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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): June 17, 1999
SYNTROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-21911 43-1764632
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
1350 South Boulder
Suite 1100
Tulsa, Oklahoma 74119-3295
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (918) 592-7900
None
(Registrant's former name and former address, if changed since last report)
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Item 5. Other Events.
On June 17, 1999, Syntroleum Corporation issued a press release (the "Press
Release") announcing stockholder approval of its reincorporation as a Delaware
corporation. The reincorporation was also completed on June 17, 1999. In the
reincorporation, Syntroleum Corporation, a Kansas corporation ("Syntroleum-
Kansas"), merged with and into Syntroleum Corporation, a Delaware corporation
("Syntroleum-Delaware" or "Syntroleum"), with Syntroleum-Delaware being the
surviving corporation. The Press Release is included as an exhibit to this
Current Report on Form 8-K and is incorporated herein by reference.
As a result of the reincorporation, Syntroleum-Delaware became the
successor corporation to Syntroleum-Kansas under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), with respect to its common stock and its
preferred share purchase rights, and will succeed to Syntroleum-Kansas's
reporting obligations thereunder. Pursuant to Rule 12g-3 promulgated under the
Exchange Act, the common stock and preferred share purchase rights of
Syntroleum-Delaware are deemed to be registered under paragraph (g) of Section
12 of the Exchange Act.
Set forth below is a description of Syntroleum's capital stock. This
description is intended to be a summary of the material terms of Syntroleum's
capital stock and is qualified in its entirety by reference to Syntroleum's
charter and bylaws and the Rights Agreement relating to the preferred stock
purchase rights associated with the common stock.
DESCRIPTION OF SYNTROLEUM CAPITAL STOCK
The total number of shares of all classes of stock that Syntroleum has
authority to issue is 155,000,000, consisting of 150,000,000 shares of common
stock and 5,000,000 shares of preferred stock. An aggregate of approximately
26,900,052 shares of Syntroleum common stock are expected to be issued in the
reincorporation merger. Syntroleum has authorized and reserved for issuance
250,000 shares of junior participating preferred stock in connection with
preferred stock purchase rights described below.
Common Stock
The holders of common stock are entitled to one vote per share on all matters
voted on by the stockholders, including the election of directors. Except as
otherwise required by law or provided in any resolution adopted by the board of
directors with respect to any series of preferred stock, the holders of shares
of common stock exclusively possess all voting power of Syntroleum's
stockholders. Subject to any preferential rights of any outstanding series of
preferred stock, the holders of common stock are entitled to those dividends as
may be declared from time to time by the board of directors from funds available
for dividends and, upon liquidation, are entitled to receive pro rata all assets
of Syntroleum available for distribution to such holders.
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Preferred Stock
Syntroleum's board of directors is authorized to establish one or more series
of preferred stock and to determine, with respect to any series of preferred
stock, the powers, designation, preferences and rights of each series and the
qualifications, limitations or restrictions of each series, including (1) the
designation of the series, (2) the number of shares of the series, which number
the board of directors may, except where otherwise provided in the preferred
stock designation, increase or decrease, but not below the number of shares
thereof then outstanding, (3) whether dividends, if any, will be cumulative or
noncumulative and the dividend rate and the preferences, if any, of the series,
(4) the dates at which dividends, if any, will be payable, (5) the redemption
rights and price or prices, if any, for shares of the series, (6) the terms and
amounts of any sinking fund provided for the purchase or redemption of shares of
the series, (7) the amounts payable on shares of the series in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of Syntroleum, (8) whether the shares of the series will be convertible into or
exchangeable for shares of any other class or series, or any other security, of
Syntroleum or any other corporation, and, if so, the specification of that class
or series or that other security, the conversion or exchange price or prices or
rate or rates, any adjustments to those prices or rates, the date or dates as of
which such shares will be convertible or exchangeable and all other terms and
conditions upon which the conversion or exchange may be made, (9) restrictions
on the issuance of shares of the same series, or of any other class or series,
and (10) the voting rights, if any, of the holders of the series.
Syntroleum believes that the ability of its board of directors to issue one or
more series of preferred stock will provide Syntroleum with flexibility in
structuring possible future financings and acquisitions, and in meeting other
corporate needs that might arise. The authorized shares of preferred stock, as
well as shares of common stock, will be available for issuance without further
action by Syntroleum's stockholders, unless stockholder action is required by
the rules of any stock exchange or automated quotation system on which
Syntroleum's securities are listed or traded. If the approval of Syntroleum's
stockholders is not required for the issuance of shares of preferred stock or
common stock, the board of directors may determine not to seek stockholder
approval.
Although Syntroleum's board of directors has no intention at the present time
of doing so, it could issue a series of preferred stock that could, depending on
the terms of such series, impede the completion of a merger, tender offer or
other takeover attempt. The board of directors will make any determination to
issue shares based on its judgment as to the best interests of Syntroleum and
its stockholders. The board of directors, in so acting, could issue preferred
stock having terms that could discourage an acquisition attempt through which an
acquiror may be able to change the composition of Syntroleum's board of
directors, including a tender offer or other transaction that some, or a
majority of, Syntroleum's stockholders might believe to be in their best
interests or in which stockholders might receive a premium for their stock over
the then current market price of the stock.
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Preferred Stock Purchase Rights
Syntroleum-Kansas's board of directors declared a dividend of one preferred
share purchase right to the holder of record of each share of Syntroleum-Kansas
common stock as of the close of business on March 3, 1997. Prior to the
reincorporation, each of these rights entitled the registered holder to purchase
from Syntroleum-Kansas one six-hundredth of a share of Syntroleum-Kansas junior
preferred stock at a purchase price of $125.00 per one one-hundredth of a share,
subject to adjustment. In connection with the reincorporation, Syntroleum has
assumed these rights and the related Rights Agreement dated January 31, 1997
between Syntroleum-Kansas and American Stock Transfer & Trust Company, as agent
for holders of rights. Syntroleum has amended and restated that Rights
Agreement to reflect the assumption. As a result of the assumption, the rights
entitle the registered holder to purchase from Syntroleum the number of shares
of junior participating preferred stock of Syntroleum that is the same as the
number of shares of junior participating preferred stock that holder was
entitled to purchase from Syntroleum-Kansas before the reincorporation, and at
the same price.
The rights will have certain anti-takeover effects. The rights could cause
substantial dilution to a person or group that attempts to acquire Syntroleum
and effect a change in the composition of its board of directors on terms not
approved by the board of directors, including by means of a tender offer at a
premium to the market price. The rights should not interfere with any merger or
business combination approved by the board of directors because the rights may
be redeemed by Syntroleum at the redemption price prior to the time that a
person has become an acquiring person.
The following summary of the material terms of the rights is qualified in its
entirety by reference to the form of the Amended and Restated Rights Agreement,
a copy of which is an exhibit to this Current Report on Form 8-K.
