<PAGE> 1
As filed with the Securities and Exchange Commission on October 22, 1998
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CONOCO INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0370352
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 NORTH DAIRY ASHFORD 77079
HOUSTON, TEXAS (Zip Code)
(Address of Principal Executive Offices)
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CONOCO INC.
1998 STOCK AND PERFORMANCE INCENTIVE PLAN
(Full title of the plan)
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R.A. HARRINGTON
SENIOR VICE PRESIDENT, LEGAL, AND GENERAL COUNSEL
CONOCO INC.
600 NORTH DAIRY ASHFORD
HOUSTON, TEXAS 77079
(Name and address of agent for service)
(281) 293-1000
(Telephone number, including area code, of agent for service)
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<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
====================================================================================================================================
PROPOSED PROPOSED MAXIMUM
AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
TITLE OF SECURITIES TO BE REGISTERED REGISTERED (2) PRICE PER SHARE PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Class A Common Stock, par value $.01 per share(1)..... 30,495,264 (3) $615,467,291 $171,100
====================================================================================================================================
</TABLE>
(1) Includes the associated rights to purchase preferred stock, which initially
are attached to and trade with the shares of Class A Common Stock being
registered hereby.
(2) Consists of the number of shares of Class A Common Stock reserved for
issuance pursuant to the Conoco Inc. 1998 Stock and Performance Incentive
Plan (the "Plan"), including without limitation shares issuable upon
exercise of options (the "Options") to purchase Class A Common Stock
granted under the Plan upon surrender by the holders thereof of options to
purchase common stock, par value $.30 per share, of E. I. du Pont de
Nemours and Company. The Options have been registered on a separate
Registration Statement of Conoco Inc. on Form S-1 (Registration No.
333-60119), and a filing fee was paid in connection therewith.
(3) Estimated pursuant to Rules 457(c) and 457(h) under the Securities Act of
1933, as amended (the "Securities Act"), solely for the purpose of
computing the registration fee and based upon (a) the aggregate exercise
price of the Options with respect to the shares of Class A Common Stock
issuable upon exercise thereof ($155,467,291) and (b) with respect to the
balance of the shares of Class A Common Stock registered hereby, the
initial public offering price per share of Class A Common Stock of $23.00
as set forth in the prospectus of Conoco Inc. relating thereto dated
October 21, 1998 as filed with the Securities and Exchange Commission
pursuant to Rule 424(b) under the Securities Act.
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<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Note: The document(s) containing the information concerning the Conoco
Inc. 1998 Stock and Performance Incentive Plan (the "Plan") required by Item 1
of Form S-8 and the statement of availability of registrant information, Plan
information and other information required by Item 2 of Form S-8 will be sent or
given to employees as specified by Rule 428 under the Securities Act of 1933, as
amended (the "Securities Act"). In accordance with Rule 428 and the requirements
of Part I of Form S-8, such documents are not being filed with the Securities
and Exchange Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to Rule 424
under the Securities Act. The registrant will maintain a file of such documents
in accordance with the provisions of Rule 428. Upon request, the registrant will
furnish to the Commission or its staff a copy of any or all of the documents
included in such file.
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<PAGE> 3
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which Conoco Inc., a Delaware corporation (the
"Company"), has filed with the Commission pursuant to the Securities Act and the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (File No.
001-14521), are incorporated in this Registration Statement by reference and
shall be deemed to be a part hereof:
(1) The Company's prospectus dated October 21, 1998 as filed
with the Commission pursuant to Rule 424(b) under the Securities Act;
and
(2) The description of the Company's Class A Common Stock, par
value $.01 per share (the "Common Stock"), contained in the Company's
Registration Statement on Form 8-A filed on September 28, 1998, as
thereafter amended from time to time for the purpose of updating,
changing or modifying such description.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered hereby have been sold, or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated in this Registration
Statement by reference and to be a part hereof from the date of filing of such
documents.
Any statement contained in this Registration Statement, in an amendment
hereto or in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any subsequently filed amendment or
supplement to this Registration Statement or in any document that also is
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute required court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, By-laws,
disinterested director vote, stockholder vote, agreement or otherwise.
II-1
<PAGE> 4
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personably liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) for
payments of unlawful dividends or unlawful stock repurchases or redemptions, or
(iv) for any transaction from which the director derived an improper personal
benefit.
Article 5E(2) of the Registrant's Certificate of Incorporation provides
that no director shall be personally liable to the Company or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability (i) for any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to section 174 of the Delaware General Corporation Law or (iv) for any
transaction from which the director derived an improper personal benefit. Any
repeal or modification of such Article 5E(2) shall not adversely affect any
right or protection of a director of the Registrant for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.
The Company's By-laws provide for indemnification of directors and officers to
the maximum extent permitted by Delaware law.
The Company has entered into indemnification agreements with each of
its directors (collectively, "Indemnitees"). Such agreements provide that, to
the fullest extent permitted by applicable law, the Company shall indemnify and
hold each Indemnitee harmless from and against any and all losses and expenses
whatsoever (i) arising out of any event or occurrence related to the fact that
such Indemnitee is or was a director or officer of the Company, is or was
serving in another capacity with the Company, consented to be named as a person
to be elected as a director of the Company in connection with the Company's
initial public offering of the Common Stock, or by reason of anything done or
not done by such Indemnitee in such capacity and (ii) incurred in connection
with any threatened, pending or completed legal proceeding.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit
Number Document Description
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<S> <C> <C>
4.1 -- Second Amended and Restated Certificate of Incorporation of the Company.
4.2 -- Bylaws of the Company, as amended.
4.3 -- Form of certificate representing Class A Common Stock.
4.4 -- Rights Agreement dated as of October 19, 1998 between the Company and First Chicago Trust
Company of New York, as Rights Agent, which includes as Exhibit A the form of Certificate of
Designations, Preferences and Rights of Series A Junior Participating Preferred Stock, as
Exhibit B the form of Class A Rights Certificate and as Exhibit D the Summary of Rights to
Purchase Preferred Stock.
4.5 -- Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred
Stock.
4.6 -- Amendment to Rights Agreement dated as of October 20, 1998 between the Company and First Chicago
Trust Company of New York, as Rights Agent.
4.7 -- Conoco Inc. 1998 Stock and Performance Incentive Plan.
5.1 -- Opinion of Baker & Botts, L.L.P. as to the legality of securities.
15.1 -- Awareness Letter of PricewaterhouseCoopers LLP.
</TABLE>
II-2
<PAGE> 5
<TABLE>
<S> <C> <C>
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Baker & Botts, L.L.P. (contained in Exhibit 5.1).
24.1 -- Powers of Attorney (included on the signature page of the Registration Statement).
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b)
of the Securities Act of 1933 if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on October 22, 1998.
CONOCO INC.
By: /s/ ARCHIE W. DUNHAM
----------------------------------------
Archie W. Dunham
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below appoints Archie W. Dunham, Robert
W. Goldman, Rick A. Harrington and Gary M. Pfeiffer, and each of them,
severally, as his true and lawful attorney or attorneys-in-fact and agent or
agents, each of whom shall be authorized to act with or without the other, with
full power of substitution and resubstitution, for him and in his name, place
and stead in his capacity as a director or officer or both, as the case may be,
of Conoco Inc., a Delaware corporation (the "Company"), to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and all documents or instruments necessary or appropriate to enable the Company
to comply with the Securities Act of 1933, and to file the same with the
Securities and Exchange Commission, with full power and authority to each of
said attorneys-in-fact and agents to do and perform in the name and on behalf of
each such director or officer, or both, as the case may be, each and every act
whatsoever that is necessary, appropriate or advisable in connection with any or
all of the above-described matters and to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their substitutes, may lawfully
do or cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES INDICATED AND ON OCTOBER 22, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
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<S> <C>
/s/ ARCHIE W. DUNHAM President, Chief Executive Officer and Director
---------------------------------------
Archie W. Dunham
/s/ ROBERT W. GOLDMAN Senior Vice President, Finance, and Chief
--------------------------------------- Financial Officer (Principal Financial Officer and
Robert W. Goldman Principal Accounting Officer)
/s/ EDGAR S. WOOLARD, JR. Chairman of the Board and Director
---------------------------------------
Edgar S. Woolard, Jr.
/s/ GARY M. PFEIFFER Director
---------------------------------------
Gary M. Pfeiffer
</TABLE>
II-4
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Document Description
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<S> <C> <C>
4.1 -- Second Amended and Restated Certificate of Incorporation of the Company.
4.2 -- Bylaws of the Company, as amended.
4.3 -- Form of certificate representing Class A Common Stock.
4.4 -- Rights Agreement dated as of October 19, 1998 between the Company and First Chicago Trust
Company of New York, as Rights Agent, which includes as Exhibit A the form of Certificate of
Designations, Preferences and Rights of Series A Junior Participating Preferred Stock, as
Exhibit B the form of Class A Rights Certificate and as Exhibit D the Summary of Rights to
Purchase Preferred Stock.
4.5 -- Certificate of Designations, Preferences and Rights of Series A Junior Participating Preferred
Stock.
4.6 -- Amendment to Rights Agreement dated as of October 20, 1998 between the Company and First Chicago
Trust Company of New York, as Rights Agent.
4.7 -- Conoco Inc. 1998 Stock and Performance Incentive Plan.
5.1 -- Opinion of Baker & Botts, L.L.P. as to the legality of securities.
15.1 -- Awareness Letter of PricewaterhouseCoopers LLP.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Baker & Botts, L.L.P. (contained in Exhibit 5.1).
24.1 -- Powers of Attorney (included on the signature page of the
Registration Statement).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
CONOCO INC.
CONOCO INC., a Delaware corporation, (hereinafter the
"Corporation") hereby certifies as follows:
1. The name of the Corporation is CONOCO INC. The
original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on November 2, 1995 under the name
Conoco Energy Company.
2. This Second Amended and Restated Certificate of
Incorporation of CONOCO INC. amends and restates the provisions of the
Certificate of Incorporation of the Corporation, filed with the Secretary of
State of the State of Delaware on November 2, 1995 and as amended on July 24,
1998 and October 19, 1998, and was duly adopted in accordance with Sections 242
and 245 of the General Corporation Law of the State of Delaware (the "DGCL") and
by written consent of its Stockholder in accordance with Section 228 of the DGCL
and the Amended and Restated Certificate of Incorporation as heretofore amended.
3. On October 19, 1998, the Corporation filed a
Certificate of Designation, Preferences and Rights of a series of Preferred
Stock designated "Series A Junior Participating Preferred Stock"; no shares of
such series of Preferred Stock have been issued. Pursuant to the authority
granted to the Board of Directors of the Corporation by Section 151(g) of the
Delaware General Corporation Law, on October 20, 1998 the Board of Directors of
the Corporation adopted the following resolution amending the terms of such
series of Preferred Stock:
RESOLVED, that pursuant to the authority granted to the Board of
Directors of the Corporation by Section 151(g) of the Delaware General
Corporation Law, the terms of the series of Preferred Stock, par value
$.01 per share, of the Corporation designated "Series A Junior
Participating Preferred Stock" are hereby amended by replacing the date
"October 18, 1998" in Section 2(A) of the Certificate of Designation,
Preferences and Rights for such Preferred Stock with "October 22,
1998".
Accordingly, effective upon the filing of this Second Amended and
Restated Certificate of Incorporation with the Secretary of State of the State
of Delaware (such time referred to herein as the "Effective Time"), the
Certificate of Designation, Preferences and Rights of Series A Preferred Stock
shall be amended in accordance with the foregoing resolution.
4. At the Effective Time, a reclassification (the
"Reclassification") of the Corporation's Class B Common Stock, par value $.01
per share (the "Class B Common Stock") shall occur as follows: the 455,500,000
(the "Initial Number") issued and outstanding shares of the Class B Common Stock
shall be reclassified, without any action on the part of the holder thereof,
into 430,000,000 (the "Aggregate Reclassified Number") shares of Class B Common
Stock, and accordingly each share of Class B Common Stock shall be reclassified
into a number of shares of Class B Common Stock equal to 430 divided by 455.5
(the "Reclassified Per Share Number"). From and after the Effective Time, the
holders of outstanding certificates which immediately prior to the Effective
Time represented the number of shares of Class B Common Stock prior to giving
effect to the Reclassification shall cease to have any rights with respect to
such shares and, until such certificates are surrendered and exchanged in the
manner provided for herein, each such certificate shall, after the Effective
Time, be deemed to represent only the number of shares of Class B Common Stock
after giving effect to the Reclassification. From and after the Effective Time,
the Corporation shall be entitled to treat any unsurrendered certificates as
evidencing the ownership of the number of shares of Class B Common Stock after
giving effect to the Reclassification, notwithstanding the failure to surrender
such certificates. Upon the surrender to the Corporation of all certificates
held by a holder of shares of Class B Common Stock, together with such stock
transfer powers and other documents reasonably requested by the Corporation, the
holder of such certificates shall receive therefor a certificate for the number
of shares of Class B Common Stock after giving effect to the Reclassification.
The rights, preferences and powers of the Class B Common Stock and the Class A
Common Stock shall be unaffected by the Reclassification.
The Corporation's Amended and Restated Certificate of
Incorporation, as heretofore amended, is hereby restated, integrated and amended
to read in its entirety as follows (with references herein to Certificate of
Incorporation to mean this Second Amended and Restated Certificate of
Incorporation):
FIRST: The name of the Corporation is Conoco
Inc. (hereinafter the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of the State of Delaware as set forth in Title 8 of the
Delaware Code (the "GCL").
FOURTH: A. The total number of shares of stock that the
Corporation shall have authority to issue is 4,850,000,000 (four billion eight
hundred fifty million) of which (i) 3,000,000,000 (three billion) shares shall
be shares of Class A Common Stock, par value $.01 per share (the "Class A Common
Stock"), and 1,600,000,000 (one billion six hundred million) shares shall be
shares of Class B Common Stock, par value $.01 per share (the "Class B Common
Stock") (the Class A Common Stock and the Class B Common Stock being
collectively referred to herein as the "Common Stock"), and (ii) 250,000,000
(two hundred and fifty million) shares shall be shares of Preferred Stock, par
value $.01 per share (the "Preferred Stock").
B. Preferred Stock The Board of Directors is expressly authorized to
provide for the issuance of all or any shares of the Preferred Stock in one or
more classes or series, and to fix for each such class or series the voting
powers (if any) and such distinctive designations, preferences and relative,
participating, optional or other special rights and such qualifications,
limitations or restrictions thereof, as shall be stated
<PAGE> 2
and expressed in the resolution or resolutions adopted by the Board of Directors
providing for the issuance of such class or series and as may be permitted by
the GCL, including, without limitation, the authority to provide that any such
class or series may be (i) subject to redemption at such time or times and at
such price or prices; (ii) entitled to receive dividends (which may be
cumulative or non-cumulative) at such rates, on such conditions, and at such
times, and payable in preference to, or in such relation to, the dividends
payable on any other class or classes or any other series; (iii) entitled to
such rights upon the dissolution of, or upon any distribution of the assets of,
the Corporation; or (iv) convertible into, or exchangeable for, shares of any
other class or classes of stock, or of any other series of the same or any other
class or classes of stock, of the Corporation at such price or prices or at such
rates of exchange and with such adjustments; all as may be stated in such
resolution or resolutions.
C. Common Stock The following is a statement of the relative powers,
preferences and participating, optional or other special rights, and the
qualifications, limitations and restrictions of the Class A Common Stock and
Class B Common Stock of the Corporation:
(1) Except as otherwise set forth below in this Article FOURTH, the
relative powers, preferences and participating, optional or other special
rights, and the qualifications, limitations or restrictions of the Class A
Common Stock and Class B Common Stock shall be identical in all respects.
(2) Subject to the rights of the holders of Preferred Stock, and
subject to any other provisions of this Certificate of Incorporation, holders of
Class A Common Stock and Class B Common Stock shall be entitled to receive such
dividends and other distributions in cash, stock of any corporation (other than
Common Stock of the Corporation) or property of the Corporation as may be
declared thereon by the Board of Directors from time to time out of assets or
funds of the Corporation legally available therefor and shall share equally on a
per share basis in all such dividends and other distributions. In the case of
dividends or other distributions payable in Common Stock, including
distributions pursuant to stock splits or divisions of Common Stock of the
Corporation,
2
<PAGE> 3
only shares of Class A Common Stock shall be paid or distributed with respect to
Class A Common Stock and only shares of Class B Common Stock shall be paid or
distributed with respect to Class B Common Stock. The number of shares of Class
A Common Stock and Class B Common Stock so distributed on each share shall be
equal in number. Neither the shares of Class A Common Stock nor the shares of
Class B Common Stock may be reclassified, subdivided or combined unless such
reclassification, subdivision or combination occurs simultaneously and in the
same proportion for each class.
(3) (a) At every meeting of the stockholders of the Corporation
every holder of Class A Common Stock shall be entitled to one vote in person or
by proxy for each share of Class A Common Stock standing in his or her name on
the transfer books of the Corporation, and every holder of Class B Common Stock
shall be entitled to five votes in person or by proxy for each share of Class B
Common Stock standing in his or her name on the transfer books of the
Corporation in connection with the election of directors and all other matters
submitted to a vote of stockholders. Except as may be otherwise required by law
or by this Certificate of Incorporation, the holders of Class A Common Stock and
Class B Common Stock shall vote together as a single class and their votes shall
be counted and totaled together, subject to any voting rights which may be
granted to holders of Preferred Stock, on all matters submitted to a vote of
stockholders of the Corporation. Notwithstanding any other provision of this
Certificate of Incorporation to the contrary, holders of Class A Common Stock
shall not be eligible to vote on any alteration or change in the powers,
preferences, or special rights of the Class B Common Stock that would not
adversely affect the rights of the Class A Common Stock; provided that, for the
foregoing purposes, any provision for the voluntary, mandatory or other
conversion or exchange of the Class B Common Stock into or for Class A Common
Stock on a one for one basis shall be deemed not to adversely affect the rights
of the Class A Common Stock.
(b) Except as otherwise provided by law, and subject to any
rights of the holders of Preferred Stock, the provisions of this Certificate of
Incorporation shall not be modified, revised, altered or amended, repealed or
rescinded in whole or in part, without the
3
<PAGE> 4
approval of a majority of the votes entitled to be cast by the holders of the
Class A Common Stock and the Class B Common Stock, voting together as a single
class (except as otherwise provided in paragraph (C)(3)(a) above); provided,
however, that with respect to any proposed amendment of this Certificate of
Incorporation which would alter or change the powers, preferences or special
rights of the shares of Class A Common Stock or Class B Common Stock so as to
affect them adversely, the approval of a majority of the votes entitled to be
cast by the holders of the shares affected by the proposed amendment, voting
separately as a class, shall be obtained in addition to the approval of a
majority of the votes entitled to be cast by the holders of the Class A Common
Stock and the Class B Common Stock voting together as a single class as
hereinbefore provided. The affirmative vote of shares representing (x) not less
than 66 2/3% (or, from and after the Second Trigger Date (as defined in
paragraph (C) of Article FIFTH), 80%) of the votes entitled to be cast by the
Voting Stock and (y) in addition, from and after the First Trigger Date (as
defined in paragraph (C) of Article FIFTH) (if there are at such time any shares
of Class B Common Stock outstanding), a majority of the votes entitled to be
cast by the holders of each class of Common Stock, voting separately by class,
shall be required to alter, amend or adopt any provision inconsistent with or
repeal Article FIFTH or Article EIGHTH or any provision of this paragraph
(C)(3)(b). "Voting Stock" shall mean the then outstanding shares of capital
stock entitled to vote generally on the election of directors and shall exclude
any class or series of capital stock only entitled to vote in the event of
dividend arrearages thereon, whether or not at the time of determination there
are any such dividend arrearages. To the fullest extent permitted by law, any
increase in the authorized number of shares of any class or classes of stock of
the Corporation or creation, authorization or issuance of any securities
convertible into, or warrants, options or similar rights to purchase, acquire or
receive, shares of any such class or classes of stock shall be deemed not to
affect adversely the powers, preferences or special rights of the shares of
Class A Common Stock or Class B Common Stock.
(c) Every reference in this Certificate of Incorporation to a
majority or other proportion of shares, or a majority or other proportion of the
votes of
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<PAGE> 5
shares, of Voting Stock, Common Stock, Class A Common Stock, or Class B Common
Stock shall refer to such majority or other proportion of the votes to which
such shares of Voting Stock, Common Stock, Class A Common Stock or Class B
Common Stock are entitled.
(d) At any meeting of stockholders, the presence in person or by
proxy of the holders of shares entitled to cast a majority of all the votes
which could be cast at such meeting by the holders of all of the outstanding
shares of stock of the Corporation entitled to vote on every matter that is to
be voted on at such meeting shall constitute a quorum.
(4) In the event of any dissolution, liquidation or winding up of
the affairs of the Corporation, whether voluntary or involuntary, after payment
in full of the amounts required to be paid to the holders of Preferred Stock,
the remaining assets and funds of the Corporation shall be distributed pro rata
to the holders of Common Stock, and the holders of Class A Common Stock and the
holders of Class B Common Stock will be entitled to receive the same amount per
share in respect thereof. For purposes of this paragraph (C)(4), the voluntary
sale, conveyance, lease, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the assets of
the Corporation or a consolidation or merger of the Corporation with one or more
other corporations (whether or not the Corporation is the corporation surviving
such consolidation or merger) shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary.
(5) Except as shall otherwise be approved by a majority of the votes
entitled to be cast by the holders of each class of Common Stock voting
separately as a class, in case of any reorganization or any consolidation of the
Corporation with one or more other corporations or a merger of the Corporation
with another corporation in which shares of Class A Common Stock or Class B
Common Stock are converted into (or entitled to receive with respect thereto)
shares of stock and/or other securities or property (including cash), each
holder of a share of Class A Common Stock shall be entitled to receive with
respect to such share the same kind and amount of shares of stock and other
securities and property (including cash) receivable upon such reorganization,
consolidation
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<PAGE> 6
or merger by a holder of a share of Class B Common Stock and each holder of a
share of Class B Common Stock shall be entitled to receive with respect to such
share the same kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reorganization, consolidation or
merger by a holder of a share of Class A Common Stock. In the event that the
holders of Class A Common Stock (or of Class B Common Stock) are granted rights
to elect to receive one of two or more alternative forms of consideration, the
foregoing provision shall be deemed satisfied if holders of Class A Common Stock
and holders of Class B Common Stock are granted substantially identical election
rights.
(6) (a) Prior to the date on which shares of Class B Common
Stock are transferred to stockholders of the DuPont Company in a Tax-Free
Spin-Off (as defined in paragraph (C)(6)(b) below), each record holder of shares
of Class B Common Stock may convert any or all of such shares into an equal
number of shares of Class A Common Stock by surrendering the certificates for
such shares, accompanied by any payment required for documentary, stamp or
similar issue or transfer taxes and by a written notice by such record holder to
the Corporation stating that such record holder desires to convert such shares
of Class B Common Stock into the same number of shares of Class A Common Stock
including for the purpose of the sale or other disposition of such shares of
Class A Common Stock, and requesting that the Corporation issue all of such
shares of Class A Common Stock to persons named therein, setting forth the
number of shares of Class A Common Stock to be issued to each such person and
the denominations in which the certificates therefor are to be issued. To the
extent permitted by law, such voluntary conversion shall be deemed to have been
effected at the close of business on the date of such surrender. Following a
Tax-Free Spin-Off, shares of Class B Common Stock shall no longer be convertible
into shares of Class A Common Stock.
