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UNITED STATES
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: August 3, 1998
(Date of earliest event reported: August 1, 1998)
EL PASO ENERGY CORPORATION
(Exact name of registrant as specified in the charter)
Delaware 76-0568816
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation) Identification No.)
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 420-2131
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Item 5. Other Events
Effective on August 1, 1998, El Paso Natural Gas Company, a Delaware
corporation ("EPNG"), reorganized into a holding company form of organizational
structure, whereby El Paso Energy Corporation, a Delaware corporation (the
"Registrant"), became the holding company.
The holding company organizational structure was effected by a merger
conducted pursuant to Section 251(g) of the Delaware General Corporation Law
(the "Merger"), which provides for the formation of a holding company structure
without a vote of the stockholders of EPNG. In the Merger, El Paso Energy
Merger Company, a Delaware corporation ("Merger Sub"), merged with and into
EPNG, with EPNG as the surviving corporation. Prior to the Merger, Merger Sub
was a direct, wholly owned subsidiary of the Registrant, which was a direct,
wholly owned subsidiary of EPNG, organized for the purpose of implementing the
holding company organizational structure. By virtue of the Merger, EPNG became
a direct, wholly owned subsidiary of the Registrant, and all of EPNG's
outstanding capital stock was converted, on a share for share basis, into
capital stock of the Registrant. As a result of such restructuring, each
outstanding share of common stock, $3.00 par value per share, of EPNG was
converted into one share of common stock, $3.00 par value per share, of the
Registrant (the "Common Stock"), and each one-half outstanding preferred stock
purchase right of EPNG was converted into one preferred stock purchase right (a
"Right") associated with each share of Common Stock, each Right representing
the right to purchase one two-hundredth (subject to adjustment) of a share of
Series A Junior Participating Preferred Stock of the Registrant. The
Registrant will assume all of EPNG's obligations under the El Paso Energy
Capital Trust I, 4 3/4% Trust Convertible Preferred Securities ("Trust
Preferred Securities"), including the conversion of the Trust Preferred
Securities into securities of the Common Stock and assumption of EPNG's
guarantee of the Trust Preferred Securities. The Common Stock will continue to
trade on the New York Stock Exchange under the symbol "EPG," the same trading
symbol under which EPNG's common stock traded.
The conversion of shares of capital stock in the Merger occurred
without an exchange of certificates. Accordingly, certificates formerly
representing shares of outstanding capital stock of EPNG are deemed to
represent the same number of shares of capital stock of the Registrant until
such certificates are submitted to the Registrant's transfer agent for
transfer. The change to the holding company structure was tax free for federal
income tax purposes for stockholders.
A copy of the press release further describing the transaction is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
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Item 7. Financial Statements and Exhibits
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
2.1 Agreement and Plan of Merger, dated July 16, 1998, by and among the Registrant, EPNG and
Merger Sub.
3.1 Restated Certificate of Incorporation of the Registrant, dated July 16, 1998; Certificate
of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock
of the Registrant, dated July 16, 1998, as amended.
3.2 By-laws of the Registrant, as amended dated July 16, 1998.
4.1 Shareholder Rights Agreement by and between the Registrant and BankBoston, N.A., dated as
of July 16, 1998.
4.2 Second Supplemental Indenture, dated August 1, 1998.
4.3 First Amendment to Amended and Restated Declaration of Trust of El Paso Energy Capital
Trust I, dated August 1, 1998.
4.4 First Amendment to Trust Convertible Preferred Securities Guarantee Agreement, dated August
1, 1998.
99.1 Press Release, dated August 3, 1998.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EL PASO ENERGY CORPORATION
By: /s/ Jeffrey I. Beason
-------------------------------
Jeffrey I. Beason
Vice President and Controller
Date: August 3, 1998
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
2.1 Agreement and Plan of Merger, dated July 16, 1998, by and among the Registrant, EPNG and
Merger Sub.
3.1 Restated Certificate of Incorporation of the Registrant, dated July 16, 1998; Certificate
of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock
of the Registrant, dated July 16, 1998, as amended.
3.2 By-laws of the Registrant, as amended dated July 16, 1998.
4.1 Shareholder Rights Agreement by and between the Registrant and BankBoston, N.A., dated as
of July 16, 1998.
4.2 Second Supplemental Indenture, dated August 1, 1998.
4.3 First Amendment to Amended and Restated Declaration of Trust of El Paso Energy Capital
Trust I, dated August 1, 1998.
4.4 First Amendment to Trust Convertible Preferred Securities Guarantee Agreement, dated August
1, 1998.
99.1 Press Release, dated August 3, 1998.
</TABLE>
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
AMONG
EL PASO NATURAL GAS COMPANY,
EL PASO ENERGY CORPORATION
AND
EL PASO ENERGY MERGER COMPANY
DATED AS OF JULY 16, 1998
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TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.3 Restated Certificate of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 1.4 By-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.5 Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.6 Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.7 Additional Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.8 Conversion of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.9 Preferred Share Purchase Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.10 No Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II ACTIONS TO BE TAKEN IN CONNECTION WITH THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.1 Company Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.2 Assumption of Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.3 Reservation of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III CONDITIONS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3.1 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.1 Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.2 Listing of Holding Company Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.3 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.4 Change in Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 4.5 Contribution of Treasury Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V TERMINATION AND AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.1 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.2 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.3 Entire Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Merger Agreement"), dated as
of July 16, 1998, is among El Paso Natural Gas Company, a Delaware corporation
(the "Company"), El Paso Energy Corporation, a Delaware corporation ("Holding")
and a direct, wholly owned subsidiary of the Company, and El Paso Energy Merger
Company, a Delaware corporation ("Merger Sub") and a direct, wholly owned
subsidiary of Holding.
R E C I T A L S:
WHEREAS, the Company's authorized capital stock consists of (i)
275,000,000 shares of common stock, par value $3.00 per share (the "Company
Common Stock"), of which, as of June 30, 1998, 121,257,707 shares were issued
and outstanding (including 1,360,000 shares held in the Company's Benefits
Protection Trust (the "Trust")) and 2,619,724 shares held in Company's
treasury; and (ii) 25,000,000 shares of preferred stock, par value $0.01 per
share, none of which is currently outstanding but of which 1,375,000 shares
have been designated as the El Paso Natural Gas Company Series A Junior
Participating Preferred Stock and an additional 1,375,000 shares are to be
designated prior to the Merger as additional shares of such Series A Junior
Participating Preferred Stock (collectively, the "Company Series A Preferred
Stock"); and
WHEREAS, as of the date hereof, Holding's authorized capital stock
consists of (i) 1,000 shares of common stock, par value $1.00 per share, of
which 1,000 shares are issued and outstanding and owned by the Company and no
shares are held in treasury, and (ii) no shares of preferred stock are
authorized; but prior to the Merger, Holding's authorized capital stock will
consist of (i) 275,000,000 shares of common stock, par value $3.00 per share
(the "Holding Common Stock"), of which 1,000 shares will be issued and
outstanding and owned by the Company and no shares will be held in treasury,
and (ii) 25,000,000 shares of preferred stock, par value $0.01 per share, none
of which is currently outstanding but of which 2,750,000 shares will be
designated as the El Paso Energy Corporation Series A Junior Participating
Preferred Stock (the "Holding Series A Preferred Stock") pursuant to a
Certificate of Designation filed with the Delaware Secretary of State; and
WHEREAS, as of the date hereof, Merger Sub has an authorized capital
stock consisting of 1,000 shares of common stock, par value $1.00 per share
(the "Merger Sub Common Stock"), of which 1,000 shares are issued and
outstanding on the date hereof and owned by Holding; and
WHEREAS, the designations, rights and preferences, and the
qualifications, limitations and restrictions thereof, of the Holding Series A
Preferred Stock and the Holding Common Stock are the same as those of the
Company Series A Preferred Stock and the Company Common Stock respectively; and
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WHEREAS, the Restated Certificate of Incorporation of Holding (the
"Holding Charter") and the By-laws of Holding (the "Holding By-laws") in effect
immediately after the Effective Date (as hereinafter defined) will contain
provisions identical to the Restated Certificate of Incorporation of the
Company (the "Company Charter") and By-laws of the Company (the "Company
By-laws") in effect immediately before the Effective Date (other than with
respect to matters excepted by Section 251(g) of the General Corporation Law of
the State of Delaware (the "DGCL")); and
WHEREAS, the directors and officers of the Company immediately prior
to the Merger (as hereinafter defined) will be the directors and officers of
Holding as of the Effective Date; and
WHEREAS, Holding and Merger Sub are newly formed corporations
organized for the purpose of participating in the transactions herein
contemplated; and
WHEREAS, the Company desires to create a new holding company structure
by merging Merger Sub with and into the Company, with the Company continuing as
the surviving corporation of such merger, and each outstanding share (or any
fraction thereof) of Company Common Stock being converted in such merger into a
like number of shares of Holding Common Stock, all in accordance with the terms
of this Merger Agreement (the "Merger"); and
WHEREAS, the Boards of Directors of Holding, Merger Sub and the
Company and Holding, in its capacity as the sole stockholder of Merger Sub,
have approved this Merger Agreement and the merger of Merger Sub with and into
the Company upon the terms and subject to the conditions set forth in this
Merger Agreement; and
WHEREAS, pursuant to authority granted by the Board of Directors of
the Company, the Company will, immediately prior to the Effective Date (defined
below), contribute to the capital of Holding all of the shares of Company
Common Stock then held by the Company in its treasury.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained in this Merger Agreement, and intending to be legally
bound hereby, the Company, Holding and Merger Sub hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER. In accordance with Section 251(g) of the
DGCL and subject to and upon the terms and conditions of this Merger Agreement,
Merger Sub shall, at the Effective Date (defined below), be merged with and
into the Company, the separate corporate existence of Merger Sub shall cease
and the Company shall continue as the surviving corporation of the Merger (the
"Surviving Corporation"). At the Effective Date, the effect of the Merger
shall be as provided in Section 259 of the DGCL.
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SECTION 1.2 EFFECTIVE DATE. The parties shall file this Merger
Agreement, executed in accordance with the relevant provisions of the DGCL,
with the Secretary of State of the State of Delaware and shall make all other
filings or recordings required under the DGCL to effectuate the Merger. The
Merger shall become effective as of 12:01 a.m. Eastern Daylight Time on August
1, 1998 (such date and time being referred to herein as the "Effective Date").
SECTION 1.3 RESTATED CERTIFICATE OF INCORPORATION. From and after
the Effective Date, the Company's Charter, as in effect immediately prior to
the Effective Date, shall be the restated certificate of incorporation of the
Surviving Corporation (the "Surviving Corporation's Charter") until thereafter
amended as provided by law; provided, however, that, from and after the
Effective Date:
(a) Article 4 thereof shall be amended so as to read in its
entirety as follows:
"The total number of authorized shares of all classes of stock
of this corporation shall consist of 1,000 shares of common stock
having a par value of $1.00 per share and 1,000,000 shares of
preferred stock having a par value of $0.01 per share. Authority is
hereby expressly granted to the Board of Directors to fix by
resolution or resolutions any of the designations and the powers,
preferences and rights, and the qualifications, limitations or
restrictions which are permitted by the General Corporation Law of the
State of Delaware in respect of any class or classes of stock or any
series of any class of stock of the corporation. No shares of the
previously designated Series A Junior Participating Preferred Stock
having been issued, such series is hereby terminated and all matters
set forth in this Restated Certificate of Incorporation with respect
to such series are hereby eliminated from this Restated Certificate of
Incorporation.
(b) A new Article 13 shall be added thereto which shall be and
read in its entirety as follows:
"ARTICLE 13. VOTE OF STOCKHOLDERS OF EL PASO ENERGY CORPORATION
REQUIRED TO APPROVE CERTAIN ACTIONS.
Any act or transaction by or involving this corporation that requires
for its adoption under the General Corporation Law of the State of
Delaware or this Restated Certificate of Incorporation the approval of
the stockholders of this corporation shall, pursuant to Section 251(g)
of the General Corporation Law of the State of Delaware, require, in
addition, the approval of the stockholders of El Paso Energy
Corporation, a Delaware corporation, or any successor thereto by
merger, by the same vote that is required by the General Corporation
Law of the State of Delaware and/or the Restated Certificate of
Incorporation of this corporation."
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SECTION 1.4 BY-LAWS. From and after the Effective Date, the Company
By-laws, as in effect immediately prior to the Effective Date, shall constitute
the By-laws of the Surviving Corporation until thereafter amended as provided
therein or by applicable law.
SECTION 1.5 DIRECTORS. The directors of Merger Sub in office
immediately prior to the Effective Date shall be the initial directors of the
Surviving Corporation and will hold office from the Effective Date until their
successors are duly elected or appointed and qualified in the manner provided
in the Surviving Corporation's Charter and By-laws, or as otherwise provided by
law.
SECTION 1.6 OFFICERS. The officers of Merger Sub in office
immediately prior to the Effective Date shall be the officers of the Surviving
Corporation until the earlier of their resignation or removal or until their
successors are duly elected or appointed and qualified in the manner provided
in the Surviving Corporation's Charter and By-laws, or as otherwise provided by
law.
SECTION 1.7 ADDITIONAL ACTIONS. Subject to the terms of this Merger
Agreement, the parties hereto shall take all such reasonable and lawful action
as may be necessary or appropriate in order to effectuate the Merger, which
shall include executing and delivering an assignment and assumption agreement
(the "Assumption Agreement"), effective upon consummation of the Merger, in
such form as the Company and Holding determine to be appropriate to evidence
the assignment to and assumption by Holding of such rights, interests,
obligations and liabilities as the Company and Holding determine to be
appropriate. If, at any time after the Effective Date, the Surviving
Corporation shall consider or be advised that any deeds, bills of sale,
assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of either of Merger Sub or the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with,
the Merger or otherwise to carry out this Merger Agreement, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of each of Merger Sub and the Company, all
such deeds, bills of sale, assignments and assurances and to take and do, in
the name and on behalf of each of Merger Sub and the Company or otherwise, all
such other actions and things as may be necessary or desirable to vest, perfect
or confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out
this Merger Agreement.
SECTION 1.8 CONVERSION OF SECURITIES. At the Effective Date, by
virtue of the Merger and without any action on the part of Holding, Merger Sub,
the Company or the holder of any of the following securities:
(a) Conversion of Company Common Stock. Each share of Company
Common Stock (or fraction of a share of Company Common Stock), including the
1,360,000 shares of
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Company Common Stock held in the Trust, issued and outstanding immediately
prior to the Effective Date shall be converted into and thereafter represent
one duly issued, fully paid and nonassessable share (or equal fraction of a
share) of Holding Common Stock.
(b) Conversion of Company Common Stock in Treasury. Each share of
Company Common Stock issued but held by the Company or Holding in its treasury
immediately prior to the Effective Date shall be converted into and thereafter
represent one duly issued, fully paid and nonassessable share of Holding Common
Stock held in such entity's treasury immediately after the Effective Date.
(c) Conversion of Capital Stock of Merger Sub. Each share of
Merger Sub Common Stock issued and outstanding immediately prior to the
Effective Date shall be converted into and thereafter represent one duly
issued, fully paid and nonassessable share of common stock, par value $1.00 per
share, of the Surviving Corporation.
(d) Cancellation of Capital Stock of Holding. Each share of
Holding Common Stock that is owned by the Company immediately prior to the
Merger and any preferred share purchase rights of Holding issued pursuant to
the Holding Rights Plan (as defined herein) and associated with any such share
shall automatically be cancelled and retired and shall cease to exist.
(e) Rights of Certificate Holders. From and after the Effective
Date, holders of certificates formerly evidencing Company Common Stock shall
cease to have any rights as stockholders of the Company, except as provided by
law; provided, however, that such holders shall have the rights set forth in
Section 1.10 herein.
SECTION 1.9 PREFERRED SHARE PURCHASE RIGHTS.
(a) In accordance with Section 24.1 of that certain Amended and
Restated Shareholders Rights Agreement dated as of July 23, 1997, as amended
and in effect on the Effective Date, between the Company and The First National
Bank of Boston, as Rights Agent (the "Company Rights Plan"), as of the
Effective Date, each one-half outstanding preferred stock purchase right of the
Company ("Company Purchase Right") shall be converted into one preferred stock
purchase right of Holding issued under the Holding Rights Plan.
(b) Holding shall, prior to the Effective Date, adopt a preferred
stock purchase rights plan (the "Holding Rights Plan") substantially similar in
form and substance to the Company Rights Plan, with such changes and
adjustments thereto as may be necessary to reflect that, at the Effective Date,
each one-half of a preferred stock purchase right of the Company will be
converted into one preferred share purchase right of Holding issued pursuant to
the Holding Rights Plan, and, in accordance therewith, Holding shall, at the
Effective Date but without duplication of Holding's obligations under the
Holding Rights Plan, issue to each holder of Holding Common Stock issued
pursuant hereto one preferred share purchase right ("Holding
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Purchase Right") for each share of Holding Common Stock issued by it pursuant
to Section 1.8(a) herein.
SECTION 1.10 NO SURRENDER OF CERTIFICATES. Until thereafter
surrendered for transfer or exchange in the ordinary course, each outstanding
stock certificate that, immediately prior to the Effective Date, evidenced
Company Common Stock shall be deemed and treated for all corporate purposes to
evidence the ownership of the number of shares of Holding Common Stock into
which such shares of Company Common Stock were converted pursuant to the
provisions of Sections 1.8 (a) and (b) herein. In addition, immediately after
the Effective Date, each such stock certificate shall evidence a number of
Holding Purchase Rights equal to the number of one-half Company Purchase Rights
evidenced thereby immediately prior to the Effective Date of the Merger (that
is, each one-half Company Purchase Right will be converted into one Holding
Purchase Right).
ARTICLE II
ACTIONS TO BE TAKEN IN CONNECTION WITH THE MERGER
SECTION 2.1 COMPANY INDEBTEDNESS. As of the Effective Date, Holding,
the Company and the trustee under the Subordinated Indenture dated as of March
1, 1998, between the Company and The Chase Manhattan Bank, as Trustee, shall
execute, acknowledge and deliver a supplemental indenture pursuant to which
Holding shall assume and agree to perform all of the Company's obligations
thereunder and will become the primary obligor with respect to the $334,750,000
principal amount of 4 3/4% subordinated convertible debentures due 2028 of the
Company (the "Debentures") and the Company's guarantee of the 6,500,000 4 3/4%
trust convertible preferred Securities of El Paso Energy Capital Trust I (the
"Trust Preferred Securities"), and the Debentures and the Trust Preferred
Securities will be convertible into Holding Common Stock (rather than Company
Common Stock).
SECTION 2.2 ASSUMPTION OF BENEFIT PLANS. Holding and the Company
hereby agree that they will, as of the Effective Date, execute, acknowledge and
deliver an assumption agreement (which may include an Assignment and Assumption
Agreement) pursuant to which Holding will, from and after the Effective Date,
assume and agree to perform all obligations of the Company pursuant to (a) the
following stock-related plans (as each may have been amended): (i) 1995 Omnibus
Compensation Plan, (ii) 1995 Incentive Compensation Plan, (iii) 1995
Compensation Plan for Non-Employee Directors, (iv) Strategic Stock Plan, (v)
Omnibus Plan for Management Employees, (vi) Retirement Savings Plan, (vii)
Omnibus Compensation Plan, (viii) Restricted Stock Award Plan for Management
Employees, and (ix) Stock Option Plan for Non-Employee Directors; and (b) such
other qualified and non-qualified plans, trust agreements, employment
agreements and other documents and agreements as the Company and Holding
determine to be appropriate (collectively the "Benefit Plans").
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SECTION 2.3 RESERVATION OF SHARES. On or prior to the Effective
Date, Holding will reserve sufficient authorized but unissued shares of Holding
Common Stock to provide for the issuance of Holding Common Stock upon (a) the
exercise of options or in satisfaction of other benefits payable and
outstanding under the Benefit Plans, and (b) the conversion of the Debentures
and the Trust Preferred Securities, and will reserve the Holding Series A
Preferred Stock sufficient to provide for the issuance thereof upon exercise of
Holding Purchase Rights.
ARTICLE III
CONDITIONS OF MERGER
SECTION 3.1 CONDITIONS PRECEDENT. The obligations of the parties to
this Merger Agreement to consummate the Merger and the transactions
contemplated by this Merger Agreement shall be subject to fulfillment or waiver
by the parties hereto of each of the following conditions:
(a) Prior to the Effective Date, the Holding Common Stock to be
issued pursuant to the Merger shall have been approved for listing, upon
official notice of issuance, by the New York Stock Exchange (the "NYSE").
(b) Holding shall have adopted the Holding Rights Plan and, prior
to the Effective Date, the Holding Purchase Rights to be issued in conjunction
with the issuance of Holding Common Stock pursuant to the Merger shall have
been approved for listing, upon official notice of issuance, by the NYSE.
(c) The Company, Holding and the Trustee shall have executed and
delivered the Supplemental Indenture contemplated by Article II herein, subject
only to the occurrence of the Effective Date.
(d) Prior to the Effective Date, Andrews & Kurth, L.L.P., counsel
to the Company, shall have received on behalf of the Company an interpretive or
no-action letter from the staff of the Securities and Exchange Commission, in
form and substance satisfactory to the Company, in response to that certain
request therefor dated May 18, 1998, from such firm.
(e) Prior to the Effective Date, White & Case, L.L.P., special tax
counsel to the Company, shall have rendered an opinion to the Board of
Directors of the Company, in form and substance satisfactory to the Company, to
the effect that for federal income tax purposes (i) the Merger will constitute
a tax-free reorganization under Section 368(a) of the Code; (ii) no gain or
loss will be recognized by the stockholders of the Company upon receipt of the
Holding Common Stock and Holding Purchase Rights in exchange for their shares
of Company Common Stock and Company Purchase Rights pursuant to the Merger;
(iii) the tax basis of the shares of Holding Common Stock to be received by the
Company's stockholders pursuant to the Merger Agreement will be the same as
their tax basis in the Company Common Stock converted or
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exchanged therefor; and (iv) the holding period of Holding Common Stock to be
received by the Company's stockholders pursuant to the Merger Agreement will
include the holding period of the Company Common Stock converted or exchanged
therefor, provided that such Company Common Stock is held as a capital asset in
the hands of such stockholder at the time of the Merger.
(f) Prior to the Effective Date, no order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits or
makes illegal the consummation of the Merger or the transactions contemplated
hereby.
(g) Prior to the Effective Date, the Company shall file with the
office of the Delaware Secretary of State a Restated Certificate of
Incorporation, among other things, to increase Holding's authorized capital
stock to (i) 275,000,000 shares of common stock, par value $3.00 per share and
(ii) 25,000,000 shares of preferred stock, par value $0.01 per share
(h) Prior to the Effective Date, the Company shall file with the
office of the Delaware Secretary of State a Certificate of Increase to increase
to a total of 2,750,000 the number of shares of Company Series A Preferred
Stock.
ARTICLE IV
COVENANTS
SECTION 4.1 ELECTION OF DIRECTORS. Effective immediately prior to
the Effective Date, the Company, in its capacity as the sole stockholder of
Holding, will cause the Board of Directors of Holding to effect, and Holding
hereby agrees to effect, such amendments to the Holding By-laws as are
necessary to increase the number of directors of Holding to equal the number of
directors of the Company and the Company, in its capacity as the sole
stockholder of Holding, will elect (or the Board of Directors of Holding will
elect to fill vacancies on the board) each person who is then a member of the
board of directors of the Company as a director of Holding (and to be the only
directors of Holding), each of whom shall serve until the next annual meeting
of shareholders of Holding and until his successor shall have been elected and
qualified.