Evidence and Transferability of Rights. The rights will be evidenced by the
certificates representing shares of common stock until the earlier to occur of:
. 10 days following a public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of
25% or more of the then outstanding shares of common stock (that
person or group is referred to as an "acquiring person"); or
. 10 business days (or a later date established by Syntroleum's board
of directors before the time any person or group becomes an acquiring
person) following the commencement of, or announcement of an intention
to make, a tender offer or exchange offer that, if completed, would
result in the beneficial ownership by a person or group of 25% or more
of the outstanding shares of common stock.
The date that the rights are no longer evidenced by the certificates
representing shares of common stock is referred to as the "rights distribution
date."
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Until the rights distribution date or the earlier redemption or expiration of
the rights, (1) the rights will be transferred with and only with the shares of
common stock, (2) certificates representing shares of common stock will contain
a notation incorporating the terms of the rights by reference and (3) the
surrender for transfer of any certificates representing shares of common stock
will also constitute the transfer of the rights associated with the shares of
common stock represented by that certificate. As soon as practicable following
the rights distribution date, separate certificates evidencing the rights will
be mailed to holders of record of the shares of common stock as of the close of
business on the rights distribution date and those separate rights certificates
alone will evidence the rights.
Exercisability of Rights. The rights are not exercisable until the rights
distribution date. The rights will expire on January 31, 2007, unless the
expiration date is extended or unless the rights are earlier redeemed or
exchanged by Syntroleum, in each case, as described below.
If any person becomes an acquiring person, each holder of a right, other than
rights beneficially owned by the acquiring person, which will be void, will
after the date that any person became an acquiring person have the right to
receive upon exercise of those rights at the then current exercise price that
number of shares of common stock having a market value of two times the exercise
price of the right. If, at any time on or after the date that any person has
become an acquiring person, Syntroleum is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, each holder of a right will after the date of that transaction
have the right to receive, upon the exercise of those rights at the then current
exercise price of the right, that number of shares of common stock of the
acquiring company which at the time of that transaction will have a market value
of two times the exercise price of the right.
The purchase price payable, and the number of shares of junior preferred stock
or other securities or property issuable upon exercise of the rights are subject
to adjustment from time to time to prevent dilution (1) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the shares of
junior preferred stock, (2) upon the grant to holders of the shares of junior
preferred stock of specified rights or warrants to subscribe for or purchase
shares of junior preferred stock at a price, or securities convertible into
shares of junior preferred stock with a conversion price less than the then-
current market price of the shares of junior preferred stock or (3) upon the
distribution to holders of the shares of junior preferred stock of evidences of
indebtedness or assets, excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in shares of junior preferred
stock or of subscription rights or warrants other than those referred to above.
The number of outstanding rights and the number of shares of junior preferred
stock issuable upon exercise of each right are also subject to adjustment in the
event of a stock split of the common stock or a stock dividend on the common
stock payable in common stock or subdivisions, consolidations or combinations of
the common stock occurring, in any such case, prior to the rights distribution
date.
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With specified exceptions, no adjustment in the purchase price will be
required until cumulative adjustments require an adjustment of at least 1% in
the purchase price. No fractional shares of junior preferred stock will be
issued, other than fractions which are integral multiples of one one-hundredth
of a share of junior preferred stock, which may, at the election of Syntroleum,
be evidenced by depositary receipts. In lieu of those fractional shares, an
adjustment in cash will be made based on the market price of the shares of
junior preferred stock on the last trading day prior to the date of exercise.
Until a right is exercised, the holder of a right will have no rights as a
stockholder of Syntroleum, including the right to vote or to receive dividends.
Terms of Junior Preferred Stock. Shares of junior preferred stock purchasable
upon exercise of the rights will not be redeemable. Each share of junior
preferred stock will be entitled to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate dividend equal
to 600 times the dividend declared per share of common stock. In the event of
liquidation, the holders of the junior preferred stock will be entitled to a
minimum preferential liquidation payment of $600 per share but will be entitled
to an aggregate payment equal to 600 times the payment made per share of common
stock. Each share of junior preferred stock will have 600 votes, 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 junior
preferred stock will be entitled to receive an amount equal to 600 times the
amount received per share of common stock. These rights are protected by
customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights of the
junior preferred stock, the value of the one six-hundredth interest in a share
of junior preferred stock purchasable upon exercise of each right should
approximate the value of one share of common stock.
Exchange or Redemption. At any time after any person becomes an acquiring
person and before the acquisition by that person of 50% or more of the
outstanding shares of common stock, the board of directors may exchange the
rights, in whole or in part, at an exchange ratio of one share of common stock,
or one six-hundredth of a share of junior preferred stock, per right, subject to
adjustment. This exchange will not apply to rights owned by the acquiring
person which will have become void.
At any time before any person becomes an acquiring person, the board of
directors may redeem the rights in whole, but not in part, at a price of $.01
per right.
The redemption of the rights may be made effective at any time, on any basis
and with any conditions as the board of directors in its sole discretion may
establish. Immediately upon any redemption of the rights, the rights will
terminate and holders of rights will only receive the redemption price.
Amendment. The terms of the rights may be amended by the board of directors
without the consent of the holders of the rights, including an amendment to
lower (1) the threshold at which a
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person becomes an acquiring person and (2) the percentage of common stock
proposed to be acquired in a tender or exchange offer that would cause the
rights distribution date to occur, to not less than the greater of (A) the sum
of .001% and the largest percentage of the outstanding common stock then known
to Syntroleum to be beneficially owned by any person or group of affiliated or
associated persons and (B) 10%, except that, from and after the time that any
person or group of affiliated or associated persons becomes an acquiring person,
no amendment may adversely affect the interests of the holders of the rights.
Restrictions on Business Combinations
Syntroleum's charter provides that "business combinations" involving an
"interested stockholder" must be approved by the holders of at least 66 2/3% of
the voting power of the shares not owned by the interested stockholder, unless
the business combination is either approved by "continuing directors" or meets
specified requirements regarding price and procedure.
"Continuing directors" is generally defined in Syntroleum's charter as (1)
directors who are unaffiliated with the interested stockholder and joined the
board before the party to the transaction became an interested stockholder or
(2) directors who are unaffiliated with the interested stockholder and are
elected to fill a vacancy and that election is recommended by a majority of
continuing directors then on the board. The charter of Syntroleum also provides
that the initial directors named in its charter who are unaffiliated with the
interested stockholder are "continuing directors."
A "business combination" is generally defined in Syntroleum's charter as
follows.