(b) Prior to a Tax-Free Spin-Off, each share of Class B Common
Stock shall automatically be converted into one share of Class A Common Stock
upon the transfer of such share if, after such transfer, such share is not
beneficially owned by DuPont. Shares of Class B Common stock shall not convert
into shares of Class A Common Stock (i) in any transfer effected in
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<PAGE> 7
connection with a distribution of Class B Common Stock to security holders of
the DuPont Company in a transaction (including any distribution in exchange for
shares of capital stock or securities of the DuPont Company) in tended to
qualify as a tax-free distribution under Section 355 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any successor provision (a "Tax-Free
Spin-Off") or (ii) in any transfer after a Tax-Free Spin- Off. For purposes of
this paragraph (C)(6), a Tax-Free Spin-Off shall be deemed to have occurred at
the time shares are first transferred to stockholders of the DuPont Company
following receipt of an affidavit described in clause (iii) of the first
sentence of paragraph (C)(6)(d) below. For purposes of this paragraph (C)(6),
each reference to a "person" shall be deemed to include not only a natural
person, but also a corporation, partnership, joint venture, association, or
legal entity of any kind; each reference to a "natural person" (or to a "record
holder" of shares, if a natural person) shall be deemed to include in his or her
representative capacity a guardian, committee, executor, administrator or other
legal representative of such natural person or record holder.
For purposes of this Certificate of Incorporation:
1. The "DuPont Company" shall mean E.I. du Pont de
Nemours & Company, Inc., a Delaware corporation, and
all its successors by way of merger, consolidation or
sale of all or substantially all of its assets;
2. The term "subsidiary" shall mean, as to any person or
entity, a corporation, partnership, joint venture,
association or other entity in which such person or
entity beneficially owns (directly or indirectly) 50%
or more of the outstanding voting stock, voting
power, partnership interests or similar voting
interests;
3. "DuPont" shall mean the DuPont Company and all its
subsidiaries, but shall not include the Corporation
and its subsidiaries; and
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4. "affiliate" and "beneficial ownership" shall have the
respective meanings given to such terms in Rule 13d-3
promulgated under the Securities Exchange Act of
1934, as amended.
Each share of Class B Common Stock shall automatically be
converted into one share of Class A Common Stock on the date on which the
outstanding shares of Class B Common Stock owned by DuPont represent less than
50% of the aggregate number of shares of the then out standing Common Stock,
provided that a Tax-Free Spin-Off has not occurred. For the avoidance of doubt,
paragraph (C)(3)(c) of this Article FOURTH shall not apply to the preceding
sentence.
The Corporation will provide notice of any automatic
conversion of all outstanding shares of Class B Common Stock to holders of
record of the Common Stock as soon as practicable following such conversion;
provided, however, that the Corporation may satisfy such notice requirement by
providing such notice prior to such conversion. Such notice shall be provided
by mailing notice of such conversion first class postage prepaid, to each holder
of record of the Common Stock, at such holder's address as it appears on the
transfer books of the Corporation; provided, however, that no failure to give
such notice nor any defect therein shall affect the validity of the automatic
conversion of any shares of Class B Common Stock. Each such notice shall state,
as appropriate, the following:
(i) the automatic conversion date;
(ii) that all outstanding shares of Class B
Common Stock are automatically converted;
(iii) the place or places where certificates
for such shares may be surrendered in exchange for
certificates representing Class A Common
Stock.
Immediately upon such conversion, the rights of the holders of
shares of Class B Common Stock as such
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<PAGE> 9
shall cease and such holders shall be treated for all purposes as having become
the record owners of the shares of Class A Common Stock issuable upon such
conversion; provided, however, that such persons shall be entitled to receive
when paid any dividends declared on the Class B Common Stock as of a record date
preceding the time of such conversion and unpaid as of the time of such
conversion, subject to paragraph (C)(6)(f) below.
(c) Prior to a Tax-Free Spin-Off, holders of shares
of Class B Common Stock may (i) sell or other wise dispose of or transfer any or
all of such shares held by them, respectively, only in connection with a
transfer which meets the qualifications of paragraph (C)(6)(d) below, and under
no other circumstances, or (ii) convert any or all of such shares into shares of
Class A Common Stock, including for the purpose of effecting the sale or
disposition of such shares of Class A Common Stock to any person as provided in
paragraph (C)(6)(a) above. Prior to a Tax-Free Spin-Off, no one other than those
persons in whose names shares of Class B Common Stock become registered on the
original stock ledger of the Corporation by reason of their record ownership of
shares of common stock of the Corporation which are reclassified into shares of
Class B Common Stock as provided in paragraph (C)(6)(l) below, or transferees
or successive transferees who receive shares of Class B Common Stock in
connection with a transfer which meets the qualifications set forth in paragraph
(C)(6)(d) below, shall by virtue of the acquisition of a certificate for shares
of Class B Common Stock have the status of an owner or holder of shares of Class
B Common Stock or be recognized as such by the Corporation or be other wise
entitled to enjoy for his or her own benefit the special rights and powers of a
holder of shares of Class B Common Stock.
Holders of shares of Class B Common Stock may at any and all
times transfer to any person the shares of Class A Common Stock issuable upon
conversion of such shares of Class B Common Stock.
(d) Prior to a Tax-Free Spin-Off, shares of Class B
Common Stock shall be transferred on the books of the Corporation and a new
certificate therefor issued, upon presentation at the office of the Secretary of
the Corporation (or at such additional place or places as may
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<PAGE> 10
from time to time be designated by the Secretary or any Assistant Secretary of
the Corporation) of the certificate for such shares, in proper form for transfer
and accompanied by all requisite stock transfer tax stamps, only if such
certificate when so presented shall also be accompanied by any one of the
following:
(i) an affidavit from the DuPont Company
stating that such certificate is being presented to
effect a transfer by the DuPont Company of such
shares to a subsidiary of the DuPont Company; or
(ii) an affidavit from the DuPont Company
stating that such certificate is being presented to
effect a transfer by any subsidiary of the DuPont
Company of such shares to the DuPont Company or
another subsidiary of the DuPont Company; or
(iii) an affidavit from the DuPont Company
stating that such certificate is being presented to
effect a transfer by the DuPont Company of such
shares to the stockholders of the DuPont Company in
connection with a Tax-Free Spin-Off.
Each affidavit of a record holder furnished pursuant to this
paragraph (C)(6)(d) shall be verified as of a date not earlier than five days
prior to the date of delivery thereof, and, where such record holder is a
corporation or partnership, shall be verified by an officer of the corporation
or by a general partner of the partnership, as the case may be.
If a record holder of shares of Class B Common Stock shall
deliver a certificate for such shares, endorsed by him or her for transfer or
accompanied by an instrument of transfer signed by him or her, to a person who
receives such shares in connection with a transfer which does not meet the
qualifications set forth in this paragraph (C)(6)(d), then such person or any
successive transferee of such certificate may treat such endorsement or
instrument as authorizing him or her on behalf of such
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<PAGE> 11
record holder to convert such shares in the manner above provided for the
purpose of the transfer to himself or herself of the shares of Class A Common
Stock issuable upon such conversion, and to give on behalf of such record holder
the written notice of conversion above required, and may convert such shares of
Class B Common Stock accordingly.
If such shares of Class B Common Stock shall improperly have
been registered in the name of a person not meeting the qualifications set forth
in this paragraph (C)(6)(d)(or in the name of any successive transferee of
such certificate) and a new certificate therefor issued, such person or
transferee shall surrender such new certificate for cancellation, accompanied by
the written notice of conversion above required, in which case (A) such person
or transferee shall be deemed to have elected to treat the endorsement on (or
instrument of transfer accompanying) the certificate so delivered by such former
record holder as authorizing such person or transferee on behalf of such former
record holder so to convert such shares and so to give such notice, (B) the
shares of Class B Common Stock registered in the name of such former record
holder shall be deemed to have been surrendered for conversion for the purpose
of the transfer to such person or transferee of the shares of Class A Common
Stock issuable upon conversion, and (C) the appropriate entries shall be made
on the books of the Corporation to reflect such action.
In the event that the Board of Directors of the Corporation
(or any committee of the Board of Directors, or any officer of the Corporation,
designated for the purpose by the Board of Directors) shall determine, upon the
basis of facts not disclosed in any affidavit or other document accompanying the
certificate for shares of Class B Common Stock when presented for transfer, that
such shares of Class B Common Stock have been registered in violation of the
provisions of paragraph (C)(6), or shall determine that a person is enjoying for
his or her own benefit the special rights and powers of shares of Class B Common
Stock in violation of such provisions, then the Corporation shall take such
action at law or in equity as is appropriate under the circumstances. An
unforeclosed pledge made to secure a bona fide obligation shall not be deemed to
violate such provisions. Prior to the occurrence of a Tax-Free Spin-Off, no
transfer of
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<PAGE> 12
title to shares of Class B Common Stock to a pledgee or other person (other than
DuPont) may occur without compliance with the foregoing provisions of this
paragraph (C)(6)(d).
(e) Prior to the occurrence of a Tax-Free Spin-Off,
every certificate for shares of Class B Common Stock shall bear a legend on the
face thereof reading as follows:
"The shares of Class B Common Stock represented by this certificate may
not be transferred to any person in connection with a transfer that
does not meet the qualifications set forth in paragraph (C)(6)(d) of
Article FOURTH of the Certificate of Incorporation of this corporation
and no person who receives such shares in connection with a transfer
which does not meet the qualifications prescribed by paragraph
(C)(6)(d) of said Article FOURTH is entitled to own or to be registered
as the record holder of such shares of Class B Common Stock, but the
record holder of this certificate may at such time and in the manner
set forth in said Article FOURTH of the Certificate of Incorporation
convert such shares of Class B Common Stock into the same number of
shares of Class A Common Stock for purposes of effecting the sale or
other disposition of such shares of Class A Common Stock to any person.
Each holder of this certificate, by accepting the same, accepts and
agrees to all of the foregoing."
Upon and after the transfer of shares in a Tax-Free Spin-Off,
shares of Class B Common Stock shall no longer bear the legend set forth above
in this paragraph (C)(6)(e).
(f) Upon any conversion of shares of Class B Common
Stock into shares of Class A Common Stock pursuant to the provisions of this
paragraph (C)(6), any dividend, for which the record date or payment date shall
be subsequent to such conversion, which may have been declared on the shares of
Class B Common Stock so converted shall be deemed to have been declared, and
shall be payable, with respect to the shares of Class A Common Stock into or for
which such shares of Class B Common
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<PAGE> 13
Stock shall have been so converted, and any such dividend which shall have been
declared on such shares payable in shares of Class B Common Stock shall be
deemed to have been declared, and shall be payable, in shares of Class A Common
Stock.
(g) The Corporation shall not reissue or resell any
shares of Class B Common Stock which shall have been converted into shares of
Class A Common Stock pursuant to or as permitted by the provisions of this
paragraph (C)(6), or any shares of Class B Common Stock which shall have been
acquired by the Corporation in any other manner. The Corporation shall, from
time to time, take such appropriate action as may be necessary to retire such
shares and to reduce the authorized amount of Class B Common Stock accordingly.
The Corporation shall at all times reserve and keep available,
out of its authorized but unissued Common Stock, such number of shares of Class
A Common Stock as would become issuable upon the conversion of all shares of
Class B Common Stock then outstanding.
(h) In connection with any transfer or conversion of
any stock of the Corporation pursuant to or as permitted by the provisions of
this paragraph (c)(6), or in connection with the making of any determination
referred to in this paragraph (c)(6):
(i) the Corporation shall be under no obligation
to make any investigation of facts unless an
officer, employee or agent of the Corporation
responsible for making such transfer or determination
or issuing Class A Common Stock pursuant to such
conversion has substantial reason to believe, or
unless the Board of Directors (or a committee of the
Board of Directors designated for the purpose)
determines that there is substantial reason to
believe, that any affidavit or other document is
incomplete or incorrect in a material respect or
that an investigation would disclose facts upon which
any determination referred to in para-
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graph (C)(6)(f) above should be made, in either of
which events the Corporation shall make or cause to
be made such investigation as it may deem necessary
or desirable in the circumstances and have a
reasonable time to complete such investigation; and
(ii) neither the Corporation nor any director,
officer, employee or agent of the Corporation shall
be liable in any manner for any action taken or
omitted in good faith.
(i) The Corporation will not be required to pay any
documentary, stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Class A Common Stock on the conversion of shares
of Class B Common Stock pursuant to this paragraph (C)(6), and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(j) All rights to vote and all voting power
(including, without limitation thereto, the right to elect directors) shall be
vested exclusively in the holders of Common Stock, voting together as a single
class, except as otherwise expressly provided in this Certificate of
Incorporation, in a Certificate of Designation with respect to any Preferred
Stock or as other wise expressly required by applicable law.
(k) No stockholder shall be entitled to exercise any
right of cumulative voting.
(l) Immediately upon the effectiveness of this
Certificate of Incorporation, each share of Class B Common Stock issued and
outstanding immediately prior to such effectiveness, shall be changed into and
reclassified into a number of shares of Class B Common Stock equal to 430
divided by 455.5.
FIFTH: A. The business and affairs of the Corporation shall
be managed by or under the direction of a Board of Directors initially
consisting of nine direc-
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tors, the exact number of directors to be not less than six nor more than
fifteen as determined from time to time by resolution adopted by affirmative
vote of a majority of the entire Board of Directors. The directors shall be
divided into three classes, designated Class I, Class II and Class III. Each
class shall consist, as nearly as may be possible, of one-third of the total
number of directors constituting the entire Board of Directors. Class I
directors shall be elected initially for a one-year term, Class II directors
initially for a two-year term and Class III directors initially for a
three-year term. At each succeeding annual meeting of stockholders beginning in
1999, successors to the class of directors whose term expires at that annual
meeting shall be elected for a three-year term. If the number of directors is
changed, any increase or decrease shall be apportioned among the classes so as
to maintain the number of directors in each class as nearly equal as possible,
and any additional director of any class elected to fill a vacancy resulting
from an increase in such class shall hold office for a term that shall coincide
with the remaining term of that class, but in no case will a decrease in the
number of directors shorten the term of any incumbent director. A director shall
hold office until the annual meeting of the year in which his term expires and
until his successor shall be elected and shall qualify, subject, however, to
prior death, resignation or removal from office. Any vacancy on the Board of
Directors may be filled by a majority of the directors then in office, even if
less than a quorum, or by a sole remaining director or by stockholders if such
vacancy was caused by the action of stockholders (in which event such vacancy
may not be filled by the directors or a majority thereof).
Any director elected to fill a vacancy not resulting from an
increase in the number of directors shall have the same remaining term as that
of his predecessor.
B. Any director or the entire Board of Directors may be removed, with
or without cause, by the affirmative vote of shares representing a majority of
the votes entitled to be cast by the Voting Stock; provided, how ever that
during the Trigger Period (as defined in para graph (C) below), a director may
be removed, with or without cause, only by the affirmative vote of shares
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<PAGE> 16
representing not less than 66 2/3% of the votes entitled to be cast by the
Voting Stock; provided, further, however, that from and after the Second Trigger
Date (as defined in paragraph (C) below), a director may only be removed for
cause, such removal to be by the affirmative vote of the shares representing a
majority of the votes entitled to be cast by the Voting Stock. Unless the Board
of Directors has made a determination that removal is in the best interests of
the Corporation (in which case the following definition shall not apply),
"cause" for removal of a director shall be deemed to exist only if (i) the
director whose removal is proposed has been convicted, or when a director is
granted immunity to testify when another has been convicted, of a felony by a
court of competent jurisdiction and such conviction is no longer subject to
direct appeal; (ii) such director has been found by the affirmative vote of a
majority of the Directors then in office at any regular or special meeting of
the Board of Directors called for that purpose, or by a court of competent
jurisdiction to have been guilty of willful misconduct in the performance of his
duties to the Corporation in a matter of substantial importance to the
Corporation; or (iii) such director has been adjudicated by a court of
competent jurisdiction to be mentally incompetent, which mental incompetency
directly affects his ability as a director of the Corporation. Notwithstanding
the foregoing, whenever holders of outstanding shares of one or more series of
Preferred Stock are entitled to elect directors of the Corporation pursuant to
the provisions applicable in the case of arrearages in the payment of dividends
or other defaults contained in the resolution or resolutions of the Board of
Directors providing for the establishment of any such series, any such director
of the Corporation so elected may be removed in accordance with the provisions
of such resolution or resolutions.
C. For purposes of this Certificate of Incorporation, "Trigger Period"
shall mean the period that begins on and after the day following the First
Trigger Date and ends on the Second Trigger Date: (i) "First Trigger Date" shall
mean the first date on which DuPont ceases to beneficially own shares
representing 50% or more of the votes entitled to be cast by the Voting Stock
and (ii) "Second Trigger Date" shall mean the first date on which DuPont ceases
to beneficially own shares representing 30% or more of the votes entitled to be
cast by the Voting Stock (First Trigger Date and Second Trigger Date, each a
"Trigger Date").
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D. Promptly upon becoming aware of the occurrence of a Trigger Date,
the Corporation shall promptly notify stockholders of such occurrence in any
reasonably practicable manner.
E. The following provisions are inserted for further definition,
limitation and regulation of the powers of the Corporation and of its directors
and stock holders:
(1) The By-Laws of the Corporation may be altered, amended or
repealed and new By-Laws may be adopted (i) by the affirmative vote of
the shares representing a majority of the votes entitled to be cast by
the Voting Stock; provided, however, that any proposed alteration,
amendment or repeal of, or the adoption of any By-Law inconsistent
with, Sections 3, 7, 10 or 11 of Article II of the By-Laws or Sections
1, 2 or 11 of Article III (in each case, as in effect on the date
hereof) of the By-Laws or this sentence, by the stockholders shall
require the affirmative vote of shares representing (x) not less than
662/3% (or, from and after the Second Trigger Date, 80%) of the votes
entitled to be cast by the Voting Stock and (y) in addition, from and
after the First Trigger Date (if there are any shares of Class B Common
Stock outstanding), a majority of the votes entitled to be cast by the
holders of each class of Common Stock, voting separately by class; and
provided, further, however, that in the case of any such stockholder
action at a special meeting of stockholders, notice of the proposed
alteration, amendment, repeal or adoption of the new By-Law or By-Laws
must be contained in the notice of such special meeting, or (ii) by
action of the Board of Directors of the Corporation.
(2) No director shall be personally liable to the Corporation or
any of its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability
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<PAGE> 18
(i) for any breach of the director's duty of loyalty to the Corporation
or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the GCL or (iv) for any transaction
from which the director derived an improper personal benefit. Any
repeal or modification of this Article FIFTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification with respect to acts or omissions occur ring prior to
such repeal or modification.
(3) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of the GCL, this Certificate of Incorporation, and
any By-Laws adopted by the stockholders; provided, however, that no
By-Laws hereafter adopted by the stockholders shall invalidate any
prior act of the directors which would have been valid if such By-Laws
had not been adopted.
(4) So long as DuPont beneficially owns shares representing 10% or
more of the votes entitled to be cast by the Voting Stock, nominations
and shareholder proposals by DuPont shall not be subject to the advance
notice procedures (including the form, content, or timing requirements
contained therein) of Sections 10 and 11 of Article II of the By-Laws.
SIXTH: A. In anticipation that (i) the Corporation will cease
to be a wholly owned subsidiary of the DuPont Company, but that DuPont will
remain a stock holder of the Corporation and have continued contractual,
corporate and business relations with the Corporation, and in anticipation that
the Corporation and DuPont may enter into contracts or otherwise transact
business with each other and that the Corporation may derive benefits therefrom
and (ii) the Corporation may from time to time enter into contractual, corporate
or business relations with one or more of its directors, or one or more
corporations, partnerships, associations or other organizations in which one or
more of its directors have a financial interest (collectively, "Related
Entities"), the provisions of this Article SIXTH are set forth to regulate and
define certain contractual relations of the Corporation as they may involve
DuPont, Related Entities and their respective officers and directors, and the
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powers, rights, duties and liabilities of the Corporation and its officers,
directors and stockholders in connection therewith. The provisions of this
Article SIXTH are in addition to, and not in limitation of, the provisions of
the GCL and the other provisions of this Certificate of Incorporation. Any
contract or business relation which does not comply with the procedures set
forth in this Article SIXTH shall not by reason thereof be deemed void or
voidable or result in any breach of fiduciary duty or duty of loyalty or failure
to act in good faith or in the best interests of the Corporation or derivation
of any improper personal benefit, but shall be governed by the provisions of
this Certificate of Incorporation, the By-Laws, the GCL and other applicable
law.
B. No contract, agreement, arrangement or transaction (or any
amendment, modification or termination thereof) between the Corporation and
DuPont or between the Corporation and one or more of the directors or officers
of the Corporation, DuPont or any Related Entity or between the Corporation and
any Related Entity shall be void or voidable solely for the reason that DuPont,
any Related Entity or any one or more of the officers or directors of the
Corporation, DuPont or any Related Entity are parties thereto, or solely because
any such directors or officers are present at or participate in the meeting of
the Board of Directors or committee thereof which authorizes the contract,
agreement, arrangement or transaction (or the amendment, modification or
termination thereof), or solely because his or their votes are counted for such
purpose, and DuPont, any Related Entity and such directors and officers (a)
shall have fully satisfied and fulfilled their fiduciary duties to the
Corporation and its stockholders with respect thereto, (b) shall not be liable
to the Corporation or its stockholders for any breach of fiduciary duty by
reason of the entering into, performance or consummation of any such contract,
agreement, arrangement or transaction (or amendment, modification or
termination thereof), (c) shall be deemed to have acted in good faith and in a
manner such persons reasonably believe to be in and not opposed to the best
interests of the Corporation and (d) shall be deemed not to have breached their
duties of loyalty to the Corporation and its stockholders and not to have
derived in improper personal benefit therefrom, if:
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(i) the material facts as to the contract,
agreement, arrangement, transaction, amendment,
modification or termination are disclosed or are
known to the Board of Directors or the committee
thereof which authorizes the contract, agreement,
arrangement or transaction (or the amendment,
modification or termination thereof), and the Board
of Directors or such committee in good faith
authorizes the contract, agreement, arrangement or
transaction (or the amendment, modification or
termination thereof) by the affirmative vote of a
majority of the disinterested directors, even though
the disinterested directors be less than a quorum;
(ii) the material facts as to the contract,
agreement, arrangement or transaction (or the
amendment, modification or termination thereof) are
disclosed or are known to the holders of Voting Stock
entitled to vote thereon, and the contract,
agreement, arrangement, or transaction (or the
amendment, modification or termination thereof) is
specifically approved in good faith by vote of the
holders of a majority of the then outstanding Voting
Stock not owned by the DuPont Company or a Related
Entity, as the case may be; or
(iii) such contract, agreement, arrangement
or transaction (or the amendment, modification or
termination thereof) is fair as to the Corporation
as of the time it is authorized, approved or
ratified by the Board of Directors, a committee
thereof or the stockholders of the Corporation.
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C. Directors of the Corporation who are also directors or officers of
DuPont or any Related Entity may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee which authorizes
the contract, agreement, arrangement or transaction (or the amendment,
modification or termination thereof). Voting Stock owned by DuPont and any
Related Entities may be counted in determining the presence of a quorum at a
meeting of stockholders which authorizes the contract, agreement, arrangement or
transaction.