SECTION 4.2 LISTING OF HOLDING COMPANY COMMON STOCK. Holding will
use its best efforts to obtain, at or before the Effective Date, authorization
to list, upon official notice of issuance, on the NYSE Holding Common Stock
issuable pursuant to the Merger and Holding Purchase Rights issuable in
conjunction therewith.
SECTION 4.3 EMPLOYEE BENEFIT PLANS. The Company and Holding will
take or cause to be taken all actions necessary or desirable in order for
Holding to assume the Benefit Plans and to assume (or become a participating
employer in) each other existing employee benefit plan, trust and agreement of
the Company, with or without amendments, or to adopt comparable plans,
8
<PAGE> 11
all to the extent deemed appropriate by the Company and Holding and permitted
under applicable law.
SECTION 4.4 CHANGE IN CAPITALIZATION. Prior to the Effective Date,
Holding and the Company agree to take all action necessary or desirable under
the DGCL to designate 2,750,000 shares of Preferred Stock of Holding as Series
A Junior Participating Preferred Stock having terms and provisions
substantially similar to those of the Company's Series A Junior Participating
Preferred Stock.
SECTION 4.5 CONTRIBUTION OF TREASURY STOCK. Immediately prior to the
Effective Date, the Company will contribute to the capital of Holding all the
Company Common Stock then held in the treasury of the Company.
ARTICLE V
TERMINATION AND AMENDMENT
SECTION 5.1 TERMINATION. This Merger Agreement may be terminated and
the Merger contemplated hereby may be abandoned at any time prior to the
Effective Date by action of the Board of Directors of the Company, Holding or
Merger Sub if it is determined that for any reason the completion of the
transactions provided for herein would be inadvisable or not in the best
interest of such corporation or its stockholders. In the event of such
termination and abandonment, this Merger Agreement shall become void and
neither the Company, Holding or Merger Sub nor their respective stockholders,
directors or officers shall have any liability with respect to such termination
and abandonment.
SECTION 5.2 AMENDMENT. This Merger Agreement may be supplemented,
amended or modified by the mutual consent of the Boards of Directors of the
parties to this Merger Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1 GOVERNING LAW. This Merger Agreement shall be governed
by, and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws.
SECTION 6.2 COUNTERPARTS. This Merger Agreement may be executed in
one or more counterparts, each of which when executed shall be deemed to be an
original but all of which shall constitute one and the same agreement.
SECTION 6.3 ENTIRE MERGER AGREEMENT. This Merger Agreement,
including the documents and instruments referred to herein, constitutes the
entire agreement and supersedes all
9
<PAGE> 12
other prior agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof.
IN WITNESS WHEREOF, Holding, Merger Sub and the Company have caused
this Merger Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
EL PASO NATURAL GAS COMPANY
By: /s/ H. Brent Austin
-----------------------------------
H. Brent Austin
Executive Vice President
and Chief Financial Officer
EL PASO ENERGY CORPORATION
By: /s/ H. Brent Austin
-----------------------------------
H. Brent Austin
Executive Vice President
and Chief Financial Officer
EL PASO ENERGY MERGER COMPANY
By: /s/ H. Brent Austin
-----------------------------------
H. Brent Austin
Executive Vice President
and Chief Financial Officer
10
<PAGE> 13
CERTIFICATE
PURSUANT TO SECTION 251(g) OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
AGREEMENT AND PLAN OF MERGER
DATED AS OF JULY 16, 1998
MERGING
EL PASO ENERGY MERGER COMPANY
WITH AND INTO EL PASO NATURAL GAS COMPANY
--------------------------
The attached Agreement and Plan of Merger shall be effective at 12:01 a.m.,
Eastern Daylight Time, on August 1, 1998.
--------------------------
El Paso Natural Gas Company
I, David L. Siddall, Corporate Secretary of El Paso Natural Gas
Company, a corporation organized and existing under the laws of the State of
Delaware (the "Corporation"), hereby certify that the Merger Agreement and Plan
of Merger to which this Certificate is attached, after having been first duly
signed on behalf of said corporation and having been duly signed on behalf of
El Paso Energy Merger Company, a Delaware corporation, and El Paso Energy
Corporation, a Delaware corporation, was duly adopted pursuant to Subsection
(g) of Section 251 of the Delaware General Corporation Law and the conditions
specified in the first sentence of such Subsection have been satisfied; and
that the Merger Agreement and Plan of Merger was thereby adopted by action of
the Board of Directors of El Paso Natural Gas Company, and is the duly adopted
agreement and act of said corporation.
/s/ David L. Siddall
-------------------------------------
David L. Siddall
Corporate Secretary
El Paso Natural Gas Company
<PAGE> 14
El Paso Energy Merger Company
I, David L. Siddall, Corporate Secretary of El Paso Energy Merger
Company, a corporation organized and existing under the laws of the State of
Delaware (the "Corporation"), hereby certify that the Merger Agreement and Plan
of Merger to which this Certificate is attached, after having been first duly
signed on behalf of said corporation and having been duly signed on behalf of
El Paso Natural Gas Company, a Delaware corporation, and El Paso Energy
Corporation, a Delaware corporation, was duly adopted pursuant to Section 251
of the Delaware General Corporation Law and the conditions specified in the
first sentence of such Subsection have been satisfied; and that the Merger
Agreement and Plan of Merger was thereby adopted by action of the Board of
Directors of El Paso Energy Merger Company, approved by vote of the sole
stockholder of El Paso Energy Merger Company, and is the duly adopted agreement
and act of said corporation.
/s/ David L. Siddall
-------------------------------------
David L. Siddall
Corporate Secretary
El Paso Energy Merger Company
<PAGE> 1
EXHIBIT 3.1
RESTATED
CERTIFICATE OF INCORPORATION
OF
EL PASO ENERGY CORPORATION
E1 Paso Energy Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware, does hereby certify:
1. The original Certificate of Incorporation was filed with the
Secretary of State on April 17, 1998. The name under which it was originally
incorporated is El Paso Energy Corporation.
2. The following Restated Certificate of Incorporation was duly
proposed by the corporation's Board of Directors pursuant to the applicable
provisions of Section 242 and Section 245 of the General Corporation Law of the
State of Delaware. In lieu of a meeting of the stockholders, unanimous written
consent of the sole stockholder of El Paso Energy Corporation has been given
for the adoption of said Restated Certificate of Incorporation and the
amendments to be made thereby pursuant to the applicable provisions of Sections
228, 242 and 245 of the General Corporation Law of the State of Delaware.
ARTICLE 1. NAME
The name of this corporation is EL PASO ENERGY CORPORATION.
ARTICLE 2. REGISTERED OFFICE AND AGENT
The address of the registered office of this corporation is
Corporation Trust Center, 1209 Orange Street, City of Wilmington, County of New
Castle, State of Delaware 19801, and the name of its registered agent at such
address is The Corporation Trust Company.
ARTICLE 3. PURPOSES
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
<PAGE> 2
ARTICLE 4. SHARES
The total number of authorized shares of all classes of stock of this
corporation consist of 275,000,000 shares of common stock having a par value of
$3.00 per share and 25,000,000 shares of preferred stock having a par value of
$0.01 per share. Authority is hereby expressly granted to the Board of
Directors to fix by resolution or resolutions any of the designations and the
powers, preferences and rights, and the qualifications, limitations or
restrictions which are permitted by the General Corporation Law of the State of
Delaware in respect of any class or classes of stock or any series of any class
of stock of the corporation.
ARTICLE 5. BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws of this corporation, subject to the power of the stockholders to
amend or repeal such By-laws. The stockholders having voting power shall also
have the power to adopt, amend or repeal the By-laws of this corporation.
ARTICLE 6. ELECTION OF DIRECTORS
Except as may be otherwise required by the By-laws, written ballots
are not required in the election of Directors.
ARTICLE 7. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of this corporation.
ARTICLE 8. CUMULATIVE VOTING
The right to cumulate votes in the election of Directors shall not
exist with respect to shares of stock of this corporation.
ARTICLE 9. AMENDMENTS TO RESTATED CERTIFICATE OF INCORPORATION
This corporation reserves the right to amend or repeal any of the
provisions contained in this Restated Certificate of Incorporation in any
manner now or hereafter permitted by law, and the rights of the stockholders of
this corporation are granted subject to this reservation.
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<PAGE> 3
ARTICLE 10. LIMITATION OF DIRECTOR LIABILITY
To the full extent that the General Corporation Law of the State of
Delaware, as it exists on the date hereof or may hereafter be amended, permits
the limitation or elimination of the liability of Directors, a Director of this
corporation shall not be liable to this corporation or its stockholders for
monetary damages for breach of fiduciary duty as a Director. Any amendment to
or repeal of this Article 10 shall not adversely affect any right or protection
of a Director of this corporation for or with respect to any acts or omissions
of such Director occurring prior to such amendment or repeal.
ARTICLE 11. ACTION BY STOCKHOLDERS WITHOUT A MEETING
Any action by the stockholders of this corporation shall be taken at a
meeting of stockholders and no action may be taken by written consent of
stockholders entitled to vote on such action.
ARTICLE 12. SPECIAL VOTING REQUIREMENTS
In addition to any affirmative vote required by law, by this Restated
Certificate of Incorporation, by any agreement with any national securities
exchange, or as may be otherwise required, any "Business Combination" (as
hereinafter defined) involving this corporation shall be subject to approval in
the manner set forth in this Article 12.
12.1 Definitions.
For the purposes of this Article 12:
(a) "Affiliate" and "beneficial owner" are used herein as
defined in Rule 12b-2 and Rule 13d-3, respectively, under the
Securities Exchange Act of 1934 as in effect on January 1, 1992 (the
"1934 Act"). The term "Affiliate" as used herein shall exclude this
corporation, but shall include the definition of "Associate" as
contained in said Rule 12b-2.
(b) An "Interested Stockholder" is a person other than
(i) the corporation or (ii) Burlington Resources Inc., a Delaware
corporation ("BRI"), as long as BRI continues to own at least a
majority of the stock of this corporation entitled to vote for the
election of Directors ("Voting Stock") and there has been no Change in
Control of BRI since January 1, 1992, who is (A) the beneficial owner
of ten percent or more of the Voting Stock or (B) an Affiliate of this
corporation which (1) at any time within a two-year period prior to
the record date for the vote on a Business Combination was the
beneficial owner of ten percent or more of the Voting Stock, or (2) at
the completion of
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<PAGE> 4
the Business Combination will be the beneficial owner of ten percent
or more of the Voting Stock.
(c) A "Person" is a natural person or a legal entity of
any kind, together with any Affiliate of such person or entity, or any
person or entity with whom such person, entity or any Affiliate has
any agreement or understanding relating to acquiring, voting or
holding Voting Stock.
(d) A "Disinterested Director" is a member of the Board
of Directors of this corporation (other than the Interested
Stockholder) who was a Director prior to the time the Interested
Stockholder became an Interested Stockholder, or any Director who was
recommended for election by the Disinterested Directors. Any action
to be taken by the Disinterested Directors shall require the
affirmative vote of at least two-thirds of the Disinterested
Directors.
(e) A "Business Combination" is (i) a merger or
consolidation of this corporation or any of its subsidiaries with an
Interested Stockholder; (ii) the sale, lease, exchange, pledge,
transfer or other disposition (A) by this corporation or any of its
subsidiaries of all or a Substantial Part of the corporation's Assets
to an Interested Stockholder, or (B) by an Interested Stockholder of
any of its assets, except in the ordinary course of business, to this
corporation or any of its subsidiaries; (iii) the issuance of stock or
other securities of this corporation or any of its subsidiaries to an
Interested Stockholder, other than on a pro rata basis to all holders
of Voting Stock of the same class held by the Interested Stockholder
pursuant to a stock spilt, stock dividend or distribution of warrants
or rights; (iv) the adoption of any plan or proposal for the
liquidation or dissolution of this corporation proposed by or on
behalf of an Interested Stockholder; (v) any reclassification of
securities, recapitalization, merger or consolidation or other
transaction which has the effect, directly or indirectly, of
increasing the proportionate share of any Voting Stock beneficially
owned by an Interested Stockholder; or (vi) any agreement, contract or
other arrangement providing for any of the foregoing transactions.
(f) A "Substantial Part of the corporation's Assets"
shall mean assets of this corporation or any of its subsidiaries in an
amount equal to twenty percent or more of the fair market value, as
determined by the Disinterested Directors, of the total consolidated
assets of this corporation and its subsidiaries taken as a whole as of
the end of its most recent fiscal year ended prior to the time the
determination is made.
(g) A "Change in Control" shall be deemed to occur (i) if
any Person is or becomes the "beneficial owner" (as defined in Rule
13d-3 of the 1934 Act), directly or indirectly, of securities of BRI
representing twenty percent or more of the stock of BRI entitled to
vote for Directors of BRI, (ii) upon the first purchase of BRI's
common stock pursuant to a tender or exchange offer (other than a
tender or exchange offer made by BRI), (iii) upon the approval by
BRI's stockholders of a merger or consolidation, a sale or disposition
of all or substantially all of BRI's assets or a plan of liquidation
or
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<PAGE> 5
dissolution of BRI, or (iv) if, during any period of two consecutive
years, individuals who at the beginning of such period constitute the
BRI Board of Directors cease for any reason to constitute at least a
majority thereof, unless the election or nomination of the election by
BRI's stockholders of each new Director was approved by a vote of at
least two-thirds of the Directors then still in office who were
Directors at the beginning of the period.
12.2 Vote Required for Business Combinations.
The affirmative vote of not less than fifty-one percent of the Voting
Stock, excluding the Voting Stock of an Interested Stockholder who is a party
to the Business Combination, shall be required for the adoption or
authorization of a Business Combination, unless the Disinterested Directors
determine that:
(a) The Interested Stockholder is the beneficial owner of
not less than eighty percent of the Voting Stock and has declared its
intention to vote in favor of or to approve such Business Combination;
or
(b) (i) The fair market value of the consideration per
share to be received or retained by the holders of each class or
series of stock of this corporation in a Business Combination is equal
to or greater than the consideration per share (including brokerage
commissions and soliciting dealer's fees) paid by such Interested
Stockholder in acquiring the largest number of shares of such class of
stock previously acquired in any one transaction or series of related
transactions, whether before or after the Interested Stockholder
became an Interested Stockholder and (ii) the Interested Stockholder
shall not have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances, guarantees,
pledges or other financial assistance provided by this corporation,
whether in anticipation of or in connection with such Business
Combination or otherwise.
12.3 Information Requirements.
In the event any vote of holders of Voting Stock is required for the
adoption or approval of any Business Combination, a proxy or information
statement describing the Business Combination and complying with the
requirements of the 1934 Act shall be mailed at a date determined by the
Disinterested Directors to all stockholders of this corporation whether or not
such statement is required under the 1934 Act. The statement shall contain any
recommendations as to the advisability of the Business Combination which the
Disinterested Directors, or any of them, may choose to state and, if deemed
advisable by the Disinterested Directors, an opinion of an investment banking
firm as to the fairness of the terms of such Business Combination. Such firm
shall be selected by the Disinterested Directors and be paid a fee for its
services by this corporation as approved by the Disinterested Directors.
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<PAGE> 6
12.4 Amendment.
No amendment to this Restated Certificate of Incorporation shall
amend, alter, change or repeal any of the provisions of Article 11 or of this
Article 12 unless such amendment shall receive the affirmative vote of not less
than fifty-one percent of the Voting Stock, excluding the Voting Stock of any
Interested Stockholder as defined in Section 12.1 of this Article 12.
IN WITNESS WHEREOF, the undersigned has executed this document and
affirms, under penalties of perjury, that the statements herein are true and
that this instrument is the act and deed of El Paso Energy Corporation as of
this 16th day of July 1998.
EL PASO ENERGY CORPORATION
/s/ H. Brent Austin
------------------------------------
H. Brent Austin
Executive Vice President and
Chief Financial Officer
Attest:
/s/ David L. Siddall
- ------------------------------------
David L. Siddall
Corporate Secretary
<PAGE> 7
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
EL PASO ENERGY CORPORATION
(Pursuant to Section 151
of the General Corporation Law of the State of Delaware)
I, Britton White, Jr., Executive Vice President and General Counsel
of El Paso Energy Corporation (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY as
follows:
That pursuant to the authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation of the said Corporation, said
Board of Directors adopted the following resolution creating a series of
2,750,000 shares of Preferred Stock designated as Series A Junior Participating
Preferred Stock:
RESOLVED that pursuant to the authority granted to and vested in the
Board of Directors of this Company in accordance with the provisions of the
Restated Certificate of Incorporation the Board of Directors hereby creates a
series of Preferred Stock of the Company and hereby states the designation and
number of shares, and fixes the relative rights, preferences and limitations
thereof (in addition to the provisions set forth in the Restated Certificate of
Incorporation which are applicable to the Preferred Stock of all classes and
series) as follows:
Section 1. Designation and Amount. There shall be a series of
Preferred Stock, par value $.0l per share, of the Company which shall be
designated as "Series A Junior Participating Preferred Stock," par value $.01
per share, and the number of shares constituting such series shall be
2,750,000. 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 Junior Participating Preferred Stock to a number less
than that of the shares then outstanding plus the number of shares issuable
upon exercise of outstanding rights, options or warrants or upon conversion of
outstanding securities issued by the Company.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
Series A Junior Participating Preferred
- 1 -
<PAGE> 8
Stock with respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock in preference to the holders of shares of Common
Stock, par value $3.00 per share (the "Common Stock"), of the Company and 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 January, April, July,
and October 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 Junior Participating Preferred Stock in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $25, or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared
on the Common Stock since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Junior
Participating Preferred Stock. In the event the Company shall at any time
after July 28, 1992 (the "Rights Declaration Date") (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of shares
of Series A Junior Participating 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 Company shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A)
above 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 $25 per share on
the Series A Junior Participating 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 Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock 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 Junior Participating 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
- 2 -
<PAGE> 9
interest. Dividends paid on the shares of Series A Junior Participating
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 Junior Participating Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to 100 votes on all matters submitted to a vote of
the stockholders of the Company. In the event the Company shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series A Junior Participating 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 or by law, the holders
of shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount equal
to six (6) quarterly dividends thereon, the occurrence of such
contingency shall mark the beginning of a period (herein called a
"default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and
for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to
elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting of
stockholders, and thereafter at annual meetings of stockholders,
provided that neither such voting right nor the right of the holders
of any other series of Preferred Stock, if any, to increase in
certain cases, the authorized number of Directors shall
- 3 -
<PAGE> 10
be exercised unless the holders of ten percent (10%) in number of
shares of Preferred Stock outstanding shall be present in person or
by proxy. The absence of a quorum of the holders of Common Stock
shall not affect the exercise by the holders of Preferred Stock of
such voting right. At any meeting at which the holders of Preferred
Stock shall exercise such voting right initially during an existing
default period, they shall have the right, voting as a class, to
elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two (2) Directors or, if such right
is exercised at an annual meeting, to elect two (2) Directors. If
the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock
shall have the right to make such increase in the number of Directors
as shall be necessary to permit the election by them of the required
number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period and
during the continuance of such period, the number of Directors shall
not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A
Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder
or stockholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of the holders of Preferred Stock, which meeting shall thereupon be
called by the Chairman of the Board or the President and Chief
Executive Officer of the Company. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled to
vote pursuant to this paragraph (C) (iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice
to him at his last address as the same appears on the books of the
Company. Such meeting shall be called for a time not earlier than 10
days and not later than 60 days after such order or request or in
default of the calling of such meeting within 60 days after such
order or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph
(C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Company if applicable, shall continue
to be entitled to elect the whole number of Directors until the
holders of Preferred Stock shall have exercised their right to elect
two (2) Directors voting as a class, after the exercise of which
right (x) the Directors so elected by the holders of Preferred Stock
shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as
- 4 -
<PAGE> 11
provided in paragraph (C)(ii) of this Section 3) be filled by vote of
a majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose office
shall become vacant. References in this paragraph (C) to Directors
elected by the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as provided in
clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the
holders of Preferred Stock as a class shall terminate, and (z) the
number of Directors shall be such number as may be provided for in
the Restated Certificate of Incorporation or By-laws irrespective of
any increase made pursuant to the provisions of paragraph (C) (ii) of
this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the Restated
Certificate of Incorporation or By-laws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z)
in the preceding sentence may be filled by a majority of the
remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating 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 Junior Participating 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 Junior Participating Preferred Stock outstanding shall have been paid
in full, the Company shall not:
(i) Declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock;
(ii) Declare or pay dividends on 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 Junior Participating Preferred Stock except dividends paid
ratably on the Series A Junior Participating 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 on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock provided that
- 5 -
<PAGE> 12
the Company may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any stock
of the Company ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) Purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock or any shares of
stock ranking on a parity with the Series A Junior Participating
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 Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company 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 Junior
Participating Preferred Stock purchased or otherwise acquired by the Company in
any manner whatsoever shall be retired and cancelled 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 to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received per share, the greater of 100 times $75 or
100 times the payment made per share of Common Stock, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series
A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series
- 6 -
<PAGE> 13
A Junior Participating Preferred Stock and holders of shares of Common Stock
shall receive their ratable and proportionate share of the remaining assets to
be distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series A Junior Participating Preferred Stock then
such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In
the event there are not sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment 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.
Section 7. Consolidation, Merger, etc. If the Company 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 event the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 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 Company shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, 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 Junior Participating 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 are outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Company's Preferred Stock as
to the payment of dividends and the distribution of assets, unless the terms of
any such series shall provide otherwise.
- 7 -
<PAGE> 14
Section 10. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred
Stock.
- 8 -
<PAGE> 15
IN WITNESS WHEREOF, I have executed this Certificate and do affirm
the foregoing as true under penalties of perjury this 16th day of July, 1998.
EL PASO ENERGY CORPORATION
By: /s/ Britton White, Jr.
--------------------------------
Britton White, Jr.
Executive Vice President
and General Counsel
Attest:
/s/ David L. Siddall
- --------------------------------
David L. Siddall
Corporate Secretary
- 9 -
<PAGE> 16
AMENDED CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
EL PASO ENERGY CORPORATION
(Pursuant to Section 151
of the General Corporation Law of the State of Delaware)
I, Britton White, Jr., Executive Vice President and General Counsel
of El Paso Energy Corporation (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY as
follows:
FIRST, that pursuant to a Certificate of Designation, Preferences and
Rights filed on July 28, 1998 in the Office of the Secretary of State of the
State of Delaware, the Company has authorized 2,750,000 shares of a series of
Preferred Stock designated Series A Junior Participating Preferred Stock. No
shares of Series A Junior Participating Preferred Stock have been issued.
SECOND, that pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said Corporation
and Section 151 (g) of the General Corporation Law of the State of Delaware,
said Board of Directors adopted the following resolution amending the
Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of the Company:
RESOLVED that pursuant to the authority granted to and vested in the
Board of Directors of this Company in accordance with the provisions of the
Restated Certificate of Incorporation and Section 151 (g) of the General
Corporation Law of the State of Delaware, the Board of Directors hereby amends
the Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of the Company (the "Certificate of Designation")
as follows:
1. Section 2(A) of the Certificate of Designation is hereby amended
to read in its entirety as follows
1
<PAGE> 17
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock in
preference to the holders of shares of Common Stock, par value $3.00 per share
(the "Common Stock"), of the Company and 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 January, April, July, and October 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 Junior Participating Preferred Stock in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $25,
or (b) subject to the provision for adjustment hereinafter set forth, 200 times
the aggregate per share amount of all cash dividends, and 200 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. In the event the
Company shall at any time after July 22, 1998 (the "Rights Declaration Date")
(i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the amount
to which holders of shares of Series A Junior Participating 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.