. any merger or consolidation of Syntroleum or its subsidiaries with
any interested stockholder;
. any disposition, in one transaction or a series of transactions, to
or with any interested stockholder of any assets of Syntroleum having
an aggregate fair market value of $10,000,000 or more;
. the issuance or transfer by Syntroleum of any securities of
Syntroleum to any interested stockholder, in exchange for property
having an aggregate fair market value of $10,000,000 or more;
. the adoption of any plan or proposal for the liquidation or
dissolution of Syntroleum proposed by or on behalf of an interested
stockholder; or
. any reclassification of securities, or recapitalization of
Syntroleum, or any merger or consolidation of Syntroleum with any of
its subsidiaries or any other transaction that has the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities of
Syntroleum that are directly or indirectly owned by any interested
stockholder.
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An "interested stockholder" is generally defined in Syntroleum's charter as
any person, other than Syntroleum, who or which:
. itself, or along with its affiliates, is the beneficial owner,
directly or indirectly, of more than 10% of the then outstanding
voting stock of Syntroleum;
. is an affiliate of Syntroleum and at any time within the two-year
period immediately before the date in question was itself, or along
with its affiliates, the beneficial owner, directly or indirectly, of
10% or more of the then outstanding voting stock of Syntroleum; or
. is an assignee of or has otherwise succeeded to any voting stock of
Syntroleum that was at any time within the two-year period immediately
before the date in question beneficially owned by an interested
stockholder, if that assignment or succession occurred in the course
of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
The provisions in Syntroleum's charter restricting business combinations with
interested stockholders also generally apply to an interested stockholder's
affiliates.
To satisfy the price and procedure requirements of these provisions, the
following criteria must be satisfied:
. the total amount of the cash and the fair market value of
consideration other than cash to be received per share by holders of
Syntroleum's capital stock is at least equal to the highest of
(1) the highest price per share paid by the interested
stockholder in transactions during the two-year period
before the announcement of the transaction or in the
transaction in which it became an interested stockholder;
(2) the fair market value of the stock on the date of
announcement of the transaction or the date of the
transaction in which it became an interested stockholder,
whichever is higher; and
(3) the amount determined under clause (2) above multiplied by
the ratio of (A) the highest price per share paid by the
interested stockholder for any shares during the two-year
period before the date of announcement of the transaction to
(B) the fair market value of the stock on the first day in
that two-year period on which the interested stockholder
acquired any shares of stock;
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. generally, the consideration to be received by holders of a particular
class of outstanding voting stock is in cash or in the same form as
the interested stockholder has previously paid for shares of that
class of voting stock;
. after the interested stockholder has become an interested stockholder
and before the completion of the business combination, specified
actions or omissions have not occurred with respect to dividends and
the interested stockholder has not become the beneficial owner of any
additional voting stock except as part of the transaction which
results in the interested stockholder becoming an interested
stockholder;
. after the interested stockholder has become an interested stockholder,
the interested stockholder has not received, except proportionately as
a shareholder, any financial assistance or tax advantages provided by
the corporation, whether in anticipation of or in connection with the
business combination or otherwise; and
. a proxy or information statement describing the proposed business
combination and complying with the requirements of the Securities
Exchange Act of 1934 is mailed to stockholders at least 30 days before
the completion of the business combination.
Section 203 of the Delaware General Corporation Law ("DGCL") provides that,
subject to specified exceptions, a corporation may not engage in a broad range
of business combinations with any "interested stockholder" for a three-year
period following the time that the stockholder becomes an interested stockholder
unless:
. prior to that time, the board of directors of the corporation
approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder;
. upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the
time the transaction commenced, excluding shares owned by persons who
are both officers and directors of the corporation and shares held by
specified employee stock ownership plans; or
. on or after that time, the business combination is approved by the
board of directors of the corporation and by the affirmative vote of
at least 66 2/3% of the outstanding voting stock which is not owned by
the interested stockholder.
In general, an "interested stockholder" is defined for purposes of Section 203
of the DGCL to include any person that is (1) the owner of 15% or more of the
outstanding voting stock of the corporation or (2) an affiliate or associate of
the corporation that was the owner of 15% or more of the outstanding
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voting stock of the corporation at any time within the previous three years. The
DGCL permits a corporation to opt out of these provisions, although Syntroleum
has not done so.
Amendments to Charter
Amendments of Syntroleum's charter generally require the approval of the
holders of a majority of the outstanding stock entitled to vote on the
amendment, and if the amendment would increase or decrease the number of
authorized shares of any class or series or the par value of shares of that
class or series or would adversely affect the rights, powers or preferences of
that class or series, a majority of the outstanding stock of that class or
series also would be required to approve the amendment. However, the amendment
or repeal of, or the adoption of provisions that are inconsistent with, the
provisions of Syntroleum's charter regarding (1) powers of the board of
directors with respect to the bylaws and the accounts and books of Syntroleum
and (2) the number, election and classification of directors of Syntroleum,
requires the approval of the board of directors and the affirmative vote of 80%
of the stock entitled to vote in the election of directors. In addition, the
amendment or repeal of, or the adoption of provisions that are inconsistent
with, the provisions of Syntroleum's charter regarding votes required for
business combinations with interested stockholders described above requires the
approval of the Syntroleum board of directors and the affirmative vote of
66 2/3% of the stock entitled to vote in the election of directors and not owned
directly or indirectly by interested stockholders or their affiliates.
Amendments to Bylaws
Syntroleum's board of directors may adopt, alter or amend the bylaws. In
addition to meeting certain notice requirements, Syntroleum's bylaws provide
that the affirmative vote of the holders of at least 80% of the voting power of
the then outstanding voting stock, voting together as a single class, is
required for stockholders to alter, amend or repeal any provision of the bylaws
or to adopt any additional bylaws.
Special Meetings of Stockholders
Subject to the rights of holders of any series of preferred stock,
Syntroleum's bylaws provide that a special meeting may be called only by the
chairman of the board of directors or by the board of directors pursuant to a
resolution adopted by a majority of the total number of directors of Syntroleum.
The business permitted to be conducted at any special meeting of stockholders is
limited to the business brought before the meeting pursuant to the notice of
meeting.
Stockholder Action by Written Consent
Syntroleum's charter provides that corporate action may not be taken by
written consent of stockholders.
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Advance Notice Provisions for Stockholder Director Nominations and Stockholder
Proposals
Syntroleum's bylaws establish an advance notice procedure for stockholders
to make nominations of candidates for election as directors or to bring other
business before an annual meeting of stockholders of Syntroleum.
The bylaws provide that only individuals who are nominated by, or at the
direction of, Syntroleum's board of directors, or by a stockholder who has given
timely written notice to the secretary of Syntroleum before the meeting at which
directors are to be elected, will be eligible for election as directors of
Syntroleum. The bylaws also provide that at an annual meeting only business may
be conducted as has been brought before the meeting by, or at the direction of,
the chairman of the board or Syntroleum's board of directors, or by a
stockholder who has given timely written notice to the secretary of Syntroleum
of the stockholder's intention to bring that business before the meeting.