D. Any person or entity purchasing or otherwise acquiring any interest
in any shares of capital stock of the Corporation will be deemed to have notice
of and to have consented to the provisions of this Article SIXTH.
E. For purposes of this Article SIXTH, any contract, agreement,
arrangement or transaction (or amendment, modification or termination thereof)
with any corporation, partnership, joint venture, association or other entity in
which the Corporation owns (directly or indirectly) 50% or more of the
outstanding voting stock, voting power, partnership interests or similar
ownership interests, or with any officer or director thereof, shall be deemed to
be a contract, agreement, arrangement or transaction with the Corporation.
SEVENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the GCL) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the By-Laws of the Corporation.
EIGHTH: Any action required or permitted to be taken by the
stockholders of the Corporation may be effected by a consent in writing by such
holders in accordance with Section 228 of the GCL; provided, however, that on
and after the Second Trigger Date, any action required or permitted to be taken
by the stockholders of the Corporation may be effected only at a duly called
annual or special meeting of such holders and may not be effected by a consent
in writing by such holders in lieu of such a meeting. Effective on and after the
Second Trigger Date, except as otherwise required by law, special meetings of
stockholders of the Corporation for
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<PAGE> 22
any purpose or purposes may be called only by the Board of Directors pursuant to
a resolution stating the purpose or purposes thereof or by the Chairman of the
Board of Directors of the Corporation and, effective on and after the Second
Trigger Date, any power of stockholders to call a special meeting is
specifically denied. No business other than that stated in the notice of such
meeting shall be transacted at any special meeting.
NINTH: A. In addition to any affirmative vote that may be required
by law, this Certificate of Incorporation or the By-Laws of the
Corporation, and except as otherwise expressly provided in paragraph (B) of
this Article NINTH:
(i) any merger or consolidation of the Corporation or any subsidiary of
the Corporation with or into (A) any Related Person or (B) any Person that is an
Affiliate of a Related Person; or
(ii) any sale, lease, exchange, transfer or other disposition by the
Corporation to any Related Person or any Affiliate of any Related Person of all
or substantially all of the assets of the Corporation; or
(iii) any reclassification of securities (including any reverse stock
split) or recapitalization of the Corporation for which the approval of
shareholders of the Corporation is otherwise required, or any merger,
consolidation or share exchange of the Corporation with any of its subsidiaries
for which the approval of shareholders of the Corporation is otherwise
required, which has the effect, either directly or indirectly, of increasing by
more than 1% the proportionate share of the Class A Common Stock, Class B Common
Stock or Voting Stock Beneficially Owned by any Related Person or any Affiliate
of any Related Person; or
(iv) any dissolution of the Corporation voluntarily caused or proposed
by or on behalf of a Related Person or any Affiliate of any Related Person,
shall require the affirmative vote of shares representing (x) not less than 80%
of the votes entitled to be cast by the Voting Stock, (y) not less than
66 2/3% of the Voting Stock not Beneficially Owned, directly or indirectly, by
any Related Person and (z) in addition, from and
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<PAGE> 23
after the First Trigger Date, a majority of the votes entitled to be cast by
the holders of each class of Common Stock (excluding all shares Beneficially
Owned, directly or indirectly, by any Related Person), voting separately as a
class, with respect to such Business Combination; provided that, at any time
prior to the Second Trigger Date, the required percentage in clause (x) shall be
66 2/3% and the required percentage in clause (y) shall be 50.01%. Such
affirmative vote shall be required, notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law, else where in
this Certificate of Incorporation, in the By-laws of the Corporation or in any
agreement with any national securities exchange or otherwise. Notwithstanding
anything to the contrary set forth herein, the provisions of this Article NINTH
shall not be applicable at such time as all shares of Class B Common Stock have
been converted into, or exchanged for, Class A Common Stock.
B. The provisions of paragraph (A) shall not be applicable to any
particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by law, the By-Laws of the Corporation
and any other provision of the Certificate of Incorporation, if all of the
conditions specified in either of the following paragraphs (B)(i) and (B)(ii)
are met:
(i) the cash, property, securities or other consideration to be
received per share by holders of the Class A Common Stock and Class B Common
Stock in the Business Combination is the same with respect to both classes and
is either (A) the same in form and amount per share as the highest consideration
paid by the Related Person in a tender or exchange offer in which such Related
Person acquired at least 50% of the outstanding stock of either the Class A
Common Stock or the Class B Common Stock and which was consummated not more than
one year prior to the date of such Business Combination, or if earlier, the
entering into of a definitive agreement providing therefor or (B) not less in
amount (as to cash) or Fair Market Value (as to consideration other than cash)
as of the date of the determination of the Highest Per Share Price (as to
property, securities or other consideration) than the Highest Per Share Price;
provided that, in the event of any Business Combination
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<PAGE> 24
in which the Corporation survives, any shares retained by the holders thereof
shall constitute consideration other than cash for purposes of this paragraph
(B)(i); or
(ii) a majority of the Continuing Directors shall have expressly
approved such Business Combination either in advance of or subsequent to such
Related Person's having become a Related Person.
In the case of any Business Combination with a Related Person to which
paragraph (B)(ii) above does not apply, a majority of the Continuing Directors,
promptly following the request of a Related Person, shall determine the Highest
Per Share Price for each class or series of stock of the Corporation. Such
determination shall be announced not less than five days prior to the meeting at
which holders of shares vote on the Business Combination. Such determination
shall be final, unless the Related Person becomes the Beneficial Owner of
additional shares of Common Stock after the date of the earlier determination,
in which case the Continuing Directors shall make a new determination as to the
Highest Per Share Price for each class or series of shares prior to the
consummation of the Business Combination.
A Related Person shall be deemed to have acquired a share at the time
that such Related Person became the Beneficial Owner thereof. With respect to
shares owned by Affiliates, Associates and other Persons whose ownership is
attributable to a Related Person, if the price paid by such Related Person for
such shares is not determinable by a majority of the Continuing Directors, the
price so paid shall be deemed to be the higher of (i) the price paid upon the
acquisition thereof by the Affiliate, Associate or other Person or (ii) the
Share Price of the shares in question at the time when the Related Person became
the Beneficial Owner thereof.
C. For purposes of this Article NINTH and notwithstanding anything to
the contrary set forth in this Certificate of Incorporation:
(i) The term "Affiliate," used to indicate a relationship to a
specified Person, shall mean a Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by, or is under common control
with, such specified Person.
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<PAGE> 25
(ii) The term "Associate," used to indicate a relationship with a
specified Person, shall mean (A) any corporation, partnership, limited liability
company, association, joint venture or other organization (other than the
Corporation or any wholly owned subsidiary of the Corporation) of which such
specified Person is an officer or partner or is, directly or indirectly, the
Beneficial Owner of 10% or more of any class of equity securities; (B) any trust
or other estate in which such specified Person has a beneficial interest of 10%
or more or as to which such specified Person serves as trustee or in a similar
fiduciary capacity; (C) any Person who is a director or officer of such
specified Person or any of its parents or subsidiaries (other than the
Corporation or any wholly owned subsidiary of the Corporation); and (D) any
relative or spouse of such specified Person or of any of its Associates, or any
relative of any such spouse, who has the same home as such specified Person or
such Associate.
(iii) A Person shall be a "Beneficial Owner" of any stock (A) which
such Person or any of its Affiliates or Associates beneficially owns, directly
or indirectly; or (B) which such Person or any of its Affiliates or Associates
has, directly or indirectly, (1) 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, warrants or options, or otherwise, or (2) the right to
vote pursuant to any agreement, arrangement or understanding; or (C) which is
beneficially owned, directly or indirectly, by any other Person, with which such
Person or any of its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of such
stock; or (D) of which such Person would be the Beneficial Owner pursuant to the
terms of Rule 13d-3 of the Exchange Act, as in effect on September 30, 1998.
Stock shall be deemed "Beneficially Owned" by the Beneficial Owner or Owners
thereof.
(iv) The term "Business Combination" shall mean any transaction which
is referred to in any one or more of clauses (i) through (iv) of paragraph (A)
of this Article NINTH.
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<PAGE> 26
(v) The term "Continuing Director" shall mean, with respect to a
Business Combination with a Related Person, any director of the Corporation who
is unaffiliated with the Related Person and was a director prior to the time
that the Related Person became a Related Person, and any successor of a
Continuing Director who is unaffiliated with the Related Person and is
recommended or nominated to succeed a Continuing Director by a majority of the
Continuing Directors. Without limiting the generality of the foregoing, a
director shall be deemed to be affiliated with a Related Person if such
director (A) is an officer, director, employee or general partner of such
Related Person; (B) is an Affiliate or Associate of such Related Person; (C) is
a relative or spouse of such Related Person or of any such officer, director,
general partner, Affiliate or Associate; (D) performs services, or is a member,
employee, greater than 5% stockholder or other equity owner of any organization
(other than the Corporation and its subsidiaries) which performs services for
such Related Person or any Affiliate of such Related Person, or is a relative or
spouse of any such Person; or (E) was nominated for election as a director by
such Related Person. Notwithstanding anything to the contrary set forth herein,
any person nominated with the approval of the DuPont Company shall be deemed to
be a Continuing Director.
(vi) The term "Fair Market Value" shall mean, in the case of
securities, the average of the closing sales prices during the 30-day period
immediately preceding the date in question of such security on the principal
United States securities exchange registered under the Exchange Act on which
such security is listed (or the composite tape therefor) or, if such securities
are not listed on any such exchange, the average of the last reported sales
price (if so reported) or the closing bid quotations with respect to such
security during the 30-day period preceding the date in question on the New
York Stock Exchange or, if no such quotations are available, the fair market
value on the date in question of such security as determined in good faith by a
majority of the Continuing Directors; and in the case of property other than
cash or securities, the fair market value of such property on the date in
question as determined in good faith by a majority of the Continuing Directors.
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<PAGE> 27
(vii) The term "Highest Per Share Price" shall mean, with respect to a
Related Person, the highest price that can be determined to have been paid or
agreed to be paid for any share or shares of the Class A Common Stock, Class B
Common Stock, or Voting Stock by such Related Person in a transaction that
either (1) resulted in such Related Person's Beneficially Owning 15% or more of
the Class A Common Stock, Class B Common Stock, or Voting Stock outstanding or
(2) was effected at a time when such Related Person Beneficially Owned 15% or
more of the Class A Common Stock, Class B Common Stock, or Voting Stock
outstanding, in either case occurring not more than one year prior to the date
of the Business Combination. In determining the Highest Per Share Price,
appropriate adjustment will be made to take into account (w) distributions paid
or payable in stock, (x) subdivisions of outstanding stock, (y) combinations of
shares of stock into a smaller number of shares and (z) similar events.
(viii) The term "Person" shall mean any individual, corporation,
limited liability company, association, partnership, joint venture, trust,
estate or other entity or organization.
(ix) The term "Related Person" shall mean any Person (other than the
Corporation or any subsidiary of the Corporation and other than any profit
sharing, employee ownership or other employee benefit plan of the Corporation
or any subsidiary of the corporation or any trustee of or fiduciary with respect
to any such plan when acting in such capacity) who or which (A) is the
Beneficial Owner of 15% or more of the Class A Common Stock, Class B Common
Stock or Voting Stock outstanding; or (B) is an Affiliate of the Corporation and
at any time within the two-year period immediately prior to the date in question
was the Beneficial Owner of 15% or more of the Class A Common Stock, Class B
Common Stock or Voting Stock outstanding. For the purposes of determining
whether a Person is a Related Person, the number of shares of any class or
series deemed to be outstanding shall include shares of such class or series of
which the Person is deemed the Beneficial Owner, but shall not include any other
shares which may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or options,
otherwise. Notwithstanding anything to the contrary herein, neither DuPont nor
its Affiliates or Associates shall be deemed to be Related Persons.
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<PAGE> 28
D. Nothing contained in this Article NINTH shall be construed to
relieve any Related Person from any fiduciary obligation imposed by law.
E. Notwithstanding any other provision of this Certificate of
Incorporation (and notwithstanding that a lesser percentage may be specified by
law), the affirmative vote of shares representing (x) not less than 80% of the
votes entitled to be cast by the Voting Stock, (y) not less than 66 2/3% of the
Voting Stock not Beneficially Owned, directly or indirectly, by any Related
Person and (z) in addition, from and after the First Trigger Date, a majority of
the votes entitled to be cast by the holders of each class of Common Stock
(excluding all shares Beneficially Owned, directly or indirectly, by any Related
Person), voting separately by class, shall be required to amend or re peal, or
adopt any provisions inconsistent with, this Article NINTH; provided that, at
any time prior to the Second Trigger Date, the required percentage in clause (x)
shall be 66 2/3% and the required percentage in clause (y) shall be 50.01%.
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<PAGE> 29
IN WITNESS WHEREOF, this Second Amended and Restated Certificate of
Incorporation which restates, integrates and amends the provisions of the
Amended and Restated Certificate of Incorporation of the Corporation, and which
has been duly adopted in accordance with Sections 242 and 245 of the Delaware
General Corporation Law, has been executed by an authorized officer of the
Corporation this 20th day of October, 1998.
Conoco Inc.
By: /s/ R. A. HARRINGTON
----------------------------------
Name: R. A. Harrington
Title: Senior Vice President,
Legal and General Counsel
<PAGE> 1
EXHIBIT 4.2
BY-LAWS
OF
CONOCO INC.
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.
Section 2. Other Offices. The Corporation may also have
offices at such other places both within and without the State of Delaware as
the Board of Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders
for the election of directors or for any other purpose shall be held at such
time and place, either within or without the State of Delaware, as shall be
designated from time to time by the Board of Directors.
<PAGE> 2
Section 2. Annual Meetings. The annual meetings of
stockholders for the election of directors shall be held on such date and at
such time as shall be designated from time to time by the Board of Directors.
Any other proper business may be transacted at the annual meeting of
stockholders.
Section 3. Special Meetings. Unless otherwise required by
law or by the certificate of incorporation of the Corporation, as amended and
restated from time to time (including any Certificates of Designation with
respect to any Preferred Stock, the "Certificate of Incorporation"), special
meetings of stockholders, for any purpose or purposes, may be called by
either(i) the Chairman, if there be one, or (ii) the President, (iii) any Vice
President, if there be one, (iv) the Secretary or (v) any Assistant Secretary,
if there be one, and shall be called by any such officer at the request in
writing of (i) the Board of Directors or (ii) a committee of the Board of
Directors that has been duly designated by the Board of Directors and whose
powers and authority include the power to call such meetings, which request
shall state the purpose or purposes of the proposed meeting; provided, however,
that effective on and after the Second Trigger Date (as hereinafter defined),
special
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<PAGE> 3
meetings of stockholders may only be called by the Board of Directors pursuant
to a resolution stating the purpose or purposes thereof or by the Chairman, if
there be one, and, effective on and after the Second Trigger Date, any power of
stockholders to call a special meeting is specifically denied. Written notice
of a special meeting stating the place, date and hour of the meeting and the
purpose or purposes for which the meeting is called shall be given not less
than ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting. Only such business shall be
conducted at a special meeting as shall be specified in the notice of meeting
(or any supplement thereto). For purposes of these By-Laws:
1. "Second Trigger Date" shall mean the first date on which
DuPont ceases to beneficially own shares representing 30% or more of the votes
entitled to be cast by the Voting Stock;
2. "Voting Stock" shall mean the shares of the then
outstanding capital stock entitled to vote generally on the election of
directors and shall exclude any class or series of capital stock only entitled
to vote in the event of dividend arrearages thereon, whether or not at the time
of determination there are any such dividend
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<PAGE> 4
arrearages;
3. "DuPont Company" shall mean E.I. du Pont de Nemours &
Company, Inc., a Delaware corporation, and all its successors by way of merger,
consolidation or sale of all or substantially all of its assets;
4. "DuPont" shall mean the DuPont Company and all its
subsidiaries, but shall not include the Corporation and its subsidiaries;
5. "subsidiary" shall mean, as to any person or entity, a
corporation, partnership, joint venture, association or other entity in which
such person or entity beneficially owns (directly or indirectly) 50% or more of
the outstanding voting stock, voting power, partnership interests or similar
voting interests; and
6. "affiliate" and "beneficial ownership" shall have the
respective meanings given to such terms in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Section 4. Adjournments. Any meeting of the stockholders may
be adjourned from time to time to reconvene at the same or some other place,
and notice need not be given of any such adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
At the adjourned meeting, the
4
<PAGE> 5
Corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 5. Quorum. Unless otherwise required by law or the
Certificate of Incorporation, the presence in person or by proxy of the holders
of shares of capital stock entitled to cast a majority of all the votes which
could be cast at such meeting by the holders of all of the outstanding shares
of capital stock entitled to vote on every matter that is to be voted on at
such meeting shall constitute a quorum at all meetings of the stockholders for
the transaction of business. A quorum, once established, shall not be broken
by the withdrawal of enough votes to leave less than a quorum. If, however,
such quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to
time, in the manner provided in Section 4, until a quorum shall be present or
represented.
5
<PAGE> 6
Section 6. Voting. Unless otherwise required by law, the
Certificate of Incorporation or these By- Laws, any question brought before any
meeting of stockholders, other than the election of directors, shall be decided
by the vote of the holders of a majority of the votes of shares of capital
stock represented and entitled to vote thereat, voting as a single class.
Every reference in these By-Laws to a majority or other proportion of shares,
or a majority or other proportion of the votes of shares, of capital stock
shall refer to such majority or other proportion of the votes to which such
shares of capital stock are entitled as provided in the Certificate of
Incorporation. Votes of stockholders entitled to vote at a meeting of
stockholders may be cast in person or by proxy but no proxy shall be voted on
or after three years from its date, unless such proxy provides for a longer
period. The Board of Directors, in its discretion, or the officer of the
Corporation presiding at a meeting of stockholders, in such officer's
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
Section 7. Consent of Stockholders in Lieu of Meeting.
Unless otherwise provided in the Certificate of Incorporation, any action
required or permitted to be
6
<PAGE> 7
taken at any annual or special meeting of stockholders of the Corporation, may
be taken without a meeting, without prior notice and without a vote, if a
consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted and
shall be delivered to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Delivery made to the Corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested. Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty days of the
earliest dated consent delivered in the manner required by this Section 8 to
the Corporation, written consents signed by a sufficient number of holders to
take action are delivered to the Corporation by delivery to its registered
office in the
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<PAGE> 8
state of Delaware, its principal place of business, or an officer or agent of
the Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to
those stockholders who have not consented in writing and who, if the action had
been taken at a meeting, would have been entitled to notice of the meeting if
the record date for such meeting had been the date that written consents signed
by a sufficient number of holders to take the action were delivered to the
Corporation as provided above in this section. Notwithstanding anything to the
contrary set forth in these By-Laws, on and after the Second Trigger Date, any
action required or permitted to be taken by the stockholders of the Corporation
may be effected only at a duly called annual or special meeting of such holders
and may not be effected by a consent in writing by such holders in lieu of such
a meeting.
Section 8. List of Stockholders Entitled to Vote. The
officer of the Corporation who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to
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<PAGE> 9
vote at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place
of the meeting during the whole time thereof, and may be inspected by any
stockholder of the Corporation who is present.
Section 9. Stock Ledger. The stock ledger of the Corporation
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by Section 8 of this Article II or the
books of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 10. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors of the Corporation, except as may be otherwise
9
<PAGE> 10
provided in the Certificate of Incorporation of the Corporation with respect to
the right of holders of preferred stock of the Corporation to nominate and
elect a specified number of directors in certain circumstances. Nominations of
persons for election to the Board of Directors may be made at any annual
meeting of stockholders (a) by or at the direction of the Board of Directors
(or any duly authorized committee thereof) or (b) by any stockholder of the
Corporation (i) who is a stockholder of record on the date of the giving of the
notice provided for in this Section 10 and on the record date for the
determination of stockholders entitled to vote at such annual meeting and (ii)
who complies with the notice procedures set forth in this Section 10.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder (other than DuPont so long as DuPont
beneficially owns shares representing 10% or more of the votes entitled to be
cast by the Voting Stock), such stockholder must have given timely notice
thereof in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not
10
<PAGE> 11
less than ninety (90) days nor more than one hundred and twenty (120) days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders; provided, however that in the event that the annual meeting is
called for a date that is not within thirty (30) days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of the annual meeting was mailed or
such public disclosure of the date of the annual meeting was made, whichever
first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth (a) as to each person whom the stockholder proposes to
nominate for election as a director (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment of
the person, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by the person that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the
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<PAGE> 12
Exchange Act and the rules and regulations promulgated thereunder; and (b) as
to the stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination (s) are to be made by
such stockholder, (iv) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to nominate the persons named in
its notice and (v) any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a nominee and to
serve as a director if elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in
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<PAGE> 13
accordance with the procedures set forth in this Section 10. If the chairman of
the annual meeting determines that a nomination was not made in accordance with
the foregoing procedures, the chairman shall declare to the meeting that the
nomination was defective and such defective nomination shall be disregarded.
Notwithstanding anything to the contrary set forth herein, so
long as DuPont beneficially owns shares representing 10% or more of the votes
entitled to be cast by the Voting Stock, nominations by DuPont shall not be
subject to the notice procedures of this Section 10.
Section 11. Business at Annual Meetings. No business may be
transacted at an annual meeting of stockholders, other than business that is
either (a) specified in the notice of meeting (or any supplement thereto) given
by or at the direction of the Board of Directors (or any duly authorized
committee thereof), (b) otherwise properly brought before the annual meeting by
or at the direction of the Board of Directors (or any duly authorized committee
thereof) or (c) otherwise properly brought before the annual meeting by any
stockholder of the Corporation (i) who is a stockholder of record on the date
of the giving of the notice provided for in this
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Section 11 and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (ii) who complies with the notice
procedures set forth in this Section 11.
In addition to any other applicable requirements, for business
to be properly brought before an annual meeting by a stockholder (other than
DuPont so long as DuPont beneficially owns shares representing 10% or more of
the votes entitled to be cast by the Voting Stock), such stockholder must have
given timely notice thereof in proper written form to be Secretary of the
Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than ninety (90) days nor more than one hundred and twenty
(120) days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; provided, however that in the event that the annual
meeting is called for a date that is not within thirty (30) days before or
after such anniversary date, notice by the stockholder in order to be timely
must be so received not later than the close of business on the tenth (10th)
day following the day on which such notice
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of the date of the annual meeting was mailed or such public disclosure of the
date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder proposes to bring
before the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such business
at the annual meeting, (ii) the name and record address of such stockholder,
(iii) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by such stockholder, (iv)
a description of all arrangements or understandings between such stockholder
and any other person or persons (including their names) in connection with the
proposal of such business by such stockholder and any material interest of such
stockholder in such business and (v) a representation that such stockholder
intends to appear in person or by proxy at the annual meeting to bring such
business before the meeting.
No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting in accordance
with the procedures set
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forth in this Section 11, provided, however, that, once business has been
properly brought before the annual meeting in accordance with such procedures,
nothing in this Section 11 shall be deemed to preclude discussion by any
stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall declare to the
meeting that the business was not properly brought before the meeting and such
business shall not be transacted.
