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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) August 17, 1999
DEVON ENERGY CORPORATION
(Exact Name of registrant as Specified in its Charter)
Delaware * 73-1567067
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation or Organization) Identification Number)
20 NORTH BROADWAY, SUITE 1500, OKLAHOMA CITY, OK 73102
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (405) 235-3611
A Commission file number is to be issued in connection with this
filing. The Commission file number of the registrant's predecessor Devon Energy
Corporation, an Oklahoma corporation is 1-10067; the Commission file number of
the registrant's predecessor, PennzEnergy Company, a Delaware corporation, is
1-05591.
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ITEM 2. Acquisition or Disposition of Assets
On August 17, 1999, Devon Energy Corporation, a Delaware corporation
("Devon"), formerly Devon Delaware Corporation, acquired (i) all of the issued
and outstanding shares of common stock of Devon Energy Corporation (Oklahoma),
formerly Devon Energy Corporation ("Devon Oklahoma"), and (ii) all of the issued
and outstanding shares of common stock of PennzEnergy Company ("PennzEnergy"),
each pursuant to an Amended and Restated Agreement and Plan of Merger dated as
of May 19, 1999 (the "Merger Agreement"). The PennzEnergy and the Devon
Oklahoma shares were acquired in exchange for shares of Devon common stock.
Devon Oklahoma is now a wholly-owned subsidiary of Devon. PennzEnergy was
merged with and into Devon.
The merger was originally announced on May 20, 1999. Shareholders of Devon
and PennzEnergy approved the merger at special meetings of shareholders on
August 17, 1999. Approximately 99 percent of Devon shares voted were in favor of
the merger. Approximately 92 percent of PennzEnergy shares voted were in favor
of the merger. A copy of the press release announcing this event is filed
herewith as an exhibit.
The terms of the Merger Agreement were described in the Joint Proxy
Statement/Prospectus of Devon Oklahoma and PennzEnergy dated July 15, 1999,
which was included in Devon's Registration Statement on Form S-4 (File No.
333-82903). A press release announcing the approval of the Merger Agreement by
the stockholders of each of Devon Oklahoma and PennzEnergy was issued on August
17, 1999, and the information contained therein is incorporated herein by
reference to Exhibit 99.1 to Devon Oklahoma's Current Report on Form 8-K filed
August 17, 1999.
Devon is the successor issuer to Devon Oklahoma and PennzEnergy under Rule
12g-3(c) of the Securities Exchange Act of 1934 (the "Act"). Pursuant to Rule
12g-3(f) of the Act, Devon, as the successor to Devon Oklahoma and PennzEnergy,
is deemed to have its Common Stock, par value $0.10 per share, registered
pursuant to Section 12(b) of the Act.
ITEM 7. Financial Statements and Exhibits
(a) Financial Statements of the Business Acquired
The financial statements of PennzEnergy are hereby incorporated by
reference to the Annual Report of PennzEnergy Company on Form 10-K for the year
ended December 31, 1998, and the Quarterly Report of PennzEnergy Company on Form
10-Q for the quarterly period ended June 30, 1999.
(b) Pro Forma Financial Information
The pro forma financial information related to the consummation of the
Merger is hereby incorporated by reference to the Registration Statement on Form
S-4 of Devon Delaware Corporation, filed with the Securities and Exchange
Commission (File No. 333-82903).
(c) Exhibits
2 Amended and Restated Agreement and Plan of Merger among the Registrant,
Devon Oklahoma, Devon Oklahoma Corporation and PennzEnergy dated as of May
19, 1999 (incorporated by reference to Exhibit 2.1 to Registrant's
Registration Statement on Form S-4 (File No. 333-82903)).
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3 Registrant's Restated Certificate of Incorporation.
4.1 Form of Common Stock Certificate.
4.2 Rights Agreement between Registrant and BankBoston, N.A.
4.3 Certificate of Designations of Series A Junior Participating Preferred
Stock of Registrant.
4.4 Certificate of Designations of the 6.49% Cumulative Preferred Stock,
Series A of Registrant.
4.5 Amending Support Agreement, dated August 17, 1999, between the Registrant
and Northstar Energy Corporation.
4.6 Second Supplemental Indenture dated as of August 17, 1999, among the
Registrant, Devon Energy Corporation (Oklahoma) and The Bank of New York as
Trustee.
4.7 Fifth Supplemental Indenture dated as of August 17, 1999, among Registrant
(as successor by Merger to PennzEnergy) and Chase Bank of Texas, National
Association as Trustee.
4.8 First Supplemental Indenture dated as of August 17, 1999, among Registrant
(as successor by Merger to PennzEnergy) and Chase Bank of Texas, National
Association as Trustee.
4.9 Description of Capital Stock of Devon Energy Corporation.
9 Amending Voting and Exchange Agreement, dated August 17, 1999, between
Registrant, Northstar Energy Corporation and CIB Mellon Trust Company.
99 Press release dated August 17, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DEVON ENERGY CORPORATION
Date: August 18, 1999 By: /s/ Marian J. Moon
-----------------------------------
Marian J. Moon
Corporate Secretary
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EXHIBIT 3
RESTATED CERTIFICATE OF INCORPORATION
OF
DEVON DELAWARE CORPORATION
ARTICLE I
Name
The name of this corporation (the "Corporation") is Devon Energy
Corporation.
ARTICLE II
Registered Office
The address of the registered office of the Corporation in the State
of Delaware is at 1209 Orange Street, in the City of Wilmington, County of New
Castle, and the name of its registered agent at that address is The Corporation
Trust Company.
ARTICLE III
Business
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "General Corporation Law").
ARTICLE IV
Authorized Capital Stock
A. The Corporation shall be authorized to issue a total of
404,500,001 shares of capital stock divided into classes as follows:
(1) 400,000,000 shares of Common Stock, par value $0.10 per share
("Common Stock"),
(2) 4,500,000 shares of Preferred Stock, par value $1.00 per share
("Preferred Stock"), and
(3) one share of Special Voting Stock, par value $.10 per share.
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B. Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board of Directors
of the Corporation (the "Board"), each of said series to be distinctly
designated. The voting powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations or
restrictions thereof, if any, of each such series may differ from those of any
and all other series of Preferred Stock at any time outstanding, and the Board
is hereby expressly granted authority to fix or alter, by resolution or
resolutions, the designation, number, voting powers, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof, of each such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock that shall constitute, such series, which number (except
where otherwise provided by the Board in the resolution establishing such
series) may be increased or decreased (but not below the number of shares
of such series then outstanding) from time to time by action of the Board;
(2) The rights in respect of dividends, if any, of such series of
Preferred Stock, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes or any
other series of the same or other class or classes of capital stock of the
Corporation, and whether or in what circumstances such dividends shall be
cumulative;
(3) The right, if any, of the holders of such series of Preferred
Stock to convert the same into, or exchange the same for, shares of any
other class or classes or of any other series of the same or any other
class or classes of capital stock or other securities of the Corporation or
any other person, and the terms and conditions of such conversion or
exchange;
(4) Whether or not shares of such series of Preferred Stock shall be
subject to redemption, and, if so, the terms and conditions of such
redemption (including whether such redemption shall be optional or
mandatory), including the date or dates or event or events upon or after
which they shall be redeemable, and the amount and type of consideration
payable upon redemption, which may vary under different conditions and at
different redemption dates;
(5) The rights, if any, of the holders of such series of Preferred
Stock upon the voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation or in the event of any merger or
consolidation of or sale of assets by the Corporation;
(6) The terms of any sinking fund or redemption or purchase account,
if any, to be provided for shares of such series of the Preferred Stock;
(7) The voting powers, if any, of the holders of any series of
Preferred Stock generally or with respect to any particular matter, which
may be less than, equal to or
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greater than one vote per share, and which may, without limiting the
generality of the foregoing, include the right, voting as a series by
itself or together with the holders of any other series of Preferred Stock
or all series of Preferred Stock as a class, to elect one or more directors
of the Corporation generally or under such specific circumstances and on
such conditions, as shall be provided in the resolution or resolutions of
the Board adopted pursuant hereto, including, without limitation, in the
event there shall have been a default in the payment of dividends on or
redemption of any one or more series of Preferred Stock; and
(8) Any other powers, preferences and relative, participating,
optional or other rights, and qualifications, limitations or restrictions
of shares of such series of Preferred Stock.
C. (1) After the provisions with respect to preferential dividends
on any series of Preferred Stock (fixed in accordance with the provisions
of Paragraph B of this Article IV), if any, shall have been satisfied and
after the Corporation shall have complied with all the requirements, if
any, with respect to redemption of, or the setting aside of sums as sinking
funds or redemption or purchase accounts with respect to, any series of
Preferred Stock (fixed in accordance with the provisions of Paragraph B of
this Article IV), and subject further to any other conditions that may be
fixed in accordance with the provisions of Paragraph B of this Article IV,
then and not otherwise the holders of Common Stock shall be entitled to
receive such dividends as may be declared from time to time by the Board.