2. Section 3(A) of the Certificate of Designation is hereby amended
to read in its entirety as follows:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to 200 votes on all matters submitted to a vote of
the stockholders of the Company. In the event the Company shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series A Junior Participating 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.
3. Section 6(A) of the Certificate of Designation is hereby amended to
read in its entirety as follows:
2
<PAGE> 18
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received per share, the greater of 200 times $75 or
200 times the payment made per share of Common Stock, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation
Preference, no additional distributions shall be made to the holders of shares
of Series A Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount per share (the
"Common Adjustment") equal to the quotient obtained by dividing (i) the Series
A Liquidation Preference by (ii) 200 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of the full amount of
the Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
4. Section 7 of the Certificate of Designation is hereby amended to
read in its entirety as follows:
Section 7. Consolidation, Merger, etc. If the Company 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 event the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 200 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 Company shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, 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 Junior Participating 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 are outstanding immediately prior to such event.
5. Except as expressly set forth herein, the Certificate of
Designation shall remain in full force and effect without modification.
3
<PAGE> 19
6. This Amended Certificate of Designation shall be effective as of
12.01 a.m. on August 3, 1998.
IN WITNESS WHEREOF, I have executed this Amended Certificate of
Designation and do affirm the foregoing as true under penalties of perjury this
29th day of July, 1998.
EL PASO ENERGY CORPORATION
By: /s/ Britton White, Jr.
------------------------------
Britton White, Jr.
Executive Vice President
and General Counsel
Attest:
/s/ David L. Siddall
- ------------------------------
David L. Siddall
Corporate Secretary
4
<PAGE> 1
EXHIBIT 3.2
BY-LAWS
OF
EL PASO ENERGY CORPORATION
As amended July 16, 1998
Effective August 1, 1998
<PAGE> 2
BY-LAWS
OF
EL PASO ENERGY CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. OFFICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 - Registered Office and Agent . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 - Other Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1 - Annual Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2 - Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3 - Place of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4 - Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 5 - Fixing of Record Date for Determining Stockholders . . . . . . . . . . . . . . 2
Section 6 - Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7 - Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8 - Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 9 - Inspectors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 10 - List of Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 11 - Stockholder Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE III. BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 1 - Number, Qualification and Term of Office . . . . . . . . . . . . . . . . . . . 6
Section 2 - Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3 - Nominations of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 4 - Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5 - Removals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6 - Place of Meetings; Books and Records . . . . . . . . . . . . . . . . . . . . . 8
Section 7 - Annual Meeting of the Board . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 8 - Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 9 - Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 10 - Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 11 - Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 12 - Consent of Directors in Lieu of Meeting . . . . . . . . . . . . . . . . . . . 10
Section 13 - Telephonic Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 14 - Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 15 - Interested Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE IV. COMMITTEES OF THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1 - Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2 - Finance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3 - Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 4 - Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5 - Committee Chairman, Books and Records . . . . . . . . . . . . . . . . . . . . 12
Section 6 - Alternates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 7 - Other Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8 - Quorum and Manner of Acting . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE V. OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 1 - Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 2 - Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3 - Resignations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4 - Removals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5 - Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6 - Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7 - Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 8 - President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 9 - Vice Chairman of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 10 - Chief Operating Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 11 - Chief Financial Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 12 - Vice Presidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 13 - General Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 14 - Secretary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 15 - Treasurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 16 - Controller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 17 - Absence or Disability of Officers . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VI. STOCK CERTIFICATES AND TRANSFER THEREOF . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1 - Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2 - Transfer of Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3 - Transfer Agents and Registrars . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 4 - Additional Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 5 - Lost, Stolen or Destroyed Certificates . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VII. DIVIDENDS, SURPLUS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII. SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IX. FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE X. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 1 - Right to Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2 - Right of Indemnitee to Bring Suit . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
ii
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<TABLE>
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Section 3 - Nonexclusivity of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 4 - Insurance, Contracts and Funding . . . . . . . . . . . . . . . . . . . . . . . 22
Section 5 - Wholly Owned Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 6 - Indemnification of Agents of the Corporation . . . . . . . . . . . . . . . . . 23
ARTICLE XI. CHECKS, DRAFTS, BANK ACCOUNTS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 1 - Checks, Drafts, Etc.; Loans . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2 - Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XII. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
iii
<PAGE> 5
BY-LAWS
OF
EL PASO ENERGY CORPORATION
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE AND AGENT
The registered office of the corporation is located at Corporation Trust
Center, 1209 Orange Street in the City of Wilmington, County of New Castle,
State of Delaware, and the name of its registered agent at such address is The
Corporation Trust Company.
SECTION 2. OTHER OFFICES
The corporation may have offices at such other places both within and
without the State of Delaware as the Board of Directors (the "Board") may from
time to time determine or the business of the corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS
A meeting of the stockholders for the purpose of electing Directors and
for the transaction of such other business as may properly be brought before
the meeting shall be held annually at 9:00 o'clock A.M. on the third Thursday
of April, or at such other time on such other date as shall be fixed by
resolution of the Board. If the day fixed for the annual meeting shall be a
legal holiday such meeting shall be held on the next succeeding business day.
SECTION 2. SPECIAL MEETINGS
Special meetings of the stockholders for any purpose or purposes may be
called only by a majority of the Board, the Chairman of the Board, the Chief
Executive Officer, the President or the Vice Chairman of the Board.
<PAGE> 6
SECTION 3. PLACE OF MEETINGS
The annual meeting of the stockholders of the corporation shall be held at
the general offices of the corporation in the City of Houston, State of Texas,
or at such other place in the United States as may be stated in the notice of
the meeting. All other meetings of the stockholders shall be held at such
places within or without the State of Delaware as shall be stated in the notice
of the meeting.
SECTION 4. NOTICE OF MEETINGS
4.1 GIVING OF NOTICE. Except as otherwise provided by statute, written
notice of each meeting of the stockholders, whether annual or special, shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder entitled to vote at such meeting. If mailed, notice shall
be given when deposited in the United States mails, postage prepaid, directed
to such stockholder at his address as it appears in the stock ledger of the
corporation. Each such notice shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called.
4.2 NOTICE OF ADJOURNED MEETINGS. When a meeting is adjourned to another
time and place, notice of the adjourned meeting need not be given if the time
and place thereof are announced at the meeting at which the adjournment is
given. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
4.3 WAIVER OF NOTICE
4.3.1 Whenever any notice is required to be given to any stockholder
under the provisions of these By-laws, the Restated Certificate of
Incorporation or the general Corporation Law of the State of Delaware, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice.
4.3.2 The attendance of a stockholder at a meeting shall constitute a
waiver of notice of such meeting, except when a stockholder attends a meeting
for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
SECTION 5. FIXING OF RECORD DATE FOR DETERMINING STOCKHOLDERS
5.1 MEETINGS. For the purpose of determining stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board, and
which record date shall not be more than sixty nor less than ten days before
the date of such meeting. If no record date is fixed by the Board, the record
date for determining stockholders shall be at the close of business on the day
next preceding the day on
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which notice is given, or, if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at the meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board may fix a new record date for the adjourned meeting.
5.2 DIVIDENDS, DISTRIBUTIONS AND OTHER RIGHTS. For the purpose of
determining stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board may fix a record date,
which record date shall not precede the date upon which the resolution fixing
the record date is adopted, and which record date shall be not more than sixty
days prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto.
SECTION 6. QUORUM
A majority of the outstanding shares of stock of the corporation entitled
to vote, present in person or represented by proxy, shall constitute a quorum
at a meeting of the stockholders; provided that where a separate vote by a
class or classes or by a series of a class is required, a majority of the
outstanding shares of such class or classes or of such series of a class,
present in person or represented by proxy at the meeting, shall constitute a
quorum entitled to take action with respect to the vote on that matter. Shares
of stock will be counted toward a quorum if they are either (i) present in
person at the meeting or (ii) represented at the meeting by a valid proxy,
whether the instrument granting such proxy is marked as casting a vote or
abstaining, is left blank or does not empower such proxy to vote with respect
to some or all matters to be voted upon at the meeting. If less than a
majority of the outstanding shares entitled to vote are represented at a
meeting, a majority of the shares so represented may adjourn the meeting from
time to time without further notice. If a quorum is present or represented at
a reconvened meeting following such an adjournment, any business may be
transacted that might have been transacted at the meeting as originally called.
The stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
SECTION 7. ORGANIZATION
At each meeting of the stockholders, the Chairman of the Board, or in his
absence the Chief Executive Officer, the President or the Vice Chairman of the
Board, or if all of the said officers are absent, a person designated by the
Board, the Chairman of the Board, the Chief Executive Officer, the President or
the Vice Chairman of the Board, or in the absence of such designated person, a
person elected by the holders of a majority in number of shares of stock
present in person or represented by proxy and entitled to vote, shall act as
chairman of the meeting.
The Secretary, or in his absence or in the event he shall be presiding
over the meeting in accordance with the provisions of this Section, an
Assistant Secretary or, in the absence of the
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Secretary and all of the Assistant Secretaries, any person appointed by the
chairman of the meeting, shall act as secretary of the meeting.
SECTION 8. VOTING
8.1 GENERAL PROVISIONS. Unless otherwise provided in the Restated
Certificate of Incorporation or a resolution of the Board creating a series of
stock, at each meeting of the stockholders, each holder of any share of any
series or class of stock entitled to vote at such meeting shall be entitled to
one vote for each share of stock having voting power in respect of each matter
upon which a vote is to be taken, standing in his name on the stock ledger of
the corporation on the record date fixed as provided in these By-laws for
determining the stockholders entitled to vote at such meeting. In all matters
other than the election of Directors, if a quorum is present, the affirmative
vote of the majority of the shares present in person or represented by proxy at
the meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the vote of a greater number is required by these By-laws,
the Restated Certificate of Incorporation or the General Corporation Law of the
State of Delaware. In determining the number of votes cast for or against a
proposal, shares abstaining from voting on a matter (including elections) will
not be treated as a vote for or against the proposal. A non-vote by a broker
will be treated as if the broker never voted, but a non-vote by a stockholder
will be counted as a vote "for" the management's position. Where a separate
vote by a class or classes or by a series of a class is required, if a quorum
is present, the affirmative vote of the majority of shares of such class or
classes or series of a class present in person or represented by proxy at the
meeting shall be the act of such class or classes or series of a class. The
provisions of this Section will govern with respect to all votes of
stockholders except as otherwise provided for in these By-laws, the Restated
Certificate of Incorporation or the General Corporation Law of the State of
Delaware.
8.2 VOTING FOR DIRECTORS. At each election of Directors the voting shall
be by written ballot. Directors shall be elected by a plurality of the votes
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the election of Directors.
8.3 SHARES HELD OR CONTROLLED BY THE CORPORATION. Shares of its own
capital stock belonging to the corporation, or to another corporation if a
majority of the shares entitled to vote in the election of Directors of such
other corporation is held by the corporation, shall neither be entitled to vote
nor counted for quorum purposes.
8.4 PROXIES. A stockholder may vote by proxy executed in writing by the
stockholder or by his attorney-in-fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the meeting. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or another duly executed proxy bearing a later date with the Secretary of
the corporation. A proxy shall become invalid three years after the date of
its execution, unless otherwise provided in the proxy. A proxy with respect to
a specified meeting shall entitle the holder thereof to vote at any reconvened
meeting following adjournment of such meeting but shall not be valid after the
final adjournment thereof.
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<PAGE> 9
SECTION 9. INSPECTORS
Prior to each meeting of stockholders, the Board shall appoint at least
one Inspector who is not a Director, candidate for Director or officer of the
corporation, who shall receive and determine the validity of proxies and the
qualifications of voters, and receive, inspect, count and report to the meeting
in writing the votes cast on all matters submitted to a vote at such meeting.
In case of failure of the Board to make such appointments or in case of failure
of any Inspector so appointed to act, the Chairman of the Board shall make such
appointment or fill such vacancies. Each Inspector, immediately before
entering upon his duties, shall subscribe to an oath or affirmation faithfully
to execute the duties of Inspector at such meeting with strict impartiality and
according to the best of his ability.
SECTION 10. LIST OF STOCKHOLDERS
The Secretary or other officer or agent having charge of the stock ledger
of the corporation shall prepare and make, at least ten days before every
meeting of stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order and showing the address of each
stockholder and the number of shares of each class and series registered in the
name of each such stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall
be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. Such list shall also be produced and
kept at the time and place of the meeting during the whole time thereof, and
may be inspected by any stockholder who is present. The stock ledger shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by this section, or the books of the corporation, or
to vote in person or by proxy at any such meeting.
SECTION 11. STOCKHOLDER PROPOSALS
At an annual meeting of stockholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
properly brought before the annual meeting of stockholders (a) by, or at the
direction of, the Board or (b) by a stockholder of the corporation who complies
with the procedures set forth in this Section 11. For business or a proposal
to be properly brought before an annual meeting of stockholders by a
stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of the corporation. To be timely, a stockholder's notice must
be delivered to or mailed and received at the principal executive offices of
the corporation not less than 60 days nor more than 90 days prior to the
scheduled date of the annual meeting, regardless of any postponement, deferral
or adjournment of that meeting to a later date; provided, however, that if less
than 70 days' notice or prior public disclosure of the date of the annual
meeting is given or made to stockholders, notice by the stockholder to be
timely must be so delivered or received not later than the close of business on
the 10th day following the earlier of (i) the day on which such notice of the
date of the meeting was mailed or (ii) the day on which such public disclosure
was made.
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A stockholder's notice to the Secretary shall set forth as to each matter
the stockholder proposes to bring before an annual meeting of stockholders (i) a
description, in 500 words or less, of the business desired to be brought before
the annual meeting and the reasons for conducting such business at the annual
meeting, (ii) the name and address, as they appear on the corporation's books,
of the stockholders known by such stockholder to be supporting such proposal,
(iii) the class and number of shares of the corporation which are beneficially
owned by such stockholder on the date of such stockholder's notice and by any
other stockholders known by such stockholder to be supporting such proposal on
the date of such stockholder's notice, (iv) a description, in 500 words or less,
of any interest of the stockholder in such proposal, and (v) a representation
that the stockholder is a holder of record of stock of the corporation and
intends to appear in person or by proxy at the meeting to present the proposal
specified in the notice. Notwithstanding anything in these By-laws to the
contrary, no business shall be conducted at a meeting of stockholders except in
accordance with the procedures set forth in this Section 11.
The chairman of the meeting shall, if the facts warrant, determine and
declare to the meeting that the business was not properly brought before the
meeting in accordance with the procedures prescribed by this Section 11, and if
he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
Notwithstanding the foregoing, nothing in this Section 11 shall be interpreted
or construed to require the inclusion of information about any such proposal in
any proxy statement distributed by, at the direction of, or on behalf of, the
Board.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. NUMBER, QUALIFICATION AND TERM OF OFFICE
The business, property and affairs of the corporation shall be managed by
a Board consisting of not less than one Director. The Board shall from time to
time by a vote of a majority of the Directors then in office fix the specific
number of Directors to constitute the Board. At each annual meeting of
stockholders a Board shall be elected by the stockholders for a term of one
year. Each Director shall serve until his successor is duly elected and shall
qualify.
SECTION 2. VACANCIES
Vacancies in the Board and newly created directorships resulting from any
increase in the authorized number of Directors may be filled by a vote of the
majority of the Directors then in office, although less than a quorum, or by a
sole remaining Director, at any regular or special meeting of the Board.
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SECTION 3. NOMINATIONS OF DIRECTORS
Subject to the rights, if any, of the holders of any series of preferred
stock then outstanding, only persons nominated in accordance with the procedures
set forth in this Section 3 shall be eligible for election as Directors.
Nominations of persons for election to the Board may be made at an annual
meeting of stockholders or special meeting of stockholders called by the Board
for the purpose of electing Directors (i) by or at the direction of the Board or
(ii) by any stockholder of the corporation entitled to vote for the election of
Directors at such meeting who complies with the notice procedure set forth in
this Section 3. Such nominations, other than those made by or at the direction
of the Board, shall be made pursuant to timely notice in writing to the
Secretary of the corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
corporation not less than 60 days nor more than 90 days prior to the scheduled
date of the meeting, regardless of any postponement, deferral or adjournment of
that meeting to a later date; provided, however, that if less than 70 days'
notice or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder to be timely must be so delivered or
received not later than the close of business on the 10th day following the
earlier of (i) the day on which such notice of the date of the meeting was
mailed or (ii) the day on which such public disclosure was made.
A stockholder's notice to the Secretary shall set forth (i) as to each
person whom the stockholder proposes to nominate for election or reelection as
a Director (a) the name, age, business address and residence address of such
person, (b) the principal occupation or employment of such person, (c) the
class and number of shares of the corporation which are beneficially owned by
such person on the date of such stockholder's notice and (d) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of Directors, or is otherwise required,
in each case pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended, or any successor statute thereto (the "Exchange Act")
(including without limitation such person's written consent to being named in
the proxy statement as a nominee and to serving as a Director if elected); (ii)
as to the stockholder giving the notice (a) the name and address, as they
appear on the corporation's (or its agent's) books, of such stockholder and any
other stockholders known by such stockholder to be supporting such nominee(s),
(b) the class and number of shares of the corporation which are beneficially
owned by such stockholder on the date of such stockholder's notice and by any
other stockholders known by such stockholder to be supporting such nominee(s)
on the date of such stockholder's notice (c) a representation that the
stockholder is a holder of record of stock of the corporation entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; and (iii) a description
of all arrangements or understandings between the stockholder and each nominee
and other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are to be made by the stockholder.
No person shall be eligible for election as a Director of the corporation
unless nominated in accordance with the procedures set forth in this Section 3.
The chairman of the meeting shall, if the facts warrant, determine and declare
to the meeting that a nomination was not made in
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accordance with the procedures prescribed by this Section and if he should so
determine, he shall so declare to the meeting and the defective nomination
shall be disregarded.
SECTION 4. RESIGNATIONS
Any Director may resign at any time upon written notice to the Board, the
Chairman of the Board, the Chief Executive Officer, the President, the Vice
Chairman of the Board or the Secretary of the corporation. Such resignation
shall take effect on the date of receipt of such notice or at any later time
specified therein; and the acceptance of such resignation, unless otherwise
required by the terms thereof, shall not be necessary to make it effective.
When one or more Directors shall resign effective at a future date, a majority
of the Directors then in office, including those who have resigned, shall have
power to fill such vacancy or vacancies to take effect when such resignation or
resignations shall become effective.
SECTION 5. REMOVALS
Any Director may be removed, with or without cause, at any special meeting
of the stockholders called for that purpose, by the affirmative vote of the
holders of a majority in number of shares of the corporation entitled to vote
for the election of such Director, and the vacancy in the Board caused by any
such removal may be filled by the stockholders at such a meeting.
SECTION 6. PLACE OF MEETINGS; BOOKS AND RECORDS
The Board may hold its meetings, and have an office or offices, at such
place or places within or without the State of Delaware as the Board from time
to time may determine.
The Board, subject to the provisions of applicable statutes, may authorize
the books and records of the corporation, and offices or agencies for the
issue, transfer and registration of the capital stock of the corporation, to be
kept at such place or places outside of the State of Delaware as, from time to
time, may be designated by the Board.
SECTION 7. ANNUAL MEETING OF THE BOARD
The first meeting of each newly elected Board, to be known as the Annual
Meeting of the Board, for the purpose of electing officers, designating
committees and the transaction of such other business as may come before the
Board, shall be held as soon as practicable after the adjournment of the annual
meeting of stockholders, and no notice of such meeting shall be necessary to
the newly elected Directors, provided a quorum shall be present. In the event
such meeting is not held due to the absence of a quorum, the meeting may be
held at such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the Board, or as shall be
specified in a written waiver signed by all of the newly elected Directors.
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SECTION 8. REGULAR MEETINGS
The Board shall provide for regular meetings of the Board at such times
and at such places as it deems desirable. Notice of regular meetings need not
be given.
SECTION 9. SPECIAL MEETINGS
Special meetings of the Board may be called by the Chairman of the Board,
the Chief Executive Officer, the President or the Vice Chairman of the Board
and shall be called by the Secretary on the written request of three Directors
on such notice as the person or persons calling the meeting shall deem
appropriate in the circumstances. Notice of each such special meeting shall be
mailed to each Director or delivered to him by telephone, telegraph or any
other means of electronic communication, in each case addressed to his
residence or usual place of business, or delivered to him in person or given to
him orally. The notice of meeting shall state the time and place of the
meeting but need not state the purpose thereof. Whenever any notice is
required to be given to any Director under the provisions of these By-laws, the
Restated Certificate of Incorporation or the General Corporation Law of the
State of Delaware, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the Board
or any committee appointed by the Board need be specified in the waiver of
notice of such meeting. Attendance of a Director at any meeting shall
constitute a waiver of notice of such meeting except when a Director attends a
meeting for the express purpose of objecting to the transaction of any business
because the meeting was not lawfully called or convened.
SECTION 10. QUORUM AND MANNER OF ACTING
Except as otherwise provided by statute, the Restated Certificate of
Incorporation, or these By-laws, the presence of a majority of the total number
of Directors shall constitute a quorum for the transaction of business at any
regular or special meeting of the Board, and the act of a majority of the
Directors present at any such meeting at which a quorum is present shall be the
act of the Board. In the absence of a quorum, a majority of the Directors
present may adjourn the meeting, from time to time, until a quorum is present.
Notice of any such adjourned meeting need not be given.
SECTION 11. ORGANIZATION
At every meeting of the Board, the Chairman of the Board or in his absence
the Chief Executive Officer, the President or the Vice Chairman of the Board,
or if all of the said officers are absent, a chairman chosen by a majority of
the Directors present shall act as chairman of the meeting. The Secretary, or
in his absence, an Assistant Secretary, or in the absence of the Secretary and
all the Assistant Secretaries, any person appointed by the chairman of the
meeting, shall act as secretary of the meeting.
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SECTION 12. CONSENT OF DIRECTORS IN LIEU OF MEETING
Unless otherwise restricted by the Restated Certificate of Incorporation
or by these By-laws, any action required or permitted to be taken at any
meeting of the Board, or any committee designated by the Board, may be taken
without a meeting if all members of the Board or committee consent thereto in
writing, and such written consent is filed with the minutes of the proceedings
of the Board or committee.
SECTION 13. TELEPHONIC MEETINGS
Members of the Board, or any committee designated by the Board, may
participate in any meeting of the Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in such a
meeting shall constitute presence in person at such meeting.
SECTION 14. COMPENSATION
Each Director, who is not a full-time salaried officer of the corporation
or any of its wholly owned subsidiaries, when authorized by resolution of the
Board, may receive as a Director a stated salary or an annual retainer, and any
other benefits as the Board may determine, and in addition may be allowed a
fixed fee or reimbursement of his reasonable expenses for attendance at each
regular or special meeting of the Board or any committee thereof.