Notwithstanding anything to the contrary set forth herein, so
long as DuPont beneficially owns shares representing 10% or more of the votes
entitled to be cast by the Voting Stock, business brought before an annual
meeting by DuPont shall not be subject to the notice procedures of this Section
11.
Section 12. Conduct of Meetings. The Board of Directors of
the Corporation may adopt by resolution such rules and regulations for the
conduct of the meeting of the stockholders as it shall deem appropriate.
Except to the extent inconsistent with such rules and regulations as adopted by
the Board of Directors, the chairman of any meeting of the stockholders shall
have the right and
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has been made pursuant to Section 11(p) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.
(b) The Company will make available, as promptly
as practicable following the Record Date, a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights")
to any holder of Rights who may so request from time to time prior to the
Expiration Date. With respect to certificates for the Class A Common Stock and
the Class B Common Stock , respectively, outstanding as of the Record Date, or
issued subsequent to the Record Date, unless and until the Distribution Date
shall occur, the Class A Rights and the Class B Rights will be evidenced by
such certificates for such class of Common Stock and the registered holders of
the Common Stock shall also be the registered holders of the associated Rights.
Until the earlier of the Distribution Date or the Expiration Date (as such term
is
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authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) the determination of when the polls
shall open and close for any given matter to be voted on at the meeting; (iii)
rules and procedures for maintaining order at the meeting and the safety of
those present; (iv) limitations on attendance at or participation in the
meeting to stockholders of record of the corporation, their duly authorized and
constituted proxies or such other persons as the chairman of the meeting shall
determine; (v) restrictions on entry to the meeting after the time fixed for
the commencement thereof; and (vi) limitations on the time allotted to
questions or comments by participants.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of
Directors shall consist initially of nine
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members, the exact number of which shall be not less than six nor more than
fifteen as determined from time to time by the Board of Directors as provided
in the Certificate of Incorporation. The directors shall be divided into three
classes, designated Class I, Class II and Class III, as provided in the
Certificate of Incorporation. Any director may resign at any time upon written
notice to the Corporation. Directors need not be stockholders.
Section 2. Vacancies. Unless otherwise required by law or
the Certificate of Incorporation, vacancies arising through death, resignation,
removal, an increase in the number of directors or otherwise may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, or by the stockholders if such vacancy resulted from
the action of stockholders (in which event such vacancy may not be filled by
the directors or a majority thereof), and the directors so chosen shall hold
office until the next election for such class and until their successors are
duly elected and qualified, or until their earlier death, resignation or
removal.
Section 3. Duties and Powers. The business and affairs of
the Corporation shall be managed by or under the direction of the Board of
Directors which may
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exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-Laws required to be exercised or done by the stockholders.
Section 4. Meetings. The Board of Directors may hold
meetings, both regular and special, either within or without the State of
Delaware. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as may from time to time be determined by
the Board of Directors. Special meetings of the Board of Directors may be
called by the Chairman, if there be one, the President, or by any director.
Notice thereof stating the place, date and hour of the meeting shall be given
to each director either by mail not less than forty-eight (48) hours before the
date of the meeting, by telephone or telegram on twenty-four (24) hours'
notice, or on such shorter notice as the person or persons calling such meeting
may deem necessary or appropriate in the circumstances.
Section 5. Quorum. Except as otherwise required by law or
the Certificate of Incorporation, at all meetings of the Board of Directors, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business and the act of a majority of
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the directors present at any meeting at which there is a quorum shall be the
act of the Board of Directors. If a quorum shall not be present at any meeting
of the Board of Directors, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting of the time and place of the adjourned meeting, until a quorum shall be
present.
Section 6. Actions by Written Consent of the Board. Unless
otherwise provided in the Certificate of Incorporation, or these By-Laws, any
action required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a meeting, if all
the members of the Board of Directors or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or committee.
Section 7. Meetings by Means of Conference Telephone. Unless
otherwise provided in the Certificate of Incorporation, members of the Board of
Directors of the Corporation, or any committee thereof, may participate in a
meeting of the Board of Directors or such committee by means of a conference
telephone or similar communications equipment by means of which all persons
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participating in the meeting can hear each other, and participation in a
meeting pursuant to this Section 7 shall constitute presence in person at such
meeting.
Section 8. Standing Committees. The Board of Directors, by
resolution adopted by a majority of the entire Board, shall appoint from among
its members (i) an Audit and Compliance Committee and (ii) a Compensation
Committee (together, the "Standing Committees") each consisting of three (3)
directors, to perform the functions traditionally performed by such Board
committees; provided, however that prior to the First Trigger Date (as
hereinafter defined), a majority of the Directors on each Standing Committee
shall be directors designated by the DuPont Company; and provided, further,
however that on and after the First Trigger Date but so long as DuPont
beneficially owns shares representing 10% or more of the votes entitled to be
cast by all of the outstanding shares of common stock of the Corporation, each
Standing Committee shall include at least one director designated by the DuPont
Company. For purposes of these By-Laws, "First Trigger Date" shall mean the
first date on which DuPont ceases to beneficially own shares representing 50%
or more of the votes entitled to be cast by the Voting Stock.
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Section 9. Committees. The Board of Directors may designate
one or more other committees (in addition to the mandatory Standing Committees
as set forth in Section 8 of this Article III), each such other committee to
consist of one or more of the directors of the Corporation; provided, however
that on and after the First Trigger Date but so long as DuPont beneficially
owns shares representing 10% or more of the votes entitled to be cast by all of
the outstanding shares of common stock of the Corporation, each such other
committee shall include at least one director designated by the DuPont Company.
With respect to all Board committees (including Standing Committees), the Board
of Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
any such committee. With respect to all Board committees (including Standing
Committees), in the absence or disqualification of a member of a committee, and
in the absence of a designation by the Board of Directors of an alternate
member to replace the absent or disqualified member, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
such member or members constitute a quorum, may unanimously appoint another
member of the
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Board of Directors to act at the meeting in the place of any absent or
disqualified member. Any committee (including any Standing Committee), to the
extent permitted by law and provided in the resolution establishing such
committee, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Each committee (including each Standing
Committee) shall keep regular minutes and report to the Board of Directors when
required.
Section 10. Compensation. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
shall receive such compensation for their services as directors as shall be
determined by the Board of Directors. No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
Section 11. Removal. Any director or the entire Board of Directors
may be removed, with or without cause, by the affirmative vote of shares
representing a
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majority of the votes entitled to be cast by the Voting Stock; provided,
however that during the Trigger Period (as defined below), a director may be
removed, with or without cause, only by the affirmative vote of shares
representing not less than 66 2/3% of the votes entitled to be cast by the
Voting Stock; provided, further, however that from and after the Second Trigger
Date, a director may only be removed for cause, such removal to be by the
affirmative vote of the shares representing a majority of the votes entitled to
be cast by the Voting Stock. Unless the Board of Directors has made a
determination that removal is in the best interests of the Corporation (in
which case the following definition shall not apply), "cause" for removal of a
director shall be deemed to exist only if (i) the director whose removal is
proposed has been convicted, or when a director is granted immunity to testify
when another has been convicted, of a felony by a court of competent
jurisdiction and such conviction is no longer subject to direct appeal; (ii)
such director has been found by the affirmative vote of a majority of the
Directors then in office at any regular or special meeting of the Board of
Directors called for that purpose, or by a court of competent jurisdiction to
have been guilty of willful misconduct in
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the performance of his duties to the Corporation in a matter of substantial
importance to the Corporation; or (iii) such director has been adjudicated by a
court of competent jurisdiction to be mentally incompetent, which mental
incompetency directly affects his ability as a director of the Corporation. As
used herein, "Trigger Period" shall mean the period that begins on and after
the day following the First Trigger Date and ends on the Second Trigger Date.
Notwithstanding the foregoing, whenever holders of outstanding shares of one or
more series of Preferred Stock are entitled to elect directors of the
Corporation pursuant to the provisions applicable in the case of arrearages in
the payment of dividends or other defaults contained in the resolution or
resolutions of the Board of Directors providing for the establishment of any
such series, any such director of the Corporation so elected may be removed in
accordance with the provisions of such resolution or resolutions.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President, a Secretary and a
Treasurer. The
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Board of Directors, in its discretion, also may choose a Chairman of the Board
of Directors (who must be a director) and one or more Vice Presidents,
Assistant Secretaries, Assistant Treasurers and other officers. Any number of
offices may be held by the same person, unless otherwise prohibited by law or
the Certificate of Incorporation. The officers of the Corporation need not be
stockholders of the Corporation nor, except in the case of the Chairman of the
Board of Directors, need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors, at its first
meeting held after each Annual Meeting of Stockholders (or action by written
consent of stockholders in lieu of the Annual Meeting of Stockholders, if
permitted by the Certificate of Incorporation) shall elect the officers of the
Corporation who shall hold their offices for such terms and shall exercise such
powers and perform such duties as shall be determined from time to time by the
Board of Directors; and all officers of the Corporation shall hold office until
their successors are chosen and qualified, or until their earlier death,
resignation or removal. Any officer elected by the Board of Directors may be
removed at any time by the affirmative vote of the Board of Directors.
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Any vacancy occurring in any office of the Corporation shall be filled by the
Board of Directors.
Section 3. Voting Securities Owned by the Corporation.
Powers of attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be executed in
the name of and on behalf of the Corporation by the President or any Vice
President or any other officer authorized to do so by the Board of Directors
and any such officer may, in the name of and on behalf of the Corporation, take
all such action as any such officer may deem advisable to vote in person or by
proxy at any meeting of security holders of any corporation in which the
Corporation may own securities and at any such meeting shall possess and may
exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have
exercised and possessed if present. The Board of Directors may, by resolution,
from time to time confer like powers upon any other person or persons.
Section 4. Chairman of the Board of Directors. The Chairman
of the Board of Directors, if there be one,
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shall preside at all meetings of the stockholders and of the Board of
Directors. Except where by law the signature of the President is required, the
Chairman of the Board of Directors shall possess the same power as the
President to sign all contracts, certificates and other instruments of the
Corporation which may be authorized by the Board of Directors. During the
absence or disability of the President, the Chairman of the Board of Directors
shall exercise all the powers and discharge all the duties of the President.
The Chairman of the Board of Directors shall also perform such other duties and
may exercise such other powers as may from time to time be assigned by these
By-Laws or by the Board of Directors.
Section 5. President. The President shall be the chief
executive officer of the Corporation and, subject to the control of the Board
of Directors, shall have general supervision of the business of the Corporation
and shall see that all orders and resolutions of the Board of Directors are
carried into effect. The President shall execute all bonds, mortgages,
contracts and other instruments of the Corporation requiring a seal, under the
seal of the Corporation, except where required or permitted by law to be
otherwise signed and executed and except that the other officers of the
Corporation may
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sign and execute documents when so authorized by these By-Laws, the Board of
Directors or the President. In the absence or disability of the Chairman of
the Board of Directors, or if there be none, the President shall preside at all
meetings of the stockholders and the Board of Directors. The President shall
also perform such other duties and may exercise such other powers as may from
time to time be assigned to such officer by these By-Laws or by the Board of
Directors.
Section 6. Vice Presidents. At the request of the President
or in the President's absence or in the event of the President's inability or
refusal to act (and if there be no Chairman of the Board of Directors), the
Vice President, or the Vice Presidents if there is more than one (in the order
designated by the Board of Directors), shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. Each Vice President shall perform
such other duties and have such other powers as the Board of Directors from
time to time may prescribe. If there be no Chairman of the Board of Directors
and no Vice President, the Board of Directors shall designate the officer of
the Corporation who, in the absence of the President or in the event of the
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inability or refusal of the President to act, shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
Section 7. Secretary. The Secretary shall attend all
meetings of the Board of Directors and all meetings of stockholders and record
all the proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for committees of the Board of
Directors when required. The Secretary shall give, or cause to be given,
notice of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the
Board of Directors, the Chairman of the Board of Directors or the President,
under whose supervision the Secretary shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President may
choose another officer to cause such notice to be given. The Secretary shall
have custody of the seal of the Corporation and the Secretary or any Assistant
Secretary, if there be one, shall have
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authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by the signature of the Secretary or by the signature of any
such Assistant Secretary. The Board of Directors may give general authority to
any other officer to affix the seal of the Corporation and to attest to the
affixing by such officer's signature. The Secretary shall see that all books,
reports, statements, certificates and other documents and records required by
law to be kept or filed are properly kept or filed, as the case may be.
Section 8. Treasurer. The Treasurer shall have the custody
of the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all transactions as Treasurer and of the financial condition of the
Corporation. If re-
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quired by the Board of Directors, the Treasurer shall give the Corporation a
bond in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of the duties of the office
of the Treasurer and for the restoration to the Corporation, in case of the
Treasurer's death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in the
Treasurer's possession or under the Treasurer's control belonging to the
Corporation.
Section 9. Assistant Secretaries. Assistant Secretaries, if
there be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the Board of Directors, the President, any Vice
President, if there be one, or the Secretary, and in the absence of the
Secretary or in the event of the Secretary's disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if
there be any, shall perform such duties and have such powers as from time to
time may be assigned to them by the Board of Directors, the President, any
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Vice President, if there be one, or the Treasurer, and in the absence of the
Treasurer or in the event of the Treasurer's disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of Directors, an Assistant Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of the office of Assistant Treasurer and for the restoration to the
Corporation, in case of the Assistant Treasurer's death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in the Assistant Treasurer's possession or
under the Assistant Treasurer's control belonging to the Corporation.
Section 11. Other Officers. Such other officers as the Board
of Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
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ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in
the Corporation shall be entitled to have a certificate signed, in the name of
the Corporation (i) by the President or a Vice President and (ii) by the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, certifying the number of shares owned by such stockholder
in the Corporation.
Section 2. Signatures. Any or all of the signatures on a
certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if such person were such officer, transfer agent or registrar at
the date of issue.
Section 3. Lost Certificates. The Board of Directors may
direct a new certificate to be issued in place of any certificate theretofore
issued by the Corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the
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person claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or the owner's legal
representative, to advertise the same in such manner as the Board of Directors
shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed
or the issuance of such new certificate.
Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-Laws. Transfers
of stock shall be made on the books of the Corporation only by the person named
in the certificate or by such person's attorney lawfully constituted in writing
and upon the surrender of the certificate therefor, which shall be cancelled
before a new certificate shall be issued. No transfer of stock shall be valid
as against the Corporation for any purpose until it shall have been entered in
the stock records of
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the Corporation by an entry showing from and to whom transferred.
Section 5. Record Date.
(a) In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, the board of directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of Directors, and which record date shall
not be more than sixty nor less than ten days before the date of such meeting.
If no record date is fixed by the Board of Directors, the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at the close of business
on the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting;
providing, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
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(b) In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not be more than
ten days after the date upon which the resolution fixing the record date is
adopted by the Board of Directors. If no record date has been fixed by the
Board of Directors, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting, when no prior action
by the Board of Directors is required by law, shall be the first date on which
a signed written consent setting forth the action taken or proposed to be taken
is delivered to the Corporation by delivery to its registered office in this
State, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to a corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is re-
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quired by law, the record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be at the close of
business on the day on which the Board of Directors adopts the resolutions
taking such prior action.
(c) In order that the Corporation may determine the
stockholders entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the purpose
of any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted, and which record date shall be not more than sixty days
prior to such action. If no record date is fixed, the record date for
determining stockholders for any such purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto.
Section 6. Record Owners. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on
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its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise required by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by
law, the Certificate of Incorporation or these By-Laws, to be given to any
director, member of a committee or stockholder, such notice may be given by
mail, addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is
required by law, the Certificate of Incorporation or these By-Laws, to be given
to any director, member of a committee or stockholder, a waiver thereof in
writing, signed, by the person or persons entitled to
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<PAGE> 41
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. Attendance of a person at a meeting, present in person or
represented by proxy, shall constitute a waiver of notice of such meeting,
except where the person attends the meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of
the Corporation, subject to the requirements of the DGCL and the provisions of
the Certificate of Incorporation, if any, may be declared by the Board of
Directors at any regular or special meeting of the Board of Directors (or any
action by written consent in lieu thereof in accordance with Section 6 of
Article III hereof), and may be paid in cash, in property, or in shares of the
Corporation's capital stock. Before payment of any dividend, there may be
set aside out of any funds of the Corporation available for dividends such sum
or sums as the Board of Directors from time to time, in its absolute
discretion, deems proper as a reserve or
40
<PAGE> 42
reserves to meet contingencies, or for equalizing dividends, or for repairing
or maintaining any property of the Corporation, or for any proper purpose, and
the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money
and notes of the Corporation shall be signed by such officer or officers or
such other person or persons as the Board of Directors may from time to time
designate.
Section 3. Fiscal Year. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization and
the words "Corporate Seal, Delaware". The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
41
<PAGE> 43
ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or
Proceedings other than Those by or in the Right of the Corporation. Subject to
Section 3 of this Article VIII, the Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Corporation) by reason of the fact that such person is or was a director or
officer of the Corporation, or is or was a director or officer of the
Corporation serving at the request of the Corporation as a director or officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person's conduct was unlawful. The
termination of any
42
<PAGE> 44
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
such person reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that such person's conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or
Proceedings by or in the Right of the Corporation. Subject to Section 3 of
this Article VIII, the Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director or officer of the Corporation, or is or was a director or officer of
the Corporation serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by such person in con-
43
<PAGE> 45
nection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the Corporation; except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.
Section 3. Authorization of Indemnification. Any
indemnification under this Article VIII (unless ordered by a court) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of the director or officer is proper in the
circumstances because such person has met the applicable standard of conduct
set forth in Section 1 or Section 2 of this Article VIII, as the case may be.
Such determination shall be made, with respect to a person who is a director or
officer at the time of such determina-
44
<PAGE> 46
tion, (i) by a majority vote of the directors who are not parties to such
action, suit or proceeding, even though less than a quorum, or (ii) by a
committee of such directors designated by a majority vote of such directors,
even though less than a quorum, or (iii) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written opinion or
(iv) by the stockholders. Such determination shall be made, with respect to
former directors and officers, by any person or persons having the authority to
act on the matter on behalf of the Corporation. To the extent, however, that a
present or former director or officer of the Corporation has been successful on
the merits or otherwise in defense of any action, suit or proceeding described
above, or in defense of any claim, issue or matter therein, such person shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith, without the
necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination
under Section 3 of this Article VIII, a person shall be deemed to have acted in
good faith and in a manner such person reasonably believed to
45
<PAGE> 47
be in or not opposed to the best interests of the Corporation, or, with respect
to any criminal action or proceeding, to have had no reasonable cause to
believe such person's conduct was unlawful, if such person's action is based on
good faith reliance on the records or books of account of the Corporation or
another enterprise, or on information supplied to such person by the officers of
the Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the Corporation or another
enterprise. The term "another enterprise" as used in this Section 4 shall mean
any other corporation or any partnership, joint venture, trust, employee benefit
plan or other enterprise of which such person is or was serving at the request
of the Corporation as a director, officer, employee or agent. The provisions of
this Section 4 shall not be deemed to be exclusive or to limit in any way the
circumstances in which a person may be deemed to have met the applicable
standard of conduct set forth in Section 1 or 2 of this Article VIII, as the
case may be.
46
<PAGE> 48
Section 5. Indemnification by a Court. Notwithstanding any
contrary determination in the specific case under Section 3 of this Article
VIII, and notwithstanding the absence of any determination thereunder, any
director or officer may apply to the Court of Chancery in the State of Delaware
for indemnification to the extent otherwise permissible under Sections 1 and 2
of this Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director or officer is
proper in the circumstances because such person has met the applicable
standards of conduct set forth in Section 1 or 2 of this Article VIII, as the
case may be. Neither a contrary determination in the specific case under
Section 3 of this Article VIII nor the absence of any determination thereunder
shall be a defense to such application or create a presumption that the
director or officer seeking indemnification has not met any applicable standard
of conduct. Notice of any application for indemnification pursuant to this
Section 5 shall be given to the Corporation promptly upon the filing of such
application. If successful, in whole or in part, the director or officer
seeking indemnification shall also be entitled to be paid the expense of
prosecuting such application.
47
<PAGE> 49
Section 6. Expenses Payable in Advance. Expenses incurred by
a director or officer in defending any civil, criminal, administrative or
investigative action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such director or officer to repay
such amount if it shall ultimately be determined that such person is not
entitled to be indemnified by the Corporation as authorized in this Article
VIII.
Section 7. Nonexclusivity of Indemnification and Advancement
of Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under the Certificate of Incorporation, any By-Law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity while
holding such office, it being the policy of the Corporation that
indemnification of the persons specified in Sections 1 and 2 of this Article
VIII shall be made to the fullest extent permitted by law. The provisions of
this Article
48
<PAGE> 50
VIII shall not be deemed to preclude the indemnification of any person who is
not specified in Section 1 or 2 of this Article VIII but whom the Corporation
has the power or obligation to indemnify under the provisions of the General
Corporation Law of the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the Corporation, or is or was a director or officer of the Corporation
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise against any liability asserted against such
person and incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the Corporation would have the power or
the obligation to indemnify such person against such liability under the
provisions of this Article VIII.
Section 9. Certain Definitions. For purposes of this Article
VIII, references to "the Corporation" shall include, in addition to the
resulting corporation, any constituent corporation (including any constituent
of a constituent) absorbed in a consolidation or merger
49
<PAGE> 51
which, if its separate existence had continued, would have had power and
authority to indemnify its directors or officers, so that any person who is or
was a director or officer of such constituent corporation, or is or was a
director or officer of such constituent corporation serving at the request of
such constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, shall stand in the same position under the provisions of
this Article VIII with respect to the resulting or surviving corporation as
such person would have with respect to such constituent corporation if its
separate existence had continued. For purposes of this Article VIII,
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee
or agent of the Corporation which imposes duties on, or involves services by,
such director or officer with respect to an employee benefit plan, its
participants or beneficiaries; and a person who acted in good faith and in a
manner such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit
50
<PAGE> 52
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in this Article VIII.
Section 10. Survival of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VIII shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director
or officer and shall inure to the benefit of the heirs, executors and
administrators of such a person.
Section 11. Limitation on Indemnification. Notwithstanding
anything contained in this Article VIII to the contrary, except for proceedings
to enforce rights to indemnification (which shall be governed by Section 5
hereof), the Corporation shall not be obligated to indemnify any director or
officer in connection with a proceeding (or part thereof) initiated by such
person unless such proceeding (or part thereof) was authorized or consented to
by the Board of Directors of the Corporation.
Section 12. Indemnification of Employees and Agents. The
Corporation may, to the extent authorized from time to time by the Board of
Directors, provide
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<PAGE> 53
rights to indemnification and to the advancement of expenses to employees and
agents of the Corporation similar to those conferred in this Article VIII to
directors and officers of the Corporation.