(2) In the event of the voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, after distribution in full of
the preferential amounts, if any (fixed in accordance with the provisions
of Paragraph B of this Article IV), to be distributed to the holders of
Preferred Stock by reason thereof, the holders of Common Stock shall,
subject to the additional rights, if any (fixed in accordance with the
provisions of Paragraph B of this Article IV), of the holders of any
outstanding shares of Preferred Stock, be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of whatever
kind available for distribution to stockholders ratably in proportion to
the number of shares of Common Stock held by them respectively.
(3) Except as may otherwise be required by law, and subject to the
provisions of such resolution or resolutions as may be adopted by the Board
pursuant to Paragraph B of this Article IV granting the holders of one or
more series of Preferred Stock exclusive voting powers with respect to any
matter, each holder of Common Stock shall have one vote in respect of each
share of Common Stock held on all matters voted upon by the stockholders.
(4) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased from
time to time by the affirmative vote of the holders of a majority of the
combined voting power of the then-outstanding shares of Voting Stock,
voting together as a single class.
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D. Each outstanding share of Special Voting Stock shall be entitled,
on all matters presented to the stockholders of the Corporation, to that number
of votes equal to the number of Exchangeable Shares of Northstar Energy
Corporation, an Alberta corporation, outstanding from time to time not owned by
the Corporation or any of its wholly owned subsidiaries. No dividend or
distribution of assets shall be paid to the holders of Special Voting Stock. The
Special Voting Stock is not convertible into any other class or series of the
capital stock of the Corporation or into cash, property or other rights, and may
not be redeemed. Any shares of Special Voting Stock purchased or otherwise
acquired by the Corporation shall be deemed retired and shall be canceled and
may not thereafter be reissued or otherwise disposed of by the Corporation. At
such time as the Special Voting Stock has no votes attached to it because there
are no Exchangeable Shares outstanding, the Special Voting Stock shall be
canceled. In respect of all matters concerning the voting of shares, the Common
Stock and the Special Voting Stock shall vote as a single class and such voting
rights shall be identical in all respects.
E. No stockholder of the Corporation shall by reason of his holding
shares of any class or series of stock of the Corporation have any preemptive or
preferential right to purchase, acquire, subscribe for or otherwise receive any
additional, unissued or treasury shares (whether now or hereafter acquired) of
any class or series of stock of the Corporation now or hereafter to be
authorized, or any notes, debentures, bonds or other securities convertible into
or carrying any right, option or warrant to purchase, acquire, subscribe for or
otherwise receive shares of any class or series of stock of the Corporation now
or hereafter to be authorized, whether or not the issuance of any such shares,
or such notes, debentures, bonds or other securities, would adversely affect the
dividends or voting or other rights of such stockholder, and the Board may issue
or authorize the issuance of shares of any class or series of stock of the
Corporation, or any notes, debentures, bonds or other securities convertible
into or carrying rights, options or warrants to purchase, acquire, subscribe for
or otherwise receive shares of any class or series of stock of the Corporation,
without offering any such shares of any such class, either in whole or in part,
to the existing stockholders of any class.
F. Cumulative voting of shares of any class or series of capital
stock of the Corporation having voting rights is not permitted.
G. The holders of Convertible Debentures (as hereinafter defined)
shall have the right to convert such Convertible Debentures into Common Stock,
subject to the terms of the Indenture (as hereinafter defined). Indenture means
the Indenture, dated as of July 3, 1996, between Devon Energy Corporation and
The Bank of New York, as the same may be supplemented or amended from time to
time. "Convertible Debentures" has the meaning assigned to such term in the
First Supplemental Indenture, dated as of July 3, 1999, between Devon Energy
Corporation and the Bank of New York.
The Corporation shall make any further conversion adjustments as may
be required from time to time by the Indenture and the Supplemental Indenture.
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ARTICLE V
Election of Directors
A. The business and affairs of the Corporation shall be conducted and
managed by, or under the direction of, the Board. The number of directors which
shall constitute the entire Board shall not be less than three nor more than
twenty, and, except as provided in Paragraph D of this Article V, shall be
determined by resolution adopted by a majority of the entire Board. No
reduction in number shall have the effect of removing any director prior to the
expiration of his or her term.
B. The Board, other than those directors elected by the holders of
any series of Preferred Stock as provided for or fixed pursuant to the
provisions of Article IV, shall be divided into three classes, Class I, Class II
and Class III, and the Board shall designate the directors who shall first serve
in Class I, Class II and Class III. Such classes shall be as nearly equal in
number as possible; provided, however, the Board of Directors at the time of
filing the Certificate of Merger pursuant to the Amended and Restated Agreement
and Plan of Merger, dated May 19, 1999, among the Corporation, Devon Energy
Corporation, an Oklahoma corporation, Devon Oklahoma Corporation, an Oklahoma
corporation, and PennzEnergy Company, a Delaware corporation, shall have four
directors in Class I, four directors in Class II and six directors in Class III.
Each director shall serve for a term ending on the third annual meeting
following the annual meeting at which such director was elected; provided,
however, that the directors first designated to Class I shall serve for a term
expiring at the annual meeting next following the date of their designation as
Class I Directors, the directors first designated to Class II shall serve for a
term expiring at the second annual meeting next following the date of their
designation as Class II Directors, and the directors first designated to Class
III shall serve for a term expiring at the third annual meeting next following
the date of their designation as Class III Directors. At each annual election
of directors, the directors chosen to succeed those whose terms then expire
shall be of the same class as the directors of the Corporation they succeed,
unless the Board of Directors shall designate one or more directorships whose
term then expires as directorships of another class in order more nearly to
achieve equality of number of directors among the classes. In the event of any
change in the authorized number of Directors of the Corporation, each Director
of the Corporation then continuing to serve as such shall nevertheless continue
as a Director of the class of which he is a member until the expiration of his
current term, or his prior death, resignation or removal.
C. Except as otherwise provided for or fixed pursuant to the
provisions of Article IV relating to the rights of the holders of any series of
Preferred Stock to elect additional directors, except as provided in Paragraph D
of this Article V, and subject to the provisions hereof, newly created
directorships resulting from any increase in the authorized number of directors,
and any vacancies on the Board resulting from death, resignation,
disqualification, removal, or other cause, may be filled only by the affirmative
vote of a majority of the remaining directors then in office, even though less
than a quorum of the Board. Any director elected in accordance with the
preceding sentence or Paragraph D of this Article V shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or
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in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified, subject to his earlier death, disqualification,
resignation or removal. Except as otherwise provided pursuant to Article IV of
this Certificate of Incorporation relating to additional directors elected by
the holders of one or more series of Preferred Stock, no decrease in the number
of directors constituting the Board shall shorten the term of any incumbent
director.
D. There shall be a "Balance Period" during which the number of
directors constituting the whole Board shall at all times be an even number and
vacancies and newly created directorships resulting from any increase in the
authorized number of directors shall be filled, and nominations by the Board
shall be made, as follows:
(a) Any vacancy on the Board resulting from the death,
resignation, disqualification or removal of a Continuing Director
(hereinafter defined) shall be filled only by the affirmative vote of
a majority of the remaining Continuing Directors then in office.
Nominations of the Board to fill the positions of Continuing Directors
whose terms are about to expire shall likewise be made by the
affirmative vote of a majority of the Continuing Directors then in
office.
(b) Any vacancy on the Board resulting from the death,
resignation, disqualification or removal of a New Director
(hereinafter defined) shall be filled only by the affirmative vote of
a majority of the remaining New Directors then in office. Nominations
of the Board to fill the positions of New Directors whose terms are
about to expire shall likewise be made by the affirmative vote of a
majority of the New Directors then in office. Notwithstanding the
foregoing provisions of this paragraph (b), throughout the Balance
Period at least one New Director shall be a person who shall have been
mutually approved (prior to his or her initial election to the Board)
by the Chairman and the President of the Corporation.
(c) Any newly created directorship or directorships resulting
from an increase in the authorized number of directors shall be
allocated so that the aggregate number of board positions to be filled
by Continuing Directors shall be equal to the number of Board
positions to be filled by New Directors. Such newly created
directorships to be filled by Continuing Directors shall be filled, or
nominations therefor made, in the same manner as is provided in
paragraph (a) above and such newly created directorships to be filled,
or nominations therefor made, by New Directors shall be filled in the
same manner as is provided in paragraph (b) above.
The number of directors which shall constitute the entire Board shall be
expanded if necessary to comply with the foregoing provision of this Section D.
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The Balance Period shall begin on the date this Amended and Restated
Certificate of Incorporation becomes effective and shall end on the annual
meeting of the stockholders in the year 2000.
"Continuing Director" shall mean a director who was a director of Devon
Energy Corporation, an Oklahoma corporation, immediately prior to the Closing
under the Amended and Restated Agreement and Plan of Merger by and among the
Corporation, Devon Energy Corporation, Devon Oklahoma Corporation and
PennzEnergy Company dated as of May 19, 1999, or who subsequently became a
director as a result of the filing of a newly created directorship or vacancy by
the Continuing Directors as aforesaid or as a result of his or her election as a
director having been nominated by the Continuing Directors as herein provided.
