this Section 11.5 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest one-hundred thousandth of a Preferred Share or the nearest
one-hundredth of a Common Share or other share or security, as the case may
be.
11.6 Shares Other Than Preferred Shares. If as a result of an
adjustment made pursuant to Section 11.1, the holder of any Right
thereafter exercised shall become entitled to receive any Shares of the
Company other than Preferred 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 Preferred Shares
contained in Sections 11.1, 11.2, 11.3, 11.5, 11.8, 11.9 and 11.13, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
11.7 Rights Issued Prior to Adjustment. All Rights originally
issued by the Company subsequent to any adjustment made to the Purchase
Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
11.8 Effect of Adjustments. Unless the Company shall have
exercised its election as provided in Section 11.9, upon each adjustment of
the Purchase Price as a result of the calculations made in Sections 11.2
and 11.3, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred Share
(calculated to the nearest one-hundred thousandth of a Preferred Share)
obtained by (i) multiplying (x) the number of one one-hundredths of a
Preferred Share covered by a Right immediately prior to this adjustment by
(y) the Purchase Price in effect immediately prior to such adjustment of
the Purchase Price and (ii) dividing the product so obtained by the
Purchase Price in effect immediately after such adjustment of the Purchase
Price.
11.9 Adjustment in Number of Rights. The Company may elect on
or after the date of any adjustment of the Purchase Price to adjust the
number of Rights, in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share issuable upon the exercise of a Right.
Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-hundredth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if
the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11.9, the Company may, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or,
at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Right Certificates held
by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates evidencing all
the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record
date specified in the public announcement.
11.10 Right Certificates Unchanged. Irrespective of any
adjustment or change in the Purchase Price or the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of one
one-hundredths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
11.11 Par Value Limitations. Before taking any action that
would cause an adjustment reducing the Purchase Price below one
one-hundredth of the then par value, if any, of the Preferred Shares or
other Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares or other such shares at such adjusted
Purchase Price.
11.12 Deferred Issuance. In any case in which this Section 11
shall require that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any Right
exercised after such record date of that number of Preferred Shares and
Shares or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and Shares or other securities, assets
or cash 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 upon the occurrence of the event requiring such
adjustment.
11.13 Reduction in Purchase Price. Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it in its
sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, issuance wholly for
cash of any of the Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, dividends
on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter
made by the Company to holders of its Preferred Shares shall not be taxable
to such shareholders.
11.14 Company Not to Diminish Benefits of Rights. The Company
covenants and agrees that after the earlier of the Shares Acquisition Date
or Distribution Date it will not, except as permitted by Section 23,
Section 26 or Section 27, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable
that such action will substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
11.15 Adjustment of Rights Associated with Common Shares.
Notwithstanding anything contained in this Agreement to the contrary, in
the event that the Company shall at any time after the date hereof and
prior to the Distribution Date (i) declare or pay any dividend on the
outstanding Common Shares payable in Common Shares, (ii) effect a
subdivision or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by the payment of dividends payable in
Common Shares), or (iii) combine the outstanding Common Shares into a
greater or lesser number of Common Shares, then in any such case, the
number of Rights associated with each Common Share then outstanding, or
issued or delivered thereafter but prior to the Distribution Date or in
accordance with Section 22 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. The adjustments
provided for in this Section 11.15 shall be made successively whenever such
a dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Shares or the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 25. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
13.1 Certain Transactions. In the event that, from and after
the first occurrence of a Trigger Event, directly or indirectly, (A) the
Company shall consolidate with, or merge with and into, any other Person
and the Company shall not be the continuing or surviving corporation, (B)
any Person shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving corporation of
such merger and, in connection with such merger, all or part of the Common
Shares shall be changed into or exchanged for Shares, stock or other
securities of the Company or any other Person or cash or any other
property, or (C) the Company shall sell, exchange, mortgage or otherwise
transfer (or one or more of its Subsidiaries shall sell, exchange, mortgage
or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or one or more wholly-owned Subsidiaries of the
Company in one or more transactions each of which complies with Section
11.14), then, and in each such case, proper provision shall be made so that
(i) each holder of a Right (other than Rights which have become void
pursuant to Section 11.1.2) shall thereafter have the right to receive,
upon the exercise thereof at a price per Right equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of a Trigger Event (as subsequently adjusted pursuant to
Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the
terms of this Agreement and in lieu of Preferred Shares or Common Shares,
such number of validly authorized and issued, fully paid, non-assessable
and freely tradable Common Shares of the Principal Party (as such term is
hereinafter defined) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result
obtained by (x) multiplying the then current Purchase Price by the number