Under these provisions, for notice of stockholder director nominations or
proposals to be made at an annual meeting to be timely, the notice must
generally be received by Syntroleum:
. not less than 70 days nor more than 90 days before the first
anniversary of the previous year's annual meeting; or
. if the date of the annual meeting is advanced by more than 20 days,
or delayed by more than 70 days, from the anniversary date, not
earlier than 90 days before the meeting and not later than the later
of (1) 70 days before the meeting and (2) 10 days after public
announcement of the date of the meeting is first made.
However, if the number of directors to be elected is increased and there is
no public announcement naming all of the nominees for director or specifying the
size of the increased board of directors at least 80 days before the first
anniversary of the preceding year's annual meeting, a stockholder's notice will
be timely, but only with respect to nominees for any new positions created by
that increase, if it is received by Syntroleum not later than 10 days after the
public announcement is first made by Syntroleum. If directors are to be elected
at a special meeting, the notice must be received by Syntroleum not earlier than
90 days before the meeting and not later than the later of (1) 70 days before
the meeting and (2) 10 days after public announcement of the date of the
meeting. Stockholders may not bring business before a special meeting of
stockholders under the bylaws.
Under the bylaws, a stockholder's notice to Syntroleum proposing to
nominate an individual for election as a director must contain specified
information, including the identity and address of the nominating stockholder,
the class and number of shares of stock that are owned by the stockholder, and
all information regarding the proposed nominee that would be required to be
included in a proxy statement soliciting proxies for the proposed nominee. Under
the bylaws, a stockholder's notice relating to the conduct of business other
than the nomination of directors must contain specified information about the
proposed business and about the proposing stockholders, including a brief
description of the business the stockholder proposes to bring before the
meeting, the reasons for
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conducting the business at the meeting, the name and address of the stockholder,
the class and number of shares of stock beneficially owned by the stockholder,
and any material interest of the stockholder in the business so proposed. If the
chairman of the board or other officer presiding at a meeting determines that a
person was not nominated, or other business was not brought before the meeting,
in accordance with the bylaws, that person will not be eligible for election as
a director, or that business will not be conducted at the meeting, as the case
may be.
Classification of Directors
Syntroleum's charter provides that directors will be divided into three
classes serving staggered three-year terms so that approximately one-third of
the board of directors is elected each year. They also provide that, subject to
the rights of the holders of any series of preferred stock or any other series
or class of stock as set forth in the charter to elect additional directors
under specified circumstances, the number of directors is fixed in accordance
with the bylaws. Syntroleum's bylaws provide that the number of directors is to
be fixed from time to time pursuant to a resolution adopted by a majority of the
whole board of directors but will not consist of more than 11 nor less than
three directors. As of June 17, 1999, the board of directors consisted of eight
persons.
The classification of directors makes it more difficult for stockholders to
change the composition of the board of directors. At least two annual meetings
of stockholders, instead of one, will be required to effect a change in a
majority of the board of directors.
Removal of Directors; Filling Vacancies on the Board of Directors
Syntroleum's charter provides that a director may be removed only for cause
and only by the affirmative vote of the holders of at least 80% of the voting
power of the then outstanding voting stock, voting together as a single class.
Under Syntroleum's bylaws, newly created directorships resulting from any
increase in the number of directors or any vacancies on the board of directors
may be filled by the affirmative vote of a majority of the directors then in
office, subject to the rights, if any, of holders of Syntroleum's preferred
stock. In addition, the Syntroleum bylaws provide that the directors elected to
fill vacancies on the board of directors will hold office until the annual
meeting of stockholders at which the term of office of the class to which they
have been elected expires.
Item 7. Financial Statements and Exhibits
(a) Exhibits
*2.1 Agreement and Plan of Merger dated as of May 7, 1999 by and
between Syntroleum-Kansas and Syntroleum-Delaware (incorporated
by reference to Appendix A to the Proxy Statement of Syntroleum-
Kansas filed with the Securities and Exchange Commission on May
12, 1999).
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*4.1 Certificate of Incorporation of Syntroleum-Delaware (incorporated
by reference to Annex B to the Proxy Statement of Syntroleum-
Kansas filed with the Securities and Exchange Commission on May
12, 1999).
4.2 Certificates of Merger filed on June 17, 1999.
*4.3 Bylaws of Syntroleum-Delaware (incorporated by reference to
Appendix C to the Proxy Statement of Syntroleum-Kansas filed with
the Securities and Exchange Commission on May 12, 1999).
4.4 Amended and Restated Rights Agreement dated as of January 31,
1997 and Amended and Restated as of June 17, 1999.
4.5 Certificate of Designations of Series A Junior Participating
Preferred Stock of Syntroleum, dated June 16, 1999.
99.1 Press Release dated June 17, 1999.
__________________________
*Incorporated by reference as indicated.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant had duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SYNTROLEUM CORPORATION
By: /s/ Eric Grimshaw
---------------------------------
Name: Eric Grimshaw
Title: Vice President
and Secretary
Date: June 17, 1999
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EXHIBIT 4.2
CERTIFICATE OF MERGER
OF
SYNTROLEUM CORPORATION
(a Kansas corporation)
WITH AND INTO
SYNTROLEUM CORPORATION
(a Delaware corporation)
Pursuant to the provisions of Section 252 of the Delaware General
Corporation Law (the "DGCL"), the undersigned corporation does hereby certify:
FIRST: That the name and state of incorporation of each of the constituent
corporations are as follows:
Name State of Incorporation
---- ----------------------
Syntroleum Corporation Delaware
Syntroleum Corporation Kansas
SECOND: That an agreement of merger (setting forth a plan of merger) has been
approved, adopted, certified, executed and acknowledged by each of the
constituent corporations in accordance with the provisions of
subsection (c) of Section 252 of the DGCL.
THIRD: That the surviving corporation of the merger is Syntroleum
Corporation, a Delaware corporation.
FOURTH: The certificate of incorporation of Syntroleum Corporation, a Delaware
corporation, shall be the certificate of incorporation of the
surviving corporation.
FIFTH: That the executed agreement of merger is on file at the principal
place of business of the surviving corporation at 1350 South Boulder,
Suite 1100, Tulsa, Oklahoma 74119.
SIXTH: That a copy of the agreement of merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder
of either constituent corporation.
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SEVENTH: The authorized capital stock of Syntroleum Corporation, a Kansas
corporation, the only constituent corporation to the merger which is
not a Delaware corporation, is as follows:
Common Stock, par value $0.01 per share - 150,000,000 shares
Preferred Stock, par value $0.01 per share - 5,000,000
IN WITNESS WHEREOF, the undersigned corporation has caused this
Certificate of Merger to be executed on its behalf as of June 17, 1999.