"New Director" shall mean any director other than a Continuing Director.
E. During any period when the holders of any series of Preferred
Stock have the right to elect additional directors as provided for or fixed
pursuant to the provisions of Article IV, then upon commencement and for the
duration of the period during which such right continues (i) the then otherwise
total authorized number of directors of the Corporation shall automatically be
increased by such specified number of directors, and the holders of such
Preferred Stock shall be entitled to elect the additional directors so provided
for or fixed pursuant to said provisions, and (ii) each such additional director
shall serve until such director's successor shall have been duly elected and
qualified, or until such director's right to hold such office terminates
pursuant to said provisions, whichever occurs earlier, subject to his earlier
death, disqualification, resignation or removal. Except as otherwise provided
by the Board in the resolution or resolutions establishing such series, whenever
the holders of any series of Preferred Stock having such right to elect
additional directors are divested of such right pursuant to the provisions of
such stock, the terms of office of all such additional directors elected by the
holders of such stock, or elected to fill any vacancies resulting from the
death, resignation, disqualification or removal of such additional directors,
shall forthwith terminate and the total and authorized number of directors of
the Corporation shall be reduced accordingly.
ARTICLE VI
Meetings of Stockholders
A. Meetings of stockholders of the Corporation may be held within or
without the State of Delaware, as the By-laws of the Corporation may provide.
Except as otherwise provided for or fixed pursuant to the provisions of Article
IV relating to the rights of the holders of any series of Preferred Stock,
special meetings of stockholders of the Corporation may be called only (i)
pursuant to a resolution adopted by a majority of the then-authorized number of
directors of the Corporation and (ii) if permitted by the By-laws of the
Corporation, by the Chairman of the Board or the President of the Corporation as
and in the manner provided in the By-laws of the Corporation. Special meetings
of stockholders may not be called by any other person or persons or in any other
manner. The ability of the stockholders of the Corporation to call a special
meeting of stockholders is hereby specifically denied. Elections of directors
need not be by written ballot unless the By-laws of the Corporation shall so
provide.
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B. In addition to the powers conferred on the Board by this
Certificate of Incorporation and by the General Corporation Law, and without
limiting the generality thereof, the Board is specifically authorized from time
to time, by resolution of the Board without additional authorization by the
stockholders of the Corporation, to adopt, amend or repeal the By-laws of the
Corporation, in such form and with such terms as the Board may determine,
including, without limiting the generality of the foregoing, By-laws relating to
(i) regulation of the procedure for submission by stockholders of nominations of
persons to be elected to the Board, (ii) regulation of the attendance at annual
or special meetings of the stockholders of persons other than holders of record
or their proxies, and (iii) regulation of the business that may properly be
brought by a stockholder of the Corporation before an annual or special meeting
of stockholders of the Corporation.
ARTICLE VII
Stockholder Consent
Any action required or permitted to be taken by the stockholders of
the Corporation must be effected at a duly called annual or special meeting of
stockholders of the Corporation, and the ability of the stockholders of the
Corporation to consent in writing to the taking of any action is hereby
specifically denied.
ARTICLE VIII
Limitation of Liability
A director of this Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the General Corporation Law as the same exists or
may hereafter be amended. Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a director of the
Corporation existing hereunder with respect to any act or omission occurring
prior to such repeal or modification.
ARTICLE IX
Executive Committee
The Board, pursuant to the By-laws of the Corporation or by resolution
passed by a majority of the then-authorized number of directors, may designate
any of their number to constitute an Executive Committee, which Executive
Committee, to the fullest extent permitted by law and provided for in said
resolution or in the By-laws of the Corporation, shall have and may exercise all
of the powers of the Board in the management of the business and affairs of the
Corporation, and shall have power to authorize the seal of the Corporation to be
affixed to all papers that may require it.
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ARTICLE X
Indemnification
A. 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 he is or was a director, officer, employee or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture or other enterprise against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interest of the Corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was unlawful.
The termination of any 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 he reasonably believed to be in or not opposed to the best
interest of the Corporation and with respect to any criminal action or
proceeding had reasonable cause to believe that his conduct was unlawful.
B. 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 he is or was a director, officer, employee
or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another Corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorney's fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interest 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 in which such action or suit was brought shall determine, upon
application, that despite the adjudication of liability, but in the view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
C. Expenses incurred in defending a civil or criminal action, suit or
proceeding may 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 the director, officer, employee or agent to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized herein.
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D. The Corporation may purchase (upon resolution duly adopted by the
board of directors) and maintain insurance on behalf of any person who is or was
a director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability.
E. To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to herein or in defense of any claim, issue
or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
F. Every such person shall be entitled, without demand by him upon
the Corporation or any action by the Corporation, to enforce his right to such
indemnity in an action at law against the Corporation. The right of
indemnification and advancement of expenses hereinabove provided shall not be
deemed exclusive of any rights to which any such person may now or hereafter be
otherwise entitled and specifically, without limiting the generality of the
foregoing, shall not be deemed exclusive of any rights pursuant to statute or
otherwise, of any such person in any such action, suit or proceeding to have
assessed or allowed in his favor against the Corporation or otherwise, his costs
and expenses incurred therein or in connection therewith or any part thereof.
ARTICLE XI
Amendment Of Corporate Documents
A. Certificate of Incorporation
In addition to any affirmative vote required by applicable law and in
addition to any vote of the holders of any series of Preferred Stock provided
for or fixed pursuant to the provisions of Article IV, any alteration,
amendment, repeal or rescission (a "Change") of any provision of this
Certificate of Incorporation must be approved by at least a majority of the
then-authorized number of directors and by the affirmative vote of the holders
of at least a majority of the combined voting power of the then-outstanding
shares of Voting Stock, voting together as a single class; provided, however,
that if any such Change relates to Article V, VI, VII, VIII, X or XII hereof or
to this Article XI, such Change must also be approved by the affirmative vote of
the holders of at least 66 2/3% of the combined voting power of the then-
outstanding shares of Voting Stock, voting together as a single class. Subject
to the provisions hereof, the Corporation reserves the right at any time, and
from time to time, to amend, alter, repeal or rescind any provision contained in
this Certificate of Incorporation in the manner now or hereafter prescribed by
law, and other provisions authorized by the laws of the State of Delaware at the
time in force may be added or inserted, in the manner now or hereafter
prescribed by law; and all rights, preferences and privileges of whatsoever
nature conferred upon
10
<PAGE>
stockholders, directors or any other persons whomsoever by and pursuant to this
Certificate of Incorporation in its present form or as hereafter amended are
granted subject to the rights reserved in this article.
B. By-Laws
In addition to any affirmative vote required by law, any Change of the
By-laws of the Corporation may be adopted either (i) by the Board by the
affirmative vote of at least a majority of the then-authorized number of
directors or (ii) by the stockholders by the affirmative vote of the holders of
at least 66 2/3% of the combined voting power of the then-outstanding shares of
Voting Stock, voting together as a single class.
ARTICLE XII
Definitions
For the purposes of this Certificate of Incorporation:
A. A "person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust, unincorporated organization or
other entity.
B. "Voting Stock" means all outstanding shares of capital stock of
the Corporation that pursuant to or in accordance with this Certificate of
Incorporation are entitled to vote generally in the election of directors of the
Corporation, and each reference herein, where appropriate, to a percentage or
portion of shares of Voting Stock shall refer to such percentage or portion of
the voting power of such shares entitled to vote.
[SIGNATURE PAGE TO FOLLOW]
11
<PAGE>
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates and integrates and does further amend the provisions of the Certificate
of Incorporation of the Corporation, and which has been duly adopted in
accordance with the provisions of Sections 242 and 245 of the Delaware General
Corporation Law, has been executed by an authorized officer of the Corporation
on this 17th day of August, 1999.
DEVON DELAWARE CORPORATION
/s/ J. Larry Nichols
By:______________________________________
[SIGNATURE PAGE OF RESTATED CERTIFICATE OF INCORPORATION]
<PAGE>
EXHIBIT 4.1
COMMON STOCK COMMON STOCK
$.10 PAR VALUE $.10 PAR VALUE
INCORPORATED UNDER THE LAWS
OF THE STATE OF DELAWARE CUSIP 25179M 10 3
THIS CERTIFICATE IS TRANSFERABLE IN SEE REVERSE FOR CERTAIN
BOSTON, MASS. AND NEW YORK, N.Y. DEFINITIONS
DEVON ENERGY CORPORATION
THIS CERTIFIES THAT
IS THE RECORD HOLDER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF
Devon Energy Corporation (hereinafter called the "Corporation") transferable on
the books of the Corporation, 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 subject to all of the provisions of
the Certificate of Incorporation of the Corporation and of the amendments
thereto, to all of which the holder, by acceptance hereof, assents. This
Certificate is not valid unless countersigned by the Transfer Agent and
registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
/s/ J. Larry Nichols
- - -------------------------------
President
/s/ Marian J. Moon
- - -------------------------------
Secretary
CORPORATE
SEAL
DEVON ENERGY CORPORATION
DELAWARE
COUNTERSIGNED AND REGISTERED BY:
BANKBOSTON, N.A.
as Transfer Agent and Registrar
By: /s/ M. Dinger
---------------------------
Authorized Signature
<PAGE>
DEVON ENERGY CORPORATION
The Corporation 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 or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights. Such request may be made to the Corporation or the transfer agent.