of one one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a Trigger Event
(as subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8,
11.9 and 11.12) and (y) dividing that product by 50% of the then current
per share market price of the Common Shares of such Principal Party
(determined pursuant to Section 11.4) on the date of consummation of such
consolidation, merger, sale or transfer; PROVIDED, that the price per Right
so payable and the number of Common Shares of such Principal Party so
receivable upon exercise of a Right shall thereafter be subject to further
adjustment as appropriate in accordance with Section 11.6 to reflect any
events covered thereby occurring in respect of the Common Shares of such
Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
its Common Shares in accordance with Section 9) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to
its Common Shares thereafter deliverable upon the exercise of the Rights;
PROVIDED that, upon the subsequent occurrence of any consolidation, merger,
sale or transfer of assets or other extraordinary transaction in respect of
such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price as
provided in this Section 13.1, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had
such holder, at the time of such transaction, owned the Common Shares of
the Principal Party receivable upon the exercise of a Right pursuant to
this Section 13.1, and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock or Shares)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants
and other property. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that the requirements of this
Section 13.1 and Section 13.2 shall promptly be performed in accordance
with their terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under this
Agreement as the same shall have been assumed by the Principal Party
pursuant to this Section 13.1 and Section 13.2 and providing that, as soon
as practicable after executing such agreement pursuant to this Section 13,
the Principal Party, at its own expense, shall
(1) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its
best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its best efforts to cause
such registration statement to remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the Expiration
Date and similarly comply with applicable state securities laws;
(2) use its best efforts, if the Common Shares of the Principal
Party shall be listed or admitted to trading on the New York Stock Exchange
or on another national securities exchange, to list or admit to trading (or
continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Shares of the Principal Party shall not be
listed or admitted to trading on the New York Stock Exchange or a national
securities exchange, to cause the Rights and the securities receivable upon
exercise of the Rights to be authorized for quotation on Nasdaq or on such
other system then in use;
(3) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(4) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Shares of the Principal Party subject to
purchase upon exercise of outstanding Rights.
In case the Principal Party has provision in any of its
authorized securities or in its certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue (other than to
holders of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this
Section 13, Common Shares or common share equivalents of such Principal
Party at less than the then current market price per share thereof
(determined pursuant to Section 11.4) or securities exercisable for, or
convertible into, Common Shares or common share equivalents of such
Principal Party at less than such then current market price (other than to
holders of Rights pursuant to this Section 13), or (ii) providing for any
special payment, taxes or similar provision in connection with the issuance
of the Common Shares of such Principal Party pursuant to the provision of
Section 13, then, in such event, the Company hereby agrees with each holder
of Rights that it shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled,
waived or amended, or that the authorized securities shall be redeemed, so
that the applicable provision will have no effect in connection with, or as
a consequence of, the consummation of the proposed transaction.
The Company covenants and agrees that it shall not, at any time
after the Trigger Event, enter into any transaction of the type described
in clauses (A) through (C) of this Section 13.1 if (i) at the time of or
immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer or other transaction, the
shareholders of the Person who constitutes, or would constitute, the
Principal Party for purposes of Section 13.2 shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
The provisions of this Section 13 shall similarly apply to successive
transactions of the type described in clauses (A) through (C) of this
Section 13.1.
13.2 Principal Party. "Principal Party" shall mean:
a. in the case of any transaction described in (A) or (B)
of the first sentence of Section 13.1: (i) the Person that is the issuer of
the securities into which the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the
Common Shares of which have the greatest aggregate market value of shares
outstanding, or (ii) if no securities are so issued, (x) the Person that is
the other party to the merger, if such Person survives said merger, or, if
there is more than one such Person, the Person the Common Shares of which
have the greatest aggregate market value of shares outstanding or (y) if
the Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the Company if
it survives) or (z) the Person resulting from the consolidation; and
b. in the case of any transaction described in (C) of the
first sentence in Section 13.1, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of
such Persons is the issuer of Common Shares having the greatest aggregate
market value of shares outstanding; PROVIDED, HOWEVER, that in any such
case described in the foregoing clause (A) or (B) of this Section 13.2, if
the Common Shares of such Person are not at such time or have not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, then (1) if such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been
so registered, the term "Principal Party" shall refer to such other Person,
or (2) if such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such
Persons is the issuer of Common Shares having the greatest aggregate market
value of shares outstanding, or (3) if such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in
clauses (1) and (2) above shall apply to each of the owners having an
interest in the venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party
in each such case shall bear the obligations set forth in this Section 13
in the same ratio as its interest in such Person bears to the total of such
interests.