SECTION 15. INTERESTED DIRECTORS
No contract or transaction between the corporation and one or more of its
Directors or officers, or between the corporation and any other corporation,
partnership, association or other organization in which one or more of its
Directors or officers are Directors or officers of this corporation, or have a
financial interest in such contract or transaction, shall be void or voidable
solely for this reason, or solely because the Director or officer is present at
or participates in the meeting of the Board or committee thereof which
authorizes the contract or transaction, or solely because his or their votes
are counted for such purpose, if: (1) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board or the committee, and the Board or committee in good
faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested Directors, even though the disinterested
Directors be less than a quorum; or (2) the material facts as to his
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (3) the contract or transaction is fair as to the corporation as of the time
it is authorized, approved or ratified by the Board, a committee thereof or the
stockholders. Common or interested Directors may be counted in determining the
presence of a quorum at a meeting of the Board or of a committee which
authorizes the contract or transaction.
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ARTICLE IV
COMMITTEES OF THE BOARD OF DIRECTORS
SECTION 1. EXECUTIVE COMMITTEE
The Board may, in its discretion, designate an Executive Committee,
consisting of such number of Directors as the Board may from time to time
determine. The committee shall have and may exercise all the powers and
authority of the Board in the management of the business and affairs of the
corporation and may authorize the seal of the corporation to be affixed to all
papers which may require it, but the committee shall have no power or authority
to amend the Restated Certificate of Incorporation (except that the committee
may, to the extent authorized in the resolution or resolutions providing for
the issuance of shares of stock adopted by the Board, fix the designations and
any of the preferences or rights of such shares relating to dividends,
redemption, dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any other class
or classes or any other series of the same or any other class or classes of
stock of the corporation or fix the number of shares of any series of stock or
authorize the increase or decrease of the shares of any series). The committee
shall have such other powers as the Board may from time to time prescribe.
SECTION 2. FINANCE COMMITTEE
The Board may, in its discretion, designate a Finance Committee,
consisting of such number of Directors as the Board may from time to time
determine. The committee shall monitor, review, appraise and recommend to the
Board appropriate action with respect to the corporation's capital structure,
its source of funds and its financial position; review and recommend
appropriate delegations of authority to management on expenditures and other
financial commitments; review terms and conditions of financing plans; develop
and recommend dividend policies and recommend to the Board specific dividend
payments; and review the performance of the trustee of the corporation's
pension trust fund, and any proposed change in the investment policy of the
trustee with respect to such fund. The committee shall have such other duties,
functions and powers as the Board may from time to time prescribe.
SECTION 3. AUDIT COMMITTEE
The Board shall designate annually an Audit Committee consisting of not
less than two Directors as it may from time to time determine, none of whom
shall be officers or employees of the corporation. The committee shall review
with the independent accountants the corporation's financial statements, basic
accounting and financial policies and practices, adequacy of controls, standard
and special tests used in verifying the corporation's statements of account and
in determining the soundness of the corporation's financial condition, and the
committee shall report to the Board the results of such reviews; review the
policies and practices pertaining to publication of quarterly and annual
statements to assure consistency with audited results and the implementation of
policies and practices recommended by the independent accountants; ensure that
suitable independent audits are made of the operations and results of
subsidiary corporations
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and affiliates; and monitor compliance with the corporation's code of business
conduct. The committee shall have such other duties, functions and powers as
the Board may from time to time prescribe.
SECTION 4. COMPENSATION COMMITTEE
The Board shall designate annually a Compensation Committee consisting of
not less than two Directors as it may from time to time determine, none of whom
shall be officers or employees of the corporation. The committee shall
administer the corporation's executive compensation plans and programs. In
addition, the committee shall consider proposals with respect to the creation
of and changes to executive compensation plans and will review appropriate
criteria for establishing certain performance measures and determining annual
corporate and executive performance ratings under applicable corporation plans
and programs. The committee shall have such other duties, functions and powers
as the Board may from time to time prescribe.
SECTION 5. COMMITTEE CHAIRMAN, BOOKS AND RECORDS
Each committee shall elect a chairman to serve for such term as it may
determine, shall fix its own rules of procedure and shall meet at such times
and places and upon such call or notice as shall be provided by such rules. It
shall keep a record of its acts and proceedings, and all action of the
committee shall be reported to the Board at the next meeting of the Board.
SECTION 6. ALTERNATES
Alternate members of the committees prescribed by this Article IV may be
designated by the Board from among the Directors to serve as occasion may
require. Whenever a quorum cannot be secured for any meeting of any such
committee from among the regular members thereof and designated alternates, the
member or members of such committee present at such meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board to act at the meeting in the
place of such absent or disqualified member.
Alternative members of such committees shall receive a reimbursement for
expenses and compensation at the same rate as regular members of such
committees.
SECTION 7. OTHER COMMITTEES
The Board may designate such other committees, consisting of such number
of Directors as the Board may from time to time determine, and each such
committee shall serve for such term and shall have and may exercise, during
intervals between meetings of the Board, such duties, functions and powers as
the Board may from time to time prescribe.
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SECTION 8. QUORUM AND MANNER OF ACTING
At each meeting of any committee the presence of a majority of the members
of such committee, whether regular or alternate, shall be necessary to
constitute a quorum for the transaction of business, and if a quorum is present
the concurrence of a majority of those present shall be necessary for the
taking of any action; provided, however, that no action may be taken by the
Executive Committee or the Finance Committee when one or more officers of the
corporation are present as members at a meeting of either such committee unless
such action shall be concurred in by the vote of at least one member of such
committee who is not an officer of the corporation.
ARTICLE V
OFFICERS
SECTION 1. NUMBER
The officers of the corporation shall consist of such of the following as
the Board may from time to time elect or appoint, or as the Chairman of the
Board may from time to time appoint pursuant to Section 6 of this Article V: a
Chairman of the Board, a Chief Executive Officer, a President, a Vice Chairman
of the Board, a Chief Operating Officer, a Chief Financial Officer, a General
Counsel, a Secretary, a Treasurer, a Controller and one or more of the
following: Executive Vice President, Senior Vice President, Vice President,
Assistant Vice President, Associate or Assistant General Counsel, Assistant
Secretary, Assistant Treasurer, Assistant Controller and such other officers
with such titles and powers and/or duties as the Board or the Chairman of the
Board, as the case may be, shall from time to time determine. Officers of the
corporation may simultaneously serve as officers of subsidiaries or divisions
thereof. Any number of offices may be held by the same person.
SECTION 2. ELECTION
The officers of the corporation, except those who may be appointed by the
Chairman of the Board as provided in Section 6 of this Article V, shall be
elected or appointed as soon as practicable after the annual meeting of
stockholders in each year to hold office until the first meeting of the Board
after the annual meeting of stockholders next succeeding his election, or until
his successor is elected and qualified or until his earlier death, resignation
or removal..
SECTION 3. RESIGNATIONS
Any elected or appointed officer may resign at any time upon written
notice to the Chairman of the Board or the Secretary of the corporation. Such
resignation shall take effect upon the date of its receipt or at such later
time as may be specified therein, and unless otherwise required by the terms
thereof, no acceptance of such resignation shall be necessary to make it
effective.
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SECTION 4. REMOVALS
Any elected or appointed officer may be removed, with or without cause, by
the Board at any regular or special meeting of the Board, and in the case of an
officer appointed pursuant to Section 6 of this Article V, may be so removed by
the Chairman of the Board. Any such removal shall be without prejudice to the
contractual rights of such officer, if any, with the corporation, but the
election or appointment of any officer shall not of itself create contractual
rights.
SECTION 5. VACANCIES
Any vacancy occurring in any office by death, resignation, removal or
otherwise may be filled for the unexpired portion of the term by the Board at
any regular or special meeting or as otherwise provided in these By-laws.
SECTION 6. CHAIRMAN OF THE BOARD
The Chairman of the Board shall, when present, preside at all meetings of
the stockholders and the Board; have authority to call special meetings of the
stockholders and of the Board; have authority to sign and acknowledge in the
name and on behalf of the corporation all stock certificates, contracts or
other documents and instruments except where the signing thereof shall be
expressly delegated to some other officer or agent by the Board or required by
law to be otherwise signed or executed and, unless otherwise provided by law or
by the Board may authorize any officer, employee or agent of the corporation to
sign, execute and acknowledge in his place and stead all such documents and
instruments; he shall fix the compensation of officers of the corporation,
other than his own compensation, and the compensation of officers of its
principal operating subsidiaries reporting directly to him unless such
authority is otherwise reserved to the Board or a committee thereof; and he
shall approve proposed employee compensation and benefit plans of subsidiary
companies not involving the issuance or purchase of capital stock of the
corporation. He shall have the power to appoint and remove any Vice President,
Controller, General Counsel, Secretary or Treasurer of the corporation. He
shall also have the power to appoint and remove such associate or assistant
officers of the corporation with such titles and duties as he may from time to
time deem necessary or appropriate. He shall have such other powers and
perform such other duties as from time to time may be assigned to him by the
Board or the Executive Committee.
The Chairman of the Board is hereby authorized, without further approval
of the Finance Committee or the Board:
(a) To approve individual expenditures by the corporation of up to $20
million each for individual expenditures in categories not presented
to the Board in the annual budget or plan, including but not limited
to individual expenditures pertaining to operating expenses,
purchases, leases, options to purchase or lease assets, investments,
business acquisitions, land purchases, products or services
acquisitions, bid or performance bonds (provided however, that the
authority to issue such a bond shall not be deemed to
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authorize the activity covered thereby unless such activity would
itself be authorized hereunder), litigation settlements, charitable
donations and political contributions.
(b) To approve expenditures by the corporation for the amounts (subject
to subparagraph (c) below) presented to the Board in the annual
budget or plan, including but not limited to individual expenditures
pertaining to operating and capital expenses, purchases, leases,
options to purchase or lease assets, investments, business
acquisitions, land purchases, products or services acquisitions, bid
or performance bonds (provided however, that the authority to issue
such a bond shall not be deemed to authorize the activity covered
thereby unless such activity would itself be authorized hereunder),
litigation settlements, charitable donations and political
contributions.
(c) To approve individual cost overruns of up to 10% of any amounts
approved by or presented to the Board.
(d) To enter into leases or extensions thereof and other agreements with
respect to the assets of the corporation, including interests in
minerals and real estate, for a term of not more than 10 years or
for an unlimited term if the aggregate initial rentals, over the
term of the lease, including renewal options, do not exceed $20
million.
(e) To approve capital contributions to the corporation's subsidiaries
and to enter into performance and financial guarantees for the
benefit of the corporation's subsidiaries.
(f) To approve disposition of assets and interests in securities of
subsidiaries or related commitments, provided that the aggregate
market value of the assets being disposed of in any one such
transaction does not exceed $20 million.
(g) To approve increases in the capital budgets of the corporation's
operating subsidiaries provided such increases in the aggregate do
not exceed 10% of the corporation's capital budget for the fiscal
year.
(h) To approve in emergency situations commitments in excess of the
above-described limits provided they are in the interests of the
corporation.
The above delegation of authority does not authorize the corporation or its
subsidiaries to make a significant change in its business or to issue the
corporation's capital stock without the specific approval of the Board.
Notwithstanding the foregoing limitations, the Chairman of the Board shall have
such power and authority as is usual, customary and desirable to perform all
the duties of the office (including, but not limited to, the approval of
payments or arrangements made in connection with the corporation's debt,
interest, tax, contractual, and regulatory obligations) necessary to, and
consistent with, the businesses of the corporation and its subsidiaries. The
Chairman of the Board (and other officers of the corporation as delegated by
the Chairman of the Board or as authorized in these By-laws) may delegate the
foregoing authorization to other officers, employees, and agents of the
corporation by either written authorization (including
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powers of attorney) or otherwise, unless such authorization is expressly
reserved for the Chairman of the Board or other officer, as applicable.
SECTION 7. CHIEF EXECUTIVE OFFICER
The Chief Executive Officer shall assist the Chairman of the Board in the
performance of his duties and shall perform those duties assigned to him in
other provisions of the By-laws and such other duties as may from time to time
be assigned to him by the Board or the Chairman of the Board. In the absence
or disability of the Chairman of the Board, or at his request, the Chief
Executive Officer may preside at any meeting of the stockholders or of the
Board and, in such circumstances, may exercise any of the other powers or
perform any of the other duties of the Chairman of the Board. Subject to
delegations by the Chairman of the Board pursuant to Section 6 of this Article
V, the Chief Executive Officer may sign or execute, in the name of the
corporation, all stock certificates, deeds, mortgages, bonds, contracts or
other documents and instruments, except in cases where the signing or execution
thereof shall be required by law or shall have been expressly delegated by the
Board or these By-laws to some other officer or agent of the corporation.
SECTION 8. PRESIDENT
The President shall have general authority over the property, business and
affairs of the corporation, and over all subordinate officers, agents and
employees of the corporation, subject to the control and direction of the
Board, the Executive Committee, the Chairman of the Board and the Chief
Executive Officer, including the power to sign and acknowledge in the name and
on behalf of the corporation all stock certificates, deeds, mortgages, bonds,
contracts or other documents and instruments except when the signing thereof
shall be expressly delegated to some other officer or agent by the Board or
required by law to be otherwise signed or executed and, unless otherwise
provided by law or by the Board, may delegate to any officer, employee or agent
of the corporation authority to sign, execute and acknowledge in his place and
stead all such documents and instruments.
SECTION 9. VICE CHAIRMAN OF THE BOARD
The Vice Chairman of the Board shall assist the Chairman of the Board, the
Chief Executive Officer and the President, in the performance of their duties
and shall perform those duties assigned to him in other provisions of the
By-laws and such other duties as may from time to time be assigned to him by
the Board, the Chairman of the Board, the Chief Executive Officer or the
President. In the absence or disability of the Chairman of the Board, the
Chief Executive Officer or the President, or at the request of any of them, the
Vice Chairman of the Board may preside at any meeting of the stockholders or of
the Board and, in such circumstances, may exercise any of the other powers or
perform any of the other duties of the Chairman of the Board, the Chief
Executive Officer or the President. Subject to delegations by the Chairman of
the Board pursuant to Section 6 of this Article V, the Vice Chairman of the
Board may sign or execute, in the name of the corporation, all stock
certificates, deeds, mortgages, bonds, contracts or other documents and
instruments, except in cases where the signing or execution thereof shall
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be required by law or shall have been expressly delegated by the Board or these
By-laws to some other officer or agent of the corporation.
SECTION 10. CHIEF OPERATING OFFICER
The Chief Operating Officer shall have direct management responsibility
for the general business operations of the corporation, and he shall have such
powers and perform such duties as may be incident to the office of chief
operating officer of a corporation, those duties assigned to him by other
provisions of the By-laws, and such other duties as may from time to time be
assigned to him either directly or indirectly by the Board, the Chairman of the
Board, the Chief Executive Officer, the President or the Vice Chairman of the
Board. Subject to delegations by the Chairman of the Board pursuant to Section
6 of this Article V, the Chief Operating Officer may sign or execute, in the
name of the corporation, all stock certificates, deeds, mortgages, bonds,
contracts or other documents and instruments, except in cases where the signing
or execution thereof shall be required by law or shall have been expressly
delegated by the Board or these By-laws to some other officer or agent of the
corporation.
SECTION 11. CHIEF FINANCIAL OFFICER
The Chief Financial Officer shall have responsibility for development and
administration of the corporation's financial plans and all financial
arrangements, its cash deposits and short term investments, its accounting
policies and its federal and state tax returns. The Chief Financial Officer
shall also be responsible for the corporation's internal control procedures and
for its relationship with the financial community. The Chief Financial Officer
shall perform all the duties incident to the office of chief financial officer
of a corporation, those duties assigned to him by other provisions of these
By-laws and such other duties as may be assigned to him either directly or
indirectly by the Board, the Chairman of the Board, the Chief Executive
Officer, the President, the Vice Chairman of the Board or the Chief Operating
Officer, or as may be provided by law.
SECTION 12. VICE PRESIDENTS
Each Executive Vice President, Senior Vice President and Vice President
shall have such powers and perform such duties as may from time to time be
assigned to him, directly or indirectly, either generally or in specific
instances, by the Board, the Chairman of the Board, the Chief Executive
Officer, the President, the Vice Chairman of the Board or the Chief Operating
Officer.
Subject to delegations by the Chairman of the Board pursuant to Section 6
of this Article V, each Executive Vice President, Senior Vice President and
Vice President shall perform all duties incident to the office of vice
president of a corporation and shall have authority to sign or execute, in the
name of the corporation, all stock certificates, deeds, mortgages, bonds,
contracts or other documents or instruments, except in cases where the signing
or execution thereof shall have been expressly delegated by the Board or these
By-laws to some other officer or agent of the corporation.
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SECTION 13. GENERAL COUNSEL
The General Counsel shall be the chief legal advisor of the corporation
and shall have responsibility for the management of the legal affairs and
litigation of the corporation and, in general, he shall perform the duties
incident to the office of general counsel of a corporation and such other
duties as may be assigned to him either directly or indirectly by the Board,
the Chairman of the Board, the Chief Executive Officer, the President or the
Vice Chairman of the Board, or as may be provided by law.
SECTION 14. SECRETARY
The Secretary shall keep the minutes of meetings of the stockholders and
of the Board in books provided for the purpose; he shall see that all notices
are duly given in accordance with the provisions of these By-laws or as
required by law; he shall be custodian of the records and of the corporate seal
or seals of the corporation; he shall see that the corporate seal is affixed to
all documents requiring same, the execution of which, on behalf of the
corporation, under its seal, is duly authorized, and when said seal is so
affixed he may attest same; and, in general, he shall perform all duties
incident to the office of the secretary of a corporation, and such other duties
as from time to time may be assigned to him directly or indirectly by the
Board, the Chairman of the Board, the Chief Executive Officer, the President,
the Vice Chairman of the Board or the General Counsel, or as may be provided by
law. Any Assistant Secretary may perform any of the duties or exercise any of
the powers of the Secretary at the request of, or in the absence or disability
of, the Secretary or otherwise as occasion may require in the administration of
the business and affairs of the corporation.
SECTION 15. TREASURER
The Treasurer shall have charge of and be responsible for all funds,
securities, receipts and disbursements of the corporation, and shall deposit,
or cause to be deposited, in the name of the corporation, all moneys or other
valuable effects in such banks, trust companies or other depositaries as shall,
from time to time, be selected by or under authority of the Board; if required
by the Board, he shall give a bond for the faithful discharge of his duties,
with such surety or sureties as the Board may determine; he shall keep or cause
to be kept full and accurate records of all receipts and disbursements in books
of the corporation; and, in general, he shall perform the duties incident to
the office of treasurer of a corporation and such other duties as may be
assigned to him directly or indirectly by the Board, the Chairman of the Board,
the Chief Executive Officer, the President, the Vice Chairman of the Board, the
Chief Operating Officer or the Chief Financial Officer, or as may be provided
by law. Any Assistant Treasurer may perform any of the duties or exercise any
of the powers of the Treasurer at the request of, or in the absence or
disability of, the Treasurer or otherwise as occasion may require in the
administration of the business and affairs of the corporation.
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SECTION 16. CONTROLLER
The Controller shall be the chief accounting officer of the corporation.
He shall keep full and accurate accounts of the assets, liabilities,
commitments, receipts, disbursements and other financial transactions of the
corporation; shall cause regular audits of the books and records of account of
the corporation and shall supervise the preparation of the corporation's
financial statements; and, in general, he shall perform the duties incident to
the office of controller of a corporation and such other duties as may be
assigned to him directly or indirectly by the Board, the Audit Committee, the
Chairman of the Board, the Chief Executive Officer, the President, the Vice
Chairman of the Board, the Chief Operating Officer or the Chief Financial
Officer, or as may be provided by law.
SECTION 17. ABSENCE OR DISABILITY OF OFFICERS
In the absence or disability of the Chairman of the Board, the Chief
Executive Officer, the President or the Vice Chairman of the Board, the Board
or a committee thereof may designate individuals to perform the duties of those
absent or disabled.
ARTICLE VI
STOCK CERTIFICATES AND TRANSFER THEREOF
SECTION 1. STOCK CERTIFICATES
Except as otherwise permitted by statute, the Restated Certificate of
Incorporation or resolution or resolutions of the Board, every holder of stock
in the corporation shall be entitled to have a certificate, signed by or in the
name of the corporation by the Chairman of the Board, the Chief Executive
Officer, the President, the Vice Chairman of the Board, the Chief Operating
Officer, the Chief Financial Officer or any Vice President and by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the
corporation, certifying the number of shares, and the class and series thereof,
owned by him in the corporation. Any and all of the signatures on the
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue. The Board or the Chairman of the Board shall determine the form of
stock certificate of the corporation.
SECTION 2. TRANSFER OF STOCK
Transfer of shares of the capital stock of the corporation shall be made
only on the books (whether physically or electronically) of the corporation by
the holder thereof, or by his attorney duly authorized, and on surrender of the
certificate or certificates for such shares. A person in whose name shares of
stock stand on the books of the corporation shall be deemed the owner
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thereof as regards the corporation, and the corporation shall not, except as
expressly required by statute, be bound to recognize any equitable or other
claim to, or interest in, such shares on the part of any other person whether
or not it shall have express or other notice thereof.
SECTION 3. TRANSFER AGENTS AND REGISTRARS
The Board or the Chairman of the Board, as appropriate, may appoint
responsible banks or trust companies from time to time to act as transfer
agents and registrars of the stock of the corporation, as may be required by
and in accordance with applicable laws, rules and regulations. Except as
otherwise provided by the Board or the Chairman of the Board, as appropriate,
in respect of temporary certificates, no certificates for shares of capital
stock of the corporation shall be valid unless countersigned by a transfer
agent and registered by one of such registrars.
SECTION 4. ADDITIONAL REGULATIONS
The Board or the Chairman of the Board, as appropriate, may make such
additional rules and regulations as it may deem expedient concerning the issue,
transfer and registration of certificates for shares of the capital stock of
the corporation.
SECTION 5. LOST, STOLEN OR DESTROYED CERTIFICATES
The Board or the Chairman of the Board may provide for the issuance of new
certificates of stock to replace certificates of stock lost, stolen or
destroyed, or alleged to be lost, stolen or destroyed, upon such terms and in
accordance with such procedures as the Board or the Chairman of the Board shall
deem proper and prescribe.
ARTICLE VII
DIVIDENDS, SURPLUS, ETC.
Except as otherwise provided by statute or the Restated Certificate of
Incorporation, the Board may declare dividends upon the shares of its capital
stock either (1) out of its surplus, or (2) in case there shall be no surplus,
out of its net profits for the fiscal year, whenever, and in such amounts as,
in its opinion, the condition of the affairs of the corporation shall render it
advisable. Dividends may be paid in cash, in property, or in shares of the
capital stock of the corporation.
ARTICLE VIII
SEAL
The corporation may have a corporate seal which shall have inscribed
thereon the name of the corporation, the year of its organization and the words
"Corporate Seal, Delaware." The
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corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.
ARTICLE IX
FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of January
of each year, or on such other day as may be fixed from time to time by the
Board.