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Devon Energy
Corporation and BankBoston, N.A. dated as of August 17, 1999 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices of Devon Energy
Corporation. Under certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may expire, or may be evidenced by separate
certificates and no longer be evidenced by this certificate. Devon Energy
Corporation will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge after receipt of
a written request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as 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.
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
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT -- ___________ Custodian ____________
(Cust) (Minor)
Under Uniform Gifts to Minors Act
__________________________________
(State)
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 ZIP CODE OF ASSIGNEE
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Shares
- - ------------------------------------------------------------------------
of the 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 Corporation 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) MUST BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION AS DEFINED
IN RULE 17Ad-15 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
------------------------------------------
SIGNATURE(S) GUARANTEED BY:
<PAGE>
EXHIBIT 4.6
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
SECOND SUPPLEMENTAL INDENTURE
among
Devon Energy Corporation
Devon Energy Corporation (Oklahoma)
and
The Bank of New York
as Trustee
Dated as of August 17, 1999
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of August __, 1999 (the "Second
Supplemental Indenture"), among Devon Energy Corporation (formerly Devon
Delaware Corporation), a Delaware corporation (the "New Devon Guarantor"), Devon
Energy Corporation (Oklahoma) (formerly Devon Energy Corporation), an Oklahoma
corporation and a wholly-owned subsidiary of New Devon Guarantor (the
"Company"), and The Bank of New York, as trustee (the "Trustee") under the
Indenture dated as of July 3, 1996 between the Company and the Trustee (the
"Base Indenture") and the First Supplemental Indenture dated as of July 3, 1996
between the Company and the Trustee (the "First Supplemental Indenture" and
together with the Base Indenture and the Second Supplemental Indenture, the
"Indenture").
WITNESSETH
WHEREAS, the Company and the Trustee have heretofore executed the Base
Indenture and the First Supplemental Indenture providing for the issuance of 6
1/2% Convertible Junior Subordinated Debentures (the "Convertible Debentures"),
the form and substance of such Convertible Debentures and the terms, provisions
and conditions thereof set forth as provided in the Base Indenture and the First
Supplemental Indenture;
WHEREAS, Devon Financing Trust, a Delaware statutory business trust (the
"Trust"), in July 1996 sold to Morgan Stanley & Co. Incorporated (the "Initial
Purchaser") in a private placement, $149,500,000 of 6 1/2% Trust Convertible
Preferred Securities (the "Convertible Preferred Securities"), representing
undivided beneficial interests in the assets of the Trust and invested the
proceeds from such sale, together with the proceeds of the issuance and sale by
the Trust to the Company of $4,623,750 aggregate liquidation amount of its
Common Securities, in $154,123,750 aggregate principal amount of the Convertible
Debentures;
WHEREAS, the Company has heretofore executed and delivered a Preferred
Securities Guarantee Agreement and a Common Securities Guarantee Agreement, each
dated as of July 3, 1996 (collectively, the "Trust Securities Guarantees"),
pursuant to which the Company guaranteed certain obligations of the Trust;
WHEREAS, as a result of the merger of PennzEnergy Company with and into New
Devon Guarantor and the merger of Devon Oklahoma Corporation, an Oklahoma
corporation, with and into the Company (collectively, the "Merger"), the
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<PAGE>
Company has continued to survive as a direct wholly owned subsidiary of New
Devon Guarantor, and each share of the common stock of the Company was converted
into the right to receive one share of New Devon Guarantor's common stock;
WHEREAS, pursuant to Section 6.4 of the First Supplemental Indenture, the
Merger constituted a Common Stock Fundamental Change (as defined in the First
Supplemental Indenture);
WHEREAS, Section 14.9 of the Base Indenture requires that the Company and
New Devon Guarantor, as a result of the Merger, execute a supplemental indenture
pursuant to which holders of the Convertible Debentures shall have the right to
convert such Convertible Debentures into the kind and amount of shares of common
stock of New Devon Guarantor receivable in the Merger by a holder of such number
of shares of common stock of the Company into which such Convertible Debentures
might have been converted immediately prior to the Merger;
WHEREAS, the New Devon Guarantor is willing to guarantee on a subordinated
basis as set forth more fully herein, among other things, the payment of the
principal of, premium, if any, and interest on the Convertible Debentures in
order to preserve the exemption available under Section 3(a)(9) of the
Securities Act of 1933, as amended (the "Securities Act") for the conversion of
Convertible Debentures into common stock of the New Devon Guarantor;
WHEREAS, Section 8.1 of the Base Indenture and Section 6.4 of the First
Supplemental Indenture permit the Company to merge with another corporation
provided certain conditions are satisfied;
WHEREAS, pursuant to Sections 9.1(h) and 9.1(i) of the Base Indenture, the
Company, New Devon Guarantor and the Trustee may enter into this Second
Supplemental Indenture without consent of the holders of the Convertible
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this Second Supplemental Indenture, and all requirements necessary to make this
Second Supplemental Indenture a valid instrument in accordance with its terms
have been performed.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
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<PAGE>
Company, New Devon Guarantor and the Trustee mutually covenant and agree for the
equal and ratable benefit of the holders of the Convertible Debentures as
follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definition of Terms.
(a) Capitalized terms used herein without definition shall have
the meaning assigned to them in the Indenture.
(b) The definition of "Common Stock" set forth in Section 1.1 of
the Base Indenture is hereby amended by deleting all references therein to "the
Company" and inserting in lieu thereof "the New Devon Guarantor," and Section
1.1(h) of the First Supplemental Indenture is hereby amended by deleting "(iii)
Common Stock" and inserting in lieu thereof "(iii) [reserved]."
(c) The definition of "Common Stock Fundamental Change" set forth
in Section 1.1 of the First Supplemental Indenture is hereby amended by deleting
all references therein to "the Company" and inserting in lieu thereof "the New
Devon Guarantor."
(d) Section 1.1 of the First Supplemental Indenture is hereby
amended to add the following definitions:
"New Devon Guarantor" means Devon Energy Corporation (formerly Devon
Delaware Corporation), a Delaware corporation, and shall include its successors
and assigns.
"Guarantor Senior Indebtedness " means, with respect to the New Devon
Guarantor, (i) the principal, premium, if any, and interest in respect of (a)
indebtedness of the New Devon Guarantor for money borrowed under any credit
agreements, notes, guarantees or similar documents and (b) indebtedness
evidenced by securities, debentures, bonds or other similar instruments issued
by the New Devon Guarantor; (ii) all capital lease obligations of the New Devon
Guarantor; (iii) all obligations of the New Devon Guarantor issued or assumed as
the deferred purchase price of property, all conditional sale obligations of the
New Devon
4
<PAGE>
Guarantor issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the New Devon Guarantor and all obligations of
the New Devon Guarantor under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business); (iv) all
obligations of the New Devon Guarantor for the reimbursement on any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the New Devon Guarantor (contingent or
otherwise) with respect to interest rate or other swap, cap or collar
agreements, oil or gas commodity hedge transactions or other similar instruments
or agreements or foreign currency hedge, exchange, purchase or similar
instruments or agreements; (vi) all obligations of the types referred to in
clauses (i) through (v) of other Persons for the payment of which the New Devon
Guarantor is responsible or liable as obligor, guarantor or otherwise; and (vii)
all obligations of the types referred to in clauses (i) through (vi) of other
Persons secured by lien on any property or asset of the New Devon Guarantor
(whether or not such obligation is assumed by the New Devon Guarantor), whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the New Devon Guarantor, except
for (A) any such indebtedness that is by its terms subordinated to or pari passu
with the New Devon Guaranty, and (B) any indebtedness between or among the New
Devon Guarantor or its Affiliates.
"New Devon Guaranty" means the guarantee of the Guarantor pursuant to
Section 16.1 hereof.
Section 1.2 Section 5.1 of the Base Indenture is hereby amended by
deleting subsection (h) thereof and adding the following new subsections:
(h) the entry by a court having jurisdiction in the premises of
decree or order for relief in respect of the New Devon Guarantor in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the New Devon Guarantor or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days;
(i) the commencement by the New Devon Guarantor of a voluntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated as bankrupt or insolvent, or the consent by it to the entry of a
decree
5
<PAGE>
or order for relief in respect of the New Devon Guarantor in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidation,
assignee, trustee, sequestrator or similar official of the New Devon Guarantor
or of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors; or
(j) any other Event of Default provided with respect to
Debentures of such series.
Section 1.3 The first sentence of Section 5.2 of the Base Indenture is
hereby amended by deleting "If an Event of Default described in clause (a), (b),
(c), (d), (g) or (h)" and inserting in lieu thereof the following: "If an Event
of Default described in clause (a), (b), (c), (d), (g), or (j)". The second
sentence of Section 5.2 of the Base Indenture is hereby amended by deleting "(e)
or (f)" and inserting in lieu thereof the following: "(e), (f), (h) or (i)".