13.3 Approved Acquisitions. Notwithstanding anything contained
herein to the contrary, in the event of any merger or other acquisition
transaction involving the Company pursuant to a merger or other acquisition
agreement between the Company and any Person (or one or more of such
Person's Affiliates or Associates) which agreement has been approved by the
Board of Directors of the Company prior to any Person becoming an Acquiring
Person, this Agreement and the rights of holders of Rights hereunder shall
be terminated in accordance with Section 7.1.
Section 14. Fractional Rights and Fractional Shares.
14.1 Cash in Lieu of Fractional Rights. The Company shall not
be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights (except prior to the
Distribution Date in accordance with Section 11.15). In lieu of such
fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14.1, the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by Nasdaq or such
other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights, the current market
value of the Rights on such date shall be the fair value of the Rights as
determined in good faith by the Board of Directors of the Company.
14.2 Cash in Lieu of Fractional Preferred Shares. The Company
shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share) upon exercise or exchange of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share). Interests in fractions of Preferred Shares in integral multiples of
one one-hundredth of a Preferred Share may, at the election of the Company,
be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; PROVIDED, that such
agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled
as beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the Company shall pay
to the registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the
same fraction of the current per share market price of one Preferred Share
(as determined in accordance with Section 14.1) for the Trading Day
immediately prior to the date of such exercise or exchange.
14.3 Cash in Lieu of Fractional Common Shares. The Company
shall not be required to issue fractions of Common Shares or to distribute
certificates which evidence fractional Common Shares upon the exercise or
exchange of Rights. In lieu of such fractional Common Shares, the Company
shall pay to the registered holders of the Right Certificates with regard
to which such fractional Common Shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole Common Share (as determined in accordance with Section 14.1) for the
Trading Day immediately prior to the date of such exercise or exchange.
14.4 Waiver of Right to Receive Fractional Rights or Shares.
The holder of a Right by the acceptance of the Rights expressly waives his
right to receive any fractional Rights or any fractional shares upon
exercise or exchange of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, except the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce this Agreement, and
may institute and maintain any suit, action or proceeding against the
Company to enforce this Agreement, or otherwise enforce or act in respect
of his right to exercise the Rights evidenced by such Right Certificate in
the manner provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations of any Person (including, without limitation, the Company)
subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) as of and after the Distribution Date, the Right
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer with all required certifications completed;
and
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made
by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except
as provided in Section 24), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Right Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered
by it hereunder in accordance with a fee schedule to be mutually agreed
upon and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim
of liability arising therefrom, directly or indirectly.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for the Preferred Shares or the Common
Shares or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation or limited liability company into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation or limited liability company resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation or limited liability
company succeeding to the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, PROVIDED
that such corporation or limited liability company would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
20.1 Legal Counsel. The Rights Agent may consult with legal
counsel selected by it (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
20.2 Certificates as to Facts or Matters. Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem
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 any one of the Chairman of the Board of Directors,
the Chief Executive Officer, the President, the Chief Financial Officer,
any Vice President, the Treasurer, the Secretary or any Assistant Treasurer
or Assistant Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
20.3 Standard of Care. The Rights Agent shall be liable
hereunder only for its own gross negligence, bad faith or willful
misconduct.
20.4 Reliance on Agreement and Right Certificates. The Rights
Agent shall not be liable for or by reason of any of the statements of fact
or recitals contained in this Agreement or in the Right Certificates
(except as to its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
20.5 No Responsibility as to Certain Matters. The Rights Agent
shall not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of
any Right Certificate (except its countersignature thereof); nor shall it
be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 11.1.2) or any adjustment
required under the provisions of Sections 3, 11, 13, 23 or 27 or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such change or adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
other securities to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
20.6 Further Assurance by Company. 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.
20.7 Authorized Company Officers. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the
Board of Directors, the Chief Executive Officer, the President, the Chief
Financial Officer, any Vice President, the Treasurer, the Secretary or any
Assistant Treasurer or Assistant Secretary of the Company, and to apply to
such officers for advice or instructions in connection with its duties
under this Agreement, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for these
instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable to the Company for any
action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified
therein (which date shall not be less than three business days after the
date any such officer actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior
to taking of any such action (or the effective date in the case of
omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.
20.8 Freedom to Trade in Company Securities. The Rights Agent
and any shareholder, director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
20.9 Reliance on Attorneys and Agents. The Rights Agent may
execute and exercise any of the rights or powers hereby vested in it or
perform any duty hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or accountable for any
act, omission, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act,
omission, default, neglect or misconduct, PROVIDED that reasonable care was
exercised in the selection and continued employment thereof.