ARTICLE X
INDEMNIFICATION
SECTION 1. RIGHT TO INDEMNIFICATION
Each person who was or is made a party or is threatened to be made a party
to or is involved (including, without limitation, as a witness) in any actual
or threatened action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he is or was a Director, officer or employee of the corporation or is
or was serving at the request of the corporation as a Director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to an employee
benefit plan (hereinafter an "indemnitee"), whether the basis of such
proceeding is alleged action in an official capacity as a Director, officer,
employee or agent or in any other capacity while serving as such a Director,
officer, employee or agent, shall be indemnified and held harmless by the
corporation to the full extent authorized by the General Corporation Law of the
State of Delaware, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment), or by other applicable law
as then in effect, against all expense, liability and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts
to be paid in settlement) actually and reasonably incurred or suffered by such
indemnitee in connection therewith and such indemnification shall continue as
to an indemnitee who has ceased to be a Director, officer, employee or agent
and shall inure to the benefit of the indemnitee's heirs, executors and
administrators; provided, however, that except as provided in Section 2 of this
Article with respect to proceedings seeking to enforce rights to
indemnification, the corporation shall indemnify any such indemnitee seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by the
Board of the corporation. The right to indemnification conferred in this
Section shall be a contract right and shall include the right to be paid by the
corporation the expenses incurred in defending any such proceeding in advance
of its final disposition (hereinafter an "advancement of expenses"); further
provided, however, that, if the General Corporation Law of the State of
Delaware requires, an advancement of expenses incurred by an
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indemnitee in his capacity as a Director, officer or employee (and not in any
other capacity in which service was or is rendered by such indemnitee while a
Director, officer or employee, including, without limitation, service to an
employee benefit plan) shall be made only upon delivery to the corporation of
an undertaking, by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined that such indemnitee is not
entitled to be indemnified under this Section 1, or otherwise.
SECTION 2. RIGHT OF INDEMNITEE TO BRING SUIT
If a claim under Section 1 of this Article is not paid in full by the
corporation within sixty days after a written claim has been received by the
corporation, except in the case of a claim for an advancement of expenses, in
which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the corporation to recover the unpaid
amount of the claim and, to the extent successful in whole or in part, the
indemnitee shall be entitled to be paid also the expense of prosecuting such
suit. The indemnitee shall be presumed to be entitled to indemnification under
this Article upon submission of a written claim (and, in an action brought to
enforce a claim for an advancement of expenses, where the required undertaking,
if any is required, has been tendered to the corporation), and thereafter the
corporation shall have the burden of proof to overcome the presumption that the
indemnitee is not so entitled. Neither the failure of the corporation
(including its Board, independent legal counsel, or its stockholders), to have
made a determination prior to the commencement of such suit that
indemnification of the indemnitee is proper in the circumstances, nor an actual
determination by the corporation (including its Board, independent legal
counsel or its stockholders) that the indemnitee is not entitled to
indemnification, shall be a defense to the suit or create a presumption that
the indemnitee is not so entitled.
SECTION 3. NONEXCLUSIVITY OF RIGHTS
The rights to indemnification and to the advancement of expenses conferred
in this Article shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Restated
Certificate of Incorporation, By-law, agreement, vote of stockholders or
disinterested Directors or otherwise.
SECTION 4. INSURANCE, CONTRACTS AND FUNDING
The corporation may maintain insurance, at its expense, to protect itself
and any Director, officer, employee or agent of the corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the corporation would have the power
to indemnify such person against such expense, liability or loss under the
General Corporation Law of the State of Delaware. The corporation may enter
into contracts with any indemnitee in furtherance of the provisions of this
Article and may create a trust fund, grant a security interest or use other
means (including, without limitation, a letter of credit) to ensure the payment
of such amounts as may be necessary to effect indemnification as provided in
this Article.
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SECTION 5. WHOLLY OWNED SUBSIDIARIES
Any person who is or was serving as a Director of a wholly owned
subsidiary of the corporation shall be deemed, for purposes of this Article
only, to be a Director, officer or employee of the corporation entitled to
indemnification under this Article.
SECTION 6. INDEMNIFICATION OF AGENTS OF THE CORPORATION
The corporation may, by action of the Board from time to time, grant
rights to indemnification and advancement of expenses to agents of the
corporation with the same scope and effect as the provisions of this Article
with respect to the indemnification and advancement of expenses of Directors,
officers and employees of the corporation.
ARTICLE XI
CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. CHECKS, DRAFTS, ETC.; LOANS
All checks, drafts or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the corporation shall be
signed by such officer or officers, agent or agents of the corporation and in
such manner as shall, from time to time, be determined by resolution of the
Board. No loans shall be contracted on behalf of the corporation unless
authorized by the Board. Such authority may be general or confined to specific
circumstances.
SECTION 2. DEPOSITS
All funds of the corporation shall be deposited, from time to time, to the
credit of the corporation in such banks, trust companies or other depositories
as the Board may select, or as may be selected by any officer or officers,
agent or agents of the corporation to whom such power may, from time to time,
be delegated by the Board; and for the purpose of such deposit, the Chairman of
the Board, the Chief Executive Officer, the President, the Vice Chairman of the
Board, any Executive Vice President, any Senior Vice President, any Vice
President, the Treasurer or any Assistant Treasurer, or any other officer or
agent to whom such power may be delegated by the Board, may endorse, assign and
deliver checks, drafts and other order for the payment of money which are
payable to the order of the corporation.
ARTICLE XII
AMENDMENTS
These By-laws may be altered or repealed and new By-laws may be made by
the affirmative vote, at any meeting of the Board, of a majority of the entire
Board, subject to the rights of the
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stockholders of the corporation to amend or repeal By-laws made or amended by
the Board by the affirmative vote of the holders of record of a majority in
number of shares of the outstanding stock of the corporation present or
represented at any meeting of the stockholders and entitled to vote thereon,
provided that notice of the proposed action be included in the notice of such
meeting.
ARTICLE XIII
MISCELLANEOUS
All references and uses herein of the masculine pronouns "he" or "his"
shall have equal applicability to and shall also mean their feminine
counterpart pronouns, such as "she" or "her."
24
<PAGE> 1
EXHIBIT 4.1
SHAREHOLDER RIGHTS AGREEMENT
This Agreement, dated as of July 16, 1998, between El Paso Energy
Corporation, a Delaware corporation (the "Company"), and BankBoston, N.A., a
national banking association (the "Rights Agent").
W I T N E S S E T H
WHEREAS, El Paso Natural Gas Company, a Delaware corporation ("El
Paso"), the Company and El Paso Energy Merger Company, a Delaware corporation
("Merger Sub") and a direct, wholly owned subsidiary of the Company have entered
into an Agreement and Plan of Merger, dated July 16, 1998, pursuant to which
Merger Sub will merge with and into El Paso (the "Merger"), as a result of which
each outstanding share of common stock, $3.00 par value per share, of El Paso
will be converted into one share of common stock, $3.00 par value per share, of
the Company (the "Common Stock"), and each one-half outstanding preferred stock
purchase right of El Paso will be converted into one preferred stock purchase
right (a "Right") associated with each share of Common Stock, each Right
representing the right to purchase one two-hundredth (subject to adjustment as
provided herein) of a share of Series A Junior Participating Preferred Stock of
the Company having the rights, powers and preferences set forth in the form of
Certificate of Designation attached hereto as Exhibit A-1, as such Certificate
of Designation shall be amended following the Merger as provided in the form of
Amended Certificate of Designation attached hereto as Exhibit A-2, upon the
terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person, who or which, together
with all Affiliates and Associates of such Person, without the prior approval of
the Company, shall be the Beneficial Owner of securities representing 15% or
more of the Voting Power (other than as a result of a Permitted Offer) or who
was such a Beneficial Owner at any time after the date hereof, whether or not
such Person continues to be the Beneficial Owner of securities representing 15%
or more of the Voting Power. Notwithstanding the foregoing, (A) the term
"Acquiring Person" shall not include (i) the Company, (ii) any subsidiary of the
Company, (iii) any employee benefit plan of the Company or any of its
subsidiaries, (iv) any Person or entity holding securities of the Company
organized, appointed or established by the Company or any of its subsidiaries
<PAGE> 2
for or pursuant to the terms of any such plan acting in such capacity and (B) no
Person shall become an "Acquiring Person" (i) as a result of the acquisition of
shares of Common Stock by the Company which, by reducing the number of shares
Common Stock outstanding, increases the proportional number of shares
beneficially owned by such Person together with all Affiliates and Associates of
such Person, provided, that if (1) a Person would become an Acquiring Person
(but for the operation of this subclause (i)) as a result of the acquisition of
shares of Common Stock by the Company, and (2) after such share acquisition by
the Company, such Person, or an Affiliate or Associate of such Person, becomes
the Beneficial Owner of any additional shares of Common Stock, then such Person
shall be deemed an Acquiring Person; or (ii) if (1) within five Business Days
after such Person would otherwise have become or, if such Person did so
inadvertently, after such Person discovers that such Person would otherwise have
become, an Acquiring Person (but for the operation of this subclause (ii)), such
Person notifies the Board of Directors that such Person did so inadvertently,
and (2) within two Business Days after such notification (or such greater period
of time as may be determined by action of the Board, but in no event greater
than five Business Days), such Person divests itself of a sufficient number of
shares of Common Stock so that such Person is the Beneficial Owner of such
number of shares of Common Stock that such Person no longer would be an
Acquiring Person.
(b) "Act" shall mean the Securities Act of 1933, as amended and as
in effect on the date of this Agreement.
(c) "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 and as in effect on the date of
this Agreement (the "Exchange Act").
(d) 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, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or
<PAGE> 3
(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 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 (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities), relating to the acquisition,
holding, voting (except to the extent contemplated by the proviso to
Section 1(d)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of a Beneficial Owner 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.
(e) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the Commonwealth of Massachusetts or
the State of New York are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Boston time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the Common Stock, $3.00 par value, of
the Company or, in the event of a subdivision, combination or consolidation with
respect to such Common Stock, the Common Stock resulting from such subdivision,
combination or consolidation. "Common Stock" when used with reference to stock
issued by any Person other than the Company shall mean the capital stock (or
equity interest) with the greatest combined economic and voting power of such
Person or, if such other Person is a subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned Person.
(h) "Disinterested Directors" shall mean the members of the Board
who are not (i) employees of the Company, (ii) Acquiring Persons or their
Affiliates or
<PAGE> 4
Associates or representatives of any of them, or (iii) any Person who was
directly or indirectly proposed or nominated as a director of the Company by a
Transaction Person.
(i) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Interested Stockholder" shall mean any Acquiring Person or
Transaction Person or any Affiliate or Associate of an Acquiring Person or
Transaction Person or any other Person in which any such Acquiring Person,
Transaction Person, Affiliate or Associate has an interest which represents in
excess of 5% of the total combined economic or voting power of such Person, or
any other Person acting directly or indirectly on behalf of or in concert with
any such Acquiring Person, Transaction Person, Affiliate or Associate.
(l) "Permitted Offer" shall mean (i) a tender or exchange offer for
all outstanding shares of Common Stock (other than a tender or exchange offer
which would constitute a Transaction) which is at a price and on terms
determined, prior to the purchase of such shares under such tender or exchange
offer, by at least a majority of the Disinterested Directors to be both adequate
and otherwise in the best interests of the Company and its shareholders (other
than the Person, or any Affiliate or Associate thereof, on whose behalf the
offer is being made) taking into account all factors that such Disinterested
Directors may deem relevant.
(m) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust, association, joint venture or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
(n) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, $.01 par value per share, of the Company having the relative
rights, preferences and limitations set forth in the Form of Certificate of
Designation, Preferences and Rights attached to this Agreement as Exhibit A-1,
as such Certificate of Designation shall be amended following the Merger as
provided in the Amended Certificate of Designation attached hereto as Exhibit
A-2.
(o) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(p) "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) hereof.
<PAGE> 5
(q) "Stock 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 the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(r) A "subsidiary" of any Person shall mean any corporation or other
Person of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
(s) "Transaction" shall mean any merger, consolidation or sale of
assets described in Section 13(a) hereof or any acquisition of Common Stock of
the Company which would result in a Person becoming a Transaction Person.
(t) "Transaction Person" with respect to a Transaction shall mean
(x) any Person who (i) is or will become an Acquiring Person or a Principal
Party (as such term is defined in Section 13(b) hereof) if the Transaction were
to be consummated and (ii) either (A) such Person directly or indirectly
proposed or nominated a director of the Company which director is in office at
the time of consideration of the Transaction, or (B) the Transaction with such
Person was approved by persons elected to the Board of Directors with the
objective, for the purpose or with the effect of facilitating a merger or
consolidation of the Company, a sale, mortgage or transfer, in one or more
transactions, of assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole) or any
transaction which would result in a Person becoming an Acquiring Person, or (y)
an Affiliate or Associate of such a Person.
(u) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
(v) "Voting Power" shall mean the voting power of all securities of
the Company then outstanding generally entitled to vote for the election of
directors of the Company.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and in no event be
liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) The Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the certificates
for Common Stock
<PAGE> 6
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates (as defined below)) and not by separate Right
Certificates, and the right to receive Right Certificates will be transferable
only in connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company) until the earliest to occur of (i) the
Stock Acquisition Date or (ii) the Close of Business on the tenth Business Day
(or such later date as may be determined by action of the Company's Board of
Directors) 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 any of its subsidiaries or any Person or entity organized, appointed or
established by the Company 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 Person or entity organized, appointed
or established by the Company for or pursuant to the terms of any such plan) to
commence (which intention to commence remains in effect for five Business Days
after such announcement), a tender or exchange offer the consummation of which
would result in any Person becoming an Acquiring Person (including, in the case
of both clauses (i) and (ii) of this Section 3(a), any such date which is after
the date of this Agreement and prior to the issuance of the Rights) or (iii)
twenty Business Days prior to the date on which a Transaction is reasonably
expected to become effective or be consummated (the earliest of such dates being
herein referred to as the "Distribution Date"); provided, however, that if the
tender or exchange offer referred to in clause (ii) above is terminated prior to
the occurrence of a Distribution Date, then no Distribution Date shall occur as
a result of such tender offer. As soon as practicable after the Distribution
Date, the Company will prepare and execute, and the Rights Agent will
countersign and send, or cause to be sent, by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, substantially in the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each share of
Common Stock so held. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) Upon the execution and delivery of this Agreement, or as soon as
practicable thereafter, the Company shall file the full text of this Agreement
and the Summary of Rights to Purchase Preferred Stock in substantially the form
of Exhibit C hereto (the "Summary of Rights") with the Securities and Exchange
Commission. With respect to certificates for the Common Stock, 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 the Common Stock shall also constitute the transfer of
the Rights associated with the Common Stock.
<PAGE> 7
(c) Certificates issued for Common Stock which become outstanding
(including, without limitation, reacquired Common Stock referred to in the last
sentence of Section 3(c)) prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, shall be deemed also to be
certificates for Rights and from and after the date hereof shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Shareholder Rights Agreement between El Paso
Energy Corporation (the "Company") and BankBoston, N.A. (the "Rights
Agent") dated as of July 16, 1998 (the "Shareholder Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Shareholder Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Shareholder Rights Agreement without charge after
receipt by the Company's corporate secretary of a written request therefor
from such holder. Under certain circumstances set forth in the Shareholder
Rights Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Interested Stockholder (as defined in the Shareholder Rights
Agreement) and any subsequent holder may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby. In
the event that the Company purchases or acquires any shares of Common Stock
prior to the Distribution Date, any Rights associated with such shares of Common
Stock shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Stock which are no
longer outstanding.
Section 4. Form of Right Certificate. (a) The Right Certificates
(and the forms of election to purchase and of assignment to be printed on the
reverse thereof) 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 11 and Section 23 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
two-hundredths of a share of Preferred Stock as shall be set forth therein at
the price per one two-hundredth of a share set forth therein (the "Purchase
Price"), but the amount and type
<PAGE> 8
of securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section
23 hereof that represents Rights beneficially owned by an Interested Stockholder
and any Right Certificate issued at any time upon the transfer of any Rights to
such an Interested Stockholder or to any nominee of such Interested Stockholder
which are null and void pursuant to Section 7(e) hereof, and any Right
Certificate issued pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Right Certificate hereof referred to in
this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Interested Stockholder. Accordingly,
this Right Certificate and the Rights represented hereby are null and void.
Provisions of Section 7(e) hereof shall be operative whether or not the
foregoing legend is contained on any such Right Certificate. The Company shall
give notice to the Rights Agent promptly after it becomes aware of the existence
of any Interested Stockholder.
Section 5. Countersignature and Registration. The Right Certificates
shall be executed on behalf of the Company by its Chairman of the Board,
President or any Vice President, 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
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right 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 office designated as the appropriate place for surrender of such
Right Certificate for transfer, 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 certificate number and the
date of each of the Right Certificates.
<PAGE> 9
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificate. Subject
to the provisions of Sections 4(b), 7(e) and 15 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 may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one two-hundredths of a share of
Preferred Stock (or, following a Triggering Event, other securities, as the case
may be) as the Right Certificate or Right Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split-up, combined or exchanged at the principal
office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate until the registered
holder shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to the provisions
of Section 4(b), Section 7(e) and Section 15 hereof, 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 countersignature and
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Subject to Section 7(e) hereof, 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
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent
<PAGE> 10
designated for such purpose, together with payment of the aggregate Purchase
Price for the total number of one two-hundredths of a share of Preferred Stock
(or other securities, as the case may be) as to which such surrendered Rights
are exercised, at or prior to the earliest of (i) the Close of Business on July
7, 2002 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 24 hereof (the "Redemption Date"), (iii) the
time at which the Rights are exchanged as provided in Section 25 hereof, or (iv)
the consummation of a transaction contemplated by Section 13(e) hereof.
(b) From and after the date hereof, the Purchase Price for each one
two-hundredth share of Preferred Stock pursuant to the exercise of a Right shall
be $75.00, subject to adjustment from time to time as provided in the third
sentence of this Section 7(b) and in Sections 11 and 13(a) hereof. The Purchase
Price shall be payable in accordance with Section 7(c) below. Anything in this
Agreement to the contrary notwithstanding, 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 Stock payable in shares of Common
Stock or (ii) effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of dividends in Common
Stock) into a greater or lesser number of Common Stock, then in any such case,
each share of Common Stock outstanding following such subdivision, combination
or consolidation shall continue to have one Right (subject to adjustment as
provided herein) associated therewith and the Purchase Price following any such
event shall be proportionately adjusted to equal the result obtained by
multiplying the Purchase Price immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event, and the number of fractional
shares of Preferred Stock issuable upon exercise of each Right shall be
proportionately adjusted to equal the result obtained by multiplying the number
of fractional shares of Preferred Stock for which a Right is exercisable
immediately prior to such event by a fraction, the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event. The adjustment provided for in the preceding sentence shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment of the Purchase Price for the shares of Preferred Stock
(or other securities, as the case may be) 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 6 hereof by certified check, cashier's
check or money order payable to the order of the Company, the
<PAGE> 11
Rights Agent shall, subject to Section 21(k), thereupon promptly (i)(A)
requisition from any transfer agent of the shares of Preferred Stock
certificates for the number of shares of Preferred Stock 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 (if the Company, in
its sole discretion, shall have elected to deposit the shares of Preferred Stock
issuable upon exercise of the Rights hereunder into a depositary) depositary
receipts representing such number of one two-hundredths of a share of Preferred
Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the depositary
agent to comply with such requests, (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 15 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 thereof deliver such cash to or upon the order of the registered holder
of such Right Certificate. In the event that the Company is obligated to issue
other securities (including Common Stock) of the Company pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such
other securities are available for distribution by the Rights Agent, if and when
appropriate.
In addition, in the case of an exercise of the Rights by a holder
pursuant to Section 11(a)(ii) hereof, the Rights Agent shall return such Right
Certificate to the registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by such Right
Certificate no longer include the rights provided by Section 11(a)(ii) hereof
and if less than all the Rights represented by such Right Certificate were so
exercised, the Rights Agent shall indicate on the Right Certificate the number
of Rights represented thereby which continue to include the rights provided by
Section 11(a)(ii) hereof.
(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 15 hereof, or the
Rights Agent shall place an appropriate notation on the Right Certificate with
respect to those Rights exercised.
(e) Notwithstanding anything in this Agreement to the contrary, if
an Interested Stockholder engages in or there occurs one or more of the
transactions set forth in Section 11(a)(ii) or Section 13(a) on or after the
time the Interested Stockholder became such, then any Rights that are or were on
or after the earlier of the Distribution Date or the Stock Acquisition Date
beneficially owned by (i) an Interested Stockholder, (ii) a transferee of an
Interested Stockholder who becomes a transferee after the Interested
<PAGE> 12
Stockholder becomes such, or (iii) a transferee of an Interested Stockholder who
becomes a transferee prior to or concurrently with the Interested Stockholder
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Interested Stockholder to holders of
equity interests in such Interested Stockholder or to any Person with whom the
Interested Stockholder has a continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Interested Stockholder or its transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise (other than a partial
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 Company.
Section 9. Reservation and Availability of Capital Stock. The
Company covenants and agrees that at all time prior to the occurrence of a
Section 11(a)(ii) Event it will cause to be reserved and kept available out of
its authorized and unissued shares of Preferred Stock, or any authorized and
issued shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the
<PAGE> 13
exercise in full of all outstanding Rights and, after the occurrence of a
Section 11(a)(ii) Event, shall, to the extent reasonably practicable, so reserve
and keep available a sufficient number of shares of Common Stock (and/or other
securities) which may be required to permit the exercise in full of the Rights
pursuant to this Agreement.
So long as the shares of Preferred Stock (and, after the occurrence of
a Section 11(a)(ii) Event, shares of Common Stock, or any other securities, as
the case may be) issuable upon the exercise of the Rights may be listed on any
national securities exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares or other securities (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares or
securities.
The Company further covenants and agrees that it will pay when due and
payable any and all U.S. 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 shares of Preferred Stock (or shares of Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts for the
shares of Preferred Stock (or shares of Common Stock and/or other securities, as
the case may be) in a name other than that of, the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for shares of Preferred Stock
(or shares of Common Stock and/or other securities, as the case may be) 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.
The Company shall use its best efforts to (i) file, as soon as
practicable following the Stock Acquisition Date (or, if required by law, at
such earlier time following the Distribution Date as so required), a
registration statement under the Act, with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the rules and regulations
thereunder) until the date of the expiration of the rights provided by Section
11(a)(ii).
<PAGE> 14
The Company will also take such action as may be appropriate under the blue sky
laws of the various states.
Section 10. Preferred Stock Record Date. Each Person in whose name
any certificate for shares of Preferred Stock (or shares of Common Stock and/or
other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares of Preferred Stock (or shares of Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or shares of Common Stock
and/or other securities, as the case may be) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock (or shares of Common Stock and/or other securities,
as the case may be) transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 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 Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of shares
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, 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 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 Stock transfer books of the Company were open, such
holder 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.