Section 1.4 The Base Indenture is hereby amended to add the following
provisions as a new Section 7.3A to be inserted immediately following Section
7.3 of the Base Indenture:
Section 7.3A Reports by New Devon Guarantor. The New Devon Guarantor
shall:
(a) file with the Trustee, within 15 days after the New Devon
Guarantor is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the New Devon Guarantor may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the New Devon Guarantor is not required to file
information, documents or reports pursuant to either of such Sections, then it
shall file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in
6
<PAGE>
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports required to be filed with respect
to compliance by the New Devon Guarantor with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit to all Holders, in the manner and to the extent
provided in Trust Indenture Act Section 313(c) within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the New Devon Guarantor pursuant to paragraphs
(a) and (b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute notice of any information contained therein or determinable from
information contained therein, including the New Devon Guarantor's compliance
with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
ARTICLE II
CONVERSION OF DEBENTURES
Section 2.1 Article XIV of the Base Indenture is hereby amended by
deleting Section 14.6, 14.7 and 14.8 and inserting in lieu thereof the
following:
"Section 14.6 Reservation of Shares of Common Stock. The New Devon
Guarantor shall at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock or treasury shares, for
the purpose of effecting the conversion of Debentures, the full number of shares
of Common Stock of the New Devon Guarantor then issuable upon the conversion of
all outstanding Debentures of any series that has conversion rights.
Section 14.7 Payment of Certain Taxes upon Conversion. The New Devon
Guarantor will pay any and all taxes that may be payable in respect of the issue
or delivery of shares of its Common Stock on conversion of Debentures
7
<PAGE>
pursuant hereto. The New Devon Guarantor shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of its Common Stock in a name other than that of the
Holder of the Debentures or Debentures to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the New Devon Guarantor the amount of any such tax, or has established,
to the satisfaction of the New Devon Guarantor, that such tax has been paid.
Section 14.8 Nonassessability. The New Devon Guarantor covenants
that all shares of Common Stock which may be issued upon conversion of
Debentures will upon issue in accordance with the terms hereof be duly and
validly issued and fully paid and nonassessable."
Section 2.2 Section 1.16 of the Base Indenture is hereby amended by
deleting all references to "the Company" and inserting in lieu thereof " the
Company or the New Devon Guarantor" and by adding at the end of the first
paragraph thereof after the word "Debentures" the following: "provided, however,
that the foregoing shall not affect or impair the obligations of the New Devon
Guarantor hereunder."
Section 2.3 Section 6.1 of the First Supplemental Indenture is hereby
amended by deleting all references to "the Company" and inserting in lieu
thereof "the New Devon Guarantor."
Section 2.4 Section 6.2(a) of the First Supplemental Indenture is
hereby amended by deleting all references to "the Company" and inserting in lieu
thereof "the New Devon Guarantor."
Section 2.5 Section 6.2(b) of the First Supplemental Indenture is
hereby amended by deleting the first reference to "the Company" and inserting in
lieu thereof "the New Devon Guarantor."
Section 2.6 Section 6.2(c) of the First Supplemental Indenture is
hereby amended by deleting the reference to "the Company" and inserting in lieu
thereof "the New Devon Guarantor."
Section 2.7 Sections 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8 of the First
Supplemental Indenture are hereby amended by deleting all references to "the
Company" and inserting in lieu thereof "the New Devon Guarantor."
8
<PAGE>
Section 2.8 The thirteenth paragraph of the [Form of Reverse of
Debenture] of Section 7.1 of the First Supplemental Indenture is hereby amended
by deleting the reference to "the Company" and inserting in lieu thereof "the
Company or the New Devon Guarantor", and by adding at the end of such thirteenth
paragraph in the [Form of Reverse of Debenture] after the word "released" the
following: "; provided, however, that the foregoing shall not affect or impair
the obligations of the New Devon Guarantor hereunder."
Section 2.9 The Company and the New Devon Guarantor confirm and agree
that, in accordance with the proviso to Section 6.4(c)(ii) of the First
Supplemental Indenture, the Conversion Price in effect immediately prior to the
Merger shall be the Conversion Price in effect immediately after the Merger and
thereafter unless and until adjusted in accordance with the Indenture.
ARTICLE III
Section 3.1 The New Devon Guarantor hereby covenants and warrants that
(a) immediately after the effective time of the Merger (the "Effective Time"),
no condition or event shall exist which constitutes or would, after notice or
lapse of time or both, constitute an Event of Default (as defined in the
Indenture), (b) it has complied, or has caused the Company to comply, and will
comply, or will cause the Company to comply, with all applicable provisions of
Article X of the Indenture and (c) it has been authorized by its Board of
Directors, pursuant to Section 9.1 of the Base Indenture, to execute this Second
Supplemental Indenture.
ARTICLE IV
Section 4.1 Guaranty of Debentures. The Indenture is hereby amended to
add the following provisions as a new Article XVI to be inserted immediately
following Article XV of the Indenture. Article XVI shall apply to the
Convertible Debentures only.
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<PAGE>
ARTICLE XVI
SUBORDINATED GUARANTY OF CONVERTIBLE DEBENTURES
Section 16.1 New Devon Guaranty. Subject to the provisions of this
Article XVI , the New Devon Guarantor hereby unconditionally guarantees, on a
subordinated basis as set forth more fully in this Article XVI, to each holder
of a Convertible Debenture authenticated and delivered by the Trustee in
accordance with the Indenture (i) the due and punctual payment of the principal
of, premium, if any, and interest (including interest on other amounts which may
accrue after the filing against the Company of a petition under the United
States Bankruptcy Code (the "Bankruptcy Code"), whether or not the obligation to
pay interest on such amounts shall be enforceable against the Company) on such
Convertible Debenture, when and as the same shall become due and payable,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal of, premium and interest, if any, on such
Convertible Debenture, to the extent lawful, and the due and punctual
performance of all obligations of the Company under the Securities Guarantees
and all other obligations of the Company to the holders or the Trustee all in
accordance with the terms of such Convertible Debenture and of this Indenture,
and (ii) in the case of any extension of time of payment or renewal of any such
Convertible Debenture or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, at stated maturity, by acceleration or otherwise. A
demand for payment under this Article XVI shall not be effective prior to 48
hours after a demand upon the Company for full and complete payment of all
amounts due and payable under the Convertible Debentures, unless such demand
upon the Company shall be stayed by operation of Section 362 of the Bankruptcy
Code or otherwise. In all other respects, the New Devon Guarantor hereby agrees
that its obligations hereunder shall be absolute and unconditional, irrespective
of, and shall be unaffected by, any invalidity, irregularity or unenforceability
of any such Convertible Debenture or this Indenture, any failure to enforce the
provisions of any such Convertible Debenture or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto, by the
holder of such Convertible Debenture or the Trustee, or any other circumstances
which may otherwise constitute a legal or equitable discharge of a surety or New
Devon Guarantor. The New Devon Guarantor hereby waives diligence, presentment,
filing of claims with a court in the event of merger or bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Convertible
Debenture or the debt evidenced thereby and all demands whatsoever (except as
specified above), and covenants, that this New Devon Guaranty
10
<PAGE>
will not be discharged as to any such Convertible Debenture except by payment in
full of the principal thereof, premium if any, and interest thereon. The New
Devon Guarantor further agrees that, as between the New Devon Guarantor, on the
one hand, and the Convertible Debenture holder and the Trustee, on the other
hand, (i) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Five hereof for the purposes of this New Devon Guaranty
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, provided that
notice of such acceleration has been given to the New Devon Guarantor by the
Trustee, and (ii) in the event of any declarations of acceleration of such
obligations as provided in Article Five hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by the New Devon
Guarantor for the purpose of this New Devon Guaranty. The New Devon Guarantor
shall be subrogated to all rights of the holders of any Convertible Debentures
against the Company in respect of any amounts paid to the Convertible Debenture
holder by the New Devon Guarantor pursuant to the provisions of this New Devon
Guaranty; provided that the New Devon Guarantor shall not be entitled to
enforce, or to receive any payments arising out of or based upon, such right of
subrogation until the principal of, premium, if any, and interest on all the
Convertible Debentures shall have been paid in full and until all amounts
payable under any Senior Indebtedness shall have been paid in full.
Section 16.2 New Devon Guaranty Subordinate to Guarantor Senior
Indebtedness. The New Devon Guarantor covenants and agrees, and each Holder of
a Convertible Debenture, by the Holder's acceptance thereof, likewise covenants
and agrees, that, to the extent and in the manner hereinafter set forth in this
Article, the obligations of the New Devon Guarantor under the New Devon Guaranty
(the "Guarantor Obligations") are hereby expressly made subordinate and junior
in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred. No provision of this Article shall prevent the occurrence of any
default or Event of Default hereunder.