20.10 Incomplete Certificate. If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an Affiliate
or Associate thereof), the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first
consulting with the Company.
20.11 Rights Holders List. At any time and from time to time
after the Distribution Date, upon the request of the Company, the Rights
Agent shall promptly deliver to the Company a list, as of the most recent
practicable date (or as of such earlier date as may be specified by the
Company), of the holders of record of Rights.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Company and to each transfer agent of the Common Shares and/or Preferred
Shares, as applicable, by registered or certified mail. Following the
Distribution Date, the Company shall promptly notify the holders of the
Right Certificates by first-class mail of any such resignation. The Company
may remove the Rights Agent or any successor Rights Agent upon thirty (30)
days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares
and/or Preferred Shares, as applicable, by registered or certified mail,
and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the resigning, removed, or incapacitated Rights Agent shall
remit to the Company, or to any successor Rights Agent designated by the
Company, all books, records, funds, certificates or other documents or
instruments of any kind then in its possession which were acquired by such
resigning, removed or incapacitated Rights Agent in connection with its
services as Rights Agent hereunder, and shall thereafter be discharged from
all duties and obligations hereunder. Following notice of such removal,
resignation or incapacity, the Company shall appoint a successor to such
Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (i) a corporation
organized and doing business under the laws of the United States or of the
State of New York or the State of California (or any other state of the
United States so long as such corporation is authorized to do business as a
banking institution in the State of New York or California) in good
standing, having an office in the State of New York or the State of
California, which is authorized under such laws to exercise stock transfer
or corporate trust powers and is subject to supervision or examination by
Federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $10 million or (ii)
an Affiliate of a corporation described in clause (i) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Shares and/or Preferred Shares, as applicable,
and, following the Distribution Date, mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the Expiration Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant
to the exercise of Share options or under any employee plan or arrangement,
granted or awarded as of the Distribution Date, or upon exercise,
conversion or exchange of securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) no such Right Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right Certificate
would be issued and (ii) no such Right Certificate shall be issued if, and
to the extent that, appropriate adjustment shall otherwise have been made
in lieu of the issuance thereof.
Section 23. Redemption.
23.1 Right to Redeem. The Board of Directors of the Company
may, at its option, at any time prior to the close of business on the 10th
day following the Shares Acquisition Date, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.001 per Right,
appropriately adjusted to reflect any Share split, Share dividend,
recapitalization or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price"), and the Company may, at its option, pay the Redemption Price in
Common Shares (based on the "current per share market price," determined
pursuant to Section 11.4, of the Common Shares at the time of redemption),
cash or any other form of consideration deemed appropriate by the Board of
Directors. The preceding sentence notwithstanding, prior to the expiration
of the period during which the Rights may be redeemed as specified therein
(or such longer period as the Board of Directors of the Company may select
pursuant to this sentence), the Board of Directors of the Company may
extend, one or more times, the period during which the Rights may be
redeemed beyond the close of business on the 10th day following the Shares
Acquisition Date. The redemption of the Rights by the Board of Directors
may be made effective at such time, on such basis and subject to such
conditions as the Board of Directors in its sole discretion may establish.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable following a transaction or event described
in Section 11.1.2 prior to the expiration or termination of the Company's
right of redemption hereunder.
23.2 Redemption Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the redemption of the Rights (or
at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. The Company shall promptly give
public notice of such redemption; PROVIDED, HOWEVER, that the failure to
give, or any defect in, any such notice shall not affect the validity of
such redemption. The Company shall promptly give, or cause the Rights Agent
to 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 Rights Agent 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 shall state the method by which the payment of
the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that specifically set forth in
this Section 23 or in Section 27, and other than in connection with the
purchase, acquisition or redemption of Common Shares prior to the
Distribution Date.
Section 24. Notice of Certain Events. In case the Company shall
propose at any time after the earlier of the Shares Acquisition Date and
the Distribution Date (a) to pay any dividend payable in Shares or stock of
any class to the holders of Preferred Shares or to make any other
distribution to the holders of Preferred Shares (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of the
last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in
excess of 50% of the average net income per share of the Company for the
four quarters ended immediately prior to the payment of such dividends, or
a share dividend on, or a subdivision, combination or reclassification of
the Common Shares), or (b) to offer to the holders of Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or Shares or stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision of
outstanding Preferred Shares), or (d) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person (other
than pursuant to a merger or other acquisition agreement of the type
described in Section 1.3(ii)(A)(z)), or (e) to effect the liquidation,
dissolution or winding up of the Company, or (f) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares), then, in each such case, the Company shall give to the Rights
Agent and to each holder of a Right Certificate, in accordance with Section
25, a notice of such proposed action, which shall specify the record date
for the purposes of such Share dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the Preferred
Shares and/or 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 (a) or
(b) above at least ten (10) days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and in the
case of any such other action, at least ten (10) days prior to the date of
the taking of such proposed action or the date of participation therein by
the holders of the Preferred Shares and/or Common Shares, whichever shall
be the earlier.