ARTICLE IX
AMENDMENTS
Section 1. Amendments. These By-Laws may be altered, amended
or repealed, in whole or in part, and new By-Laws may be adopted (i) by the
affirmative vote of the shares representing a majority of the votes entitled to
be cast by the Voting Stock; provided, however, that any proposed alteration,
amendment or repeal of, or the adoption of any By-Law inconsistent with,
Sections 3, 7, 10 or 11 of Article II of these By-Laws or Sections 1, 2 or 11
of Article III of these By-Laws or this sentence, by the stockholders shall
require the affirmative vote of shares representing (x) not less than 66 2/3%
(or, from and after the Second Trigger Date, 80%) of the votes entitled to be
cast by the Voting Stock and, in addition, from and after the First Trigger
Date (if there are any shares of Class B Common Stock outstanding), (y) a
majority of the votes entitled to be cast by the holders of each class of
Common Stock, voting separately by class; and provided
52
<PAGE> 54
further, however, that in the case of any such stockholder action at a meeting
of stockholders, notice of the proposed alteration, amendment, repeal or
adoption of the new By-Law or By-Laws must be contained in the notice of such
meeting, or (ii) by action of the Board of Directors of the Corporation. The
provisions of this Section 1 are subject to any contrary provisions and any
provisions requiring a greater vote that are set forth in the Certificate of
Incorporation.
Section 2. Entire Board of Directors. As used in these
By-Laws generally, the term "entire Board of Directors" means the total number
of directors which the Corporation would have if there were no vacancies.
* * *
Adopted as of: October 18, 1998
----------------
Last Amended as of: October 18, 1998
----------------
53
<PAGE> 1
EXHIBIT 4.3
INCORPORATED UNDER THE LAWS CLASS A
OF THE STATE OF DELAWARE COMMON STOCK
PAR VALUE $.01
NUMBER SHARES
[GRAPHIC]
CA
THIS CERTIFICATE IS TRANSFERABLE RIGHTS ATTACHED TO
IN NEW YORK, NEW YORK THIS CERTIFICATE
DESCRIBED ON REVERSE
CONOCO INC. CUSIP 208251 30 6
SEE REVERSE FOR
This Certifies that CERTAIN DEFINITIONS
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE CLASS A COMMON STOCK OF
Conoco Inc., transferable on the books of the Company by the holder
hereof in person or by duly authorized attorney, upon surrender of
this Certificate properly endorsed. This Certificate and the shares
represented hereby are issued and shall be held subject to all of
the provisions of the Certificate of Incorporation and all amendments
thereto, to all of which the holder by acceptance hereof assents.
This Certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
[CONOCO LOGO] [SEAL]
Witness the facsimile corporate seal and the facsimile
signatures of its duly authorized officers.
PRESIDENT AND CEO
TREASURER
SECRETARY
DATED
COUNTERSIGNED AND REGISTERED:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
TRANSFER AGENT
AND REGISTRAR
BY
AUTHORIZED SIGNATURE
American Bank Note Company
<PAGE> 2
CONOCO INC.
The Company will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock of the Company or
series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights. Any such request may be made to the Transfer Agent
named on the face of this certificate.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT
MIN ACT--___________Custodian___________
TEN ENT -- as tenants by the (Cust) (Minor)
entireties
under Uniform Gifts to Minors
JT TEN -- as joint tenants
with right of Act _________________________
survivorship and not (State)
as tenants in common
Additional abbreviations may also be used though not in the above list.
For value received, _______________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
/____________________________/ _________________________________________________
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _____________________________________________
________________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Company
with full power of substitution in the premises.
Dated, _______________________
X_____________________________________
(Signature)
NOTICE:
THE SIGNATURE(S) TO THIS ASSIGNMENT
MUST CORRESPOND WITH THE NAME(S)
AS WRITTEN UPON THE FACE OF THE ----
CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATEVER. X_____________________________________
(Signature)
================================================================================
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
- --------------------------------------------------------------------------------
SIGNATURE(S) GUARANTEED BY:
================================================================================
This certificate also evidences and entitles the holder hereof to certain Class
A Rights as set forth in the Rights Agreement between Conoco Inc. (the
"Company") and First Chicago Trust Company of New York (the "Rights Agent")
dated as of October 19, 1998 (the "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 Rights Agreement, such Class A 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 Rights Agreement, as
in effect on the date of mailing, without charge, promptly after receipt of a
written request therefor. Under certain circumstances set forth in the Rights
Agreement, Class A Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and void.
<PAGE> 1
EXHIBIT 4.4
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of October 19, 1998 (the
"Agreement"), between Conoco Inc. (formerly known as Conoco Energy Company), a
Delaware corporation (the "Company"), and First Chicago Trust Company of New
York, a New York corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on October 18, 1998 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Class B Right (as hereinafter defined)
for each share of Class B Common Stock, par value $.01 per share, outstanding at
the close of business on October 20, 1998 (the "Record Date"), and has
authorized the issuance of one Class A Right (as hereinafter defined) and one
Class B Right, respectively, (as such numbers may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for each share of Class A
Common Stock, par value $.01 per share, and Class B Common Stock (the Class A
Common Stock and the Class B Common Stock together, the "Common Stock"),
respectively, issued between the Record Date (whether
<PAGE> 2
originally issued or delivered from the Company's treasury) and the
Distribution Date (as hereinafter defined), each Right (as hereinafter defined)
initially representing the right to purchase one one-thousandth 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,
Preferences and Rights attached hereto as Exhibit A, upon the terms and subject
to the conditions hereinafter set forth (the Class A Rights and the Class B
Rights together, the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of (A) 15% or more of the shares of Class A Common Stock
then outstanding, (B) 15% or more of the shares of Class B Common Stock then
outstanding, or (C) shares of Common Stock which have the right to cast 15% or
more of the
2
<PAGE> 3
votes that may be cast by all outstanding shares for the election of directors
of the Company, but shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) 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, (iv)
DuPont, (v) any Person who becomes the Beneficial Owner of shares that meet the
requirements set forth in (A), (B), or (C) above as a result of (i) a reduction
in the number of shares of Common Stock outstanding due to the repurchase of
shares of Common Stock by the Company or (ii) the conversion by stockholders of
the Company of any or all outstanding shares of Class B Common Stock into
shares of Class A Common Stock, unless and until (in the case of both (i) and
(ii)) such Person, after becoming aware that such Person has become the
Beneficial Owner of shares that meet the requirements set forth in (A), (B), or
(C) above (and without regard to which of (A), (B) or (C) has been met)
acquires beneficial ownership of additional shares representing (x) one percent
(1%) or more of the Class A Common Stock then outstanding, (y) one percent (1%)
or more of the Class B Common Stock then outstanding, or (z) shares of Common
Stock which have the
3
<PAGE> 4
right to cast 1% or more of the votes that may be cast by all outstanding
shares outstanding for the election of directors or (vi) any such Person who
has reported or is required to report such ownership (but less than 20%) on
Schedule 13G under the Securities and Exchange Act of 1934, as amended and in
effect on the date of the Agreement (the "Exchange Act") (or any comparable or
successor report) or on Schedule 13D under the Exchange Act (or any comparable
or successor report) which Schedule 13D does not state any intention to or
reserve the right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of such schedule
(other than the disposition of the Common Stock) and, within 10 Business Days
of being requested by the Company to advise it regarding the same, certifies to
the Company that such Person acquired shares that meet the requirements set
forth in (A), (B), or (C) above inadvertently or without knowledge of the terms
of the Rights and who, together with all Affiliates and Associates, thereafter
does not acquire additional shares of Common Stock while the Beneficial Owner
of shares meeting the requirements set forth in (A), (B) or (C) above;
provided, however, that if the Person requested to so certify fails to do so
within 10 Business Days, then
4
<PAGE> 5
such Person shall become an Acquiring Person immediately after such
10-Business-Day period.
(b) "Act" shall mean the Securities Act of 1933.
(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 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, directly or indirectly, has the
right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such
5
<PAGE> 6
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (B)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event (as hereinafter defined), or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date (as hereinafter defined) or pursuant to Section 3(a)
or Section 22 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or
6
<PAGE> 7
not in writing; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement, arrangement
or understanding to vote such security if such agreement, arrangement
or understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (B) is not reportable by
such Person 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 (whether
or not in writing), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (d)) or disposing
7
<PAGE> 8
of any voting securities of the Company; provided, however, that
nothing in this paragraph (d) shall cause a Person engaged in business
as an underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition, and
then only if such securities continue to be owned by such Person at
such expiration of forty days;
provided, however that any Affiliates, Associates or other Persons who may be
deemed representatives of DuPont serving as directors of the Company shall not
be deemed to beneficially own securities held by DuPont as a result of (i) their
serving as directors or taking any action in connection therewith or (ii)
discussing the status of DuPont's shares with the Company, absent an express
agreement among DuPont and such stockholders to act in concert with one another
as stockholders so as to cause, in the good faith judgment of the Board of
Directors, each such stockholder to be the Beneficial Owner of the shares held
by DuPont or the other stockholders.
8
<PAGE> 9
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(f) "Class A Rights Certificate" shall have the
meaning set forth in Section 3(a) hereof.
(g) "Class B Rights Certificate" shall have the
meaning set forth in Section 3(a) hereof.
(h) "Class A Common Stock" shall mean the Class A
Common Stock, par value $.01, of the Company.
(i) "Class B Common Stock" shall mean the Class B
Common Stock, par value $.01, of the Company.
(j) "Class A Rights" shall have the meaning set
forth in the WHEREAS clause at the beginning of the Agreement.
(k) "Class B Rights" shall have the meaning set
forth in the WHEREAS clause at the beginning of the Agreement.
(l) "Close of business" on any given date shall mean
5:00 P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day, it shall mean 5:00 P.M., New York City time,
on the next succeeding Business Day.
9
<PAGE> 10
(m) "Common Stock" shall mean the Class A Common
Stock and the Class B Common Stock, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(n) "Common Stock Equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(o) "Current Market Price" shall have the meaning
set forth in Section 11(d)(i) hereof.
(p) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(q) "Distribution Date" shall have the meaning
set forth in Section 3(a) hereof.
(r) "DuPont" shall mean the DuPont Company, all
successors to the DuPont Company by way of merger, consolidation or sale of all
or substantially all of its assets, and all corporations, partnerships, joint
ventures, associations and other entities in which the DuPont Company owns
(directly or indirectly) fifty percent of the outstanding voting stock, voting
power, partnership interests or similar ownership interests, but shall not
include the Company.
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<PAGE> 11
(s) "DuPont Company" shall mean E.I. du Pont de
Nemours & Company, Inc., a Delaware corporation.
(t) "Equivalent Preferred Stock" shall have the
meaning set forth in Section 11(b) hereof.
(u) "Exchange Act" shall mean the Securities and
Exchange Act of 1934.
(v) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(w) "Final Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(x) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(y) "Preferred Stock" shall mean shares of Series
A Junior Participating Preferred Stock, par value $.01 per share, of the
Company, and, to the extent that there are not a sufficient number of shares of
Series A Junior Participating Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the terms
of the Series A Junior Participating Preferred Stock.
(z) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
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<PAGE> 12
(aa) "Purchase Price" shall have the meaning set
forth in Section 4(a)(ii) hereof.
(ab) "Record Date" shall have the meaning set
forth in the WHEREAS clause at the beginning of this Agreement.
(ac) "Rights" shall have the meaning set forth in
the WHEREAS clause at the beginning of this Agreement.
(ad) "Rights Agent" shall have the meaning set
forth in the parties clause at the beginning of this Agreement.
(ae) "Rights Certificates" shall mean the Class A
Rights Certificates and the Class B Rights Certificates.
(aa) "Rights Dividend Declaration Date" shall have
the meaning set forth in the WHEREAS clause at the beginning of this Agreement.
(bb) "Section 11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii) hereof.
(cc) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) hereof.
(dd) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
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(ee) "Stock Acquisition Date" shall mean the first
date of public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed or amended pursuant to Section
13(d) under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(ff) "Subsidiary" shall mean, with reference to
any Person, any corporation of which an amount of voting securities sufficient
to elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(gg) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(hh) "Summary of Rights" shall have the meaning set
forth in Section 3(b) hereof.
(ii) "Trading Day" shall have the meaning set forth
in Section 11(d)(i) hereof.
(jj) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
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<PAGE> 14
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-rights agents
as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the close of
business on the tenth Business Day after the Stock Acquisition Date (or, if the
tenth Business Day after the Stock Acquisition Date occurs before the Record
Date, the close of business on the Record Date), or (ii) the close of business
on the tenth Business Day (or such later date as the Board shall determine)
after the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any
such plan) is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would become an Acquiring Person (the earlier
of (i) and (ii) being herein referred to as the "Distribution Date"), (x) the
Class A Rights
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<PAGE> 15
and the Class B Rights, respectively, will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Class A Common Stock and the Class B Common Stock, respectively, registered in
the names of the holders of such class of Common Stock (which certificates for
such class of Common Stock shall be deemed also to be certificates for such
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including transfers to the Company). As soon as practicable
after the Distribution Date, the Rights Agent will send by first-class,
postage-prepaid mail, to each record holder of Class A Common Stock and Class B
Common Stock, respectively, as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the Company, one or
more right certificates, in substantially the form of Exhibit B and C hereto,
evidencing one Class A Right for each share of Class A Common Stock (a "Class A
Rights Certificate") and one Class B Right for each share of Class B Common
Stock (a "Class B Rights Certificate"), respectively, so held, subject to
adjustment as provided herein. In the event that any adjustment in the number
of Rights per share of Common Stock
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<PAGE> 16
defined in Section 7(a) hereof), the transfer of any certificates representing
shares of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of Common
Stock.
(c) Rights shall be issued in respect of all
shares of Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date (including an issuance of Class A
Common Stock upon the conversion, whether automatic or voluntary, of Class B
Common Stock into Class A Common Stock (and for purposes of the foregoing, any
deemed conversion of Class B Common Stock upon the transfer of such shares or
otherwise shall be deemed to be an issuance of Class A Common Stock)).
Certificates representing such shares of Class A Common Stock shall also be
deemed to be certificates for the associated Class A Rights, and shall bear the
following legend:
This certificate also evidences and entitles the holder hereof
to certain Class A Rights as set forth in the Rights Agreement between
Conoco Inc. (the "Company") and First Chicago Trust Company of New York
(the "Rights Agent") dated as of October 19, 1998 (the "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
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<PAGE> 17
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Class A 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
Rights Agreement, as in effect on the date of mailing, without
charge, promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Class A
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and
void.
Certificates representing such shares of Class B Common Stock shall also be
deemed to be certificates for the associated Class B Rights, and shall bear the
following legend:
This certificate also evidences and entitles the holder hereof
to certain Class B Rights as set forth in the Rights Agreement between
Conoco Inc. (the "Company") and First Chicago Trust Company of New York
(the "Rights Agent") dated as of October 19, 1998 (the "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 Rights
Agreement, such Class B 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
Rights Agreement, as in effect on the date of mailing, without
charge, promptly after receipt of a written request therefor. Under
certain circumstances set forth in the Rights Agreement, Class B
Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person
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<PAGE> 18
or any Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legends, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B and Exhibit C
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made
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<PAGE> 19
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 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein at
the price set forth therein (such exercise price per one one-thousandth of a
share, 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 Rights Certificate issued pursuant to
Section 3(a), Section 11(i) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person
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<PAGE> 20
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of Section 7(e) hereof, and
any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights
Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have affixed
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<PAGE> 21
thereto the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be countersigned by the
Rights Agent, either manually or by facsimile signature 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 Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights 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 Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep, or cause to be kept, at its
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<PAGE> 22
principal office or offices designated as the appropriate place for surrender
of Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Rights Certificates,
the number of Rights evidenced on its face by each of the Rights Certificates
and the date of each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the close of business on
the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one
one-thousandths of a share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Certificates surrendered then entitles such
holder (or former holder in the case of a transfer) to
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<PAGE> 23
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
at the principal office or offices 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
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights 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 Section 4(b), Section 7(e), and Section 14
hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights 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
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<PAGE> 24
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and 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 Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights 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, at any time
after the Distribution Date the registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or in part
upon surrender of the Rights Certificate, with the form
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<PAGE> 25
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 with respect to the total number of one one-thousandths of a
share (or other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to the earlier
of (i) 5:00 P.M., New York City time, on August 31, 2008, or such later date as
may be established by the Board of Directors prior to the expiration of the
Rights (such date, as it may be extended by the Board, the "Final Expiration
Date"), or (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one
one-thousandth of a share of Preferred Stock pursuant to the exercise of a
Right shall initially be $88.00 (eighty-eight dollars), and shall be subject to
adjustment from time to time as
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<PAGE> 26
provided in Section 11 and Section 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or other shares, securities, cash or other assets, as the case
may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of one
one-thousandths of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total number
of shares of Preferred Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the depositary agent depositary
receipts representing such number of one one-thousandths of a share of
Preferred Stock as
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<PAGE> 27
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 request, (ii) requisition from the Company the amount of cash,
if any, to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts, cause
the same to be delivered to or, upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. In the event that the Company
is obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other securities,
cash and/or other property are available for distribution by the Rights Agent,
if
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<PAGE> 28
and when appropriate. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock would be
issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently
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<PAGE> 29
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect 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 Rights Certificates or any other Person as a result
of its failure to make any determinations with respect to an Acquiring Person
or its Affiliates, Associates or 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
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<PAGE> 30
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 Rights 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 Rights
Certificates. All Rights Certificates surrendered for the purpose of exercise,
transfer, split-up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Rights 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 Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all
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cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a Triggering Event,
out of its authorized and unissued shares of Class A and Class B Common Stock
and/or other securities or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Class A and Class B Common Stock and/or other
securities) that, as provided in this Agreement including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Class A and Class B Common Stock
and/or other securities) issuable and deliverable upon the exercise of
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<PAGE> 32
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.
(c) The Company shall use its best efforts to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii) hereof, 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) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the
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various states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to exceed ninety (90)
days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension has been rescinded. In
addition, if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may temporarily suspend
the exercisability of the Rights until such time as a registration statement
has been declared effective. Notwithstanding any provision of this Agreement
to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law, or a registration
statement shall not have been declared effective.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to
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<PAGE> 34
ensure that all one one-thousandths of a share of Preferred Stock (and,
following the occurrence of a Triggering Event, Class A and Class B Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that
it will pay when due and payable any and all federal and state transfer taxes
and charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one one-thousandths
of a share of Preferred Stock (or Class A and Class B 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 Rights Certificates to a Person other
than, or the issuance or delivery of a number of one one-thousandths of a share
of Preferred Stock (or Class A and Class B Common Stock and/or other securities,
as the case may be) in respect of a name other than that of the registered
holder of the Rights Certificates evidencing
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Rights surrendered for exercise or to issue or deliver any certificates for a
number of one one-thousandths of a share of Preferred Stock (or Class A and
Class B Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-thousandths of a share of
Preferred Stock (or Class A and Class B 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 such fractional
shares of Preferred Stock (or Class A and Class B 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 Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date
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upon which the Preferred Stock (or Class A and Class B 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
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Class A and Class B
Common Stock and/or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number 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.
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<PAGE> 37
(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
Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and
kind
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<PAGE> 38
of shares of Preferred Stock or capital stock, as the case may be,
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. 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 (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), alone or together with its Affiliates and Associates, shall, at any
time after the Rights Dividend Declaration Date, become an Acquiring Person,
unless the event causing the requirements set
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<PAGE> 39
forth in (A), (B) or (C) of the definition of "Acquiring Person" (set forth in
Section 1 hereof) to be met is a transaction set forth in Section 13(a) hereof,
then, promptly following the occurrence of such event, proper provision shall
be made so that each holder of a Class A Right and each holder of a Class B
Right, respectively, (except, in both cases, as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise thereof
at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu (in both cases) of a number of one one-thousandths of a
share of Preferred Stock, such number of shares of Class A Common Stock and
Class B Common Stock, respectively, as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-thousandths 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 (which, following such first occurrence, shall thereafter
be referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price (determined pursuant to
Section 11(d) hereof) per share of such class of Common Stock for which a Right
is exercisable on the date of
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<PAGE> 40
such first occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares
of Common Stock (either or both of Class A Common Stock or Class B
Common Stock) which are authorized by the Company's certificate of
incorporation but which are not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights, are not
sufficient to permit the exercise in full of all Rights in accordance
with the foregoing subparagraph (ii) of this Section 11(a), the
Company shall (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"), and (B)
with respect to each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment Shares, upon the
exercise of a Right and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) such class of Common
Stock for which a Right is exercisable or other equity securities of
the Company (including, without limitation, shares, or units of
shares,
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of preferred stock, such as the Preferred Stock, which the Board has
deemed to have essentially the same value or economic rights as shares
of such class of Common Stock for which a Right is exercisable (such
shares of preferred stock being referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment
banking firm selected by the Board; provided, however, that if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the
later of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
the date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be
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obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of such class
of Common Stock for which a Right is exercisable (to the extent
available) and then, if necessary, cash or shares of the other class
of Common Stock, which shares (of the class of Common Stock for which
a Right is exercisable and/or the other class of Common Stock) and/or
cash have an aggregate value equal to the Spread. For purposes of the
preceding sentence, the term "Spread" shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the Board determines
in good faith that it is likely that sufficient additional shares of
Class A Common Stock and/or Class B Common Stock, as the case may be,
could be authorized for issuance upon exercise in full of all Rights,
the thirty (30) day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek shareholder
approval for the authorization of such
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additional shares (such thirty (30) day period, as it may be extended,
is herein called the "Substitution Period"). To the extent that
action is to be taken pursuant to the first and/or third sentences of
this Section 11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (2) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek such shareholder approval for such authorization of additional
shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of each Adjustment Share shall be
the current market price per share of the class of Common Stock for
which a Right is
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exercisable on the Section 11(a)(ii) Trigger Date and the per share or
per unit value of any Common Stock Equivalent shall be deemed to equal
the current market price per share of such class of Common Stock on
such date.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible into
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 Preferred Stock or Equivalent
Preferred Stock) less than the Current Market Price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock 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
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<PAGE> 45
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 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). In case such subscription price may be
paid by delivery of consideration, part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. 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
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<PAGE> 46
fixed, and in the event that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be
in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for
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 corporation), cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or evidences of indebtedness, or
of 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 Current
Market Price (as determined pursuant to Section 11(d) hereof) per share of
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
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<PAGE> 47
with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock, and the denominator of which shall be
such Current Market Price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock. 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 be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per share on any date of such class of Common Stock for which a
Right is exercisable shall be deemed to be the average of the daily closing
prices per share of such class of Common Stock for which a Right is exercisable
for the thirty (30) consecutive Trading Days immediately prior to such date,
and for purposes of computations made pursuant to Section 11(a)(iii) hereof,
the Current Market Price per share of such class of Common Stock on any date
shall be deemed to be the average of the daily closing prices
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<PAGE> 48
per share of such class of Common Stock for the ten (10) consecutive Trading
Days immediately following such date; provided, however, that in the event that
the Current Market Price per share of such class of Common Stock for which a
Right is exercisable is determined during a period following the announcement
by its issuer of (A) a dividend or distribution on such class of Common Stock
payable in shares of Common Stock or securities convertible into shares of
Common Stock (other than the Rights), or (B) any subdivision, combination or
reclassification of such class of Common Stock, and the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day
period, as set forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend trading. 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
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Exchange or, if the shares of such class of Common Stock 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 shares of such class of
Common Stock are listed or admitted to trading or, if the shares of such class
of Common Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
or such other system then in use, or, if on any such date the shares of such
class of Common Stock are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in such class of Common Stock selected by the Board. If on any
such date no market maker is making a market in the class of Common Stock for
which a Right is exercisable, the fair value of such shares 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
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<PAGE> 50
shares of the class of Common Stock for which a Right is exercisable are listed
or admitted to trading is open for the transaction of business or, if the
shares of such class of Common Stock are not listed or admitted to trading on
any national securities exchange, a Business Day. If the class of Common Stock
for which a Right is exercisable is not publicly held or not so listed or
traded, Current Market Price per share 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 conclusive for all
purposes. Anything in this Agreement to the contrary notwithstanding, if the
Current Market Price per share of the Class B Common Stock is otherwise
determined to be lower than the Current Market Price per share of the Class A
Common Stock, then the Current Market Price per share of the Class B Common
Stock shall be deemed to equal the Current Market Price per share of the Class
A Common Stock.