Section 16.3 Payment Over of Proceeds Upon Dissolution, Etc. Upon
any payment by the New Devon Guarantor or distribution of assets of the New
Devon Guarantor of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or liquidation or
reorganization of the New Devon Guarantor, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings, all amounts due
upon all Guarantor Senior Indebtedness shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the New Devon Guarantor
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<PAGE>
on the Guarantor Obligations; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the New Devon Guarantor, or
distribution of assets of the New Devon Guarantor of any kind or character,
whether in cash, property or securities, to which the Holders of the Convertible
Debentures or the Trustee would be entitled to receive from the New Devon
Guarantor, except for the provisions of this Article, shall be paid by the New
Devon Guarantor or by any receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Convertible Debentures or by the Trustee under the Indenture if received by
them or it, directly to the holders of Guarantor Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Guarantor Senior
Indebtedness held by such holders, as calculated by the New Devon Guarantor) or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay such Guarantor Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Guarantor Senior Indebtedness, before any payment
or distribution is made to the Holders of the Convertible Debentures or to the
Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the New Devon Guarantor of any kind or character,
whether in cash, property or securities, prohibited by the foregoing, shall be
received by the Trustee before all Guarantor Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Guarantor Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the New Devon Guarantor, for application
to the payment of all Guarantor Senior Indebtedness, as the case may be,
remaining unpaid to the extent necessary to pay such Guarantor Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Guarantor Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the New Devon
Guarantor as reorganized or readjusted, or securities of the New Devon Guarantor
or any other corporation provided for by a plan of reorganization or
readjustment which are
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subordinated in right of payment to all Guarantor Senior Indebtedness which may
at the time be outstanding to substantially the same extent as, or to a greater
extent than, the New Devon Guaranty is so subordinated as provided in this
Article. The consolidation of the New Devon Guarantor with, or the merger of the
New Devon Guarantor into, another Person or the liquidation or dissolution of
the New Devon Guarantor following the conveyance or transfer of its properties
and assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article XVII shall not be deemed a dissolution, winding
up, liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the New Devon Guarantor for the
purposes of this Section if the Person formed by such consolidation or into
which the New Devon Guarantor is merged or the Person which acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the condition set forth in Article XVII.
Section 16.4 Prior Payment to Guarantor Senior Indebtedness Upon
Acceleration of Convertible Debentures. In the event that any Convertible
Debentures are declared due and payable before their Stated Maturity, then and
in such event the holders of Guarantor Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on or in respect of
all Guarantor Senior Indebtedness or provision shall be made for such payment in
cash, before the Holders of the Convertible Debentures are entitled to receive
any payment (including any payment which may be payable by reason of the payment
of any other indebtedness of the New Devon Guarantor being subordinated to the
Guarantor Obligations) by the New Devon Guarantor under the Guarantor
Obligations or on account of the purchase or other acquisition of Convertible
Debentures.
In the event that, notwithstanding the foregoing, the New Devon
Guarantor shall make any payment to the Trustee or the Holder of any Convertible
Debenture prohibited by the foregoing provisions of this Section, and if such
fact shall, at or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the New Devon Guarantor.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
Section 16.5 No Payment When Guarantor Senior Indebtedness in
Default. In the event and during the continuation of any default by the New
Devon Guarantor in the payment of principal, premium, interest or any other
payment due
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on any Guarantor Senior Indebtedness, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Guarantor Senior Indebtedness, as the case may be, has been accelerated because
of a default, then, in any such case, no payment shall be made by the New Devon
Guarantor with respect to the Guarantor Obligations until such default is cured
or waived or ceases to exist or any such acceleration or demand for payment has
been rescinded.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 16.5 such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Guarantor Senior Indebtedness (or
their representative or representatives or a trustee) notify the Trustee in
writing within 90 days of such payment of the amounts then due and owing on the
Guarantor Senior Indebtedness and only the amounts specified in such notice to
the Trustee shall be paid to the holders of Guarantor Senior Indebtedness.
Section 16.6 Payment Permitted in Certain Situations. Nothing
contained in this Article or elsewhere in this Indenture or in any of the
Convertible Debentures shall prevent (a) the New Devon Guarantor, at any time
except during the pendency of any dissolution, winding-up, liquidation or
reorganization of the New Devon Guarantor, whether voluntary or involuntary or
any bankruptcy, insolvency, receivership or other proceedings of the New Devon
Guarantor referred to in Section 16.3 or under the conditions described in
Section 16.4 or 16.5, from making payments at any time of principal of or
premium, if any, or interest on the Convertible Debentures, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of, or premium, if any, or interest
on the Convertible Debenture or the retention of such payment by the Holders,
if, at the time of such application by the Trustee, it did not have knowledge
that such payment would have been prohibited by the provisions of this Article.
Section 16.7 Subrogation to Rights of Holders of Guarantor Senior
Indebtedness. Subject to the payment in full of all Guarantor Senior
Indebtedness or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Guarantor Senior
Indebtedness, the rights of the Holders of Convertible Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Guarantor Senior Indebtedness pursuant to the provisions of this Article
(equally and ratably with the holders of indebtedness of
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the New Devon Guarantor which by its express terms is subordinated to
indebtedness of the New Devon Guarantor to substantially the same extent as the
Guarantor Obligations are subordinated to the Guarantor Senior Indebtedness and
is entitled to like rights of subrogation) to the rights of the holders of such
Guarantor Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Guarantor Senior Indebtedness until
the principal of (and premium, if any) and interest on the Convertible
Debentures shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Guarantor Senior Indebtedness of any
cash, property or securities to which the Holders of Convertible Debentures or
the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to or for the benefit
of the holders of Guarantor Senior Indebtedness by Holders of Convertible
Debentures or the Trustee, shall, as among the New Devon Guarantor, its
creditors other than holders of Guarantor Senior Indebtedness and the Holders of
Convertible Debentures, be deemed to be payment or distribution by the New Devon
Guarantor to or on account of the Guarantor Senior Indebtedness.
Section 16.8 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of Convertible Debentures on the one
hand and the holders of Guarantor Senior Indebtedness on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Convertible Debentures is intended to or shall (a) impair, as among the New
Devon Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness and the Holders of Convertible Debentures, the obligation of the
New Devon Guarantor, which is absolute and unconditional (and which, subject to
the rights under this Article of the holders of Guarantor Senior Indebtedness,
is intended to rank equally with all other general obligations of the New Devon
Guarantor), to pay to the Holders of Convertible Debentures the Guarantor
Obligations as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the New Devon Guarantor
of the Holders of Convertible Debentures and creditors of the New Devon
Guarantor, as the case may be, other than the holders of Guarantor Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Convertible
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Guarantor Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder.
Section 16.9 Trustee to Effectuate Subordination. Each Holder of a
Convertible Debenture by such Holder's acceptance thereof authorizes and directs
the
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Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
Section 16.10 No Waiver of Subordination Provisions. No right of any
present or future holder of any Guarantor Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the New Devon Guarantor or
by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the New Devon Guarantor with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Convertible Debentures, without incurring responsibility to the Holders of
Convertible Debentures and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of
Convertible Debentures to the holders of Guarantor Senior Indebtedness do any
one or more of the following: (a) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Guarantor Senior
Indebtedness or otherwise amend or supplement in any manner Guarantor Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Guarantor Senior Indebtedness is outstanding; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Indebtedness; (c) release any Person liable in any manner for
the collection of Guarantor Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the New Devon Guarantor and any other Person.
Section 16.11 Notice to Trustee. The New Devon Guarantor shall give
prompt written notice to a Responsible Officer of the Trustee of any fact known
to the New Devon Guarantor which would prohibit the making of any payment to or
by the Trustee in respect of the Guarantor Obligations pursuant to the
provisions of this Article. Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Guarantor Obligations pursuant to
the provisions of this Article, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the New Devon Guarantor
or a holder or holders of Guarantor Senior
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Indebtedness or from any trustee therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 6.2, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall have not received the notice provided for in this
Section at least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment under the Guarantor Obligations), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.2, the Trustee shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Guarantor Senior Indebtedness (or
a trustee therefor) to establish that such notice has been given by a holder of
Guarantor Senior Indebtedness (or a trustee therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any person as a holder of Guarantor Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Guarantor Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such person to receive such payment.
Section 16.12 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the New Devon Guarantor
referred to in this Article, the Trustee, subject to the provisions of Section
6.2, and the Holders of Convertible Debentures shall be entitled to conclusively
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Convertible Debentures, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Guarantor Senior
Indebtedness and other indebtedness of the New Devon Guarantor, as the case
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may be, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
Section 16.13 Trustee Not Fiduciary for Holders of Guarantor Senior
Indebtedness. With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of such Guarantor Senior
Indebtedness shall be read into the Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness and shall not be liable to any such holders or creditors if it
shall in good faith pay over or distribute to Holders of Convertible Debentures
or to the New Devon Guarantor or to any other Person cash, property or
securities to which any holders of Guarantor Senior Indebtedness shall be
entitled by virtue of this Article or otherwise.
Section 16.14 Rights of Trustee as Holder of Guarantor Senior
Indebtedness, Preservation of Trustee's Rights. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article with
respect to any Guarantor Senior Indebtedness which may at any time be held by
it, to the same extent as any other holder of Guarantor Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
Section 16.15 Article Applicable to Paying Agents. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company or the New Devon Guarantor and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 16.14 shall not apply to the New Devon Guarantor or any
Affiliate of the New Devon Guarantor if it or such Affiliate acts as Paying
Agent.