In case any event set forth in Section 11.1.2 or Section 13
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a
Right Certificate, in accordance with Section 25, a notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11.1.2 and
Section 13, and (ii) all references in this Section 24 to Preferred Shares
shall be deemed thereafter to refer to Common Shares and/or, if
appropriate, other securities.
Notwithstanding anything in this Agreement to the contrary,
prior to the Distribution Date a filing by the Company with the Securities
and Exchange Commission shall constitute sufficient notice to the holders
of securities of the Company, including the Rights, for purposes of this
Agreement and no other notice need be given.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Sempra Energy
101 Ash Street
San Diego, California 92101
Attention: Secretary
Subject to the provisions of Section 21 and Section 24, any notice or
demand authorized by this Agreement to be given or made by the Company or
by the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
First Chicago Trust Company of New York
Newport Tower, Suite 4660
525 Washington Boulevard
Jersey City, New Jersey 07310
Attention: Tenders & Exchange Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate
representing Common Shares) shall be sufficiently given or made if sent by
first- class mail, postage prepaid, addressed to such holder at the address
of such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. For so long as the
Rights are then redeemable, the Company may in its sole and absolute
discretion, and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement in any respect without
the approval of any holders of Rights or Common Shares. From and after the
time that the Rights are no longer redeemable, the Company may, and the
Rights Agent shall, if the Company so directs, from time to time supplement
or amend this Agreement without the approval of any holders of Rights (i)
to cure any ambiguity or to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein, (ii) to shorten or lengthen any time period hereunder or (iii) to
make any other changes or provisions in regard to matters or questions
arising hereunder which the Company may deem necessary or desirable,
including but not limited to extending the Final Expiration Date; PROVIDED,
HOWEVER, that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person), and no such
supplement or amendment may cause the Rights again to become redeemable or
cause this Agreement again to become amendable other than in accordance
with this sentence; PROVIDED FURTHER, that the right of the Board of
Directors to extend the Distribution Date or the Redemption Date shall not
require any amendment or supplement hereunder. Upon the delivery of a
certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of
this Section 26, the Rights Agent shall execute such supplement or
amendment. Without limiting the foregoing, at any time prior to such time
as any Person becomes an Acquiring Person, the Company and the Rights Agent
may amend this Agreement to lower the thresholds set forth in Sections 1.1
and 3.1 to not less than the greater of (i) any percentage greater than the
largest percentage of the outstanding Common Shares then known by the
Company to be beneficially owned by any Person (other than an Exempt
Person) and (ii) 10%.
Section 27. Exchange.
27.1 Exchange of Common Shares for Rights. The Board of
Directors of the Company may, at its option, at any time after the
occurrence of a Trigger Event, exchange Common Shares for all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11.1.2) by
exchanging at an exchange ratio of that number of Common Shares having an
aggregate value equal to the Spread (with such value being based on the
current per share market price (as determined pursuant to Section 11.4) on
the date of the occurrence of a Trigger Event) per Right, appropriately
adjusted to reflect any Share split, Share dividend or similar transaction
occurring after the date hereof (such amount per Right being hereinafter
referred to as the "Exchange Consideration"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Acquiring Person shall have become the
Beneficial Owner of 50% or more of the Common Shares then outstanding. From
and after the occurrence of an event specified in Section 13.1, any Rights
that theretofore have not been exchanged pursuant to this Section 27.1
shall thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 27.1. The exchange of the Rights
by the Board of Directors may be made effective at such time, on such basis
and with such conditions as the Board of Directors in its sole discretion
may establish.
27.2 Exchange Procedures. Immediately upon the action of the
Board of Directors of the Company ordering the exchange for any Rights
pursuant to Section 27.1 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive the
Exchange Consideration. The Company shall promptly give public notice of
any such exchange; PROVIDED, HOWEVER, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange shall state the method by
which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than the Rights that have become void pursuant to
the provisions of Section 11.1.2) held by each holder of Rights.