SYNTROLEUM CORPORATION,
a Delaware corporation
By: /s/ Kenneth L. Agee
-------------------------
Kenneth L. Agee
Chief Executive Officer and
Chairman of the Board
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CERTIFICATE OF MERGER
of
SYNTROLEUM CORPORATION, a Kansas corporation
into
SYNTROLEUM CORPORATION, a Delaware corporation
(pursuant to Section 17-6702 of the Kansas General Corporation
Code and Section 252 of the Delaware General Corporation Law)
Pursuant to the provisions of the Kansas General Corporation Code, the
undersigned corporation certifies as follows:
1. The constituent corporations to the merger are Syntroleum Corporation, a
Kansas corporation ("Syntroleum-Kansas"), and Syntroleum Corporation, a
Delaware corporation ("Syntroleum-Delaware").
2. Syntroleum-Kansas and Syntroleum-Delaware have entered into an Agreement
and Plan of Merger, dated as of May 7, 1999 (the "Merger Agreement"), which
has been approved, adopted, certified, executed and acknowledged by
Syntroleum-Kansas and Syntroleum-Delaware in accordance with Section 17-
6702 of the Kansas General Corporation Code and Section 252 of the Delaware
General Corporation Law.
3. The name of the surviving corporation is Syntroleum Corporation, a
Delaware corporation.
4. The Certificate of Incorporation of the surviving corporation shall be
Syntroleum-Delaware's Certificate of Incorporation.
5. The executed Merger Agreement is on file at the office of the surviving
corporation located at 1350 South Boulder, Suite 1100, Tulsa, Oklahoma
74119.
6. A copy of the Merger Agreement will be furnished by the surviving
corporation, on request and without cost, to any stockholder of Syntroleum-
Kansas or Syntroleum-Delaware.
7. Syntroleum-Delaware hereby agrees that it may be served with process in
Kansas in any proceeding for enforcement of any obligation of Syntroleum-
Kansas, as well as for enforcement of any obligation of Syntroleum-Delaware
arising from the merger, including any suit or other proceeding to enforce
the right of any stockholders as determined in appraisal proceedings
pursuant to Section 17-6712 of the Kansas General Corporation Code and
Syntroleum-Delaware hereby irrevocably appoints the Secretary of State of
the State of Kansas as its agent to accept service of process in any such
suit or other proceedings and a copy of such process shall be mailed by the
Secretary of State to Syntroleum-Delaware at the following address:
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1350 South Boulder, Suite 1100
Tulsa, Oklahoma 74119
Attn: General Counsel
IN WITNESS WHEREOF, this Certificate of Merger has been executed on
behalf of the surviving corporation by Kenneth L. Agee, its Chief Executive
Officer and Chairman of the Board, as of June 17, 1999.
SYNTROLEUM CORPORATION,
a Delaware corporation
By: /s/ Kenneth L. Agee
------------------------
Kenneth L. Agee
Chief Executive Officer and
Chairman of the Board
Attest:
/s/ Eric Grimshaw
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Eric Grimshaw, Secretary
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EXHIBIT 4.4
================================================================================
AMENDED AND RESTATED RIGHTS AGREEMENT
between
SYNTROLEUM CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
Dated as of January 31, 1997 and Amended and Restated as of June 17, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Section 1. Certain Definitions.................................................... 2
Section 2. Appointment of Rights Agent............................................ 5
Section 3. Issue of Right Certificates............................................ 5
Section 4. Form of Right Certificates............................................. 7
Section 5. Countersignature and Registration...................................... 7
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates................ 7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......... 8
Section 8. Cancellation and Destruction of Right Certificates..................... 9
Section 9. Availability of Preferred Shares....................................... 9
Section 10. Preferred Shares Record Date...........................................10
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights.....10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.............16
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...17
</TABLE>
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<TABLE>
<S> <C> <C>
Section 14. Fractional Rights and Fractional Shares................................18
Section 15. Rights of Action.......................................................19
Section 16. Agreement of Right Holders.............................................19
Section 17. Right Certificate Holder Not Deemed a Stockholder......................19
Section 18. Concerning the Rights Agent............................................20
Section 19. Merger or Consolidation or Change of Name of Rights Agent..............20
Section 20. Duties of Rights Agent.................................................21
Section 21. Change of Rights Agent.................................................22
Section 22. Issuance of New Right Certificates.....................................23
Section 23. Redemption.............................................................23
Section 24. Exchange...............................................................24
Section 25. Notice of Certain Events...............................................25
Section 26. Notices................................................................26
Section 27. Supplements and Amendments.............................................27
</TABLE>
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<TABLE>
<S> <C> <C>
Section 28. Successors.............................................................27
Section 29. Benefits of this Agreement.............................................27
Section 30. Severability...........................................................27
Section 31. Governing Law..........................................................27
Section 32. Counterparts...........................................................27
Section 33. Descriptive Headings...................................................28
Section 34. Determinations and Actions by the Board of Directors, etc..............28
Exhibit A..............................................................................A-1
Exhibit B..............................................................................B-1
</TABLE>
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AMENDED AND RESTATED RIGHTS AGREEMENT
Agreement, dated as of January 31, 1997 and amended and restated as of June
17, 1999 effective as of the Effective Time (as defined in the Merger Agreement
as hereinafter defined (the "Effective Time")), between Syntroleum Corporation,
a Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company (the "Rights Agent").
Syntroleum Corporation, a Kansas corporation formerly named SLH Corporation
("Syntroleum-Kansas") and the Rights Agent entered into a Rights Agreement dated
as of January 31, 1997 (the "Original Rights Agreement"). The Board of
Directors of the Syntroleum-Kansas authorized and declared a dividend of one
preferred share purchase right (a "Predecessor Right") for each Common Share (as
defined in the Original Rights Agreement) of Syntroleum-Kansas outstanding as of
the close of business on February 24, 1997 (the "Record Date"), each Predecessor
Right originally representing the right to purchase one one-hundredth of a
Preferred Share (as defined in the Original Rights Agreement), upon the terms
and subject to the conditions set forth in the Original Rights Agreement, and
further authorized and directed the issuance of one Predecessor Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date and the
Final Expiration Date (as such terms are defined in the Original Rights
Agreement).
On July 21, 1997, Syntroleum-Kansas effected a three-for-one split of its
Common Shares, and on February 9, 1998, Syntroleum-Kansas effected a two-for-one
split of its Common Shares (collectively, the "Stock Splits"), resulting in an
adjustment to the Predecessor Rights to represent the right to purchase one-
sixth of one one-hundredth of a Preferred Share (as defined in the Original
Rights Agreement).
Syntroleum-Kansas and the Rights Agent entered into an Amendment to Rights
Agreement dated as of March 30, 1998 and a Second Amendment to Rights Agreement
dated as of August 7, 1998 (collectively, the "Rights Agreement Amendments").