(ii) For the purpose of any computation
hereunder, the Current Market Price per share of Preferred Stock shall
be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section
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11(d) (other than the last two sentences thereof). If the Current
Market Price per share of Preferred Stock cannot be determined in the
manner provided above or if the Preferred Stock is not publicly held
or listed or traded in a manner described in clause (i) of this
Section 11(d), the Current Market Price per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 1000 (as such
number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the Current
Market Price per share of the Class A Common Stock. If neither the
Class A Common Stock nor the Preferred Stock is publicly held or so
listed or traded, Current Market Price per share of the Preferred
Stock 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 conclusive for all purposes.
For all purposes of this Agreement, the Current Market
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Price of a Unit shall be equal to the Current Market Price of one
share of Preferred Stock divided by 1000.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
(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
ten-thousandth of a share of Common Stock or other share or one-millionth of a
share of Preferred Stock, 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 (3) years from the date of
the transaction which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock other
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than Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof 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), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 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
one one-thousandths 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), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one
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<PAGE> 54
one-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one
one-thousandths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(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 one-thousandths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the
number of one one-thousandths 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
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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 Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights 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 Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the
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option of the Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-thousandths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per one one-thousandth of a share and the number of one one-thousandth of a
share which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated value, if any, of
the number of one one-thousandths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one one-
thousandths of a share of Preferred Stock at such adjusted Purchase Price.
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(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised
after such record date the number of one one-thousandths of a share of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of one one-thousandths of
a share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares (fractional or otherwise)
or securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall
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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 stockholders.
(n) 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
complies with Section 11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related transactions,
assets, cash flow 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
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and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights 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.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by Section 23 or
Section 25 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company
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shall at any time after the Rights Dividend Declaration Date and prior to the
Distribution Date and in accordance with its certificate of incorporation (i)
declare a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator which shall be the aggregate number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the aggregate number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the
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Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred
Stock and the Common Stock, a copy of such certificate and (c) if a
Distribution Date has occurred, mail a brief summary thereof to each holder of
a Rights Certificate (or, if prior to the Distribution Date, to each holder of
a Certificate representing shares of Common Stock). The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets Cash Flow or Earning Power.
(a) In the event that, following the time an
Acquiring Person becomes such, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving corporation
of such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or
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into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, 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, cash
flow or earning power aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section 11(o) hereof),
then, and in each such case, proper provision shall be made so that: (i) 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 the then current
Purchase Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens,
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encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase Price
by the number of one one-thousandths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) 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; (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being
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specifically intended that the provisions of Section 11 hereof shall apply only
to such Principal Party following the first occurrence of a Section 13 Event;
(iv) 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; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of any
Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section 13(a), 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; and
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(ii) in the case of any transaction
described in clause (z) of the first sentence of Section
13(a), the Person that is the party receiving the greatest
portion of the assets, cash flow or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, 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.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to permit the exercise in
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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 paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of
this Section 13, the Principal Party will
(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 will 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 Expiration Date; and
(ii) take such all such other action
as may be necessary to enable the Principal Party to issue the
securities purchasable upon exercise of the Rights, including
but not limited to the registration or qualification of
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such securities under all requisite securities laws of
jurisdictions of the various states and the listing of such
securities on such exchanges and trading markets as may be
necessary or appropriate; and
(iii) will deliver to holders of the
Rights historical financial statements for the Principal Party
and each of its Affiliates 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. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which evidence
fractional
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Rights. In lieu of such fractional Rights, the Company shall pay to the
registered holders of the Class A Rights Certificates or the Class B Rights
Certificates, as the case may be, 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 Class A Right or Class B Right, as the case
may be. For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Class A Rights and the Class B
Rights, as the case may be, 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 such 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 such Rights are listed or admitted to
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trading, or if such 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
such Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in such Rights, selected by the Board of Directors of the Company. If
on any such date no such market maker is making a market in such Rights, the
fair value of such Rights on such date as determined in good faith by the Board
of Directors of the Company shall be used. Notwithstanding the foregoing, if
the current market value of a Class B Right is otherwise determined to be lower
than the current market value of a Class A Right, then the current market value
of a Class B Right shall be deemed to equal the current market value of a Class
A Right.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) upon exercise of
the Rights or to distribute certificates which evidence
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fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock). In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one- thousandth of a share of Preferred Stock, the Company may pay to the
registered holders of Rights 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 one-thousandth of a share of Preferred Stock. For purposes
of this Section 14(b), the current market value of one one-thousandth of a
share of Preferred Stock shall be one one-thousandth of 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 a Triggering
Event, the Company shall not be required to issue fractions of shares of Common
Stock upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash
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equal to the same fraction of the current market value of one (1) share of such
class of Common Stock for which a Right is exercisable. For purposes of this
Section 14(c), the current market value of one share of Common Stock for which
a Right is exercisable shall be the closing price of one share of such class of
Common Stock (as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of
the Rights expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, any registered holder of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, any registered
holder of the Common Stock), may, in
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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 Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights 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 Rights
Certificates are transferable only on the registry books of the Rights Agent if
surrendered at the principal
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office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the person in whose
name a Rights 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 Rights Certificates 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 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
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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 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
number of one one-thousandths of a share 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
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to
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receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) 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 disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered or omitted
by it in connection with its administration of this Agreement in reliance
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upon any Rights 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 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or stock transfer or other
shareholder services 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; but only if such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor
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Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the
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full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the opinion of such
counsel 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 Current Market Price) 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 (except with regard to matters requiring the
approval or concurrence of the
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DuPont Company) be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, or the Secretary of the Company and delivered to the
Rights Agent; and subject to the aforesaid, 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. With respect to matters requiring the approval or concurrence of
the DuPont Company, a certificate to such effect signed by the Chairman of the
Board, the President, any Vice President, the Treasurer or the Secretary of the
DuPont Company shall be full authorization to the Rights Agent to the extent
the authorization, approval or concurrence of the DuPont Company is required
for any action taken or suffered in good faith by the Rights Agent under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or
by reason of any of the statements of fact or recitals contained in this
Agreement or in the Rights
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Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights 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
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11, or Section 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 Rights Certificates after actual notice
of any such adjustment); 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 Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any
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shares of Common Stock or Preferred Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice President,
the Secretary, any Assistant Secretary, the Treasurer or any Assistant
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 to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in
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any transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights Agent
shall not be answerable or accountable for any act, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct; provided, 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 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.
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(k) If, with respect to any Rights Certificate
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 either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company, and
to each transfer agent of the Common Stock and Preferred Stock, by registered
or certified mail, and, if such resignation occurs after the Distribution Date,
to the registered holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty
(30) days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and, if such removal occurs
after the Distribution Date, to the holders of the
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Rights 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 thirty (30) days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a legal business
entity organized and doing business under the laws of the United States or of
the State of New York (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), in good standing, having a principal office in the State of
New York, which is authorized under such laws to exercise corporate trust, or
stock transfer shareholder services powers and is subject to supervision or
examination by federal or state authority
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and which has at the time of its appointment as Rights Agent a combined capital
and surplus of at least $100,000,000 or (b) an affiliate of a legal business
entity described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and, if such appointment occurs after the Distribution Date,
mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
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Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the 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 Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, granted or awarded as of the Distribution Date, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number and class of Rights in connection with such issuance or
sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the
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extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company
or the Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at
its option, at any time prior to the earlier of (i) the close of business on
the tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth Business Day following the Record Date), or (ii) the
Final Expiration Date, 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." Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii)
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Event until such time as the Company's right of redemption hereunder has
expired. The Company may, at its option, pay the Redemption Price in cash,
shares of the relevant Common Stock for which a Right is exercisable (based on
the Current Market Price, as defined in Section 11(d)(i) hereof, of the
relevant Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors, including shares of
the other class of Common Stock; provided, however that the Redemption Price
shall first be paid in shares of the relevant Common Stock for which a Right is
exercisable to the extent of the authorized shares of the relevant Common Stock
for which a Right is exercisable (excluding all such shares that are
outstanding or reserved for issuance for purposes other than the exercise of
the Rights).
(b) Immediately upon the action 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. Promptly after the action of the
Board of
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Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears 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.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any
time after the Distribution Date, (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 regular quarterly cash dividend
out of earnings or retained earnings of the Company), or (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, or (iii) to effect any reclassification
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of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) 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 transaction or a
series of related transactions, of more than 50% of the assets, cash flow 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 complies with Section 11(o) 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 Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof, a
notice of such proposed action, 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
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holders of the shares of Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (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 twenty (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 any of the events set forth in
Section 11(a)(ii) hereof shall occur, then, in any such case, (i) the Company
shall as soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Preferred Stock shall be
deemed thereafter to refer to Common Stock and/or, if appropriate, other
securities.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate
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to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing by
the Rights Agent with the Company) as follows:
Conoco Inc.
---------------------------------------------------
600 North Dairy Ashford
---------------------------------------------------
Houston, Texas 77079
---------------------------------------------------
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Rights Agent with the Company) as follows:
First Chicago Trust Company of New York
-----------------------------------------------
525 Washington Boulevard, Suite 4660
-----------------------------------------------
Jersey City, New Jersey 07310
-----------------------------------------------
Attention: Tenders and Exchanges Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Common Stock) shall be sufficiently
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given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
Section 26. Supplements and Amendments. 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 shares of 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 Rights 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
Rights Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, from and after the Distribution
Date, this Agreement may not be supplemented or amended to lengthen, pursuant
to clause (iii) of this sentence, any
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<PAGE> 94
time period hereunder unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of
Rights. Anything in this Agreement to the contrary notwithstanding, (i) no
supplement or amendment of any provision of this Agreement shall be effected
without the prior written consent of the DuPont Company unless DuPont
beneficially owns shares of Common Stock representing less than thirty percent
(30%) of the voting power of the outstanding shares of Common Stock at the time
of such supplement or amendment, and (ii) no supplement or amendment of the
definition of "Acquiring Person" (set forth in Section 1 hereof) shall be
effected without the prior written consent of the DuPont Company unless DuPont
beneficially owns less than ten percent (10%) of the voting power of the
outstanding shares of Common Stock at the time of such supplement or amendment.
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with
the terms of this Section 26, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of the
underlying Common
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<PAGE> 95
Stock. Notwithstanding anything herein to the contrary, this Agreement may not
be amended at a time when the Rights are not redeemable.
Section 27. 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 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of the voting power of
the outstanding shares of Common Stock 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.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement,
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<PAGE> 96
and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement); provided however that no action,
calculation, interpretation or determination of the Board of Directors shall
limit the rights of the DuPont Company hereunder pursuant to Section 26. 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, subject to the rights
of the DuPont Company aforesaid, (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board, or any of the directors on the Board to any
liability to the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the
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<PAGE> 97
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23
hereof shall be reinstated and shall not expire until the close of business on
the tenth Business Day following the date of such determination by the Board of
Directors.
Section 31. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of
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<PAGE> 98
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 made and to
be performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
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<PAGE> 99
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: CONOCO INC.
By /s/ MICHAEL A. GIST By /s/ R.A. HARRINGTON
------------------------------- -------------------------------
Name: Michael A. Gist Name: R.A. Harrington
Title: Secretary Title: Senior Vice President,
Legal, and General Counsel
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By /s/ MARY E. GARCIA By /s/ JOANNE GOROSTIOLA
------------------------------- -------------------------------
Name: Mary E. Garcia Name: Joanne Gorostiola
Title: Customer Service Officer Title: Assistant Vice President
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<PAGE> 100
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A PREFERRED STOCK
of
Conoco Inc.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned officers of Conoco Inc. , 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:
That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on October 18, 1998 adopted the
following resolution creating a series of 1,000,000 shares of Preferred Stock
designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Amended and Restated Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created, effective as of the adoption and
filing of the Amended and Restated Certificate of Incorporation, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 1,000,000 (one million).
<PAGE> 101
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the 31st day of March, the 30th day of June, the
30th day of September and the 31st day of December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$1.00 (one dollar) or (b) subject to the provision for adjustment hereinafter
set forth, 1000 times the aggregate per share amount of all cash dividends, and
1000 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
Class A Common Stock par value $.01 per share or Class B Common Stock par value,
$.01 per share, (the Class A Common Stock and the Class B Common Stock together
the "Common Stock") or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock, of the
Corporation (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 Corporation shall at any
time after October 18, 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.
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<PAGE> 102
(B) The Corporation 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 either class of Common
Stock); provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 (one dollar) 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
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<PAGE> 103
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 30 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 1000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation 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 Corporation.
(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
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<PAGE> 104
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 such voting right shall not be exercised unless the
holders of one-third 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.
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<PAGE> 105
(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 President, a Vice-President or the
Secretary of the Corporation. 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
Corporation. Such meeting shall be called for a time not earlier than
20 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 Corporation 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
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<PAGE> 106
(C)(ii) of this Section 3) be filled by vote of a majority of the
remaining directors theretofore elected by the holders of such capital
stock (Common or Preferred) which elected the director whose office
shall have become vacant. References in this Paragraph (C) to
directors elected by the holders of particular capital 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
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 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 Corporation shall not
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<PAGE> 107
(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 Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series A 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.
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<PAGE> 108
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, 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 an amount equal to $1000 per share of Series A
Participating Preferred 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
both Classes 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) 1000 (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
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<PAGE> 109
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 both classes 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, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other 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, however, that 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 both classes of
Common Stock.
(C) In the event the Corporation 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. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case 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 1000 times the
aggregate amount of stock,
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<PAGE> 110
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time 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 were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Amendment. At any time when any shares of Series
A Junior Participating Preferred Stock are outstanding, neither the Certificate
of Incorporation of the Corporation nor this Certificate of Designation shall
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of a majority or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
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.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this ____ day of October, 1998.
Chairman of the Board
Attest:
- -------------------------
Secretary
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<PAGE> 111
EXHIBIT B
Form of Class A Rights Certificate
Certificate No. R- Rights
--------
NOT EXERCISABLE AFTER AUGUST 31, 2008 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM
IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Class A Rights Certificate
Conoco Inc.
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
- ---------------------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE> 112
conditions of the Rights Agreement, dated as of October __, 1998 (the "Rights
Agreement"), between Conoco Inc., a Delaware corporation (the "Company"), and
First Chicago Trust Company of New York, a New York corporation (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 P.M. (New York
City time) on August 31, 2008 (unless such date is extended prior thereto by the
Board of Directors) at the office or offices of the Rights Agent designated for
such purpose, or its successors as Rights Agent, one one-thousandth of a fully
paid, non-assessable share of Series A Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $_____ per one
one-thousandth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Class A Rights evidenced by
this Class A Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of _________ __, 199_, based
on the Preferred Stock as constituted at such date. The Company reserves the
right to require prior to the occurrence of a Triggering Event
2
<PAGE> 113
(as such term is defined in the Rights Agreement) that a number of Class A
Rights be exercised so that only whole shares of Preferred Stock will be
issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Class A Rights evidenced by this
Class A Rights Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, such Class A Rights shall become null and void and no holder hereof
shall have any right with respect to such Class A Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Class A Rights evidenced by this Class A
Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events.
3
<PAGE> 114
This Class A Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference and made
a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Class A Rights Certificates and the Class B Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Class A Rights under the specific circumstances set forth in the Rights
Agreement. Copies of the Rights Agreement are on file with the Secretary of
the Company and are also available upon written request.
This Class A Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Class A Rights
Certificate or Class A Rights Certificates of like tenor and date evidencing
Class A Rights entitling
4
<PAGE> 115
the holder to purchase a like aggregate number of one one-thousandths of a
share of Preferred Stock as the Class A Rights evidenced by the Class A Rights
Certificate or Class A Rights Certificates surrendered shall have entitled
such holder to purchase. If this Class A Rights Certificate shall be exercised
in part, the holder shall be entitled to receive upon surrender hereof another
Class A Rights Certificate or Class A Rights Certificates for the number of
whole Class A Rights not exercised.
Subject to the provisions of the Rights Agreement, the Class A
Rights evidenced by this Class A Rights Certificate may be redeemed by the
Company at its option at a redemption price of $.01 per Right at any time prior
to the earlier of the close of business on (i) the tenth Business Day following
the Stock Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement), and (ii) the Final Expiration Date.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Class A Right or Class A Rights evidenced hereby (other
than fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
5
<PAGE> 116
No holder of this Class A Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of 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
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 consent to or withhold consent from any
corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Class A Right or
Class A Rights evidenced by this Class A Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Class A Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.
6
<PAGE> 117
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________ __, 19__
ATTEST: Conoco Inc.
By
Secretary Title:
Countersigned:
First Chicago Trust Company of New York
By
Authorized Signature
7
<PAGE> 118
Form of Reverse Side of Class A Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer the Class A Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Class A Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint __________________
Attorney, to transfer the within Class A Rights Certificate on the books of the
within named Company, with full power of substitution.
Dated: , 199
----------------- --
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
<PAGE> 119
(1) this Class A Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Class
A Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, 199__
Signature
Signature Guaranteed:
<PAGE> 120
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Class A Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
<PAGE> 121
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: Conoco Inc.:
The undersigned hereby irrevocably elects to exercise
__________ Class A Rights represented by this Rights Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of the Class A Rights
(or such other securities of the Company or of any other person which may be
issuable upon the exercise of the Class A Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Class A Rights shall not be all the Rights
evidenced by this Class A Rights Certificate, a new Class A Rights Certificate
for the balance of such Class A Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
<PAGE> 122
(Please print name and address)
Dated: _______________, 199__
Signature
Signature Guaranteed:
Class A Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Class A Rights evidenced by this Class A Rights
Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Class A Rights evidenced by
this Class A Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________, 199__
Signature
Signature Guaranteed:
<PAGE> 123
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Class
A Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever.
<PAGE> 124
EXHIBIT C
Form of Class B Rights Certificate
Certificate No. R- Rights
--------
NOT EXERCISABLE AFTER AUGUST 31, 2008 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM
IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Class B Rights Certificate
Conoco Inc.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of October __, 1998 (the "Rights
Agreement"), between Conoco Inc., a
- ----------------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE> 125
Delaware corporation (the "Company"), and First Chicago Trust Company of New
York, a New York corporation (the "Rights Agent"), to purchase from the Company
at any time prior to 5:00 P.M. (New York City time) on August 31, 2008 (unless
such date is extended prior thereto by the Board of Directors) at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series
A Junior Participating Preferred Stock (the "Preferred Stock") of the Company,
at a purchase price of $_____ per one one-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The number
of Class B Rights evidenced by this Class B Rights Certificate (and the number
of shares which may be purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and Purchase Price as
of ___________ __, 199_, based on the Preferred Stock as constituted at such
date. The Company reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights Agreement) that a number
of Class B Rights be exercised so that only whole shares of Preferred Stock will
be issued.
<PAGE> 126
Upon the occurrence of a Section 11(a)(ii) Event (as such term
is defined in the Rights Agreement), if the Class B Rights evidenced by this
Class B Rights Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, such Class B Rights shall become null and void and no holder hereof
shall have any right with respect to such Class B Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Class B Rights evidenced by this Class B
Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events.
This Class B Rights Certificate is subject to all of the
terms, provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by reference and made
a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of
<PAGE> 127
the Rights Agent, the Company and the holders of the Class B Rights
Certificates and the Class A Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Class B Rights
under the specific circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file with the Secretary of the Company and are also
available upon written request.
This Class B Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Class B Rights
Certificate or Class B Rights Certificates of like tenor and date evidencing
Class B Rights entitling the holder to purchase a like aggregate number of one
one-thousandths of a share of Preferred Stock as the Rights evidenced by the
Class B Rights Certificate or Class B Rights Certificates surrendered shall
have entitled such holder to purchase. If this Class B Rights Certificate
shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Class B Rights Certificate or Class B Rights
Certificates for the number of whole Class B Rights not exercised.
Subject to the provisions of the Rights Agreement, the Class B
Rights evidenced by this Class B Certificate may be redeemed by the Company at
its option at
<PAGE> 128
a redemption price of $.01 per Right at any time prior to the earlier of the
close of business on (i) the tenth Business Day following the Stock Acquisition
Date (as such time period may be extended pursuant to the Rights Agreement),
and (ii) the Final Expiration Date.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Class B Right or Class B Rights evidenced hereby (other
than fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Class B Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of 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
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 consent to or withhold consent from any
corporate action, or, to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription
<PAGE> 129
rights, or otherwise, until the Class B Right or Class B Rights evidenced by
this Class B Rights Certificate shall have been exercised as provided in the
Rights Agreement.
This Class B Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.
<PAGE> 130
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _________ __, 19__
ATTEST: Conoco Inc.
By
Secretary Title:
Countersigned:
First Chicago Trust Company of New York
By
Authorized Signature
<PAGE> 131
[Form of Reverse Side of Class B Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Class B Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Class B Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint __________________
Attorney, to transfer the within Class B Rights Certificate on the books of the
within named Company, with full power of substitution.
Dated: __________________, 199__
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Class B Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate
<PAGE> 132
or Associate of any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Class
B Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 199
--------------- -- Signature
Signature Guaranteed:
<PAGE> 133
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Class B Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
<PAGE> 134
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: Conoco Inc.:
The undersigned hereby irrevocably elects to exercise
__________ Class B Rights represented by this Rights Certificate to purchase
the shares of Preferred Stock issuable upon the exercise of the Class B Rights
(or such other securities of the Company or of any other person which may be
issuable upon the exercise of the Class B Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Class B Rights shall not be all the Rights
evidenced by this Class B Rights Certificate, a new Class B Rights Certificate
for the balance of such Class B Rights shall be registered in the name of and
delivered to:
Please insert social security
or other identifying number
(Please print name and address)
<PAGE> 135
Dated: , 199
--------------- --
Signature
Signature Guaranteed:
Class B Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Class B Rights evidenced by this Class B Rights
Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Class B Rights evidenced by
this Class B Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 199
-------------- -- Signature
Signature Guaranteed:
<PAGE> 136
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Class
B Rights Certificate in every particular, without alteration or enlargement or
any change whatsoever.
<PAGE> 137
EXHIBIT D
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On October 18, 1998, the Board of Directors of Conoco Inc.