27.3 Insufficient Shares. The Company may at its option
substitute, and, in the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit an
exchange of Rights for Common Shares as contemplated in accordance with
this Section 27, the Company shall substitute to the extent of such
insufficiency, for each Common Share that would otherwise be issuable upon
exchange of a Right, a number of Preferred Shares or fraction thereof (or
equivalent preferred shares, as such term is defined in Section 11.2) such
that the current per share market price (determined pursuant to Section
11.4) of one Preferred Share (or equivalent preferred share) multiplied by
such number or fraction is equal to the current per share market price of
one Common Share (determined pursuant to Section 11.4) as of the date of
such exchange.
Section 28. Successors. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 30. Determination and Actions by the Board of
Directors. The Board of Directors of the Company shall have the exclusive
power and authority to administer this Agreement and to exercise the rights
and powers specifically granted to the Board of Directors of the Company or
to the Company, or as may be necessary or advisable in the administration
of this Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including, without limitation, a determination to redeem or not
redeem the Rights or amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) that are done or made
by the Board of Directors of the Company in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of California 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.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Heading. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above written.
SEMPRA ENERGY
By: /s/ Richard D. Farman
---------------------------------
Name: Richard D. Farman
Title: Chairman of the Board and
Chief Executive Officer
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ Joanne Gorostiola
---------------------------------
Name: Joanne Gorostiola
Title: Assistant Vice President
EXHIBIT A
FORM OF
CERTIFICATE OF DETERMINATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
SEMPRA ENERGY
(Pursuant to Section 401 of the
General Corporation Law of the State of California)
-----------------------------
Sempra Energy, a corporation organized and existing under the
laws of the State of California (hereinafter called the "Corporation"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 401 of the General
Corporation Law of the State of California at a meeting duly called and
held on May 26, 1998.
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the
"Board of Directors" or the "Board") in accordance with the provisions of
the Amended and Restated Articles of Incorporation of this Corporation, the
Board of Directors hereby creates a series of Preferred Stock, no par value
per share (the "Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the rights, preferences,
privileges and restrictions thereof as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 7,500,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; PROVIDED,
that no decrease shall reduce the number of shares of Series A Preferred
Stock to a number less than the number of shares then outstanding plus the
number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding
securities issued by the Corporation convertible into Series A Preferred
Stock.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any class or series of shares of this Corporation
ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of common stock, no par value
(the "Common Stock"), of the Corporation, and of any other shares
ranking junior to the Series A Preferred Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable
in cash on the first day of March, June, September and December in
each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock , in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) subject
to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this
Section 2 immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall
at any time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Determination creating a series of Preferred Stock or
any similar shares, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any
other shares of the Corporation having general voting rights shall
vote together as one class on all matters submitted to a vote of
shareholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such parity shares on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
shares in exchange for shares of the Corporation ranking junior
(both as to dividends and upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares ranking on a parity with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of Preferred Stock and may be reissued as part of a new
series of Preferred Stock subject to the conditions and restrictions on
issuance set forth herein, in the Amended and Restated Articles of
Incorporation, or in any other Certificate of Determination creating a
series of Preferred Stock or any similar shares or as otherwise required by
law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, voluntary or otherwise no distribution shall be made (1)
to the holders of shares ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received an amount per share (the
"Series A Liquidation Preference") equal to $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall
be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times
the aggregate amount to be distributed per share to holders of shares
of Common Stock, or (2) to the holders of shares ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such parity shares in
proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other classes and
series of shares of the Corporation, if any, that rank on a parity
with the Series A Preferred Stock in respect thereof, then the assets
available for such distribution shall be distributed ratably to the
holders of the Series A Preferred Stock and the holders of such
parity shares in proportion to their respective liquidation
preferences.
(C) Neither the merger or consolidation of the Corporation into
or with another corporation nor the merger or consolidation of any
other corporation into or with the Corporation shall be deemed to be
a liquidation, dissolution or winding up of the Corporation within
the meaning of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other shares, stock, securities, cash and/or any other
property (other than the pending business combination of Pacific
Enterprises and Enova Corporation in which such corporations will become
subsidiaries of the Corporation), then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of shares,
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable by the Company.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, junior to all series of any other
class of the Corporation's Preferred Stock, except to the extent that any
such other series specifically provides that it shall rank on a parity with
or junior to the Series A Preferred Stock.
Section 10. Amendment. At any time any shares of Series A
Preferred Stock are outstanding, the Amended and Restated Articles of
Incorporation of the Corporation shall not be amended in any manner which
would materially alter or change the rights, preferences, privileges or
restrictions granted to or imposed on the Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock,
voting separately as a single class.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock.