Syntroleum-Kansas and the Company are parties to an Agreement and Plan of
Merger (the "Merger Agreement") dated as of May 7, 1999, pursuant to which (i)
Syntroleum-Kansas would be merged with and into the Company, (ii) the Company
would be the surviving corporation, (iii) each outstanding Common Share of
Syntroleum-Kansas would be converted into the right to receive one Common Share
(as hereinafter defined) of the Company in accordance with and pursuant to the
terms and conditions set forth in the Merger Agreement, (iv) the Original Rights
Agreement, as amended, would be assumed by the Company and amended and restated
to effect such assumption and (v) each Predecessor Right would be converted into
and become a preferred share purchase right (a "Right") representing the right
to purchase one-sixth of one one-hundredth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth. The
Board of Directors of the Company has authorized and directed the issuance of
one Right with respect to each Common Share that shall become outstanding
between the Effective Time and the earliest of the
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Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined).
The Company desires to amend and restate the Original Rights Agreement to
reflect the Stock Splits, the Rights Agreement Amendments and the transactions
contemplated by the Merger Agreement.
Accordingly, 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:
(a) "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 25% or more
of the Common Shares of the Company then outstanding, but shall not include
the Company, any Subsidiary (as such term is hereinafter defined) of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any entity holding Common Shares for or pursuant to the
terms of any such plan; provided, however, that a Person shall not be or
become an Acquiring Person if such Person, together with its Affiliates and
Associates, shall become the Beneficial Owner of 25% or more of the Common
Shares then outstanding solely as a result of a reduction in the number of
Common Shares outstanding due to the repurchase of Common Shares by the
Company, unless and until such time as such Person or any Affiliate or
Associate of such Person shall purchase or otherwise become the Beneficial
Owner of additional Common Shares constituting 1% or more of the then
outstanding Common Shares or any other Person (or Persons) who is (or
collectively are) the Beneficial Owner of Common Shares constituting 1% or
more of the then outstanding Common Shares shall become an Affiliate or
Associate of such Person, unless, in either such case, such Person,
together with all Affiliates and Associates of such Person, is not then the
Beneficial Owner of 25% or more of the Common Shares then outstanding. In
determining the percentage of Common Shares as to which any Person, is the
Beneficial Owner there shall be excluded any Common Shares as to which such
Person, or any Affiliate or Associate of such Person, became the Beneficial
Owner after the Effective Time (i) by reason of the operation of the laws
of descent and distribution or as the result of any transaction or
arrangement entered into for bona fide estate planning purposes (including,
---- ----
without limitation, transfers by will or the establishment, modification,
operation of the terms of, or the termination of any trust or similar
arrangement), as determined in the sole discretion of the Board of
Directors of the Company; (ii) a "qualified domestic relations order" as
defined by the Internal Revenue Code of 1986, as amended; (iii) any
acquisition by gift or similar transaction; or (iv) pursuant to the terms
of any Company-sponsored benefit plan (including, without limitation, any
stock purchase, savings, option, bonus, stock appreciation, profit-sharing,
thrift, incentive, pension or similar
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plan); in the cases of clauses (i) through (iv), unless and until such time
as such Person or any Affiliate or Associate of such Person shall purchase
or otherwise become the Beneficial Owner of additional Common Shares
constituting 1% or more of the then outstanding Common Shares or any other
Person (or Persons) who is (or collectively are) the Beneficial Owner of
Common Shares constituting 1% or more of the then outstanding Common Shares
shall become an Affiliate or Associate of such Person. 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 paragraph (a), has
become such inadvertently, 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 paragraph (a), then such Person shall not be deemed to
be an "Acquiring Person" for any purposes of this Agreement.
Notwithstanding anything in this Section 1(a) relating to the definition of
Acquiring Person to the contrary, neither Kenneth L. Agee, nor Mark A.
Agee, nor members of their immediate families, nor any of their Affiliates
or Associates, individually or collectively, shall be deemed an Acquiring
Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
i. which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
ii. which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security 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
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<PAGE>
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
iii. which are beneficially owned, directly or indirectly, by any
other Person with 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) for the purpose of acquiring, holding, voting (except to
the extent contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company. Notwithstanding anything
in this definition of Beneficial Ownership to the contrary, the phrase
"then outstanding," when used with reference to a Person's Beneficial
Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of
such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in Oklahoma are authorized or
obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M., Tulsa,
Oklahoma time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Tulsa, Oklahoma time, on the next
succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the shares of common stock, par value $0.01 per share, of the Company.
"Common Shares" when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a Subsidiary
of another Person, the Person or Persons which ultimately control such
first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(j) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company
having the rights and preferences set forth in the Form of Certificate of
Designations attached to this Agreement as Exhibit A.
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(k) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(l) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such. In the event of a public announcement by any Person
that such Person, alone or in combination with any Affiliate or Associate
of such Person, is the Beneficial Owner of 25% or more of the then
outstanding Common Shares, such Person shall be deemed an Acquiring Person,
unless such Person within five business days of such public announcement
shall establish to the satisfaction of the Board of Directors of the
Company that such Person is not an Acquiring Person.
(m) "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 interest is owned, directly or indirectly, by such
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common 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.
Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth business day (or such later date as may
be determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) after the date of the commencement by
any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such
plan) of, or of the first public announcement of the intention of any
Person (other than the Company, any subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan)
to commence, a tender or exchange offer the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares
aggregating 25% or more of the then outstanding Common Shares (including
any such date which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced (subject to
the provisions of Section 3(b) hereof) by the certificates for Common
Shares registered in the names of the holders thereof (which certificates
shall also be deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares. As
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soon as practicable after the Distribution Date, the Company will prepare
and execute, the Rights Agent will countersign, and the Company will send
or cause to be sent (and the Rights Agent will, if requested, send) by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date, at the address
of such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) With respect to certificates for Common Shares outstanding as of
the Effective Time, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders
thereof. Until the Distribution Date (or the earlier of the Redemption Date
or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last sentence of this paragraph (c)) on or after the Effective Time but
prior to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend: This certificate also
evidences and entitles the holder hereof to certain rights as set forth in
a Rights Agreement between Syntroleum Corporation and American Stock
Transfer & Trust Company, dated as of January 31, 1997 (the "Rights
Agreement") as amended or restated or amended or restated hereafter. The
terms of the Rights Agreement are hereby incorporated herein by reference
and a copy of which is on file at the principal executive offices of
Syntroleum Corporation. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. Syntroleum Corporation
will mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person (as defined in the Rights Agreement)
may become null and void.
(d) With respect to such certificates containing the foregoing legend,
until the Distribution 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 certificate 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 Effective Time 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.