(the "Company") declared a dividend distribution of one Class B Right for
each outstanding share of Class B Common Stock, to the stockholder of record at
the close of business on October 20, 1998 (the "Record Date") and authorized the
issuance of one Class A Right and one Class B Right (the Class A Rights and
Class B Rights together, the "Rights") for each share of Class A Common Stock
and Class B Common Stock (the Class A Common Stock and the Class B Common Stock
together, the "Common Stock"), respectively, issued after the Record Date. Each
Right entitles the registered holder to purchase from the Company a unit
consisting of one one-thousandth of a share (a "Unit") of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "Series A Preferred
Stock") at a Purchase Price of $________ per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and First Chicago Trust Company of New
York, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate Class A
Rights Certificates or Class B Rights Certificates (the Class A Rights
Certificates and the Class B Rights Certificates together, the "Rights
Certificates") will be distributed. Subject to certain exceptions specified in
the Rights Agreement, the Rights will separate from the underlying Common Stock
and a Distribution Date will occur upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") (but excluding E.I. du Pont de
Nemours and Company ("DuPont") and its subsidiaries (excluding the Company))
has acquired, beneficial ownership of (A) 15% or more of the outstanding shares
of Class A Common Stock, (B) 15% or more of the outstanding shares of Class B
Common Stock, or (C) shares of Common Stock representing 15% or more of the
voting power of the shares of Common Stock outstanding (the "Stock Acquisition
<PAGE> 138
Date"), other than as a result of repurchases of stock by the Company,
conversions of Class B Common Stock into Class A Common Stock or certain
inadvertent actions by institutional or certain other stockholders or (ii) 10
business days (or such later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would result in a person
or group becoming an Acquiring Person. Until the Distribution Date, (i) the
Rights will be evidenced by the underlying Common Stock certificates and will
be transferred with and only with such Common Stock certificates, (ii) new
Common Stock certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificates. Pursuant to the Rights Agreement, the Company reserves the right
to require prior to the occurrence of a Triggering Event (as defined below)
that, upon any exercise of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and
will expire at 5:00 P.M. (New York City time) on August 31, 2008, unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the class of Common Stock
into which such Rights are exercisable (as set forth below) as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined
by the Board of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a Person becomes an Acquiring Person, each
holder of a Class A Right and Class B Right, respectively, will thereafter have
the right to receive, upon exercise, Class A Common Stock and Class B Common
Stock, respectively, (or, in certain circumstances cash, property or other
securities of the Company) having a Current Market Price (as defined in the
Rights Agreement) equal to two times the exercise price of such Right. The
Exercise Price is the Purchase Price times the number of shares of such class
of Common Stock associated with each such Right. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially
2
<PAGE> 139
owned by any Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the event set forth above until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $100 per Right, each
Class A Right not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $200 worth (based on its Current Market Price) of Class A
Common Stock (or other consideration, as noted above) for $100. Assuming that
the Class A Common Stock had a per share value of $50 at such time, the holder
of each valid Class A Right would be entitled to purchase 4 shares of Class A
Common Stock for $100. A similar example would apply with respect to Class B
Rights.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company engages in a merger or other business combination
transaction in which the Company is not the surviving corporation, (ii) the
Company engages in a merger or other business combination transaction in which
the Company is the surviving corporation and the Common Stock of the Company is
changed or exchanged, or (iii) 50% or more of the Company's assets, cash flow
or earning power is sold or transferred, each holder of a Right (except Rights
which have previously been voided as set forth above) shall thereafter have the
right to receive, upon exercise, common stock of the acquiring company having a
Current Market Price equal to two times the exercise price of the Right. The
events set forth in this paragraph and in the second preceding paragraph are
referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the Preferred
Stock are granted certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to holders of the 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).
3
<PAGE> 140
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof, 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.
At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.01 per Right (payable in cash, the relevant class of Common
Stock for which a Right is exercisable or other consideration deemed
appropriate by the Board of Directors).
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 or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company or in the event of the
redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended
by the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights, or to shorten or lengthen
any time period under the Rights Agreement; provided, however, that no
amendment to lengthen a time period relating to when the Rights may be redeemed
may be made at such time as the Rights are not redeemable. Notwithstanding
the foregoing, (i) the amendment of any provision of the Rights Agreement at
any time requires the consent of DuPont unless DuPont (together with its
subsidiaries) holds shares representing less than 30% of the voting power of
the outstanding shares of Common Stock at the time of such amendment, and (ii)
the amendment of the definition of "Acquiring Person" requires the consent of
DuPont unless DuPont owns less than 10% of the voting power of the outstanding
shares of Common Stock at the time of such amendment.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as Exhibit 4.3 to the Company's S-1
Registration Statement No. 333-60119. A copy of the Rights Agreement is
available free of charge from the Rights Agent. This summary description of
the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference.
4
<PAGE> 1
EXHIBIT 4.5
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A PREFERRED STOCK
of
Conoco Inc.
(formerly Conoco Energy Company)
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned officers of Conoco Inc. , 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:
That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on October 18, 1998 adopted the
following resolution creating a series of 1,000,000 shares of Preferred Stock
designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Amended and Restated Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created, effective as of the adoption and
filing of the Amended and Restated Certificate of Incorporation, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 1,000,000 (one million).
<PAGE> 2
Section 2. Dividends and Distributions.
(A) The holders of shares of Series A Junior Participating
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the 31st day of March, the 30th day of June, the
30th day of September and the 31st day of December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
(one dollar) or (b) subject to the provision for adjustment hereinafter set
forth, 1000 times the aggregate per share amount of all cash dividends, and 1000
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 Class A Common
Stock par value $.01 per share or Class B Common Stock par value, $.01 per
share, (the Class A Common Stock and the Class B Common Stock together the
"Common Stock") or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, of the Corporation
(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 Corporation shall at any time
after October 18, 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.
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<PAGE> 3
(B) The Corporation 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 either class of Common
Stock); provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 (one dollar) 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
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<PAGE> 4
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 30 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 1000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation 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 Corporation.
(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
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<PAGE> 5
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 such voting right shall not be exercised unless the
holders of one-third 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.
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<PAGE> 6
(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 President, a Vice-President or the
Secretary of the Corporation. 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
Corporation. Such meeting shall be called for a time not earlier than
20 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 Corporation 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
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<PAGE> 7
(C)(ii) of this Section 3) be filled by vote of a majority of the
remaining directors theretofore elected by the holders of such capital
stock (Common or Preferred) which elected the director whose office
shall have become vacant. References in this Paragraph (C) to
directors elected by the holders of particular capital 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
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 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 Corporation shall not
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<PAGE> 8
(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 Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any
stock of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series A 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.
8
<PAGE> 9
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under Paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon
any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, 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 an amount equal to $1000 per share of Series A
Participating Preferred 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
both Classes 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) 1000 (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
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<PAGE> 10
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 both classes 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, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other 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, however, that 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 both classes of
Common Stock.
(C) In the event the Corporation 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. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such case 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 1000 times the
aggregate amount of stock,
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<PAGE> 11
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time 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 were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Amendment. At any time when any shares of Series
A Junior Participating Preferred Stock are outstanding, neither the Certificate
of Incorporation of the Corporation nor this Certificate of Designation shall
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote of the
holders of a majority or more of the outstanding shares of Series A Junior
Participating Preferred Stock, voting separately as a class.
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.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of perjury
this 19th day of October, 1998.
By: /s/ R. A. HARRINGTON
-------------------
Name: R. A. Harrington
Title: Senior Vice President,
Legal, and General
Counsel
Attest:
/s/ MICHAEL A. GIST
- -------------------------
Secretary
11
<PAGE> 1
EXHIBIT 4.6
This Amendment to the Rights Agreement between Conoco Inc. (formerly Conoco
Energy Company) and First Chicago Trust Company of New York dated October 19,
1998 (the "Rights Agreement") is hereby adopted on October 20, 1998.
Pursuant to Section 26 of the Rights Agreement, the Rights Agreement is
hereby amended as follows:
Section 11, paragraph (p) is hereby amended to read in its entirety:
"(p) Anything to this Agreement to the contrary notwithstanding
(other than Section 11, paragraph (q) below), in the event that the Company
shall at any time after the Rights Dividend Declaration Date and prior to
the Distribution Date and in accordance with its certificate of
incorporation (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of Common
Stock into a smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with each share
of Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator which shall be
the aggregate number of shares of Common Stock outstanding immediately
prior to the occurrence of the event and the denominator of which shall be
the aggregate number of shares of Common Stock outstanding immediately
following the occurrence of such event."
<PAGE> 2
Section 11, paragraph (q) is hereby added to the Rights Agreement to read in
its entirety:
"(q) Anything in this Agreement to the contrary notwithstanding, each
share of Class B Common Stock outstanding after giving effect to the
reclassification of the Company's capital stock on October 20, 1998
(reclassifying 455,500,000 shares of Class B Common Stock into 430,000,000
shares of Class B Common Stock) and any dividend on or other change to
(including the number of shares outstanding of) the Class B Common Stock on
or before October 22, 1998 shall have one Class B Right attached thereto
and no adjustment that would otherwise be made by reason of the foregoing
reclassification or any such dividend or change described above shall be
given effect."
This Amendment may be executed in counterparts.
<PAGE> 3
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands this
20th day of October, 1998.
/s/ R.A. HARRINGTON
----------------------------------
Conoco Inc.
/s/ JOANNE GOROSTIOLA
----------------------------------
First Chicago Trust Company
of New York
/s/ SUSAN STALNECKER
----------------------------------
E.I. du Pont de Nemours & Co. Inc.
<PAGE> 1
EXHIBIT 4.7
1998 STOCK AND PERFORMANCE INCENTIVE PLAN
OF
CONOCO INC.
1. Plan. This 1998 Stock and Performance Incentive Plan of
Conoco Inc. (the "Plan") was adopted by Conoco Inc. (the "Company") to reward
certain corporate officers and key employees of Conoco Inc., certain independent
contractors and nonemployee directors of Conoco Inc. by providing for certain
cash benefits and by enabling them to acquire shares of common stock of Conoco
Inc.
2. Objectives. The purpose of this 1998 Stock and Performance
Incentive Plan of Conoco Inc. is to further the interests of the Company, its
Subsidiaries and its shareholders by providing incentives in the form of awards
to key employees, independent contractors and directors who can contribute
materially to the success and profitability of the Company and its Subsidiaries
and to provide for issuance of awards in connection with the "Option Program"
under which certain existing DuPont awards will be canceled at the election of
the holder. Such awards will recognize and reward outstanding performances and
individual contributions and give Participants in the Plan an interest in the
Company parallel to that of the shareholders, thus enhancing the proprietary and
personal interest of such Participants in the Company's continued success and
progress. This Plan will also enable the Company and its Subsidiaries to attract
and retain such employees, independent contractors and directors.
3. Definitions. As used herein, the terms set forth below
shall have the following respective meanings:
"Annual Director Award Date" means, for each year beginning on
or after the IPO Closing Date, the first business day of the month next
succeeding the date upon which the annual meeting of stockholders of the Company
is held in such year.
"Authorized Officer" means the Chairman of the Board or the
Chief Executive Officer of the Company (or any other senior officer of the
Company to whom either of them shall delegate the authority to execute any Award
Agreement, where applicable).
"Award" means an Employee Award, a Director Award or an
Independent Contractor Award.
"Award Agreement" means any Employee Award Agreement, Director
Award Agreement or Independent Contractor Award Agreement.
"Board" means the Board of Directors of the Company.
"Cash Award" means an award denominated in cash.
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<PAGE> 2
"Chairman" means the Chairman of the Board as of the IPO
Pricing Date.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means the Compensation Committee of the Board or
such other committee of the Board as is designated by the Board to administer
the Plan; provided, however, that prior to the IPO Closing Date, (i) except for
purposes of any action to be taken by the Committee under the Option Program,
"Committee" shall mean the Compensation Committee of the Board of Directors of
DuPont, and (ii) for any action to be taken under the Option Program, the
"Committee" shall mean the Board or such other persons as are authorized to act
on behalf of the Board.
"Common Stock" means the Class A or Class B Common Stock, par
value $.01 per share, of the Company.
"Company" means Conoco Inc., a Delaware corporation.
"Director Award" means a Director Option or Stock Unit.
"Director Award Agreement" means a written agreement setting
forth the terms, conditions and limitations applicable to a Director Award.
"Director Option" means a Nonqualified Stock Option granted to
a Nonemployee Director pursuant to paragraph 9 hereof.
"Directors Deferred Compensation Plan" means the Conoco Inc.
Deferred Compensation Plan for Nonemployee Directors established under the Plan.
"Disability" means, with respect to a Nonemployee Director,
the inability to perform the duties of a member of the Board for a continuous
period of more than three months by reason of any medically determinable
physical or mental impairment.
"Dividend Equivalents" means, with respect to shares of
Restricted Stock that are to be issued at the end of the Restriction Period, an
amount equal to all dividends and other distributions (or the economic
equivalent thereof) that are payable to stockholders of record during the
Restriction Period on a like number of shares of Common Stock.
"DuPont" means E. I. du Pont de Nemours and Company, a
Delaware corporation.
"DuPont Award" means an option, stock appreciation right or
other form of stock award granted by DuPont pursuant to the DuPont Stock
Performance Plan, the DuPont Variable Compensation Plan, the DuPont Corporate
Sharing Plan or the Conoco Unit Option Plan.
"Employee" means an employee of the Company or any of its
Subsidiaries and an individual who has agreed to become an employee of the
Company or any of its Subsidiaries and is expected to become such an employee
within the following six months.
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<PAGE> 3
"Employee Award" means any Option, SAR, Stock Award, Cash
Award or Performance Award granted, whether singly, in combination or in tandem,
to a Participant who is an Employee pursuant to such applicable terms,
conditions and limitations (including treatment as a Performance Award) as the
Committee may establish in order to fulfill the objectives of the Plan.
"Employee Award Agreement" means a written agreement setting
forth the terms, conditions and limitations applicable to an Employee Award.
"Fair Market Value" of a share of Common Stock means, as of a
particular date, (i) if shares of Common Stock are listed on a national
securities exchange, the mean between the highest and lowest sales price per
share of Common Stock on the consolidated transaction reporting system for the
principal national securities exchange on which shares of Common Stock are
listed on that date, or, if there shall have been no such sale so reported on
that date, on the next succeeding date on which such a sale was so reported, or,
at the discretion of the Committee, the price prevailing on the exchange at the
time of exercise, (ii) if shares of Common Stock are not so listed but are
quoted on the Nasdaq National Market, the mean between the highest and lowest
sales price per share of Common Stock reported by the Nasdaq National Market on
that date, or, if there shall have been no such sale so reported on that date,
on the next succeeding date on which such a sale was so reported, or, at the
discretion of the Committee, the price prevailing on the Nasdaq National Market
at the time of exercise, (iii) if the Common Stock is not so listed or quoted,
the mean between the closing bid and asked price on that date, or, if there are
no quotations available for such date, on the next succeeding date on which such
quotations shall be available, as reported by the Nasdaq Stock Market, or, if
not reported by the Nasdaq Stock Market, by the National Quotation Bureau
Incorporated or (iv) if shares of Common Stock are not publicly traded, the most
recent value determined by an independent appraiser appointed by the Company for
such purpose; provided that, notwithstanding the foregoing, "Fair Market Value"
in the case of any Award granted in connection with the IPO means the price per
share of Common Stock set on the IPO Pricing Date, as set forth in the final
prospectus relating to the IPO.
"Grant Date" means the date an Award is granted to a
Participant pursuant to the Plan.
"Grant Price" means the price at which a Participant may
exercise his or her right to receive cash or Common Stock, as applicable, under
the terms of an Award.
"Incentive Stock Option" means an Option that is intended to
comply with the requirements set forth in Section 422 of the Code.
"Independent Contractor" means a person providing services to
the Company or any of its Subsidiaries, or who will provide such services,
except an Employee or Nonemployee Director.
"Independent Contractor Award" means any Nonqualified Stock
Option, SAR, Stock Award, Cash Award or Performance Award granted, whether
singly, in combination or in tandem, to a Participant who is an Independent
Contractor pursuant to such applicable terms, conditions and limitations as the
Committee may establish in order to fulfill the objectives of the Plan.
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<PAGE> 4
"Independent Contractor Award Agreement" means a written
agreement setting forth the terms, conditions and limitations applicable to an
Independent Contractor Award.
"IPO" means the first time a registration statement filed
under the Securities Act of 1933 and respecting an underwritten primary offering
by the Company of shares of Common Stock is declared effective under that Act
and the shares registered by that registration statement are issued and sold by
the Company (otherwise than pursuant to the exercise of any overallotment
option).
"IPO Closing Date" means the date on which the Company first
receives payment for the shares of Common Stock it sells in the IPO.
"IPO Pricing Date" means the date of the execution and
delivery of an underwriting or other purchase agreement among the Company and
the underwriters relating to the IPO setting forth the price at which shares of
Common Stock will be issued and sold by the Company to the underwriters and the
terms and conditions thereof.
"Nonemployee Director" means an individual serving as a member
of the Board who is not an employee of DuPont or any of its Subsidiaries or the
Company or any of its Subsidiaries.
"Nonqualified Stock Option" means an Option that is not an
Incentive Stock Option.
"Option" means a right to purchase a specified number of
shares of Common Stock at a specified Grant Price, which may be an Incentive
Stock Option or a Nonqualified Stock Option.
"Option Program" means a program involving the cancellation of
certain existing DuPont Awards, and the issuance upon such cancellation of
comparable awards with respect to Class A Common Stock, in which certain
employees will be given the option to participate in connection with the IPO.
"Option Program Award" means an Option, SAR or Stock Award
granted pursuant to Section 8(d) in connection with the Option Program.
"Option Value" means the value of a Director Option as
determined on the basis of a generally accepted valuation methodology as
determined by the Board.
"Participant" means an Employee, Director or Independent
Contractor to whom an Award has been granted under this Plan.
"Performance Award" means an award made pursuant to this Plan
to a Participant who is an Employee or Independent Contractor that is subject to
the attainment of one or more Performance Goals.
"Performance Goal" means a standard established by the
Committee, to determine in whole or in part whether a Performance Award shall be
earned.
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<PAGE> 5
"Restricted Stock" means Common Stock that is restricted or
subject to forfeiture provisions.
"Restriction Period" means a period of time beginning as of
the Grant Date of an Award of Restricted Stock and ending as of the date upon
which the Common Stock subject to such Award is no longer restricted or subject
to forfeiture provisions.
"Stock Appreciation Right" or "SAR" means a right to receive a
payment, in cash or Common Stock, equal to the excess of the Fair Market Value
or other specified valuation of a specified number of shares of Common Stock on
the date the right is exercised over a specified Grant Price, in each case, as
determined by the Committee.
"Stock Award" means an Award in the form of shares of Common
Stock or units denominated in shares of Common Stock, including an award of
Restricted Stock.
"Stock Unit" means a unit equal to one share of Common Stock
(as adjusted pursuant to Section 3.6 of the Directors Deferred Compensation
Plan) granted to a Nonemployee Director.
"Subsidiary" means (i) in the case of a corporation, any
corporation of which the Company directly or indirectly owns shares representing
50% or more of the combined voting power of the shares of all classes or series
of capital stock of such corporation which have the right to vote generally on
matters submitted to a vote of the stockholders of such corporation and (ii) in
the case of a partnership or other business entity not organized as a
corporation, any such business entity of which the Company directly or
indirectly owns 50% or more of the voting, capital or profits interests (whether
in the form of partnership interests, membership interests or otherwise).
4. Eligibility.
(a) Employees. Employees eligible for the grant of Employee
Awards under this Plan are those who hold positions of responsibility
and whose performance, in the judgment of the Committee, can have a
significant effect on the success of the Company and its Subsidiaries.
(b) Directors. Members of the Board eligible for the grant of
Director Awards under this Plan are those who are Nonemployee
Directors.
(c) Independent Contractors. All Independent Contractors are
eligible for the grant of Independent Contractor Awards under this
Plan.
5. Common Stock Available for Awards.
(a) Subject to the provisions of paragraph 15 hereof, no Award
shall be granted if it shall result in the aggregate number of shares
of Class A Common Stock issued under the Plan plus the number of shares
of Class A Common Stock covered by or subject to Awards then
outstanding (after giving effect to the grant of the Award in question)
to exceed
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<PAGE> 6
the greater of (a) 20,000,000 shares or (b) 3.3% of the number of
shares of Common Stock (including both Class A and Class B) outstanding
at the time of granting such Award. No more than 7,000,000 shares of
Class A Common Stock shall be available for Incentive Stock Options. No
Awards shall be granted under this Plan with respect to Class B Common
Stock. The number of shares of Common Stock that are the subject of
Awards under this Plan that are forfeited or terminated, expire
unexercised, are settled in cash in lieu of Common Stock or in a manner
such that all or some of the shares covered by an Award are not issued
to a Participant or are exchanged for Awards that do not involve Common
Stock, shall again immediately become available for Awards hereunder.
The Committee may from time to time adopt and observe such procedures
concerning the counting of shares against the Plan maximum as it may
deem appropriate. The Board and the appropriate officers of the Company
shall from time to time take whatever actions are necessary to file any
required documents with governmental authorities, stock exchanges and
transaction reporting systems to ensure that shares of Common Stock are
available for issuance pursuant to Awards.
(b) Option Program Awards shall not be subject to the
limitations in paragraph 8(b), nor shall such Awards count against the
limitations on Common Stock available for Awards set forth in paragraph
5(a). Option Program Awards shall be subject to such terms and
conditions as the Committee may establish in accordance with Section
8(d), but shall in all events comply with the applicable provisions of
that certain Restructuring, Transfer, and Separation Agreement to which
the Company and DuPont are parties and shall in all respects comply
with the provisions of Exhibit 10.3 thereto (the Employee Matters
Agreement).
6. Administration.
(a) This Plan shall be administered by the Committee except as
otherwise provided herein.
(b) Subject to the provisions hereof, insofar as this Plan
relates to Employee Awards or Independent Contractor Awards, the
Committee shall have full and exclusive power and authority to
administer this Plan and to take all actions that are specifically
contemplated hereby or are necessary or appropriate in connection with
the administration hereof. Insofar as this Plan relates to Employee
Awards or Independent Contractor Awards, the Committee shall also have
full and exclusive power to interpret this Plan and to adopt such
rules, regulations and guidelines for carrying out this Plan as it may
deem necessary or proper, all of which powers shall be exercised in the
best interests of the Company and in keeping with the objectives of
this Plan. The Committee may, in its discretion, provide for the
extension of the exercisability of an Employee Award or Independent
Contractor Award, accelerate the vesting or exercisability of an
Employee Award or Independent Contractor Award, eliminate or make less
restrictive any restrictions applicable to an Employee Award or
Independent Contractor Award, waive any restriction or other provision
of this Plan (insofar as such provision relates to Employee Awards or
to Independent Contractor Awards) or an Employee Award or Independent
Contractor Award or otherwise amend or modify an Employee Award or
Independent Contractor Award in any manner that is either (i) not
adverse to the Participant to whom such Employee Award or Independent
Contractor Award
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<PAGE> 7
was granted or (ii) consented to by such Participant. The Committee may
grant an Award to an Employee who it expects to become an employee of
the Company or any of its Subsidiaries within the following six months,
with such Award being subject to the individual's actually becoming an
employee within such time period, and subject to such other terms and
conditions as may be established by the Committee. The Committee may
correct any defect or supply any omission or reconcile any
inconsistency in this Plan or in any Employee Award or Independent
Contractor Award in the manner and to the extent the Committee deems
necessary or desirable to further the Plan purposes. Any decision of
the Committee in the interpretation and administration of this Plan
shall lie within its sole and absolute discretion and shall be final,
conclusive and binding on all parties concerned.
(c) No member of the Committee or officer of the Company to
whom the Committee has delegated authority in accordance with the
provisions of paragraph 7 of this Plan shall be liable for anything
done or omitted to be done by him or her, by any member of the
Committee or by any officer of the Company in connection with the
performance of any duties under this Plan, except for his or her own
willful misconduct or as expressly provided by statute.