If an event occurs which would require an adjustment under both this
<PAGE> 15
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person, then proper provision shall
be made so that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall, for a period of 60 days after the later of (i)
the occurrence of any such event or (ii) the effective date of an
appropriate registration statement under the Act pursuant to Section 9
hereof, have a right to receive, upon exercise thereof at a price equal to
the then current Purchase Price in accordance with the terms of this
Agreement, such number of shares of Common Stock of the Company (or, in the
discretion of the Board of Directors, one two-hundredths of a share of
Preferred Stock) as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one two-hundredths of a
share of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing
that product by 50% of the then current per share market price of the
Company's Common Stock (determined pursuant to Section 11(d) hereof) on the
date of such first occurrence (such number of shares being referred to as
the "Adjustment Shares"); provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject to
the provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that there shall not be sufficient treasury shares
or authorized but unissued (and unreserved) shares of Common Stock to
permit the exercise in full of the Rights in accordance with the foregoing
Section 11(a)(ii) and the Rights become so exercisable (and the Board has
determined to make the Rights exercisable into fractions of a share of
preferred stock), notwithstanding any other provision of this Agreement, to
the extent necessary and permitted by applicable law, each Right shall
thereafter represent the right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement,
(A) a number of shares (or fractions of shares) of Common Stock (up to the
maximum number of shares of Common Stock which may permissibly be issued)
and (B) a number of one two-hundredths of a share of Preferred Stock or a
number of (or fractions of) other equity securities of the Company (or, in
the discretion of the Board, debt securities) which the Board has
determined to have the same aggregate current market value (determined
pursuant to Sections 11(d)(i) and 11(d)(ii) hereof, to the extent
applicable) as one share of Common Stock (such number of shares (or
fractions of shares) of Preferred Stock (or other equity securities or debt
securities of the Company) being referred to as a "capital stock
<PAGE> 16
equivalent"), equal in the aggregate to the number of Adjustment Shares;
provided, however, if sufficient shares of Common Stock and/or capital
stock equivalents are unavailable, then the Company shall, to the extent
permitted by applicable law, take all such action as may be necessary to
authorize additional shares of Common Stock or capital stock equivalents
for issuance upon exercise of the Rights, including the calling of a
meeting of shareholders; and provided, further, that if the Company is
unable to cause sufficient shares of Common Stock and/or capital stock
equivalents to be available for issuance upon exercise in full of the
Rights, then each Right shall thereafter represent the right to receive the
Adjusted Number of Shares upon exercise at the Adjusted Purchase Price (as
such terms are hereinafter defined). As used herein, the term "Adjusted
Number of Shares" shall be equal to that number of shares (or fractions of
shares) of Common Stock (and/or capital stock equivalents) equal to the
product of (x) the number of Adjustment Shares and (y) a fraction, the
numerator of which is the number of shares of Common Stock (and/or shares
or units of common stock equivalents) available for issuance upon exercise
of the Rights and the denominator of which is the aggregate number of
Adjustment Shares otherwise issuable upon exercise in full of all Rights
(assuming there were a sufficient number of shares of Common Stock
available) (such fraction being referred to as the "Proration Factor"). The
"Adjusted Purchase Price" shall mean the product of the Purchase Price and
the Proration Factor. The Board of Directors may, but shall not be required
to, establish procedures to allocate the right to receive shares of Common
Stock and capital stock equivalents upon exercise of the Rights among
holders of Rights.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase shares of Preferred Stock (or shares
having the same rights and privileges as the Preferred Stock ("equivalent
preferred stock")) or securities convertible into shares of Preferred Stock or
equivalent preferred stock at a price per share of Preferred Stock or per share
of equivalent preferred stock (or having a conversion price per share, if a
security convertible into shares of Preferred Stock or equivalent preferred
stock) less than the then current per share market price of the Preferred Stock
(as determined pursuant to Section 11(d) hereof) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current per share market price, and the
denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
<PAGE> 17
shares of Preferred Stock and/or equivalent preferred stock 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
the 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 determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (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
Stock) 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 (as determined pursuant to Section 11(d)
hereof) of the Preferred Stock on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on 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 share of Preferred Stock and the denominator of which shall be
such current per share market price of the Preferred Stock; 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 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
<PAGE> 18
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 per share market price equivalent of such Security. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Security is not
listed or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by 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, selected by the Board, making a market in the Security. If on any
such date no such market maker is making a market in the Security, the fair
value of the Security on such date as determined in good faith by the Board
shall be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a Business
Day. Subject to Section 11(d)(ii) hereof, if any Security is not publicly held
or so listed or traded, "current per share market price" of such Security shall
mean the fair market value per share as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Stock shall be determined in accordance
with the method set forth in the foregoing Section 11(d)(i). If the Preferred
Stock is not publicly traded, the current per share market price of the
Preferred Stock shall be conclusively deemed to be the current per share market
price of the Common Stock as determined pursuant to the foregoing 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 Stock nor the Preferred Stock is publicly held or so
listed or traded, "current per share market price" shall mean the fair value per
share as
<PAGE> 19
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent.
(e) Notwithstanding anything herein to the contrary, 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 two-hundredth of a share of Preferred Stock or one
hundred-hundredth 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 mandates such adjustment or (ii)
the Final Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
(ii) or 13(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 Stock, thereafter the number of 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 Stock contained in Sections 11(a) through 11(c) hereof,
inclusive, and the provisions of Sections 7, 9, 10, 13 and 15 hereof with
respect to the Preferred Stock 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 two-hundredths of a
share of Preferred Stock 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) hereof, upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and 11(c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one two-hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth of a share of Preferred Stock) obtained by (i) multiplying (A) the
number of one two-hundredths of a share of Preferred Stock covered by a Right
immediately prior to this adjustment of the Purchase Price by (B) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
<PAGE> 20
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of one two-hundredths of a share of Preferred Stock 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 two-hundredths
of a share of Preferred Stock 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 15 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 two-hundredths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
two-hundredths of a share of Preferred Stock 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 the then par value, if any, of the number of one
two-hundredths of a share of Preferred Stock, Common Stock or other securities
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 such number of fully paid and
nonassessable one two-hundredths of a share of Preferred Stock, Common Stock or
other securities at such adjusted Purchase Price.
<PAGE> 21
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one two-hundredths of a share of Preferred Stock, Common Stock or
other securities of the Company, if any, issuable upon such exercise over and
above the number of one two-hundredths of a share of Preferred Stock, Common
Stock or other securities of the Company, if any, issuable upon 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) Notwithstanding anything in this Section 11 to the contrary, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock, (ii)
issuance wholly for cash of any shares of Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are convertible into or exchangeable
for shares of Preferred Stock, (iv) stock dividends, or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
shareholders.
(n) The exercise of Rights under Section 11(a)(ii) hereof shall only
result in the reduction of rights under Section 11(a)(ii) hereof to the extent
so exercised and shall not otherwise affect the rights represented by the Rights
under this Agreement, including the rights represented by Section 13 hereof.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 7(b), 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 Preferred
Stock and the Common Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
26 hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of such adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, on or following the Stock Acquisition
Date or, if a Transaction is proposed, the Distribution Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
Interested Stockholder or, if in such
<PAGE> 22
merger or consolidation all holders of Common Stock are not offered the same
consideration, any other Person, (y) the Company shall consolidate with, or
merge with, any Interested Stockholder or, if in such merger or consolidation
all holders of Common Stock are not offered the same consideration, any other
Person and the Company shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any transaction described in
(x) or (y), a merger or consolidation which would result in all of the
securities generally entitled to vote in the election of directors ("voting
securities") of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into securities
of the surviving entity) all of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation and
the holders (and relative percentage holdings of each such holder) of such
securities not having changed as a result of such merger or consolidation) or
(z) the Company shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its subsidiaries (taken as a
whole) to any Interested Stockholder or, if in such transaction all holders of
Common Stock are not offered the same consideration, any other Person (other
than the Company or any subsidiary of the Company in one or more transactions
each of which does not violate Section 14(b) hereof), then, and in each such
case (except as provided in Section 13(e) hereof), proper provision shall be
made so that (A) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current Purchase Price in accordance with the terms of
this Agreement, and in lieu of Preferred Stock, such number of shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined), not
subject to any liens, rights of first refusal, encumbrances or other adverse
claims, as shall equal the result obtained by (1) multiplying the then current
Purchase Price by the number of one two-hundredths of a share of Preferred Stock
for which a Right is then exercisable (without taking into account any
adjustment previously made pursuant to Section 11(a)(ii) hereof) and dividing
that product by (2) 50% of the then current per share market price of the Common
Stock of such Principal Party (determined pursuant to Section 11(d) hereof) on
the date of consummation of such Section 13 Event; (B) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(C) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall only apply to such Principal Party following the first occurrence of a
Section 13 Event; and (D) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights.
<PAGE> 23
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a) hereof, the Person that is the issuer
of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or consolidation
(including, if applicable, the Company if it is the surviving corporation);
and
(ii) in the case of any transaction described in (z) of the
first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any of the foregoing cases, (1) if the Common Stock
of such Person is not at such time and has not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect subsidiary or Affiliate of another Person
the Common Stock of which is and has been so registered, "Principal Party" shall
refer to such other Person; (2) in case such Person is a subsidiary, directly or
indirectly, or Affiliate of more than one Person, the Common Stocks of two or
more of which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value; and (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in clauses (1)
and (2) above of this Section 13(b) shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"subsidiary" of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
shares of its authorized Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in Section 13(a) and 13(b) hereof and further
providing that, as soon as practicable after the date of any consolidation,
merger, sale or transfer mentioned in Section 13(a) hereof, the Principal Party
at its own expense shall
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise of
the Rights on
<PAGE> 24
an appropriate form, and use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the blue
sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. The rights under this Section 13
shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) hereof and shall survive any exercise thereof.
(d) The Company shall not consummate any such merger, consolidation,
sale or transfer which shall be a Transaction unless prior thereto certificates
evidencing the Rights have been distributed in accordance with Section 3(a) to
holders of Common Stock not less than twenty business days prior to the date on
which the Transaction becomes effective or is consummated.
(e) Notwithstanding anything in this Agreement to the contrary, the
provisions of this Section 13 shall not be applicable to a transaction described
in subparagraphs (x) and (y) of Section 13(a) hereof if: (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a Permitted Offer (or a wholly owned subsidiary of any such Person
or Persons); (ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock paid to all
holders of Common Stock whose shares were purchased pursuant to such Permitted
Offer; and (iii) the form of consideration offered in such transaction is the
same as the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section 13(e), all
Rights hereunder shall expire.
Section 14. Additional Covenants. (a) The Company covenants and
agrees that it shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a subsidiary of the Company in a
transaction which does not violate Section 14(b) hereof), (ii) merge with or
into any other Person (other than a subsidiary of the Company in a transaction
which does not violate Section 14(b) hereof), or (iii) sell or transfer (or
permit any subsidiary to sell or transfer), in one transaction, or a series of
related transactions, assets or earning power aggregating more than 50% of the
<PAGE> 25
assets or earning power of the Company and its subsidiaries taken as a whole, to
any other Person or Persons (other than the Company and/or any of its
subsidiaries in one or more transactions each of which does not violate Section
14(b) hereof) if (x) at the time of or after such consolidation, merger or sale
or transfer there are any charter or by-law provisions of the Company or any
other Person or any rights, warrants or other instruments of the Company or any
other Person outstanding or agreements in effect or any other action taken which
would materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Company and such other Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing compliance with this
subsection.
(b) The Company covenants and agrees that, after the earlier of (i)
the Stock Acquisition Date and (ii) the Distribution Date, it will not, except
as permitted by Section 24 or Section 28 hereof, take (or permit any of its
subsidiaries to take) any action the purpose of which is to, or if at the time
such action is taken it is reasonably foreseeable that the effect of which is
to, materially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
Section 15. 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 15(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 of the Rights 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
<PAGE> 26
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker, selected by the
Board, making a market in the Rights. 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 shares
of Preferred Stock (other than fractions which are one two-hundredths or
integral multiples of one two-hundredth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Preferred Stock (other than fractions which are one two-hundredths or
integral multiples of one two-hundredth of a share of Preferred Stock).
Fractions of shares of Preferred Stock in integral multiples of one
two-hundredth of a share of Preferred Stock 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 shares of Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not one two-hundredth or integral multiples of one two-hundredth of a share of
Preferred Stock, 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 share of
Preferred Stock. For purposes of this Section 15(b), the current market value of
a share of Preferred Stock shall be the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 hereof giving rise to the right to receive shares of
Common Stock or capital stock equivalents (other than Preferred Stock) or other
securities upon the exercise of a Right, the Company shall not be required to
issue fractions of shares or units of such Common Stock, capital stock
equivalents or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional shares of such Common Stock, capital
stock equivalents or other securities. In lieu of fractional shares or units of
such Common Stock, capital stock equivalents or other securities, the Company
may 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 a share or unit of such capital stock equivalents or
other securities. For purposes of this Section 15(c), the current market value
shall be determined in the manner set forth in Section 11(d) hereof for the
Trading Day immediately prior to the date of such exercise and, if such capital
stock equivalent is not traded, each such capital stock equivalent shall have
the value of one two-hundredth of a share of Preferred Stock.
<PAGE> 27
(d) 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 16. Rights of Action. All rights of action in respect of this
Agreement excepting the rights of action given to the Rights Agent under Section
19 hereof are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in 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 hereunder of any Person subject to, this
Agreement.
Section 17. 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 Common Stock;
(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 or offices of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate form fully executed;
(c) subject to Section 6 and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
<PAGE> 28
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 18. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Preferred
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or other distributions or to exercise any preemptive 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 19. 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
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom. The
indemnification provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement. In no case shall the Rights Agent
be liable for special, indirect, incidental or consequential loss or damage of
any kind whatsoever, even if the Rights Agent has been advised of the likelihood
of such loss or damage.
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 Common Stock
<PAGE> 29
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.
Section 20. 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 all or substantially all of the corporate trust business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22 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 or in the name of the successor Rights Agent. In all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name. In all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 21. 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.
<PAGE> 30
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of the current per share market price of any Security) 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 President,
any Vice President, the Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross 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 or be required to verify the same (except its countersignature
thereof). 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 adjustment required under the provisions of
Section 11 or 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of the certificate described in Section 12
hereof); nor shall it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares of Preferred
Stock or Common Stock or other securities to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Preferred
Stock or Common Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable; nor shall it be under any
duty to make any independent investigation or determination of the identity of
any Acquiring Person or any Affiliate or Associate thereof, but shall be
entitled to rely, in the absence of instructions identifying any such Person, on
representations made by holders of Right Certificates.
(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
<PAGE> 31
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 President, any Vice President, the
Secretary, any Assistant 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.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
omission, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights
hereunder if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificates surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further action with respect to
such requested exercise of transfer without first consulting with the Company.
Section 22. 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 Stock and Preferred Stock by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any
<PAGE> 32
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 Stock and Preferred Stock by registered or certified mail, and to
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 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 either (a) a corporation organized and doing business
under the laws of the United States or of the State of New York or the
Commonwealth of Massachusetts (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 New York or the Commonwealth of Massachusetts), in good
standing, having a principal office in the State of New York or the Commonwealth
of Massachusetts, 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 $50,000,000 (or such
lower number as approved by the Board) or (b) an affiliate of such a
corporation. After appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 22, 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 23. 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.
<PAGE> 33
In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the earliest of the Redemption
Date, the Final Expiration Date and the consummation of a transaction
contemplated by Section 13(e) hereof, the Company (a) shall with respect to
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that no
Right Certificates shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 24. Redemption and Termination.
(a) (i) The Board of Directors of the Company may, at its option,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price") at any time prior to the earlier of
(A) the occurrence of a Section 11(a)(ii) Event or (B) the Final Expiration
Date, and the Company may, at its option, pay the Redemption Price either
in Common Stock (based on the current per share market price, as defined in
Section 11(d) hereof, of the Common Stock at the time of redemption) or
cash; provided, however, that if the Company elects to pay the Redemption
Price in Common Stock, the Company shall not be required to issue any
fractional Common Stock and the number of Common Stock issuable to each
holder of Rights shall be rounded down to the next whole share.
(ii) In addition, the Board of Directors of the Company may
redeem all but not less than all of the then outstanding Rights at the
Redemption Price following the occurrence of a Stock Acquisition Date but
prior to any event described in Section 13(a), either (x) if each of the
following shall have occurred and remain in effect: (1) a Person who is an
Acquiring Person shall have transferred or otherwise disposed of a number
of voting securities of the Company in a transaction, or series of
transactions, (which did not result in the occurrence of an event described
in Section 11(a)) such that such Person is thereafter a Beneficial Owner of
securities representing 5% or less of the Voting Power, (2) there are no
other Persons, immediately following the occurrence of the event described
in clause (1), who are Acquiring Persons, and (3) the transfer or other
disposition described in clause (1) above was other than pursuant to a
transaction, or series of transactions, which directly or indirectly
involved the Company or any of its Subsidiaries or (y) in connection with
any event specified in Sections 11(a)(ii) or 13(a) in which all holders of
Common Stock are offered the same
<PAGE> 34
consideration and not involving an Interested Stockholder or any other
Person in which such Interested Stockholder has any interest, or any other
Person acting directly or indirectly on behalf of or in association with
any such Interested Stockholder or (z) following the occurrence of an event
set forth in, and the expiration of any period during which the holder of
Rights may exercise the rights under, Section 11(a)(ii) if and for as long
as the Interested Stockholder is not thereafter the Beneficial Owner of
securities representing 15% or more of the Voting Power.
(iii) Notwithstanding anything to the contrary in this
Agreement, including, without limitation, the provisions of Sections 24
(a)(i) and (a)(ii) hereof, in the event that a majority of the Board of
Directors is comprised of persons elected at a meeting of shareholders who
were not nominated by the Board of Directors in office immediately prior to
such meeting (including successors of such persons elected to the Board of
Directors) with the objective or for the purpose of either facilitating a
Transaction or circumventing directly or indirectly the provisions of this
Section 24(a)(iii), then (1) the Rights may not be redeemed for a period of
365 days following the effectiveness of such election if such redemption is
reasonably likely to have the objective, purpose or effect of facilitating
a Transaction, and (2) the Rights may not be redeemed following such
365-day period if (x) such redemption is reasonably likely to have the
objective, purpose or effect of facilitating a Transaction and (y) during
such 365-day period, the Company enters into any agreement, arrangement or
understanding with any Transaction Person which is reasonably likely to
have the purpose or effect of facilitating a Transaction.
(b) In the case of a redemption permitted under Section 24(a)(i) and
(a)(iii) hereof, immediately upon the date for redemption set forth in (or
determined in the manner specified in) a resolution of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. In the case of a redemption permitted under Section
24(a)(ii) and (a)(iii) hereof, evidence of which shall have been filed with the
Rights Agent, the right to exercise the Rights will terminate and represent only
the right to receive the Redemption Price upon the later of ten Business Days
following the giving of notice or the expiration of any period during which the
rights under Section 11(a)(ii) hereof may be exercised. 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 ten (10) days after such date for redemption set
forth in a resolution 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
<PAGE> 35
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 Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. 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 24 and other than in connection with the purchase of shares of
Common Stock prior to the Distribution Date.
(c) In the case of a redemption permitted under Section 24(a)(i) and
(a)(iii) hereof, the Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release announcing
the manner of redemption of the Rights in accordance with this Agreement and
(ii) mailing payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Stock, and upon such action, all outstanding Rights
and Right Certificates shall be null and void without any further action by the
Company.
Section 25. Exchange. (a) The Board of Directors of the Company may,
at its option, at any time after the time that 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 7(e) and Section 11(a)(ii) hereof) for Common Stock of the Company at
an exchange ratio of one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction involving
either the Common Stock or the Preferred Stock 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, any entity holding Common Stock for or pursuant to the terms of any
such plan or any trustee, administrator or fiduciary of such a plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 25 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any
<PAGE> 36
defect in, such notice shall not affect the validity of such exchange. The
Company shall promptly mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of shares of Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) and Section 11(a)(ii) hereof) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 25, the Company, at its
option, may substitute Preferred Stock (or equivalent preferred stock, as such
term is defined in Section 11(b) hereof) for some or all of the Common Stock
exchangeable for Rights, at the initial rate of two-hundredth of a share of
Preferred Stock (or equivalent preferred stock) for each share of Common Stock,
as appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Stock pursuant to the terms thereof, so that the fraction of a share
of Preferred Stock delivered in lieu of each share of Common Stock shall have
the same voting rights as one share of Common Stock.
(d) The Board of Directors of the Company shall not authorize any
exchange transaction referred to in Section 25(a) hereof unless at the time such
exchange is authorized there shall be sufficient Common Stock or Preferred Stock
issued but not outstanding or authorized but unissued to permit the exchange of
Rights as contemplated in accordance with this Section 25.
Section 26. 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
Preferred Stock or to make any other distribution to the holders of Preferred
Stock (other than a regularly quarterly cash dividend), (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to purchase
any additional shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of its
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), (iv) to effect any consolidation or
merger into or with any other Person (other than a subsidiary of the Company in
a transaction which does not violate Section 14(b) hereof), 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 or Persons (other than the Company and/or any of its
subsidiaries in one or more transactions each of which does not violate Section
14(b) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of a
Right Certificate, in accordance with Section 27 hereof, a notice of such
<PAGE> 37
proposed action to the extent feasible and file a certificate with the Rights
Agent to that effect, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date is to
be fixed. Such notice shall be so given in the case of any action covered by
clause (i) or (ii) above of this Section 26(a) at least 20 days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then (i) the Company shall
as soon as practicable thereafter give to each holder of a Right Certificate, in
accordance with Section 27 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 and (ii) all references in the
foregoing Section 26(a) to Preferred Stock shall be deemed thereafter to refer
also, if appropriate, to Common Stock and/or, if appropriate, other securities
of the Company.
Section 27. 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, and addressed (until another address is filed
in writing with the Rights Agent) as follows:
El Paso Energy Corporation
1001 Louisiana Street
Houston, Texas 77002
Attention: General Counsel
Subject to the provisions of Section 22, 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, and addressed (until another address
is filed in writing with the Company) as follows:
BankBoston, N.A.
c/o Boston EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
Attention: Client Administration
(1998 El Paso Energy Corporation Rights Agreement)
<PAGE> 38
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate or, if prior
to the Distribution Date, to the holder of certificates representing Common
Stock shall be sufficiently given or made if sent by first-class mail, postage
prepaid, and addressed to such holder at the address of such holder as shown on
the registry books of the Company.
Section 28. Supplements and Amendments. Prior to the Distribution
Date, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other than
an Interested Stockholder); provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
28, the Rights Agent shall execute such supplement or amendment, provided that
such supplement or amendment does not adversely affect the rights or obligations
of the Rights Agent under Section 19 or 21 of this Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Notwithstanding anything contained in this Agreement to the contrary,
in the event that a majority of the Board of Directors is comprised of persons
elected at a meeting of shareholders who were not nominated by the Board of
Directors in office immediately prior to such meeting (including successors of
such persons elected to the Board of Directors) with the objective or for the
purpose of either facilitating a Transaction or circumventing directly or
indirectly the provisions of this Section 28, then (A) for a period of 365 days
following the effectiveness of such action, this Agreement shall not be amended
or supplemented in any manner reasonably likely to have the objective, purpose
or effect of facilitating a Transaction and (B) no amendments or
<PAGE> 39
supplements may be made following such 365-day period if (1) such amendment or
supplement is reasonably likely to have the objective, purpose or effect of
facilitating a Transaction and (2) during such 365-day period, the Company
enters into any agreement, arrangement or understanding with any Transaction
Person which is reasonably likely to have the objective, purpose or effect of
facilitating a Transaction.
Section 29. Determination and Actions by the Board of Directors, etc.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or 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 and
whether any proposed amendment adversely affects the interests of the holders of
Right Certificates). For all purposes of this Agreement, any calculation of the
number of shares of Common Stock or other securities outstanding at any
particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock or any other securities 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. All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board in good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Right Certificates and all
other parties, and (y) not subject the Board to any liability to the holders of
the Right Certificates.
Section 30. 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 31. Benefits of this Agreement. 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 Stock) and nothing in this Agreement shall be construed to give
to any Person other than the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Stock) any legal or equitable right, remedy or claim under this
Agreement.
Section 32. 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
<PAGE> 40
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 33. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of 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 to be performed entirely within such State.
Section 34. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 35. 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.