[Signature page to follow]
IN WITNESS WHEREOF, this Certificate of Determination is
executed on behalf of the Corporation by its ____________________ this
____th day of May, 1998.
SEMPRA ENERGY
Name:
Title:
EXHIBIT B
[Form of Right Certificate]
Certificate No. R-_______ Rights
NOT EXERCISABLE AFTER MAY 31, 2008 OR EARLIER IF NOTICE OF REDEMPTION
OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED PURSUANT
TO AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION 1.3(ii)(A)(z) OF THE
AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT,
AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE AGREEMENT),
RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON
(AS DEFINED IN THE AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS WILL BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
SEMPRA ENERGY
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the
Rights Agreement, dated as of May 26, 1998, as the same may be amended from
time to time (the "Agreement"), between Sempra Energy, a California
corporation (the "Company"), and First Chicago Trust Company of New York,
as Rights Agent (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date and prior to 5:00 P.M. (California time)
on May 31, 2008, at the offices of the Rights Agent, or its successors as
Rights Agent, designated for such purpose, one one-hundredth of a fully
paid, nonassessable share of Series A Junior Participating Preferred Stock,
no par value per share (the "Preferred Shares") of the Company, at a
purchase price of $80 per one one-hundredth of a Preferred Share, subject
to adjustment (the "Purchase Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase and
certification duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share
which may be purchased upon exercise thereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of May
26, 1998 based on the Preferred Shares as constituted at such date.
Capitalized terms used in this Right Certificate without definition shall
have the meanings ascribed to them in the Agreement. As provided in the
Agreement, the Purchase Price and the number of Preferred Shares which may
be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Agreement are on file at the
principal offices of the Company and the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the offices of the Rights Agent designated
for such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one one-hundredths of a Preferred
Share as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Agreement, the Board of
Directors may, at its option, (i) redeem the Rights evidenced by this Right
Certificate at a redemption price of $.001 per Right or (ii) exchange
Common Shares for the Rights evidenced by this Certificate, in whole or in
part.
No fractional Preferred Shares will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions of Preferred
Shares which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash payment will be made, as
provided in the Agreement.
No holder of this Right Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in
the Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to
vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided
in the Agreement.
If any term, provision, covenant or restriction of the
Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of the Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated.
This Right Certificate shall not be valid or binding for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______________.
Attest: SEMPRA ENERGY
By ______________________ By _________________________________
Title: Title
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK, AS RIGHTS AGENT
By_________________________________
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address
of transferee)
Rights evidenced by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ___________
______________________________
Signature
Signature Guaranteed:
_________________________
Signatures must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended.
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or
an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this
Right Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof.
Dated: _______________
_______________________________
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: SEMPRA ENERGY
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase
the Preferred Shares issuable upon the exercise of such Rights (or such
other securities or property of the Company or of any other Person which
may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of:
_____________________________________________________
(Please print name and address)
_____________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
______________________________________________________
(Please print name and address)
______________________________________________________
Dated: __________________
____________________________
Signature
Signature Guaranteed:
_________________________
Signatures must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended.
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or
an Affiliate or an Associate thereof; and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this
Right Certificate from any person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate thereof.
Dated:_______________
_____________________________
Signature
NOTICE
The signature in the foregoing Form of Assignment and Form of
Election to Purchase must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or Form of Election to Purchase is not completed, the Company
will deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or Associate hereof
and such Assignment or Election to Purchase will not be honored.
EXHIBIT C
As described in the Rights Agreement, Rights which are
held by or have been held by an Acquiring Person or Associates
or Affiliates thereof (as defined in the Rights Agreement) and
certain transferees thereof shall become null and void and will
no longer be transferable.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 26, 1998, the Board of Directors of Sempra Energy (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each share of common stock, no par value (the "Common
Shares"), of the Company outstanding immediately prior to the consummation
of the pending business combination of Pacific Enterprises and Enova
Corporation in which such two corporations will become subsidiaries of the
Company (the "Record Date"). As long as the Rights are attached to the
Common Shares, the Company will issue one Right (subject to adjustment)
with each new Common Share issued after the Record Date so that all such
shares will have attached Rights. When exercisable, each Right will entitle
the registered holder to purchase from the Company one one-hundredth of a
share of Series A Junior Participating Preferred Stock (the "Preferred
Shares") at a price of $80 per one one-hundredth of a Preferred Share,
subject to adjustment (the "Purchase Price"). The description and terms of
the Rights are set forth in a Rights Agreement, dated as of May 26, 1998,
as the same may be amended from time to time (the "Agreement"), between the
Company and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated
persons has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the Common Shares (an "Acquiring Person") or
(ii) ten (10) business days (or such later date as may be determined by
action of the Board of Directors prior to such time as any person or group
of affiliated persons becomes an Acquiring Person) following the
commencement or announcement of an intention to make a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the Common Shares (the
earlier of (i) and (ii) being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate
together with a copy of this Summary of Rights.
