SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
Amendment No. 1
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
EL PASO ENERGY CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 76-0568816
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1001 Louisiana Street
Houston, Texas 77002
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange
to be so registered on which each class
- ------------------- is to be registered
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Rights to Purchase Series A New York Stock Exchange
Junior Participating Preferred Stock
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1),
please check the following box. |_|
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933 pursuant
to General Instruction A.(c)(2), please check the following box. |_|
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
This Form 8A/A Amendment No. 1 amends and supplements the
information set forth in the Registration Statement on Form 8-A, filed on
August 3, 1998 (the "Form 8-A") by El Paso Energy Corporation, a Delaware
corporation (the "Company"). On January 20, 1999, the Board of Directors of
the Company approved an Amended and Restated Shareholder Rights Agreement,
dated as of January 20, 1999 between the Company and BankBoston, N.A.,
which became effective as of January 20, 1999.
Item 1. Description of Securities to be Registered.
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Item 1 of the Form 8-A is amended and restated in its entirety by
substituting the following:
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 was 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 was converted into one preferred
stock purchase right (a "Right") associated with each share of Common
Stock, and one Right is associated with each share of Common Stock issued
after August 1, 1998. 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 an Amended and Restated Shareholder Rights
Agreement, dated as of January 20, 1999 (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 person or group becoming an
Acquiring Person (the earlier 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 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 (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 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 an Interested Stockholder (as defined in the Shareholder
Rights Agreement), (ii) following an event giving rise to, and the
expiration of the exercise period for, the Flip-In 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 Flip-In 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
$.125 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 made based on the market price of the Preferred
Stock on the last trading date prior to the date of exercise.
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.
Attached hereto as Exhibit 1 and incorporated herein by reference
is a form of the Amended and Restated Shareholder Rights Agreement, dated
as of January 20, 1999, between the Company and BankBoston, N.A., as Rights
Agent, specifying the terms of the Rights, including the exhibits thereto,
as follows: Exhibit A-1 -- Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock of the Company;
Exhibit A-2 -- Amended Certificate of Designation, Preferences and Rights
of Series A Junior Participating Preferred Stock of the Company; Exhibit B
- -- Form of Right Certificate; and Exhibit C -- Summary of Rights to
Purchase Preferred Stock. The foregoing description of the Rights is
qualified by reference to the Rights Agreement and the exhibits thereto.
Item 2. Exhibits.
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1. Amended and Restated Shareholder Rights Agreement, dated as
of January 20, 1999 between the Company and BankBoston,
N.A., as Rights Agent, which includes, as Exhibit A-1
thereto, the Certificate of Designation, Preferences and
Rights of Series A Junior Participating Preferred Stock of
the Company, as Exhibit A-2 thereto, the Amended Certificate
of Designation, Preferences and Rights of Series A Junior
Participating Preferred Stock of the Company, as Exhibit B
thereto, the Form of Right Certificate, and as Exhibit C
thereto, the Summary of Rights to Purchase Preferred Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, as amended, the registrant has duly caused this
Amendment No. 1 to be signed on its behalf by the undersigned, thereto duly
authorized.
EL PASO ENERGY CORPORATION.
By: /s/ H. Brent Austin
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Name: H. Brent Austin
Title: Executive Vice President
and Chief Financial Officer
Dated: January 28, 1999
EL PASO ENERGY CORPORATION
and
BANKBOSTON, N.A.