<PAGE> 41
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: EL PASO ENERGY CORPORATION
/s/ DAVID L. SIDDALL
- -------------------------------
Name: David L. Siddall
Title: Corporate Secretary
By: /s/ H. BRENT AUSTIN
-----------------------------------
Name: H. Brent Austin
Title: Executive Vice President and
Chief Financial Officer
Attest: BANKBOSTON, N.A.
as Rights Agent
/s/ PAUL L. EORI By: /s/ KATHERINE ANDERSON
- ------------------------------------ -----------------------------------
Name: Paul L. Eori Name: Katherine Anderson
Title: Senior Account Manager Title: Administration Manager
<PAGE> 42
Exhibit A-1
Form of
Certificate of Designation,
Preferences and Rights of
Series A Junior Participating Preferred Stock
of
El Paso Energy Corporation
(Pursuant to Section 151
of the General Corporation Law of the State of Delaware)
I, Britton White Jr., Executive Vice President and General Counsel of
El Paso Energy Corporation (the "Company"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, in accordance with
the provisions of Section 103 thereof, DO HEREBY CERTIFY as follows:
That pursuant to the authority conferred upon the Board of Directors by
the Restated Certificate of Incorporation of the said Corporation, said Board of
Directors adopted the following resolution creating a series of 2,750,000 shares
of Preferred Stock designated as Series A Junior Participating Preferred Stock:
RESOLVED that pursuant to the authority granted to and vested in the
Board of Directors of this Company in accordance with the provisions of the
Restated Certificate of Incorporation the Board of Directors hereby creates a
series of Preferred Stock of the Company and hereby states the designation and
number of shares, and fixes the relative rights, preferences and limitations
thereof (in addition to the provisions set forth in the Restated Certificate of
Incorporation which are applicable to the Preferred Stock of all classes and
series) as follows:
Section 1. Designation and Amount. There shall be a series of
Preferred Stock, par value $.01 per share, of the Company which shall be
designated as "Series A
<PAGE> 43
Junior Participating Preferred Stock," par value $.01 per share, and the number
of shares constituting such series shall be 2,750,000. 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 Junior
Participating Preferred Stock to a number less than that of the shares then
outstanding plus the number of shares issuable upon exercise of outstanding
rights, options or warrants or upon conversion of outstanding securities issued
by the Company.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the Series
A Junior Participating Preferred Stock with respect to dividends, the holders of
shares of Series A Junior Participating Preferred Stock in preference to the
holders of shares of Common Stock, par value $3.00 per share (the "Common
Stock"), of the Company and 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 January, April, July, and October 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 Junior Participating Preferred Stock in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $25, or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. In the event the Company
shall at any time after July 28, 1992 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of shares of Series A Junior Participating 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 Company shall declare a dividend or distribution on the
Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend
<PAGE> 44
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 $25 per share on the Series A Junior
Participating 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 Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock 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 Junior Participating 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 Junior Participating
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 Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Junior Participating Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Company. In the event the Company shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of
Series A Junior Participating 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.
<PAGE> 45
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Junior Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Company.
(C) (i) If at any time dividends on any Series A Junior Participating
Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall
mark the beginning of a period (herein called a "default period")
which shall extend until such time when all accrued and unpaid
dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Junior
Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default
period, all holders of Preferred Stock (including holders of the
Series A Junior Participating Preferred Stock) with dividends in
arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to
elect two (2) Directors.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii)
of this Section 3(C) or at any annual meeting of stockholders, and
thereafter at annual meetings of stockholders, provided that neither
such voting right nor the right of the holders of any other series of
Preferred Stock, if any, to increase in certain cases, the authorized
number of Directors shall be exercised unless the holders of ten
percent (10%) in number of shares of Preferred Stock outstanding shall
be present in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the holders
of Preferred Stock of such voting right. At any meeting at which the
holders of Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting
as a class, to elect Directors to fill such vacancies, if any, in the
Board of Directors as may then exist up to two (2) Directors or, if
such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special
meeting does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the
number of Directors as shall be necessary to permit the election by
them of the required number. After the holders of the Preferred Stock
shall have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the
holders of Preferred Stock as herein provided or pursuant to the
<PAGE> 46
rights of any equity securities ranking senior to or pari passu with
the Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%)
of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of the holders of Preferred Stock, which meeting shall thereupon be
called by the Chairman of the Board or the President and Chief
Executive Officer of the Company. Notice of such meeting and of any
annual meeting at which holders of Preferred Stock are entitled to
vote pursuant to this paragraph (C) (iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice
to him at his last address as the same appears on the books of the
Company. Such meeting shall be called for a time not earlier than 10
days and not later than 60 days after such order or request or in
default of the calling of such meeting within 60 days after such order
or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this paragraph
(C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Company if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two (2)
Directors voting as a class, after the exercise of which right (x) the
Directors so elected by the holders of Preferred Stock shall continue
in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any
vacancy in the Board of Directors may (except as provided in paragraph
(C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of
stock which elected the Director whose office shall become vacant.
References in this paragraph (C) to Directors elected by the holders
of a particular class of stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of
Directors shall be such number as may
<PAGE> 47
be provided for in the Restated Certificate of Incorporation or
By-laws irrespective of any increase made pursuant to the provisions
of paragraph (C) (ii) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the
Restated Certificate of Incorporation or Bylaws). Any vacancies in the
Board of Directors effected by the provisions of clauses (y) and (z)
in the preceding sentence may be filled by a majority of the remaining
Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating 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 Junior Participating 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 Junior Participating Preferred Stock outstanding shall have been paid in full,
the Company shall not:
(i) Declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock;
(ii) Declare or pay dividends on 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 Junior
Participating Preferred Stock except dividends paid ratably on the
Series A Junior Participating 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 on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock provided that the Company may at any
time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Company ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Junior Participating Preferred Stock; or
<PAGE> 48
(iv) Purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock or any shares of
stock ranking on a parity with the Series A Junior Participating
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 Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company 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 Junior
Participating Preferred Stock purchased or otherwise acquired by the Company in
any manner whatsoever shall be retired and cancelled 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 to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received per share, the greater of 100 times $75 or
100 times the payment made per share of Common Stock, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common
<PAGE> 49
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series A Junior Participating Preferred Stock then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event
there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.
(C) In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment 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.
Section 7. Consolidation, Merger, etc. If the Company 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 event the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 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 Company shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, 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 Junior Participating 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 are
outstanding immediately prior to such event.
<PAGE> 50
Section 8. Redemption. The shares of Series A Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Company's Preferred Stock as
to the payment of dividends and the distribution of assets, unless the terms of
any such series shall provide otherwise.
Section 10. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred Stock.
<PAGE> 51
IN WITNESS WHEREOF, I have executed this Certificate and do affirm the
foregoing as true under penalties of perjury this ____ day of July, 1998.
EL PASO ENERGY CORPORATION
By:
------------------------------------
Britton White, Jr.
Executive Vice President
and General Counsel
Attest:
- ----------------------------------
David L. Siddall
Corporate Secretary
<PAGE> 52
Exhibit A-2
Amended Certificate of Designation,
Preferences and Rights of
Series A Junior Participating Preferred Stock
of
El Paso Energy Corporation
(Pursuant to Section 151
of the General Corporation Law of the State of Delaware)
I, Britton White, Jr., Executive Vice President and General Counsel of
El Paso Energy Corporation (the "Company"), a corporation organized and existing
under the General Corporation Law of the State of Delaware, in accordance with
the provisions of Section 103 thereof, DO HEREBY CERTIFY as follows:
FIRST, that pursuant to a Certificate of Designation, Preferences and
Rights filed on July , 1998 in the Office of the Secretary of State of the State
of Delaware, the Company has authorized 2,750,000 shares of a series of
Preferred Stock designated Series A Junior Participating Preferred Stock. No
shares of Series A Junior Participating Preferred Stock have been issued.
SECOND, that pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said Corporation
and Section 151 (g) of the General Corporation Law of the State of Delaware,
said Board of Directors adopted the following resolution amending the
Certificate of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of the Company:
RESOLVED that pursuant to the authority granted to and vested in the
Board of Directors of this Company in accordance with the provisions of the
Restated Certificate of Incorporation and Section 151 (g) of the General
Corporation Law of the State of Delaware, the Board of Directors hereby amends
the Certificate of Designation,
<PAGE> 53
Preferences and Rights of Series A Junior Participating Preferred Stock of the
Company (the "Certificate of Designation") as follows:
1. Section 2(A) of the Certificate of Designation is hereby amended to
read in its entirety as follows
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the Series
A Junior Participating Preferred Stock with respect to dividends, the holders of
shares of Series A Junior Participating Preferred Stock in preference to the
holders of shares of Common Stock, par value $3.00 per share (the "Common
Stock"), of the Company and 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 January, April, July, and October 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 Junior Participating Preferred Stock in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $25, or (b)
subject to the provision for adjustment hereinafter set forth, 200 times the
aggregate per share amount of all cash dividends, and 200 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series A Junior Participating Preferred Stock. In the event the Company
shall at any time after July 22, 1998 (the "Rights Declaration Date") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of shares of Series A Junior Participating 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.
2. Section 3(A) of the Certificate of Designation is hereby amended to
read in its entirety as follows:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Stock shall entitle the holder
thereof to 200 votes on all matters submitted to a vote of the stockholders of
the Company. In the
<PAGE> 54
event the Company shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series A Junior Participating
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.
3. Section 6(A) of the Certificate of Designation is hereby amended to
read in its entirety as follows:
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Company, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received per share, the greater of 200 times $75 or
200 times the payment made per share of Common Stock, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 200 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
4. Section 7 of the Certificate of Designation is hereby amended to
read in its entirety as follows:
Section 7. Consolidation, Merger, etc. If the Company 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 event the shares of Series A
Junior Participating Preferred
<PAGE> 55
Stock shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to
200 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 Company shall at
any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, 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 Junior
Participating 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 are outstanding immediately prior to such
event.
5. Except as expressly set forth herein, the Certificate of Designation
shall remain in full force and effect without modification.
6. This Amended Certificate of Designation shall be effective as of
12.01 a.m. on August 3, 1998.
IN WITNESS WHEREOF, I have executed this Amended Certificate of
Designation and do affirm the foregoing as true under penalties of perjury this
_______ day of July, 1998.
EL PASO ENERGY CORPORATION
By:
--------------------------------------
Britton White, Jr.
Executive Vice President
and General Counsel
Attest:
- -------------------------------
David L. Siddall
Corporate Secretary
<PAGE> 56
EXHIBIT B
Form of Right Certificate
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER JULY 7, 2002, OR EARLIER IF REDEEMED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT,
RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS AN INTERESTED
STOCKHOLDER, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON
OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
Right Certificate
EL PASO ENERGY CORPORATION
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
Shareholder Rights Agreement, dated as of July 16, 1998 (the "Shareholder Rights
Agreement"), between El Paso Energy Corporation, a Delaware corporation (the
"Company"), and BankBoston, N.A. (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in the
Shareholder Rights Agreement) and prior to 5:00 P.M., New York, New York time,
on July 7, 2002, unless the Rights evidenced hereby shall have been previously
redeemed by the Company, at the principal office or offices of the Rights Agent
designated for such purpose, or at the office of its successor as Rights Agent,
one two-hundredth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, $.01 par value per share (the "Preferred Stock"),
of the Company, at a purchase price of $75.00 per one two-hundredth of a share
of Preferred Stock (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 one
two-hundredths of a share of Preferred Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase
<PAGE> 57
Price set forth above, are the number and Purchase Price as of ____________,
____ based on the shares of Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Shareholder Rights Agreement), if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Interested Stockholder (as
such terms are defined in the Rights Agreement), (ii) a transferee of any such
Interested Stockholder who becomes a transferee after the Interested Stockholder
becomes such, or (iii) under certain circumstances specified in the Shareholder
Rights Agreement, a transferee of any such Interested Stockholder who becomes a
transferee prior to or concurrently with the Interested Person becoming such,
such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
As provided in the Shareholder Rights Agreement, the Purchase Price and
the number of one two-hundredths of a share of Preferred Stock or other
securities 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, including Triggering Events (as such term is
defined in the Shareholder Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Shareholder Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Shareholder 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, which limitations of rights include the temporary suspension
of the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the principal office or 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
shares of Preferred Stock or other securities as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Shareholder Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at a
redemption price of
<PAGE> 58
$.01 per Right (subject to adjustment as provided in the Shareholder Rights
Agreement) payable in shares of Common Stock or cash.
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 as defined in the Shareholder Rights Agreement.
The Company will not be required to issue fractions of shares of
Preferred Stock (other than fractions which are one two-hundredth or integral
multiples of one two-hundredth of a share of Preferred Stock) upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are one two-hundredth or integral
multiples of one two-hundredth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock other than fractions that are multiples of
one two-hundredth of a share of Preferred Stock, the Company will pay to the
registered holders of Right Certificates at the time such Rights are exercised
an amount in cash equal to the same fraction of the current market value of one
share of Preferred Stock as defined 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 shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the
Shareholder 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 Shareholder Rights Agreement), or to
receive dividends or other distributions or to exercise any preemptive or
subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Shareholder
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
<PAGE> 59
WITNESS the signature of the proper officers of the Company and its
corporate seal. Dated as of _______,_____.
[SEAL]
ATTEST: EL PASO ENERGY CORPORATION
Attest:
By By
---------------------------- ------------------------------
Name: Name:
Title: Title:
Countersigned:
BANKBOSTON, N.A.,
as Right Agent
By
----------------------------
Authorized Signatory
Name:
Title:
<PAGE> 60
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________________________________________
hereby sells, assigns and transfers unto_______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
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 a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank, savings association, credit union or trust company
having an office or correspondent in the United States or other eligible
guarantor institution which is a participant in a signature guarantee medallion
program.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on behalf of
a Person who is or was an Interested Stockholder thereof (as such terms are
defined in the Shareholder Rights Agreement) and (2) after due inquiry and to
the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Right Certificate from any Person who is or was or
subsequently became an Interested Stockholder.
________________________________
Signature
<PAGE> 61
Form of Reverse Side of Right Certificate -- continued
- -------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires
to exercise Rights represented by the Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Right Certificate to purchase the shares of Preferred Stock,
Common Stock or such other securities issuable upon the exercise of such Rights
at this time as follows:
Please Insert
Number of Rights
To Be Exercised
---------------
(i) Preferred Stock Exercise
-------------
(ii) Section 11(a)(ii) Exercise
-------------
(iii) Section 13 Exercise
-------------
The undersigned requests that certificates for such shares of Preferred
Stock, Common Stock or other securities be issued in the name of:
Please insert social security
or other identifying number ___________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
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 of transferee)
________________________________________________________________________________
<PAGE> 62
Form of Reverse Side of Right Certificate -- continued.
- --------------------------------------------------------------------------------
Dated: _________, ____
____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank, savings association, credit union or trust company
having an office or correspondent in the United States or other eligible
guarantor institution which is a participant in a signature guarantee medallion
program.
<PAGE> 63
Form of Reverse Side of Right Certificate -- continued.
- --------------------------------------------------------------------------------
The undersigned hereby certifies that (1) the Rights evidenced by this
Right Certificate are not being exercised by or on behalf of a Person who is or
was an Interested Stockholder thereof (as such terms are defined in the
Shareholder Rights Agreement) and (2) after due inquiry and to the best
knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Rights Certificate from any Person who is or was an Interested
Stockholder.
__________________________
Signature
- --------------------------------------------------------------------------------
NOTICE
The signature on the foregoing Forms of Assignment and Election and
certificates 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 Interested Stockholder
(as such terms are defined in the Shareholder Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
<PAGE> 64
EXHIBIT C
August 3, 1998
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE SHAREHOLDER RIGHTS
AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN
INTERESTED STOCKHOLDER (AS DEFINED IN THE SHAREHOLDER RIGHTS AGREEMENT) AND
CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON
OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
El Paso Natural Gas Company, a Delaware corporation ("El Paso"), El
Paso Energy Corporation, a Delaware corporation (the "Company") and El Paso
Energy Merger Company, a Delaware corporation ("Merger Sub") and a direct,
wholly owned subsidiary of the Company entered into an Agreement and Plan of
Merger, dated July 16, 1998, pursuant to which effective August 1, 1998, Merger
Sub merged with and into El Paso, with El Paso as the surviving corporation, as
a result of which each outstanding share of common stock, $3.00 par value per
share, of El Paso has been converted into one share (or equal fraction thereof)
of common stock, $3.00 par value per share, of the Company (the "Common Stock"),
and each one-half outstanding preferred stock purchase right of El Paso has been
converted into one preferred stock purchase right (a "Right") associated with
each share of Common Stock. Except as set forth below, each Right, when it
becomes exercisable, entitles the registered holder to purchase from the Company
one two-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $.01 per share (the "Preferred Stock"), at a price of $75.00 per one
two-hundredth of a share of Preferred Stock (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a
Shareholder Rights Agreement, dated as of July 16, 1998 (the "Shareholder Rights
Agreement"), between the Company and BankBoston, N.A. (the "Rights Agent").
The Rights are attached to all certificates representing outstanding
shares of Common Stock, and no separate Right Certificates (as hereinafter
defined) have been distributed. The Rights will separate from the shares of
Common Stock on the earliest to occur of (i) the first date of public
announcement that a person or "group" has acquired beneficial ownership of
securities having 15% or more of the voting power of all outstanding voting
securities of the Company (as hereinafter defined); or (ii) ten (10) business
days (or such later date as the Board of Directors of the Company may determine)
following the commencement of, or announcement of an intention to commence, a
tender offer or exchange offer the consummation of which would result in a
<PAGE> 65
person or group becoming an Acquiring Person; or (iii) twenty business days
prior to the date on which a Transaction (as defined in the Shareholder Rights
Agreement) is reasonably expected to become effective or be consummated (the
earliest of such dates being called the "Distribution Date"). A person or group
whose acquisition of voting securities causes a Distribution Date pursuant to
clause (i) above is an "Acquiring Person". The first date of public announcement
that a person or group has become an Acquiring Person is the "Stock Acquisition
Date".
The Rights Agreement provides that until the Distribution Date the
Rights will be transferred with and only with the shares of Common Stock. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued upon transfer or new issuance of shares of
Common Stock will contain a notation incorporating the Shareholder Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding, even without such notation, will also
constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the shares of Common Stock
as of the close of business on the Distribution Date (and to each initial record
holder of certain shares of Common Stock issued after the Distribution Date),
and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire at 5:00 P.M., New York, New York time, on July 7, 2002, unless earlier
redeemed by the Company as described below.
In the event that any person becomes an Acquiring Person (except
pursuant to a Permitted Offer as hereinafter defined), each holder of a Right
will have (subject to the terms of the Shareholder Rights Agreement) the right
(the "Flip-In Right") to receive upon exercise the number of shares of Common
Stock, or, in the discretion of the Board of Directors of the Company, the
number of one two-hundredths of a share of Preferred Stock (or, in certain
circumstances, other securities of the Company) having a value (immediately
prior to such triggering event) equal to two times the Purchase Price.
Notwithstanding the foregoing, following the occurrence of the event described
above, all Rights that are, or (under certain circumstances specified in the
Shareholder Rights Agreement) were, beneficially owned by any Acquiring Person
or any affiliate or associate thereof will be null and void. A "Permitted Offer"
is a tender or exchange offer for all outstanding shares of Common Stock which
is at a price and on terms determined, prior to the purchase of shares under
such tender or exchange offer, by a majority of Disinterested Directors (as
hereinafter defined) to be adequate (taking into account all factors that such
Disinterested Directors deem relevant) and otherwise in the best
<PAGE> 66
interests of the Company and its stockholders (other than the person or any
affiliate or associate thereof on whose basis the offer is being made) taking
into account all factors that such Disinterested Directors may deem relevant.
"Disinterested Directors" are directors of the Company who are not officers of
the Company and who are not Acquiring Persons or affiliates or associates
thereof, or representatives of any of them, or any person who was directly or
indirectly proposed or nominated as a director of the Company by a Transaction
Person (as defined in the Shareholder Rights Agreement).
In the event that, at any time following the Stock Acquisition Date or,
if a Transaction is proposed, the Distribution Date, (i) the Company is acquired
in a merger or other business combination transaction in which the holders of
all of the outstanding shares of Common Stock immediately prior to the
consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 50% of the Company's assets or
earning power is sold or transferred, in either case with or to an Interested
Stockholder, or, if in such transaction all holders of shares of Common Stock
are not offered the same consideration, any other person, then each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise,
shares of common stock of the acquiring company having a value equal to two
times the Purchase Price. The holder of a Right will continue to have the
Flip-Over Right whether or not such holder exercises or surrenders the Flip-In
Right.
The Purchase Price payable, and the number of two-hundredths of a share
of Preferred Stock or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
shares of Preferred Stock, (ii) upon the grant to holders of the shares of
Preferred Stock of certain rights or warrants to subscribe for or purchase
shares of Preferred Stock at a price, or securities convertible into shares of
Preferred Stock with a conversion price, less than the then current market price
of the shares of Preferred Stock or (iii) upon the distribution to holders of
the shares of Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
The Purchase Price payable, and the number of two-hundredths of a share
of Preferred Stock or other securities issuable, upon exercise of the Rights are
also subject to adjustment in the event of a stock split of the shares of Common
Stock, or a stock dividend on the shares of Common Stock payable in shares of
Common Stock, or subdivisions, consolidations or combinations of the shares of
Common Stock occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such
<PAGE> 67
Purchase Price. No fractional two-hundredths of a share of Preferred Stock
will be issued, and in lieu thereof, an adjustment in cash will be made based on
the market price of the shares of Preferred Stock on the last trading day prior
to the date of exercise.
At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective upon the action of the
Board of Directors of the Company. Additionally, the Company may redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price after the
triggering of the Flip-In Right and before the expiration of any period during
which the Flip-In Right may be exercised in connection with a merger or other
business combination transaction or series of transactions involving the Company
in which all holders of shares of Common Stock are not offered the same
consideration but not involving a Transaction Person (as defined in the
Shareholder Rights Agreement), (ii) following an event giving rise to, and the
expiration of the exercise period for, the Subscription Right if and for as long
as no person beneficially owns securities representing 15% or more of the voting
power of the Company's voting securities or (iii) if the Acquiring Person
reduces his ownership below 5% in transactions not involving the Company. The
redemption of Rights described in the preceding sentence shall be effective only
as of such time when the Subscription Right is not exercisable, and in any
event, only after 10 business days' prior notice. Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
The shares of Preferred Stock purchasable upon exercise of the Rights
will be non-redeemable and junior to any other series of preferred stock the
Company may issue (unless otherwise provided in the terms of such stock). Each
share of Preferred Stock will have a preferential quarterly dividend in an
amount equal to 200 times the dividend declared on each share of Common Stock,
but in no event less than $25 (the equivalent of $.25 per share of common
stock). In the event of liquidation, the holders of Preferred Stock will receive
a preferred liquidation payment equal to the greater of 200 times $75 or 200
times the payment made per each share of Common Stock. Each share of Preferred
Stock will have 200 votes, voting together with the shares of Common Stock. In
the event of any merger, consolidation or other transaction in which shares of
Common Stock are exchanged, each share of Preferred Stock will be entitled to
receive 200 times the amount and type of consideration received per share of
Common Stock. The rights of the Preferred Stock as to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary anti-dilution provisions. Fractional shares of Preferred Stock will be
issuable; however, the Company may elect to distribute depositary receipts in
lieu of such fractional shares. In lieu of fractional shares other than
fractions that are multiples of one two-hundredth of a share, an adjustment in
cash will be
<PAGE> 68
made based on the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
In the event that a majority of the Board of Directors of the Company
is comprised of persons elected at a meeting of stockholders who were not
nominated by the Board of Directors in office immediately prior to such meeting
(including successors of such persons elected to the Board of Directors), then
for 365 days following such meeting, the Shareholder Rights Agreement may not be
amended and the Rights may not be redeemed if such amendment or redemption, as
the case may be, is reasonably likely to facilitate a combination or sale,
mortgage or other transfer of assets or earning power (a "Transaction") with a
Transaction Person (as defined below). The Shareholder Rights Agreement may not
be amended and the Rights may not be redeemed thereafter if during such 365 day
period the Company enters into any agreement reasonably likely to facilitate a
Transaction with a Transaction Person and the amendment or redemption, as the
case may be, is reasonably likely to facilitate a Transaction with a Transaction
Person.