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Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of 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 on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 22 hereof, the Right Certificates 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, its Chief
Executive Officer, its President, any of its Vice Presidents, or its Treasurer,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless 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 Rights 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 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 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or other Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a
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Preferred Share as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchas e. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
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 delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Secyion 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) 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 on the reverse side
thereof duly executed, to the Rights Agent at the principal office of the
Rights Agent, together with payment of the Purchase Price for each one one-
hundredth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business on January 31, 2007 (the
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred Share
purchasable pursuant to the exercise of a Right shall initially be $125.00,
and shall be subject to adjustment from time to time as provided in Section
11 or 13 hereof and shall be payable in lawful money of the United States
of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares 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 hereof by certified
check, cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly
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i. (A) requisition from any transfer agent of the Preferred
Shares 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) requisition from the depositary
agent depositary receipts representing 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
such request;
ii. when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof;
iii. 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, deliver such cash to or
upon the order of the registered holder of such Right Certificate.
(d) 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 to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
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. Availability of Preferred Shares. The Company covenants and
agrees that it will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7. The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
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Preferred Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
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 upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares 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 reasonable satisfaction that no
such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares 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 transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares 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, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare 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 of its capital stock 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(a),
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 of capital stock
issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after
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such time shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the 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 capital stock of the Company issuable
upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in the event any Person
becomes an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price 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, in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
Common Shares of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-
hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (y) 50% of the then current per share market price
of the Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event. In the event that any
Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the Rights.
From and after the occurrence of such event, any Rights that are or
were acquired or beneficially owned by any Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be void and any
holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Agreement. No Right Certificate shall be
issued pursuant to Section 3 that represents Rights beneficially owned by
an Acquiring Person whose Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be canceled.
(iii) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary to authorize additional Common Shares for issuance upon exercise
of the Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional Common Shares, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exercise of a Right, 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
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share market price of one Common Share as of the date of issuance of such
Preferred Shares or fraction thereof.
(b) 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 shares 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 equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) 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 outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or 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 capital
stock 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. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) 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 or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price
to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the
Company, whose determination
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<PAGE>
shall be described in a statement filed with the Rights Agent) of the
portion of the assets 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; 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 capital stock 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.
(d) (i) 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(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 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 a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of 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 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 the National
Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
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.
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.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in
accordance with the method set forth
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in Section 11(d)(i). If the Preferred Shares are not publicly traded, the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof), multiplied by one hundred. If neither the Common
Shares nor the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share
or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
which requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock 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 Section 11(a) through
(c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with respect
to the Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of 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.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right immediately
prior to this adjustment by (y) the
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Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share
purchasable 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 ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) 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 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 at such adjusted Purchase Price.
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(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the
Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any 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
Section 11(b), hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case (A) the number of one one-hundredths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such
event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each Common Share
outstanding immediately after such event shall have issued with respect to
it that number of Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided
for in this Section 11(n) 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 Section 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares
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or the Preferred Shares a copy of such ce rtificate and (c) mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. In the event, directly or indirectly, at any time after a Person has
become an Acquiring Person, (a) the Company shall consolidate with, or merge
with and into, any other Person, (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
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 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 the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price 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, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares 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 issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the reservation of
a sufficient number of its Common Shares in accordance with Section 9 hereof) 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 the Common Shares thereafter deliverable upon the exercise of
the Rights. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
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. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. 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(a), 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 fair value of the
Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) 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 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). 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 as herein provided an amount in cash equal to the same fraction
of the current market value of one Preferred Share. For the purposes of
this Section 14(b), the current market value of a Preferred Share shall be
the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
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(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, 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, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common 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 Certificate 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 Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the 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
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of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), 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
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
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 Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust powers 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 would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
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In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
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, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
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Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of facts
that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant
to this Agreement or any Right Certificate or as to whether any Preferred
Shares will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 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 or Preferred Shares 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
-22-
<PAGE>
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of Oklahoma (or of 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 Oklahoma), in good standing, having an office in the
State of Oklahoma, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by 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.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any
time prior to such time as any Person becomes an Acquiring Person, redeem
all but not less than all the then outstanding Rights at a redemption price
of $.01 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
The redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish.
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<PAGE>
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, 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. The
Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such notice shall
not affect the validity of such redemption. Within 10 days after such
action of the Board of Directors ordering the redemption of the Rights, the
Company shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. 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 24 hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(ii)
hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner herein
provided shall
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<PAGE>
be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the
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 Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights. In the
event the Company shall, after good faith effort, be unable to take all
such action as may be necessary to authorize such additional Common Shares,
the Company shall substitute, for each Common Share that would otherwise be
issuable upon exchange of a Right, 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 as of the date of issuance of such
Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. 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. For the purposes of this paragraph (d), the current market value of
a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable
in stock of any class to the holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the
Common Shares payable in
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<PAGE>
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 each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, or 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 Common
Shares and/or Preferred Shares, if any such date is to be fixed, and such
notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 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 10 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be
the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights under Section
11(a)(ii) hereof.
Section 26. 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:
Syntroleum Corporation
1350 South Boulder
Suite 1100
Tulsa, Oklahoma 74119-3295
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of 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:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
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 shall be
sufficiently given or made if sent by
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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 27. Supplements and Amendments. The Company may from time to time
supplement or amend this Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provisions herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which would
adversely affect the interests of the holders of Rights. Without limiting the
foregoing, the Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) to not less than the greater of (i) the sum of .001% and
the largest percentage of the outstanding Common Shares then known by the
Company to be beneficially owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) and (ii) 10%.
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. 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 31. 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 Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. 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.
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Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 34. Determinations and Actions by the Board of Directors, etc. 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 Exchange Act as in
effect on the date of this Agreement. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board 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 to 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
SYNTROLEUM CORPORATION
By: /s/ Mark A. Agee
------------------------------
Name: Mark A. Agee
Title: President and Chief
Operating Officer
ATTEST:
By: /s/ Eric Grimshaw
--------------------------------
Name: Eric Grimshaw
Title: Secretary
AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ Herbert J. Lemmer
-------------------------------
Name: Herbert J. Lemmer
Title: Vice President
ATTEST:
By: /s/ Susan Silber
-------------------------------
Name: Susan Silber
Title: Assistant Secretary
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Exhibit A
FORM OF CERTIFICATE OF DESIGNATIONS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF
SYNTROLEUM CORPORATION
(Pursuant to Section 151 of the General Corporation Law of the State of
Delaware)
Syntroleum Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law as of May 7, 1999:
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 Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $0.01 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
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 250,000. 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 rights of the
holders of any shares of any series of Preferred Stock (or any similar stock)
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, par value $0.01 per share (the "Common Stock"), of
the Corporation, and of any other junior 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 or (b) subject to the
provision for adjustment hereinafter set forth, 600 times the aggregate per
share amount of all cash dividends, and 600 times the aggregate per share amount
(payable in kind) of all
A-1
<PAGE>
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 or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount to which
holders of shares of Series 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 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 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 600 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
A-2
<PAGE>
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 Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation. (C) 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 of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or 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 of stock 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.