Section 16.16 Certain Conversions Deemed Payment. For the purposes of
this Article only, (a) the issuance and delivery of junior securities (or cash
paid in lieu of fractional shares) upon conversion of Convertible Debentures in
accordance with Article XIV, or pursuant to the terms set forth in an Officers'
Certificate or established in one or more indentures supplemental hereto in
accordance
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with Section 3.1, shall not be deemed to constitute a payment or distribution on
account of the Guarantor Obligations or on account of the purchase or other
acquisition of Convertible Debentures, and (b) the payment, issuance or delivery
of cash, property or securities (other than junior securities and cash paid in
lieu of fractional shares) upon conversion of a Convertible Debenture shall be
deemed to constitute payment on account of the principal of such Convertible
Debenture. For the purposes of this Section, the term "junior securities" means
(i) shares of any stock of any class of the New Devon Guarantor and (ii)
securities of the New Devon Guarantor which are subordinated in right of payment
to all Guarantor Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Guarantor Obligations are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in this
Indenture or in the Convertible Debentures is intended to or shall impair, as
among the New Devon Guarantor, its creditors other than holders of Guarantor
Senior Indebtedness and the Holders of Convertible Debentures, the right, which
is absolute and unconditional, of the Holder of any Convertible Debenture to
convert such Convertible Debenture in accordance with Article XIV.
Section 16.17 Execution of Guaranty. To evidence its New Devon
Guaranty to the Convertible Debenture Holders specified in Section 16.1, the New
Devon Guarantor hereby agrees to execute the New Devon Guaranty in substantially
the form above recited to be endorsed on each Convertible Debenture
authenticated and delivered by the Trustee after the Effective Time or, in lieu
thereof, stamp each such Convertible Debenture with an appropriate notation on
such Convertible Debenture. The New Devon Guarantor hereby agrees that its New
Devon Guaranty set forth in Section 16.1 shall remain in full force and effect
notwithstanding any failure to include such endorsement or notation of such New
Devon Guaranty on each Convertible Debenture. If applicable, the New Devon
Guaranty shall be signed on behalf of the New Devon Guarantor by its Chairman of
the Board, Chief Executive Officer, President or a Vice President, prior to the
authentication of the Convertible Debenture on which it is endorsed, and the
delivery of such Convertible Debenture by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the New Devon Guaranty on
behalf of the New Devon Guarantor. Such signatures upon the New Devon Guaranty
may be manual or facsimile signatures of the present, past or any future such
officers and may be imprinted or otherwise reproduced on the New Devon Guaranty,
and in case any such officer who shall have signed the New Devon Guaranty shall
cease to be such officer before the Convertible Debenture on which such New
Devon Guaranty is endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Convertible
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Debenture nevertheless may be authenticated and delivered or disposed of as
though the person who signed the New Devon Guaranty had not ceased to be such
officer of the New Devon Guarantor.
Section 16.18 Termination of Guaranty. The New Devon Guaranty shall
terminate upon the date on which there are no Convertible Debentures outstanding
under the Indenture.
ARTICLE V
NEW DEVON GUARANTOR CONSOLIDATION, MERGER,
SALE OR CONVEYANCE
Section 17.1 The Indenture is hereby amended to add the following
provisions as a new Article XVII to be inserted immediately following Article
XVI of the Indenture.
ARTICLE XVII
NEW DEVON GUARANTOR CONSOLIDATION, MERGER,
SALE OR CONVEYANCE
Section 17.1 New Devon Guarantor May Consolidate, Etc. on Certain
Terms. The New Devon Guarantor shall not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (a) either the New Devon Guarantor shall be the continuing
corporation, or the successor corporation (if other than the New Devon
Guarantor) shall be a corporation organized under the laws of the United States
of America or any State thereof and shall expressly assume the Guarantor
Obligations, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed or observed by the
New Devon Guarantor, by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation, and (b) the New Devon
Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition.
Section 17.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the New Devon Guarantor, with the same effect as if it had been
named herein. Such successor corporation may cause to be signed, and may issue
either in its own
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name or in the name of the New Devon Guarantor prior to such succession the New
Devon Guaranty to be endorsed upon the Convertible Debentures issuable hereunder
which theretofore shall not have been signed by the New Devon Guarantor and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the New Devon Guarantor and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any securities which previously shall have been signed and
delivered by the officers of the New Devon Guarantor, to the Trustee for
authentication, and any such endorsement which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the New Devon Guarantor or any successor corporation which
shall theretofore have become such in the manner described in this Article shall
be discharged from all obligations and covenants under this Indenture and the
Convertible Debentures and may be liquidated and dissolved.
Section 17.3 Opinion of Counsel to Trustee. The Trustee may receive
an Opinion of Counsel, prepared in accordance with Section 1.2, as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and any
such assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
ARTICLE VI
MISCELLANEOUS
Section 6.1 This Second Supplemental Indenture shall become effective
at the Effective Time and shall be automatically null and void if and in the
event that the Merger shall not become effective on or prior to December 31,
1999.
Section 6.2 After the Effective Time, any Convertible Debentures
authenticated and delivered in substitution for, or in lieu of, Convertible
Debentures then outstanding and all Convertible Debentures presented or
delivered to the Trustee on and after the Effective Time for such purpose shall
be either restated to give the
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effect to the Second Supplemental Indenture or, in lieu thereof, stamped with a
notation substantially as follows:
The principal amount of this Debenture has become convertible into
shares of the Common Stock, par value $0.10 per share, of Devon Energy
Corporation, a Delaware corporation, at a conversion price per share in
accordance with the terms of the Indenture, such conversion price being
subject to certain adjustments as set forth in the Indenture. Reference
herein to "Common Stock of the Company" or the "Company's Common Stock"
shall be deemed to be to the Common Stock of Devon Energy Corporation.
The payment of principal of, premium, if any, and interest on the
Debentures has been guaranteed by Devon Energy Corporation on a
subordinated basis as set forth in the Indenture. The Indenture, dated
as of July 3, 1996, referred to in this Debenture, as amended by the
First Supplemental Indenture, dated as of July 3, 1996, has been
further amended by a Second Supplemental Indenture, dated as of August
17, 1999, to provide for such convertibility and guarantee. Reference
is hereby made to said Second Supplemental Indenture, copies of which
are on file with Devon Energy Corporation, for a statement of the
amendment therein made.
Nothing contained in this Second Supplemental Indenture shall require the
holder of any Convertible Debenture to submit or exchange such Convertible
Debenture prior to the Effective Time in order to obtain the benefits of the New
Devon Guaranty or any other provisions hereunder.
The Company agrees to provide the Trustee with a stamp or means of
reproducing the above legend on the Convertible Debentures without materially
obscuring the text of the Convertible Debentures.
Anything herein contained to the contrary notwithstanding, the Trustee
shall not at any time be under any responsibility to acquire or cause any
Convertible Debenture now or hereafter outstanding to be presented or delivered
to it for any purpose provided for in this Section.
Section 6.3 Ratification of Indenture; Second Supplemental Indenture
Controls. The Indenture, as supplemented by the First Supplemental Indenture and
this Second Supplemental Indenture, is in all respects ratified and confirmed,
and this Second Supplemental Indenture shall be deemed part of the Indenture in
the manner and to the extent herein and therein provided. The provisions of this
Second
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Supplemental Indenture shall supercede the provisions of the Base Indenture and
First Supplemental Indenture to the extent they are inconsistent herewith.
Section 6.4 Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and the New Devon Guarantor and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Second Supplemental Indenture.
Section 6.5 Governing Law. This Second Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York, as applied to contracts made and performed within the State of New York,
without regard to principles of conflict of laws.
Section 6.6 Separability. In case any one or more of the provisions
contained in this Second Supplemental Indenture or in the Convertible Debentures
shall for any reason be held to be invalid or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Second Supplemental Indenture or of the Convertible Debentures, but this
Second Supplemental Indenture and the Convertible Debentures shall be construed
as if such invalid or illegal or unenforceable provision had never been
contained herein or therein.
Section 6.7 Counterparts. This Second Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the date first above written.