The Agreement provides that until the Distribution Date (or
earlier redemption exchange, termination, or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the close of business on the Record
Date upon transfer or new issuance of the Common Shares will contain a
notation incorporating the Agreement by reference. Until the Distribution
Date (or earlier redemption, exchange, termination or expiration of the
Rights), the surrender for transfer of any certificates for Common Shares,
with or without such notation or a copy of this Summary of Rights, will
also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as
of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 31, 2008, subject to the Company's right to
extend such date (the "Final Expiration Date"), unless earlier redeemed or
exchanged by the Company or terminated.
Each Preferred Share purchasable upon exercise of the Rights
will be entitled, when, as and if declared, to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend, if any, declared per Common
Share. In the event of liquidation, dissolution or winding up of the
Company, the holders of the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $100 per share (plus any accrued but
unpaid dividends) but will be entitled to an aggregate payment of 100 times
the payment made per Common Share. Each Preferred Share will have 100 votes
and will vote together with the Common Shares. Finally, in the event of any
merger, consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive 100 times the
amount received per Common Share. Preferred Shares will not be redeemable.
These rights are protected by customary antidilution provisions. Because of
the nature of the Preferred Share's dividend, liquidation and voting
rights, the value of one one-hundredth of a Preferred Share purchasable
upon exercise of each Right should approximate the value of one Common
Share.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a share dividend on, or a subdivision, combination or
reclassification of the Preferred Shares, (ii) upon the grant to holders of
the Preferred Shares of certain rights or warrants to subscribe for or
purchase Preferred Shares or convertible securities at less than the
current market price of the Preferred Shares or (iii) upon the distribution
to holders of the Preferred Shares of evidences of indebtedness, cash,
securities or assets (excluding regular periodic cash dividends at a rate
not in excess of 125% of the rate of the last regular periodic cash
dividend theretofore paid or, in case regular periodic cash dividends have
not theretofore been paid, at a rate not in excess of 50% of the average
net income per share of the Company for the four quarters ended immediately
prior to the payment of such dividend, or dividends payable in Preferred
Shares (which dividends will be subject to the adjustment described in
clause (i) above)) or of subscription rights or warrants (other than those
referred to above).
In the event that a Person becomes an Acquiring Person or if
the Company were the surviving corporation in a merger with an Acquiring
Person or any affiliate or associate of an Acquiring Person and the Common
Shares were not changed or exchanged, each holder of a Right, other than
Rights that are or were acquired or beneficially owned by the Acquiring
Person (which Rights will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having a market
value of two times the then current Purchase Price of the Right. In the
event that, after a person has become an Acquiring Person, the Company were
acquired in a merger or other business combination transaction or more than
50% of its assets or earning power were sold, proper provision shall be
made so that each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price of
the Right, that number of shares of common stock or shares of the acquiring
company which at the time of such transaction would have a market value of
two times the then current Purchase Price of the Right.
At any time after a Person becomes an Acquiring Person and
prior to the earlier of one of the events described in the last sentence of
the previous paragraph or the acquisition by such Acquiring Person of 50%
or more of the outstanding Common Shares, the Board of Directors may cause
the Company to exchange the Rights (other than Rights owned by an Acquiring
Person which will have become void), in whole or in part, for Common Shares
at an exchange rate of one Common Share per Right (subject to adjustment).
No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such
Purchase Price. No fractional Preferred Shares or Common Shares will be
issued (other than fractions of Preferred Shares which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the
election of the Company, be evidenced by depository receipts), and in lieu
thereof, a payment in cash will be made based on the market price of the
Preferred Shares or Common Shares on the last trading date prior to the
date of exercise.
The Rights may be redeemed in whole, but not in part, at a
price of $.001 per Right (the "Redemption Price") by the Board of Directors
at any time prior to the close of business on the 10th day following the
first date of public announcement that a Person has become an Acquiring
Person. The Board of Directors may extend the period during which the
Rights are redeemable beyond the 10 days following the public announcement
that a Person has become an Acquiring Person. The redemption of the Rights
may be made effective at such time, on such basis and with such conditions
as the Board of Directors in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a shareholder of the Company beyond those as an existing
shareholder, including, without limitation, the right to vote or to receive
dividends.
Any of the provisions of the Agreement may be amended by the
Board of Directors of the Company for so long as the Rights are then
redeemable, and after the Rights are no longer redeemable, the Company may
amend or supplement the Agreement in any manner that does not adversely
affect the interests of the holders of the Rights.
A copy of the Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Agreement,
which is incorporated herein by reference.