A "Transaction Person" with respect to a Transaction means (x) any
Person who (i) is or will become an Acquiring Person or a Principal Party (as
such term is defined in the Shareholder Rights Agreement) if the Transaction
were to be consummated and (ii) either (A) such Person directly or indirectly
proposed or nominated a director of the Company which director is in office at
the time of consideration of the Transaction, or (B) the Transaction with such
Person was approved by persons elected to the Board of Directors with the
objective, for the purpose or with the effect of facilitating a merger or
consolidation of the Company, a sale, mortgage or transfer, in one or more
transactions, of assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole) or any
transaction which would result in a Person becoming an Acquiring Person, or (y)
an Affiliate or Associate of such a Person.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders of the Company, stockholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
A copy of the Shareholder Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to the Company's Registration
Statement on Form 8-A. A copy of the Shareholder Rights Agreement is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Shareholder Rights Agreement, which is incorporated herein by reference.
<PAGE> 1
EXHIBIT 4.2
SECOND SUPPLEMENTAL INDENTURE
This SECOND SUPPLEMENTAL INDENTURE, dated as of August 1, 1998 is
between EL PASO ENERGY CORPORATION, a Delaware corporation ("El Paso Energy"),
and THE CHASE MANHATTAN BANK, as trustee (the "Trustee"), and supplements and
amends to the extent specified below that certain Indenture, dated as of March
1, 1998 (the "Subordinated Debt Indenture"), between El Paso Natural Gas
Company, a Delaware corporation ("EPNG") and the Trustee, as supplemented by
that certain First Supplemental Indenture, dated as of March 17, 1998 (the
"First Supplement"), between EPNG and the Trustee. The Subordinated Debt
Indenture as supplemented and amended by the First Supplement is referred to
herein as the "Indenture."
W I T N E S S E T H :
WHEREAS, EPNG and the Trustee have entered into the Indenture; and
WHEREAS, EPNG recently caused El Paso Energy to be formed as a wholly
owned subsidiary of EPNG and then caused El Paso Energy to form El Paso Energy
Merger Company as a Delaware corporation and wholly owned subsidiary of El Paso
Energy ("Merger Sub"); and
WHEREAS, in accordance with that certain Reorganization Agreement, dated
as of July 16, 1998, among EPNG, El Paso Energy and Merger Sub, and pursuant to
that certain Agreement and Plan of Merger, dated as of July 16, 1998, among
EPNG, El Paso Energy and Merger Sub, effective as of 12:01 a.m., Eastern
Daylight Time, on August 1, 1998 EPNG merged (the "Merger") with Merger Sub,
with EPNG continuing as the surviving corporation of the Merger and each
outstanding share (or fraction thereof) of the common stock, par value $3.00 per
share, of EPNG (the "EPNG Common Stock") being converted into a share (or equal
fraction thereof) of common stock, par value $3.00 per share, of El Paso Energy
("El Paso Common Stock"); and
WHEREAS, as a result of the Merger, El Paso Energy has become the
holding company of EPNG and such holding company reorganization was effected in
accordance with Section 251(g) of the Delaware General Corporation Law; and
WHEREAS, such holding company reorganization constitutes a Stock
Fundamental Change as such term is defined in the First Supplement as a result
of which the Debentures shall be convertible into El Paso Common Stock at a
Conversion Price of $41.59 principal amount of Debentures per share of El Paso
Common Stock; and
WHEREAS, Section 8.2 of the Indenture requires El Paso Energy to
expressly assume the obligations of EPNG under the Indenture in a supplemental
indenture in form reasonably satisfactory to the Trustee; and
<PAGE> 2
WHEREAS, pursuant to and in compliance with Section 8.2 of the
Indenture, El Paso Energy shall succeed to and be substituted for EPNG under the
Indenture as the "Company," with the same effect as if it had been named
therein; and
WHEREAS, Section 9.1 of the Indenture provides that, without the consent
of any Holders, the Company and the Trustee may enter into one or more
indentures supplemental to the Indenture, in form satisfactory to the Trustee,
for the purpose of, among other things, evidencing the succession of another
Person to the Company and the assumption by such successor of the covenants of
EPNG under the Indenture; and
WHEREAS, the entry into this Second Supplemental Indenture by the
parties hereto is in all respects authorized by the provisions of the Indenture;
and
WHEREAS, all things necessary to make this Second Supplemental Indenture
a valid indenture and agreement according to its terms have been done;
NOW, THEREFORE, for and in consideration of the premises, El Paso Energy
and the Trustee mutually covenant and agree for the equal and proportionate
benefit of the respective Holders from time to time of the Securities as
follows:
ARTICLE 1
SECTION 1.01. Assumption of Obligations by El Paso Energy. Pursuant to
Section 8.2 of the Indenture, El Paso Energy does hereby: (i) expressly assume
the due and punctual payment of the principal of and any premium and interest on
all Securities and the performance and observance of every covenant and
condition of the Indenture on the part of EPNG to be performed or observed; (ii)
agree to succeed to and be substituted for EPNG under the Indenture with the
same effect as if it had been named originally therein as the Company; and (iii)
represent that immediately after giving effect to the Merger, no Default or
Event of Default exists.
ARTICLE 2
MISCELLANEOUS
SECTION 2.01. Further Assurances. El Paso Energy will, upon request by
the Trustee, execute and deliver such further instruments and do such further
acts as may reasonably be necessary or proper to carry out more effectively the
purposes of this Second Supplemental Indenture.
SECTION 2.02. Other Terms of Indenture. Except insofar as herein
otherwise expressly provided, all the provisions, terms and conditions of the
Indenture are in all respects ratified and confirmed and shall remain in full
force and effect.
-2-
<PAGE> 3
SECTION 2.03. Terms Defined. All terms defined elsewhere in the
Indenture shall have the same meanings when used herein.
SECTION 2.04. GOVERNING LAW. THE LAW OF THE STATE OF NEW YORK SHALL
GOVERN THIS SECOND SUPPLEMENTAL INDENTURE.
SECTION 2.05. Multiple Counterparts. This Second Supplemental Indenture
may be executed in any number of counterparts, each of which shall be deemed to
be an original for all purposes, but such counterparts shall together be deemed
to constitute but one and the same instrument.
SECTION 2.06. Responsibility of Trustee. The recitals contained herein
shall be taken as the statements of El Paso Energy, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Second Supplemental
Indenture.
SECTION 2.07. Agency Appointments. El Paso Energy hereby confirms and
agrees to all agency appointments made by EPNG under or with respect to the
Indenture or the Securities and hereby expressly assumes the due and punctual
performance and observance of all the covenants and conditions to have been
performed or observed by EPNG contained in any agency agreement entered into by
EPNG under or with respect to the Indenture or the Securities.
-3-
<PAGE> 4
IN WITNESS WHEREOF, this Second Supplemental Indenture has been duly
executed by El Paso Energy and the Trustee as of the day and year first written
above.
EL PASO ENERGY CORPORATION
By: /s/ H. BRENT AUSTIN
---------------------------------------
Name: H. Brent Austin
Title: Executive Vice President and CFO
THE CHASE MANHATTAN
BANK, as Trustee
By: /s/ R. LORENZEN
--------------------------------------
Name: R. Lorenzen
Title: Senior Trust Officer
-4-
<PAGE> 1
EXHIBIT 4.3
FIRST AMENDMENT TO AMENDED AND RESTATED
DECLARATION OF TRUST
THIS FIRST AMENDMENT TO AMENDED AND RESTATED DECLARATION OF TRUST, dated
as of August 1, 1998 (the "First Amendment"), is among EL PASO ENERGY
CORPORATION, a Delaware corporation ("El Paso Energy" and hereinafter the
"Sponsor"), THE CHASE MANHATTAN BANK, as property trustee (the "Property
Trustee"), Chase Manhattan Bank Delaware, as Delaware trustee (the "Delaware
Trustee"), and the administrative trustees named on the signature page hereto
(the "Administrative Trustees"), and amends to the extent specified below the
Declaration (as defined herein),
W I T N E S S E T H :
WHEREAS, El Paso Natural Gas Company ("EPNG"), the Property Trustee, the
Delaware Trustee and the Administrative Trustees are parties to that certain
Amended and Restated Declaration of Trust of El Paso Energy Capital Trust I
dated as of March 16, 1998 (the "Declaration"); and
WHEREAS, EPNG recently caused El Paso Energy to be formed as a wholly
owned subsidiary of EPNG and then caused El Paso Energy to form El Paso Energy
Merger Company as a Delaware corporation and wholly owned subsidiary of El Paso
Energy ("Merger Sub"); and
WHEREAS, in accordance with that certain Reorganization Agreement, dated
as of July 16, 1998, among EPNG, El Paso Energy and Merger Sub, and pursuant to
that certain Agreement and Plan of Merger, dated as of July 16, 1998, among
EPNG, El Paso Energy and Merger Sub, effective as of 12:01 a.m., Eastern
Standard Daylight Time, on August 1, 1998 EPNG merged (the "Merger") with Merger
Sub, with EPNG continuing as the surviving corporation of the Merger and each
outstanding share (or fraction thereof) of the common stock, par value $3.00 per
share, of EPNG being converted into a share (or equal fraction thereof) of
common stock, par value $3.00 per share, of El Paso Energy; and
WHEREAS, as a result of the Merger, El Paso Energy has become the
holding company of EPNG, and such holding company reorganization was effected in
accordance with Section 251(g) of the Delaware General Corporation Law; and
WHEREAS, Section 15.9 of the Declaration requires El Paso Energy to
expressly assume the obligations of EPNG under the Declaration in an instrument
of assumption in form satisfactory to the Property Trustee; and
<PAGE> 2
WHEREAS, pursuant to and in compliance with Section 15.9 of the
Declaration, El Paso Energy is entering into this First Amendment to succeed to
and to be substituted for EPNG under the Declaration as "Sponsor," with the same
effect as if it had been named as Sponsor therein; and
WHEREAS, Section 13.1(h) of the Declaration provides that, without the
consent of the Holders, the Declaration may be amended by written instrument, in
form satisfactory to the Property Trustee, for the purpose of, among other
things, modifying, eliminating and adding to any provision of the Declaration to
such extent as may be necessary, provided that such amendment does not have a
material adverse effect on the rights, preferences or privileges of the Holders;
and
WHEREAS, the entry into this First Amendment to the Declaration by the
parties hereto is in all respects authorized by the provisions of the
Declaration; and
WHEREAS, all things necessary to make this First Amendment a valid
agreement according to its terms have been done;
NOW, THEREFORE, for and in consideration of the premises, El Paso
Energy, the Property Trustee and the Administrative Trustees mutually covenant
and agree for the equal and proportionate benefit of the respective Holders from
time to time of the Trust Securities as follows:
ARTICLE 1
SECTION 1.01. Assumption of Obligations by El Paso Energy. Pursuant to
Section 15.9 of the Declaration, El Paso Energy does hereby: (i) expressly
assume the due and punctual performance and observance of all of the covenants
and conditions of the Declaration to be performed by EPNG; (ii) agree to succeed
to and be substituted for EPNG under the Declaration with the same effect as if
it had been named originally therein as the Sponsor; and (iii) represent that it
is not in default in the performance of any such covenant and condition.
ARTICLE 2
MISCELLANEOUS
SECTION 2.01. Further Assurances. El Paso Energy will, upon request by
the Property Trustee, execute and deliver such further instruments and do such
further acts as may reasonably be necessary or proper to carry out more
effectively the purposes of this First Amendment.
SECTION 2.02. Other Terms of Declaration. Except insofar as herein
otherwise expressly provided, all the provisions, terms and conditions of the
Declaration are in all respects ratified and confirmed and shall remain in full
force and effect.
SECTION 2.03. Terms Defined. All terms defined elsewhere in the
Declaration shall have the same meanings when used herein.
-2-
<PAGE> 3
SECTION 2.04. GOVERNING LAW. THIS FIRST AMENDMENT TO THE DECLARATION
SHALL BE GOVERNED BY SUCH LAWS AS ARE PROVIDED IN SECTION 15.2 OF THE
DECLARATION.
SECTION 2.05. Multiple Counterparts. This First Amendment may be
executed in any number of counterparts, each of which shall be deemed to be an
original for all purposes, but such counterparts shall together be deemed to
constitute but one and the same instrument.
SECTION 2.06. Responsibility of Property Trustee. The recitals contained
herein shall be taken as the statements of El Paso Energy, and the Property
Trustee assumes no responsibility for the correctness of the same. The Property
Trustee makes no representations as to the validity or sufficiency of this First
Amendment.
SECTION 2.07. Agency Appointments. El Paso Energy hereby confirms and
agrees to all agency appointments made by EPNG under or with respect to the
Declaration or the Trust Securities and hereby expressly assumes the due and
punctual performance and observance of all the covenants and conditions to have
been performed or observed by EPNG contained in any agency agreement entered
into by EPNG under or with respect to the Declaration or the Trust Securities.
-3-
<PAGE> 4
IN WITNESS WHEREOF, this First Amendment has been duly executed by El
Paso Energy, the Property Trustee, the Delaware Trustee and the Administrative
Trustees as of the day and year first written above.
EL PASO ENERGY CORPORATION,
as sponsor of EL PASO ENERGY CAPITAL TRUST I
By: /s/ H. BRENT AUSTIN
---------------------------------------
Title: Executive Vice President and CFO
THE CHASE MANHATTAN
BANK, as Property Trustee
By: /s/ R. LORENZEN
---------------------------------------
Title: Senior Trust Officer
CHASE MANHATTAN BANK
DELAWARE, as Delaware Trustee
By: /s/ JOHN CASHIN
---------------------------------------
Title: Vice President
-4-
<PAGE> 5
/s/ H. BRENT AUSTIN
--------------------------------------------
H. Brent Austin, as Administrative Trustee
/s/ JEFFREY I. BEASON
--------------------------------------------
Jeffrey I. Beason, as Administrative Trustee
/s/ C. DANA RICE
--------------------------------------------
C. Dana Rice, as Administrative Trustee
-5-
<PAGE> 1
EXHIBIT 4.4
FIRST AMENDMENT TO
TRUST CONVERTIBLE PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS FIRST AMENDMENT TO TRUST CONVERTIBLE PREFERRED SECURITIES GUARANTEE
AGREEMENT, dated as of August 1, 1998 (the "First Amendment"), is between EL
PASO ENERGY CORPORATION, a Delaware corporation ("El Paso Energy" and
hereinafter the "Guarantor") and THE CHASE MANHATTAN BANK, as trustee (the
"Trust Preferred Guarantee Trustee"), and amends to the extent specified below
the Trust Preferred Securities Guarantee (as defined herein).
W I T N E S S E T H :
WHEREAS, El Paso Natural Gas Company ("EPNG") and the Trust Preferred
Guarantee Trustee are parties to that certain Trust Convertible Securities
Guarantee Agreement dated as of March 17, 1998 (the "Trust Preferred Securities
Guarantee") for the benefit of the holders ("Holders") of the Trust Convertible
Preferred Securities (the "Trust Preferred Securities") of El Paso Energy
Capital Trust I; and
WHEREAS, EPNG recently caused El Paso Energy to be formed as a wholly
owned subsidiary of EPNG and then caused El Paso Energy to form El Paso Energy
Merger Company as a Delaware corporation and wholly owned subsidiary of El Paso
Energy ("Merger Sub"); and
WHEREAS, in accordance with that certain Reorganization Agreement, dated
as of July 16, 1998, among EPNG, El Paso Energy and Merger Sub, and pursuant to
that certain Agreement and Plan of Merger, dated as of July 16, 1998, among
EPNG, El Paso Energy and Merger Sub, effective as of 12:01 a.m., Eastern
Daylight Time, on August 1, 1998 EPNG merged (the "Merger") with Merger Sub,
with EPNG continuing as the surviving corporation of the Merger and each
outstanding share (or fraction thereof) of the common stock, par value $3.00 per
share, of EPNG being converted into a share (or equal fraction thereof) of
common stock, par value $3.00 per share, of El Paso Energy; and
WHEREAS, as a result of the Merger, El Paso Energy has become the
holding company of EPNG, and such holding company reorganization was effected in
accordance with Section 251(g) of the Delaware General Corporation Law; and
WHEREAS, Section 10.3 of the Trust Preferred Securities Guarantee
requires El Paso Energy to expressly assume the obligations of EPNG under the
Trust Preferred Securities Guarantee in an instrument of assumption in form
satisfactory to the Trust Preferred Guarantee Trustee; and
WHEREAS, pursuant to and in compliance with Section 10.3 of the Trust
Preferred Securities Guarantee, El Paso Energy is entering into this First
Amendment to succeed to and to be substituted
<PAGE> 2
for EPNG under the Trust Preferred Securities Guarantee as "Guarantor," with the
same effect as if it had been named as Guarantor therein; and
WHEREAS, Section 10.2 of the Trust Preferred Securities Guarantee
provides that, without the consent of the Holders, the Trust Preferred
Securities Guarantee may be amended with respect to changes that do not
materially adversely effect the rights of Holders; and
WHEREAS, the entry into this First Amendment to the Trust Preferred
Securities Guarantee by the parties hereto is in all respects authorized by the
provisions of the Trust Preferred Securities Guarantee; and
WHEREAS, all things necessary to make this First Amendment a valid
agreement according to its terms have been done;
NOW, THEREFORE, for and in consideration of the premises, El Paso Energy
and the Trust Preferred Guarantee Trustee mutually covenant and agree for the
equal and proportionate benefit of the respective holders from time to time of
the Trust Preferred Securities as follows:
ARTICLE 1
SECTION 1.01. Assumption of Obligations by El Paso Energy. Pursuant to
Section 10.3 of the Trust Preferred Securities Guarantee, El Paso Energy does
hereby: (i) expressly assume the due and punctual performance and observance of
all of the covenants and conditions of the Trust Preferred Securities Guarantee
to be performed by EPNG; (ii) agree to succeed to and be substituted for EPNG
under the Trust Preferred Securities Guarantee with the same effect as if it had
been named originally therein as the Guarantor; and (iii) represent that it is
not in default in the performance of any such covenant and condition.
ARTICLE 2
MISCELLANEOUS
SECTION 2.01. Further Assurances. El Paso Energy will, upon request by
the Trust Preferred Guarantee Trustee, execute and deliver such further
instruments and do such further acts as may reasonably be necessary or proper to
carry out more effectively the purposes of this First Amendment.
SECTION 2.02. Other Terms of Declaration. Except insofar as herein
otherwise expressly provided, all the provisions, terms and conditions of the
Trust Preferred Securities Guarantee are in all respects ratified and confirmed
and shall remain in full force and effect.
SECTION 2.03. Terms Defined. All terms defined elsewhere in the Trust
Preferred Securities Guarantee shall have the same meanings when used herein.
-2-
<PAGE> 3
SECTION 2.04. GOVERNING LAW. THIS FIRST AMENDMENT TO THE TRUST
PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 2.05. Multiple Counterparts. This First Amendment may be
executed in any number of counterparts, each of which shall be deemed to be an
original for all purposes, but such counterparts shall together be deemed to
constitute but one and the same instrument.
SECTION 2.06. Responsibility of Property Trustee. The recitals contained
herein shall be taken as the statements of El Paso Energy, and the Trust
Preferred Guarantee Trustee assumes no responsibility for the correctness of the
same. The Trust Preferred Guarantee Trustee makes no representations as to the
validity or sufficiency of this First Amendment.
SECTION 2.07. Agency Appointments. El Paso Energy hereby confirms and
agrees to all agency appointments made by EPNG under or with respect to the
Trust Preferred Securities Guarantee or the Trust Preferred Securities and
hereby expressly assumes the due and punctual performance and observance of all
the covenants and conditions to have been performed or observed by EPNG
contained in any agency agreement entered into by EPNG under or with respect to
the Trust Preferred Securities Guarantee or the Trust Preferred Securities.
-3-
<PAGE> 4
IN WITNESS WHEREOF, this First Amendment has been duly executed by El
Paso Energy and the Trust Preferred Guarantee Trustee as of the day and year
first written above.
EL PASO ENERGY CORPORATION,
as Guarantor
By: /s/ H. BRENT AUSTIN
---------------------------------------
Title: Executive Vice President & CFO
THE CHASE MANHATTAN
BANK, as Trust Preferred Guarantee Trustee
By: /s/ R. LORENZEN
---------------------------------------
Title: Senior Trust Officer
-4-
<PAGE> 1
EXHIBIT 99.1
[EL PASO ENERGY LOGO] NEWS
- --------------------------------------------------------------------------------
El Paso Energy Corporation Contact: Norma F. Dunn, CPA
P.O. Box 2511 Vice President
Houston, Texas 77252-2511 Investor & Public Relations
Office: (713) 420-3750
Fax: (713) 420-4993
FOR IMMEDIATE RELEASE
EL PASO ENERGY CORPORATION
FINALIZES HOLDING COMPANY STRUCTURE
HOUSTON, TEXAS, AUGUST 3, 1998 -- El Paso Energy Corporation (NYSE:EPG)
announced today that effective August 1, 1998, it has finalized plans to create
a new parent holding company. The new parent company, El Paso Energy
Corporation, owns 100 percent of El Paso Natural Gas Company, the previous
publicly held company. El Paso Natural Gas Company began doing business under
the name El Paso Energy Corporation in April 1996.
This action conforms the legal structure of the company to the functional
organization it has employed for some time. The business operations of the
company will not change as a result of implementing the new legal structure,
although administrative and operational flexibility will be improved.
The reorganization was structured in a manner under Delaware law that did
not require action by El Paso Natural Gas Company shareholders, whose rights,
privileges and interests will remain the same with respect to the new parent
corporation. Existing El Paso Natural Gas Company common stock certificates
serve as evidence of ownership of the same number of shares in El Paso Energy
Corporation; an exchange of certificates is not required. The change to the
holding company structure was tax free to its shareholders. The company's
name, charter, By-laws, officers, and board of directors did not change as a
result of the reorganization. The new parent company will continue to be
traded with the ticker symbol "EPG" on the New York Stock Exchange.
-more-
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EL PASO ENERGY CORPORATION FINALIZES HOLDING COMPANY STRUCTURE
PAGE TWO
With over $9 billion in assets, El Paso Energy Corporation provides
energy solutions through five business units: Tennessee Gas Pipeline Company,
El Paso Natural Gas Company, El Paso Field Services Company, El Paso Energy
Marketing Company, and El Paso Energy International Company. The company owns
the nation's only integrated coast-to-coast natural gas pipeline system and has
operations in interstate natural gas transmission, gas gathering and
processing, energy marketing, and international infrastructure development.
Visit El Paso Energy's web site at www.epenergy.com.
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Contacts:
Media Relations: Russ Roberts
(713) 420-5435
Investor Relations: Scott Vonderheide
(713) 420-4527
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Some information included in this document may be forward looking and may
involve risks and uncertainties, including general economic and competitive
conditions that could significantly impact expected results. Reference should
be made to the Company's (and its affiliates') Securities and Exchange
Commission filings for important factors that may affect actual results.