as Rights Agent
Amended and Restated Shareholder Rights Agreement
Dated as of January 20, 1999
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions..............................................1
Section 2. Appointment of Rights Agent.......................................5
Section 3. Issue of Right Certificates.......................................5
Section 4. Form of Right Certificate.........................................7
Section 5. Countersignature and Registration.................................8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificate.......................................................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.....9
Section 8. Cancellation and Destruction of Right
Certificates...............12
Section 9. Reservation and Availability of Capital Stock....................12
Section 10. Preferred Stock Record Date.....................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights........................................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power............................................................21
Section 14. Additional Covenants............................................24
Section 15. Fractional Rights and Fractional Shares.........................25
Section 16. Rights of Action................................................26
Section 17. Agreement of Right Holders......................................27
Section 18. Right Certificate Holder Not Deemed a Shareholder...............27
Section 19. Concerning the Rights Agent.....................................28
Section 20. Merger or Consolidation or Change of Name of Rights Agent.......28
Section 21. Duties of Rights Agent..........................................29
Section 22. Change of Rights Agent..........................................31
Section 23. Issuance of New Right Certificates..............................32
Section 24. Redemption and Termination......................................33
Section 25. Exchange........................................................34
Section 26. Notice of Certain Events........................................36
Section 27. Notices.........................................................36
Section 28. Supplements and Amendments......................................37
Section 29. Determination and Actions by the Board of Directors, etc........38
Section 30. Successors......................................................38
Section 31. Benefits of this Agreement......................................38
Section 32. Severability....................................................39
Section 33. Governing Law...................................................39
Section 34. Counterparts....................................................39
Section 35. Descriptive Headings............................................39
<PAGE>
AMENDED AND RESTATED SHAREHOLDER RIGHTS AGREEMENT
This Agreement, dated as of January 20, 1999, 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 entered into an Agreement and Plan of Merger, dated July 16, 1998,
pursuant to which Merger Sub merged 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 was 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 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 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 amended as
provided in the form of Amended Certificate of Designation attached hereto
as Exhibit A-2, upon the terms and subject to the conditions set forth in
the Shareholder Rights Agreement dated as of July 16, 1998 (the "Original
Rights Agreement").
WHEREAS, the parties hereto desire to amend and restate the
provisions of the Original Rights Agreement as set forth herein.
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 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 (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 or (ii) Acquiring Persons or their
Affiliates or Associates or representatives of any of them.
(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
any Affiliate or Associate of an Acquiring Person or any other Person in
which any such Acquiring 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, Affiliate or
Associate.
(l) "Permitted Offer" shall mean 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 amended 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.
(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) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
(t) "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 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) (the earlier 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.
(c) Certificates issued for Common Stock which become outstanding
after the date hereof (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 an Amended and Restated
Shareholder Rights Agreement between El Paso Energy Corporation
(the "Company") and BankBoston, N.A. (the "Rights Agent") dated
as of January 20, 1999 (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 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.
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 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 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 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 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). 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 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
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 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 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 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.
(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.
(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, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any Interested Stockholder or, if in such
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.
(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 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) 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 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 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.
(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
(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 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.
(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 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 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.
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 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.
(b) In the case of a redemption permitted under Section 24(a)(i)
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) 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 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)
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 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 one
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 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)
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.
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 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>
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 -----------------------
Title: Senior Account Manager Name: Katherine Anderson
Title: Administration Manager
<PAGE>
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 $.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 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
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 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 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
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 canceled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock 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 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.
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>
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>
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, 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 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 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>
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 Amended and Restated Shareholder Rights Agreement, dated as of
January 20, 1999 (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 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 $.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>
WITNESS the signature of the proper officers of the Company and
its corporate seal. Dated as of , .
--------- ------
[SEAL]
ATTEST:
Attest: EL PASO ENERGY CORPORATION
By By
------------------------ ------------------------
Name: Name:
Title: Title:
Countersigned:
BANKBOSTON, N.A.,
as Right Agent
By
------------------------
Authorized Signatory
Name:
Title:
<PAGE>
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>
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>
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>
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>
EXHIBIT C
January 20, 1999
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 was 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 was converted into one preferred
stock purchase right (a "Right") associated with each share of Common
Stock, and one Right is associated with each share of Common Stock issued
after August 1, 1998. 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 an Amended and Restated Shareholder Rights
Agreement, dated as of January 20, 1999 (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 person or group becoming an
Acquiring Person (the earlier 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 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 (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 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 an Interested Stockholder (as defined in the Shareholder
Rights Agreement), (ii) following an event giving rise to, and the
expiration of the exercise period for, the Flip-In 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 Flip-In 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
$.125 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 made based on the market price of the Preferred
Stock on the last trading date prior to the date of exercise.
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.