A-3
<PAGE>
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock 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
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $600 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 600 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. 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 stock or
securities, cash and/or any other property, 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 600 times the aggregate amount of 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
A-4
<PAGE>
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series 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.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of 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
together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Chairman of the Board and attested by its Secretary
this ____ day of ____________ , 1999.
-----------------------------------
Chairman of the Board
ATTEST:
- ----------------------------
Secretary
A-5
<PAGE>
Exhibit B
RIGHT CERTIFICATE OF
SYNTROLEUM CORPORATION
NOT EXERCISABLE AFTER JANUARY 31, 2007 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
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
Amended and Restated Rights Agreement, dated as of January 31, 1997 and amended
and restated as of June 17, 1999 (the "Rights Agreement"), between Syntroleum
Corporation, a Delaware corporation (the "Company"), and American Stock Transfer
&Trust Company (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., Tulsa, Oklahoma time, on January 31, 2007 at the
principal office of the Rights Agent, or at the office of its successor as
Rights Agent, one-sixth of one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "Preferred Shares"), of the Company, at a purchase price of $125.00
per one-sixth of one one-hundredth of a Preferred Share (the "Purchase Price"),
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of Preferred Shares which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of _______________, _____, based on the
Preferred Shares as constituted at such date. As provided in the Rights
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 Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, 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
Preferred Shares 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
B-1
<PAGE>
in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right or (ii) may be exchanged in whole or in part for Preferred Shares
or shares of the Company's Common Stock, par value $0.01 per share.
Fractional Preferred Shares are not required to be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate 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 Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ________________, _____.
SYNTROLEUM CORPORATION
By:
--------------------------------
Title:
----------------------------
ATTEST:
By:
------------------------------
B-2
<PAGE>
Countersigned:
------------------------------
By:
---------------------------
Authorized Signature
ATTEST:
By:
----------------------------
B-3
<PAGE>
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
---------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
---------------------------------
Signature
B-4
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Right
Certificate.)
To: SYNTROLEUM CORPORATION
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 and requests that certificates for
such Preferred Shares be issued in the name of:_______________________________
(Please insert social security or other identifying number) ___________________
_______________________________________________ (Please print name and address).
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance 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 (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
-----------------------------------
Signature
B-5
<PAGE>
NOTICE: The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, 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 the Form of Election to Purchase, as the case may be, is
not completed, the Company and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
<PAGE>
Exhibit 4.5
CERTIFICATE OF DESIGNATIONS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK OF
SYNTROLEUM CORPORATION
(Pursuant to Section 151 of the General Corporation Law of the State of
Delaware)
Syntroleum Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law as of May 7, 1999:
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 Certificate of
Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, par value $0.01 per share (the "Preferred Stock"), of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
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 250,000. 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 rights of the
holders of any shares of any series of Preferred Stock (or any similar stock)
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, par value $0.01 per share (the "Common Stock"), of
the Corporation, and of any other junior 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 or (b) subject to the
provision for adjustment hereinafter set forth, 600 times the aggregate per
share amount of all cash dividends, and 600 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
<PAGE>
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 or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series 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
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 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 600 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per share
to which holders of shares of Series 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
2
<PAGE>
herein, in any other Certificate of Designations creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the Corporation. (C)
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 of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or 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 of stock 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 stock 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.
3
<PAGE>
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
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received $600 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 600 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. 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 stock or
securities, cash and/or any other property, 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 600 times the aggregate amount of 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 or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
4
<PAGE>
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.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of 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
together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Chairman of the Board and attested by its Secretary
this 16th day of June, 1999.
/s/ Kenneth L. Agee
-----------------------------------
Chairman of the Board
ATTEST:
/s/ Eric Grimshaw
- ---------------------------------
Secretary
5
<PAGE>
EXHIBIT 99.1
SYNTROLEUM(R) PRESS
RELEASE
SYNTROLEUM HOLDS ANNUAL
STOCKHOLDERS' MEETING
For Immediate Release
Thursday, June 17, 1999
Contact: John Ford
Syntroleum Corporation
(918) 592-7900
www.syntroleum.com
Tulsa, OK--Syntroleum Corporation (NASDAQ: SYNM) announced that stockholders
reelected directors Alvin R. Albe, Jr. and J. Edward Sheridan to the Board of
Directors to hold office for terms to expire in the year 2002 at it's Annual
Stockholders' Meeting today. Mr. Albe has served as a board member since
December 1988 and Mr. Sheridan has served since November 1995. Continuing board
members are Messrs. Kenneth L. Agee, Mark A. Agee, Frank M. Bumstead, P. Anthony
Jacobs, Robert Rosene, Jr. and James R. Seward. The meeting was held at the
company's corporate headquarters in Tulsa, Oklahoma.
Stockholders also approved the proposal to reincorporate Syntroleum as a
Delaware corporation and ratified the appointment of Arthur Anderson LLP as
independent public accountants for Syntroleum for the year ending December 31,
1999.
Kenneth L. Agee, Chairman and CEO reported that 1998 had been a pivotal year for
Syntroleum as a result of becoming a public company, weathering the decline in
oil prices, and establishing a number of key technology development programs.
He indicated that the company has made substantial progress during the past
year, citing the company's success in attracting outstanding engineering and
scientific professionals as the major driver. He went on to say that 1999 could
see accelerated development of gas-to-liquids projects as a result of the recent
increase in oil prices and intensified interest in bringing clean fuels to
market.
<PAGE>
Syntroleum Holds Annual Stockholders' Meeting
June 17, 1999
Page 2
Syntroleum licenses its proprietary process for converting natural gas into
synthetic crude oil and transportation fuels. The process is designed to be
applied in plant sizes ranging from 2,000 barrels per day to more than 100,000
barrels per day. Current licensees include YPF, Texaco, ARCO, Kerr-McGee,
Marathon and Enron.
# # #
This document includes forward-looking statements as well as historical
information. Forward-looking statements include, but are not limited to,
statements relating to the development of gas-to-liquids projects and interest
in clean fuels. When used in this document, the words "anticipate," "believe,"
"estimate," "expect," "intent," "may," "project," "plan" "should," and similar
expressions are intended to be among the statements that identify forward-
looking statements. Although Syntroleum believes that its expectations reflected
in these forward-looking statements are reasonable, such statements involve
risks and uncertainties and no assurance can be given that actual results will
be consistent with these forward-looking statements. Important factors that
could cause actual results to differ from these forward-looking statements
include the potential that commercial-scale GTL plants will not achieve the same
results as those demonstrated on a laboratory or pilot basis or that such plants
will experience technological and mechanical problems, the potential that
improvements to the Syntroleum Process currently under development may not be
successful, the impact on plant economics of operating conditions (including
energy prices), competition, intellectual property risks, Syntroleum's ability
to obtain financing and other risks described in the company's filings with the
Securities and Exchange Commission.
(R) "Syntroleum" is registered as a trademark and service mark in the U.S.
Patent and Trademark Office.