7. Delegation of Authority. The Committee may delegate to the
Chief Executive Officer and to other senior officers of the Company its duties
under this Plan pursuant to such conditions or limitations as the Committee may
establish. The Committee may engage or authorize the engagement of a third party
administrator to carry out administrative functions under the Plan.
8. Employee and Independent Contractor Awards.
(a) The Committee shall determine the type or types of
Employee Awards to be made under this Plan and shall designate from
time to time the Employees who are to be the recipients of such Awards.
Each Employee Award shall be embodied in an Employee Award Agreement,
which shall contain such terms, conditions and limitations as shall be
determined by the Committee in its sole discretion and, if required by
the Committee, shall be signed by the Participant to whom the Employee
Award is granted and by an Authorized Officer for and on behalf of the
Company. Employee Awards may consist of those listed in this paragraph
8(a) and may be granted singly, in combination or in tandem. Employee
Awards may also be granted in combination or in tandem with, in
replacement of, or as alternatives to, grants or rights under this Plan
or any other employee plan of the Company or any of its Subsidiaries,
including the plan of any acquired entity. An Employee Award may
provide for the grant or issuance of additional, replacement or
alternative Employee Awards upon the occurrence of specified events,
including the exercise of the original Employee Award granted to a
Participant. All or part of an Employee Award may be subject to
conditions established by the Committee, which may include, but are not
limited to, continuous service with the Company and its Subsidiaries,
achievement of specific business objectives, increases in specified
indices, attainment of specified growth rates and other comparable
measurements of performance. Upon the termination of employment by a
Participant who is an Employee, any unexercised, deferred, unvested or
unpaid Employee Awards shall be treated as set forth in the applicable
Employee Award Agreement.
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<PAGE> 8
(i) Option. An Employee Award may be in the form of
an Option, which may be an Incentive Stock Option or a
Nonqualified Stock Option. The Grant Price of an Option shall
be not less than the Fair Market Value of the Common Stock on
the Grant Date. Subject to the foregoing provisions, the
terms, conditions and limitations applicable to any Options
awarded to Employees pursuant to this Plan, including the
Grant Price, the term of the Options and the date or dates
upon which they become exercisable, shall be determined by the
Committee.
(ii) Stock Appreciation Rights. An Employee Award may
be in the form of an SAR. The terms, conditions and
limitations applicable to any SARs awarded to Employees
pursuant to this Plan, including the Grant Price, the term of
any SARs and the date or dates upon which they become
exercisable, shall be determined by the Committee.
(iii) Stock Award. An Employee Award may be in the
form of a Stock Award. The terms, conditions and limitations
applicable to any Stock Awards granted pursuant to this Plan
shall be determined by the Committee.
(iv) Cash Award. An Employee Award may be in the form
of a Cash Award. The terms, conditions and limitations
applicable to any Cash Awards granted pursuant to this Plan
shall be determined by the Committee.
(v) Performance Award. Without limiting the type or
number of Employee Awards that may be made under the other
provisions of this Plan, an Employee Award may be in the form
of a Performance Award. A Performance Award shall be paid,
vested or otherwise deliverable solely on account of the
attainment of one or more pre-established, objective
Performance Goals established by the Committee prior to the
earlier to occur of (x) 90 days after the commencement of the
period of service to which the Performance Goal relates and
(y) the lapse of 25% of the period of service (as scheduled in
good faith at the time the goal is established), and in any
event while the outcome is substantially uncertain. A
Performance Goal is objective if a third party having
knowledge of the relevant facts could determine whether the
goal is met. Such a Performance Goal may be based on one or
more business criteria that apply to the Employee, one or more
business units of the Company, or the Company as a whole, and
may include one or more of the following: increased revenue,
net income, stock price, market share, earnings per share,
return on equity, return on assets, decrease in costs,
shareholder value, net cash flow, total shareholder return,
return on capital, return on investors' capital, operating
income, funds from operations, cash flow, cash from
operations, after-tax operating income, reserve addition,
proceeds from dispositions, production volumes, refinery runs,
net cash flow before financing activities, reserve replacement
ratio, finding and development costs, refinery utilizations
and total market value. Unless otherwise stated, such a
Performance Goal need not be based upon an increase or
positive result under a particular business criterion and
could include, for example, maintaining the status quo or
limiting economic losses (measured, in each case, by reference
to
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<PAGE> 9
specific business criteria). In interpreting Plan provisions
applicable to Performance Goals and Performance Awards, it is
the intent of the Plan to conform with the standards of
Section 162(m) of the Code and Treasury Regulation ss.
1.162-27(e)(2)(i), and the Committee in establishing such
goals and interpreting the Plan shall be guided by such
provisions. Prior to the payment of any compensation based on
the achievement of Performance Goals, the Committee must
certify in writing that applicable Performance Goals and any
of the material terms thereof were, in fact, satisfied.
Subject to the foregoing provisions, the terms, conditions and
limitations applicable to any Performance Awards made pursuant
to this Plan shall be determined by the Committee.
(b) Notwithstanding anything to the contrary contained in this
Plan excluding paragraph 5(b), the following limitations shall apply to
any Employee Awards made hereunder:
(i) no Participant may be granted, during any
calendar year, Employee Awards consisting of Options or SARs
that are exercisable for more than 2,500,000 shares of Common
Stock;
(ii) no Participant may be granted, during any
calendar year, Stock Awards covering or relating to more than
150,000 shares of Common Stock (the limitation set forth in
this clause (ii), together with the limitation set forth in
clause (i) above, being hereinafter collectively referred to
as the "Stock Based Awards Limitations"); and
(iii) no Participant may be granted Employee Awards
consisting of cash or in any other form permitted under this
Plan (other than Employee Awards consisting of Options or SARs
or Stock Awards) in respect of any calendar year having a
value determined on the Grant Date in excess of $7,500,000.
(c) The Committee shall have the sole responsibility and
authority to determine the type or types of Independent Contractor
Awards to be made under this Plan and the terms, conditions and
limitations applicable to such Awards.
(d) Holders of DuPont Awards who elect to participate in the
Option Program may be granted Option Program Awards under this Plan. An
Option Program Award shall generally be subject to the same terms and
conditions as the canceled DuPont Award, with appropriate adjustments
to exercise price and the number of shares subject to the Option
Program Award, subject to such other terms as are determined by the
Committee.
9. Director Awards. Each Nonemployee Director of the Company
shall be granted Director Awards in accordance with this paragraph 9 and subject
to the applicable terms, conditions and limitations set forth in this Plan and
the applicable Director Award Agreements. Notwithstanding anything to the
contrary contained herein, Director Awards shall not be granted in
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<PAGE> 10
any year in which a sufficient number of shares of Common Stock are not
available to make all such scheduled Awards under this Plan.
(a) Initial Director Options. On the IPO Pricing Date, each
Nonemployee Director, other than the Chairman, and each person who has
agreed to become a Nonemployee Director in connection with the IPO
shall be automatically granted a Director Option on that number of
shares of Common Stock such that the aggregate Option Value is $30,000,
and the Chairman shall be automatically awarded a Director Option on
that number of shares of Common Stock such that the aggregate Option
Value is $1,300,000, but in the case of a person who is not a
Nonemployee Director on such date, subject to that person becoming a
Nonemployee Director no later than the next regularly scheduled meeting
of the Board.
(b) Annual Director Options. On each Annual Director Award
Date, each Nonemployee Director other than the Chairman shall
automatically be granted a Director Option such that the aggregate
Option Value is $30,000.
(c) Terms of Director Option. Each Director Option shall have
a term of ten years following the Grant Date. The Grant Price of each
share of Common Stock subject to a Director Option shall be equal to
the Fair Market Value of the Common Stock on the Grant Date. All
Director Options shall be fully vested after 6 months of service as a
Nonemployee Director. All Director Options shall become exercisable in
increments of one-third of the total number of shares of Common Stock
that are subject thereto (rounded up to the nearest whole number) on
the first and second anniversaries of the Grant Date and of all
remaining shares of Common Stock that are subject thereto on the third
anniversary of the Grant Date. Notwithstanding the foregoing exercise
schedule, all Director Options held by a Nonemployee Director shall
immediately become fully exercisable if the Nonemployee Director
terminates his or her status as a member of the Board by reason of the
director's death or Disability.
(d) Director Option Agreements. Any Award of Director Options
shall be embodied in a Director Award Agreement, which shall contain
the terms, conditions and limitations set forth above and shall be
signed by an Authorized Officer for and on behalf of the Company.
(e) Initial Stock Units. On the IPO Pricing Date, each
Nonemployee Director, other than the Chairman, and each person who has
agreed to become a Nonemployee Director in connection with the IPO
shall be automatically granted that number of Stock Units under the
Director's Deferred Compensation Plan determined by dividing $95,000 by
the Fair Market Value of Class A Common Stock on the IPO Pricing Date,
and the Chairman shall be automatically granted that number of Stock
Units under the Director's Deferred Compensation Plan determined by
dividing $100,000 by the Fair Market Value of Class A Common Stock on
the IPO Pricing Date; provided, however, that in the case of a person
who is not a Nonemployee Director on such date, the grant under this
subparagraph (e) shall be
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<PAGE> 11
subject to that person becoming a Nonemployee Director no later than
the next regularly scheduled meeting of the Board.
(f) Other Stock Unit Grants. From and after the IPO Closing
Date, on the date of his or her first appointment or election to the
Board, a Nonemployee Director shall automatically be granted that
number of Stock Units determined by dividing $95,000 by the Fair Market
Value of Class A Common Stock on the date of election to the Board. In
addition, on each Annual Director Award Date, each Nonemployee Director
other than the Chairman shall automatically be granted an additional
number of Stock Units determined by dividing $20,000 by the Fair Market
Value of Class A Common Stock on such date.
(g) Terms of Stock Units. Stock Units granted under this Plan
shall be accounted for and subject to the terms and conditions of the
Director's Deferred Compensation Plan, including provisions that the
Stock Units cannot be distributed or made available to the Nonemployee
Director before the expiration of three years from the Grant Date,
except by reason of death or Disability of the director, and that
dividend equivalents shall be accumulated and reinvested in additional
Stock Units.
(h) Stock Unit Agreements. Any Award of Stock Units shall be
embodied in a Director Award Agreement, which shall contain the terms
and conditions and limitations set forth above, and applicable terms
and conditions from the Director's Deferred Compensation Plan, and
shall be signed by the Participant to whom the Stock Units are granted
and by an Authorized Officer for and on behalf of the Company.
10. Payment of Awards.
(a) General. Payment made to a Participant pursuant to an
Award may be made in the form of cash or Class A Common Stock, or a
combination thereof, and may include such restrictions as the Committee
shall determine, including, in the case of Common Stock, restrictions
on transfer and forfeiture provisions. If such payment is made in the
form of Restricted Stock, the applicable Award Agreement relating to
such shares shall specify whether they are to be issued at the
beginning or end of the Restriction Period. In the event that shares of
Restricted Stock are to be issued at the beginning of the Restriction
Period, the certificates evidencing such shares (to the extent that
such shares are so evidenced) shall contain appropriate legends and
restrictions that describe the terms and conditions of the restrictions
applicable thereto. In the event that shares of Restricted Stock are to
be issued at the end of the Restricted Period, the right to receive
such shares shall be evidenced by book entry registration or in such
other manner as the Committee may determine. Payment of Stock Units
awarded to Nonemployee Directors shall be governed by the Director's
Deferred Compensation Plan.
(b) Deferral. With the approval of the Committee, amounts
payable in respect of Awards may be deferred and paid either in the
form of installments or as a lump-sum payment. The Committee may permit
selected Participants to elect to defer payments of some or all types
of Awards or any other compensation otherwise payable by the Company
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<PAGE> 12
in accordance with procedures established by the Committee. Any
deferred payment pursuant to an Award, whether elected by the
Participant or specified by the Award Agreement or by the Committee,
may be forfeited if and to the extent that the Award Agreement so
provides.
(c) Dividends, Earnings and Interest. Rights to dividends or
Dividend Equivalents may be extended to and made part of any Stock
Award, subject to such terms, conditions and restrictions as the
Committee may establish. The Committee may also establish rules and
procedures for the crediting of interest or other earnings on deferred
cash payments and Dividend Equivalents for Stock Awards.
(d) Substitution of Awards. At the discretion of the
Committee, a Participant who is an Employee or Independent Contractor
may be offered an election to substitute an Employee Award or
Independent Contractor Award for another Employee Award or Independent
Contractor Award or Employee Awards or Independent Contractor Awards of
the same or different type.
(e) Cash-out of Awards. At the discretion of the Committee, an
Award that is an Option or SAR may be settled by a cash payment equal
to the difference between the Fair Market Value per share of Common
Stock on the date of exercise and the Grant Price of the Award,
multiplied by the number of shares with respect to which the Award is
exercised.
11. Option Exercise. The Grant Price shall be paid in full at
the time of exercise in cash or, if permitted by the Committee and elected by
the optionee, the optionee may purchase such shares by means of tendering Common
Stock or surrendering another Award, including Restricted Stock, valued at Fair
Market Value on the date of exercise, or any combination thereof. The Committee
shall determine acceptable methods for Participants to tender Common Stock or
other Awards. The Committee may provide for procedures to permit the exercise or
purchase of such Awards by use of the proceeds to be received from the sale of
Common Stock issuable pursuant to an Award. Unless otherwise provided in the
applicable Award Agreement, in the event shares of Restricted Stock are tendered
as consideration for the exercise of an Option, a number of the shares issued
upon the exercise of the Option, equal to the number of shares of Restricted
Stock used as consideration therefor, shall be subject to the same restrictions
as the Restricted Stock so submitted as well as any additional restrictions that
may be imposed by the Committee. The Committee may adopt additional rules and
procedures regarding the exercise of Options from time to time, provided that
such rules and procedures are not inconsistent with the provisions of this
paragraph.
12. Taxes. The Company or its designated third party
administrator shall have the right to deduct applicable taxes from any Employee
Award payment and withhold, at the time of delivery or vesting of cash or shares
of Common Stock under this Plan, an appropriate amount of cash or number of
shares of Common Stock or a combination thereof for payment of taxes or other
amounts required by law or to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for withholding of such taxes.
The Committee may also permit withholding to be satisfied by the transfer to the
Company of shares of Common Stock theretofore owned by the holder of the
Employee Award with respect to which withholding is required. If
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<PAGE> 13
shares of Common Stock are used to satisfy tax withholding, such shares shall be
valued based on the Fair Market Value when the tax withholding is required to be
made. The Committee may provide for loans, on either a short term or demand
basis, from the Company to a Participant who is an Employee or Independent
Contractor to permit the payment of taxes required by law.
13. Amendment, Modification, Suspension or Termination of the
Plan. The Board may amend, modify, suspend or terminate this Plan for the
purpose of meeting or addressing any changes in legal requirements or for any
other purpose permitted by law, except that (i) no amendment or alteration that
would adversely affect the rights of any Participant under any Award previously
granted to such Participant shall be made without the consent of such
Participant and (ii) no amendment or alteration shall be effective prior to its
approval by the stockholders of the Company to the extent such approval is
required by applicable legal requirements.
14. Assignability. Unless otherwise determined by the
Committee and provided in the Award Agreement, no Award or any other benefit
under this Plan shall be assignable or otherwise transferable except by will or
the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder. The Committee may prescribe and
include in applicable Award Agreements other restrictions on transfer. Any
attempted assignment of an Award or any other benefit under this Plan in
violation of this paragraph 14 shall be null and void.
15. Adjustments.
(a) The existence of outstanding Awards shall not affect in
any manner the right or power of the Company or its stockholders to
make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the capital stock of the Company or
its business or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock
(whether or not such issue is prior to, on a parity with or junior to
the Class A Common Stock) or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding of any kind, whether
or not of a character similar to that of the acts or proceedings
enumerated above.
(b) In the event of any subdivision or consolidation of
outstanding shares of Common Stock, declaration of a dividend payable
in shares of Common Stock or other stock split, then (i) the number of
shares of Common Stock reserved under this Plan, (ii) the number of
shares of Common Stock covered by outstanding Awards, (iii) the Grant
Price or other price in respect of such Awards, (iv) the appropriate
Fair Market Value and other price determinations for such Awards, and
(v) the Stock Based Awards Limitations shall each be proportionately
adjusted by the Board as appropriate to reflect such transaction. In
the event of any other recapitalization or capital reorganization of
the Company, any consolidation or merger of the Company with another
corporation or entity, the adoption by the Company of any plan of
exchange affecting the Common Stock or any distribution to holders of
Common Stock of securities or property (other than normal cash
dividends or dividends payable in Common Stock), the Board shall make
appropriate adjustments to (i) the number of shares
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<PAGE> 14
of Common Stock covered by Awards, (ii) the Grant Price or other price
in respect of such Awards, (iii) the appropriate Fair Market Value and
other price determinations for such Awards, and (iv) the Stock Based
Awards Limitations to reflect such transaction; provided that such
adjustments shall only be such as are necessary to maintain the
proportionate interest of the holders of the Awards and preserve,
without increasing, the value of such Awards. In the event of a
corporate merger, consolidation, acquisition of property or stock,
separation, reorganization or liquidation, the Board shall be
authorized (x) to issue or assume Awards by means of substitution of
new Awards, as appropriate, for previously issued Awards or to assume
previously issued Awards as part of such adjustment or (y) to cancel
Awards that are Options or SARs and give the Participants who are the
holders of such Awards notice and opportunity to exercise for 30 days
prior to such cancellation.
16. Restrictions. No Common Stock or other form of payment
shall be issued with respect to any Award unless the Company shall be satisfied
based on the advice of its counsel that such issuance will be in compliance with
applicable federal and state securities laws. Certificates evidencing shares of
Common Stock delivered under this Plan (to the extent that such shares are so
evidenced) may be subject to such stop transfer orders and other restrictions as
the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange
or transaction reporting system upon which the Common Stock is then listed or to
which it is admitted for quotation and any applicable federal or state
securities law. The Committee may cause a legend or legends to be placed upon
such certificates (if any) to make appropriate reference to such restrictions.
17. Unfunded Plan. This Plan shall be unfunded. Although
bookkeeping accounts may be established with respect to Participants under this
Plan, any such accounts shall be used merely as a bookkeeping convenience. The
Company shall not be required to segregate any assets for purposes of this Plan
or Awards hereunder, nor shall the Company, the Board or the Committee be deemed
to be a trustee of any benefit to be granted under this Plan. Any liability or
obligation of the Company to any Participant with respect to an Award under this
Plan shall be based solely upon any contractual obligations that may be created
by this Plan and any Award Agreement, and no such liability or obligation of the
Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. Neither the Company nor the Board nor the Committee
shall be required to give any security or bond for the performance of any
obligation that may be created by this Plan.
18. Governing Law. This Plan and all determinations made and
actions taken pursuant hereto, to the extent not otherwise governed by mandatory
provisions of the Code or the securities laws of the United States, shall be
governed by and construed in accordance with the laws of the State of Delaware.
19. Effectiveness. The Plan, as approved by the Board, shall
be effective as set forth herein as of October 16, 1998, but all Awards granted
hereunder prior to the IPO Closing Date shall be null and void and canceled
without consideration if the IPO Closing Date does not occur on or before ten
(10) business days after the IPO Pricing Date. This Plan was approved by the
stockholder of the Company on October 19, 1998.
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EXHIBIT 5.1
[Letterhead of Baker & Botts, L.L.P.]
October 22, 1998
Conoco Inc.
600 North Dairy Ashford
Houston, Texas 77079
Gentlemen:
As set forth in the Registration Statement on Form S-8 (the
"Registration Statement") to be filed by Conoco Inc., a Delaware corporation
(the "Company"), with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "Act"), relating to up to
30,495,264 shares (the "Shares") of Class A Common Stock of the Company, par
value $.01 per share, issuable pursuant to the Conoco Inc. 1998 Stock and
Performance Incentive Plan (the "Plan"), we are passing upon certain legal
matters in connection with the Shares for the Company. At your request, we are
furnishing this opinion to you for filing as Exhibit 5.1 to the Registration
Statement.
In our capacity as your counsel in the connection referred to above,
we have examined the Plan, the Amended and Restated Certificate of
Incorporation and Bylaws of the Company, each as amended to date, and the
originals, or copies certified or otherwise identified, of corporate records of
the Company, including minute books of the Company as furnished to us by the
Company, certificates of public officials and of representatives of the
Company, statutes and other instruments and documents as a basis for the
opinions hereinafter expressed. In giving such opinions, we have relied upon
certificates of officers of the Company and of public officials with respect to
the accuracy of the material factual matters contained in such certificates.
We have assumed that all signatures on all documents examined by us
are genuine, that all documents submitted to us as originals are accurate and
complete, that all documents submitted to us as copies are true and correct
copies of the originals thereof and that all information submitted to us was
accurate and complete. In addition, we have assumed for purposes of paragraph
2 below that the consideration received by the Company for the Shares will be
not less than the par value of the Shares.
On the basis of the foregoing, and subject to the assumptions,
limitations and qualifications set forth herein, we are of the opinion that:
1. The Company is a corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware.
2. In the case of Shares originally issued by the
Company pursuant to the provisions of the Plan following due
authorization of a particular award thereunder by a duly constituted
and acting committee of the Board of Directors of the Company as
provided in and in accordance with the Plan, the Shares issuable
pursuant to such award will have been duly authorized by all necessary
corporate action on the part of the Company. Upon issuance and
delivery of such Shares from time to time pursuant to the terms of
such award for the consideration established pursuant to the terms of
the Plan and otherwise in accordance with the terms and conditions of
such award, including, if applicable, the lapse of any restrictions
relating thereto, the satisfaction of any performance conditions
associated therewith and any requisite determinations by or pursuant
to the authority of the Board of Directors or a duly constituted and
acting committee thereof as provided therein, and, in the case of
stock options, the exercise thereof and payment for such Shares as
provided therein, such Shares will be validly issued, fully paid and
nonassessable.
The opinions set forth above are limited in all respects to the
General Corporation Law of the State of Delaware as in effect on the date
hereof.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. In giving such consent, we do not
admit that we are within the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
BAKER & BOTTS, L.L.P.
<PAGE> 1
EXHIBIT 15.1
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Ladies and Gentlemen:
We are aware that Conoco Inc., a Delaware corporation ("Conoco"), has
incorporated by reference in this Registration Statement on Form S-8 our report
dated September 28, 1998 (issued pursuant to the provisions of Statement on
Auditing Standards No. 71) included in the Company's prospectus dated October
21, 1998 as filed with the Securities and Exchange Commission pursuant to Rule
424(b) under the Securities Act of 1933 (the "Prospectus"). In addition, we
are aware that Conoco has incorporated by reference in this Registration
Statement on Form S-8 our report dated October 21, 1998 on the pro forma
combined balance sheet as of June 30, 1998 and the pro forma combined
statements of income for the six-month periods ended June 30, 1997 and 1998
included in the Prospectus. We are also aware of our responsibilities under
the Securities Act of 1933.
Yours very truly,
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
October 21, 1998
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our reports dated July 24, 1998 and October 21, 1998
relating to the combined financial statements and the pro forma combined
statement of income, respectively, of Conoco, which appear in the Company's
prospectus dated October 21, 1998 as filed with the Securities and Exchange
Commission pursuant to Rule 424(b) under the Securities Act of 1933.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
October 21, 1998