DEVON ENERGY CORPORATION
By: /s/ J. Larry Nichols
----------------------------------------
Name: J. Larry Nichols
Title: President
DEVON ENERGY CORPORATION (OKLAHOMA)
By: /s/ J. Larry Nichols
----------------------------------------
Name: J. Larry Nichols
Title: President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Thomas C. Knight
----------------------------------------
Name: Thomas C. Knight
Title: Assistant Vice President
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EXHIBIT 4.3
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
DEVON ENERGY CORPORATION
Pursuant to Section 151 of the General
Corporation Law
of the State of Delaware
DEVON ENERGY CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Restated Certificate of Incorporation of
the said Corporation, the said Board of Directors on August 17, 1999 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 the
Restated Certificate of Incorporation, a series of Preferred Stock, par
value $1.00 per share, of the Corporation be and hereby is created, and
that the designation and number of shares thereof and the voting and other
powers, preferences and relative, participating, optional or other rights
of the shares of such series and the qualifications, limitations and
restrictions thereof are as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation and Amount. There shall be a series of Preferred Stock
that shall be designated as "Series A Junior Participating Preferred Stock," and
the number of shares constituting such series shall be 1,000,000. Such number
of shares may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease shall reduce the number of shares of Series
A Junior Participating Preferred Stock to less than the number of shares then
issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
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2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock, in
preference to the holders of shares of any class or series of stock of the
Corporation ranking junior to the 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 1st day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) the Adjustment Number (as defined below) times the aggregate
per share amount of all cash dividends, and the Adjustment Number times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $0.10 per share, 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. The "Adjustment Number" shall initially be
100. In the event the Corporation shall at any time (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.
(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 Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
A Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock
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<PAGE>
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.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, in the Restated Certificate
of Incorporation or by law, the holders of shares of Series A Junior
Participating Preferred Stock, the holders of shares of any other class or
series entitled to vote with the Common 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 quarterly
dividends thereon, the occurrence of such contingency shall mark the beginning
of a period (herein called a "default period") that shall extend until such time
when all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding shall have been declared
and paid or set apart for payment. During each default period, (1) the number of
Directors shall be increased by two, effective as of the time of election of
such Directors as herein provided, and (2) the holders of Preferred Stock
(including holders of the Series A Junior Participating Preferred Stock) upon
which these or like voting rights have been conferred and are exercisable (the
"Voting Preferred Stock") with dividends in arrears in an amount equal to six
quarterly dividends thereon, voting as a class, irrespective of series, shall
have the right to elect such two 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 at least one-third in number of the shares of Voting 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
Voting Preferred Stock of such voting right.
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<PAGE>
(iii) Unless the holders of Voting 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 of the total number of shares
of Voting Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Voting Preferred Stock, which
meeting shall thereupon be called by the Chairman of the Board, the President, a
Vice President or the Secretary of the Corporation. Notice of such meeting and
of any annual meeting at which holders of Voting Preferred Stock are entitled to
vote pursuant to this paragraph (C)(iii) shall be given to each holder of record
of Voting 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 of the total number of shares of Voting 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, after the holders of Voting Preferred
Stock shall have exercised their right to elect Directors voting as a class, (x)
the Directors so elected by the holders of Voting 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 be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class or classes of stock which
elected the Director whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular class or
classes of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Voting Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Voting
Preferred Stock as a class shall terminate and (z) the number of Directors shall
be such number as may be provided for in the Restated Certificate of
Incorporation or By-Laws irrespective of any increase made pursuant to the
provisions of paragraph (C) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the Restated
Certificate of Incorporation or By-Laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
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<PAGE>
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
(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; or
(iii) redeem or 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 Series A Junior Participating Preferred Stock, or to all such holders
and the holders of any such shares ranking on a parity therewith, upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
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 canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to any conditions and restrictions on issuance set forth
herein.
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
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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 $100 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A Liquidation Preference").
Following the payment of the full amount of the Series A Liquidation Preference,
no additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) the Adjustment Number. Following the payment of
the full amount of the Series A Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall, subject to the
prior rights of all other series of Preferred Stock, if any, ranking prior
thereto, 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 Series A Junior Participating 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, that
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 Common Stock.
(C) Neither the merger or consolidation of the Corporation into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
6, but the sale, lease or conveyance of all or substantially all the
Corporation's assets shall be deemed to be a liquidation, dissolution or winding
up of the Corporation within the meaning of this Section 6.
7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
8. Redemption. (A) The Corporation, at its option, may redeem shares
of the Series A Junior Participating Preferred Stock in whole at any time and in
part from time to time, at a redemption price equal to the Adjustment Number
times the current per share market price (as such term is hereinafter defined)
of the Common Stock on the date of the mailing of the notice of
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<PAGE>
redemption, together with unpaid accumulated dividends to the date of such
redemption. The "current per share market price" on any date shall be deemed to
be the average of the closing price per share of such Common Stock for the ten
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; provided, however, that in the event that the current per share
market price of the Common Stock is determined during a period following the
announcement of (A) a dividend or distribution on the Common Stock other than a
regular quarterly cash dividend or (B) any subdivision, combination or
reclassification of such 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 such ten
Trading Day period, then, and in each such case, the current per share market
price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sales 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
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange but sales price information is reported for such security,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other self-regulatory organization or
registered securities information processor (as such terms are used under the
Securities Exchange Act of 1934, as amended) that then reports information
concerning the Common Stock, or, if sales price information is not so reported,
the average of the high bid and low asked prices in the over-the-counter market
on such day, as reported by NASDAQ or such other entity, or, if on any such date
the Common Stock is not quoted by any such entity, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock selected by the Board of Directors of the Corporation. If on
any such date no such market maker is making a market in the Common Stock, the
fair value of the Common Stock on such date as determined in good faith by the
Board of Directors of the Corporation shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for the transaction of
business, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange but is quoted by NASDAQ, a day on which NASDAQ
reports trades, or, if the Common Stock is not so quoted, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of New
York are not authorized or obligated by law or executive order to close.
(B) In the event that fewer than all the outstanding shares of the
Series A Junior Participating Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method that may be
determined by the Board of Directors in its sole discretion to be equitable.
(C) Notice of any such redemption shall be given by mailing to the
holders of the shares of Series A Junior Participating Preferred Stock to be
redeemed a notice of such redemption, first class postage prepaid, not later
than the fifteenth day and not earlier than the sixtieth day before
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<PAGE>
the date fixed for redemption, at their last address as the same shall appear
upon the books of the Corporation. Each such notice shall state: (i) the
redemption date; (ii) the number of shares to be redeemed and, if fewer than all
the shares held by such holder are to be redeemed, the number of such shares to
be redeemed from such holder; (iii) the redemption price; (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on the close of business on such redemption date. Any notice
that is mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the stockholder received such notice, and
failure duly to give such notice by mail, or any defect in such notice, to any
holder of Series A Junior Participating Preferred Stock shall not affect the
validity of the proceedings for the redemption of any other shares of Series A
Junior Participating Preferred Stock that are to be redeemed. On or after the
date fixed for redemption as stated in such notice, each holder of the shares
called for redemption shall surrender the certificate evidencing such shares to
the Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If fewer than all the
shares represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(D) The shares of Series A Junior Participating Preferred Stock shall
not be subject to the operation of any purchase, retirement or sinking fund.
9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise, and shall rank senior to the Common Stock
as to such matters.
10. Amendment. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.
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IN WITNESS WHEREOF, the undersigned has executed this Certificate and
does affirm the foregoing as true this 17th day of August, 1999.
/s/ J. LARRY NICHOLS
____________________________________________
Name: J. Larry Nichols
Title: President and Chief Executive Officer
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<PAGE>
EXHIBIT 4.4
CERTIFICATE OF DESIGNATIONS
of the
6.49% CUMULATIVE PREFERRED STOCK, SERIES A
of
DEVON ENERGY CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
DEVON ENERGY CORPORATION, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that resolutions were duly adopted by the Board of Directors of
the Corporation in accordance with Section 151(g) of the General Corporation Law
of the State of Delaware pursuant to the authority conferred upon the Board of
Directors of the Corporation by the provisions of the Restated Certificate of
Incorporation of the Corporation as follows:
RESOLVED, that a series of the Corporation's Preferred Stock, par
value $1.00 per share ("Preferred Stock"), designated as 6.49% Cumulative
Preferred Stock, Series A be and hereby is created and that the designation and
number of shares thereof and the powers, preferences and rights thereof are as
follows:
6.49% CUMULATIVE PREFERRED STOCK, SERIES A
1. Designation and Amount; No Fractional Shares. There shall be a
series of Preferred Stock designated as "6.49% Cumulative Preferred Stock,
Series A" (the "Series A Preferred Stock") and the authorized number of shares
constituting such series shall be 1,500,000. The Series A Preferred Stock is
issuable in whole shares only.
2. Dividends. Holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors or a
duly authorized committee thereof out of funds of the Corporation legally
available for payment of dividends, cumulative cash dividends at the rate of
6.49% per annum per share on the initial liquidation preference of $100.00 per
share (equivalent to $6.49 per annum per share of Series A Preferred Stock).
Dividends on the Series A Preferred Stock shall be payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year, commencing
September 30, 1999 (each a "Dividend Payment Date"). If any date on which
dividends would otherwise be payable is 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, then the dividends otherwise payable on such date
shall instead be payable on the next succeeding business day. Dividends on
shares of the Series A Preferred Stock shall be fully cumulative and shall
accumulate (whether or not earned or declared and whether or not the Corporation
has funds legally available for the payment of dividends), on a daily basis,
without interest, from the previous Dividend Payment Date, except that the first
dividend shall accrue, without interest, from June 30, 1999 (being the last
dividend payment date on the 6.49% Cumulative Preferred Stock, Series A (the
"Converted PZE Preferred Stock"), of PennzEnergy Company, a Delaware corporation
("PennzEnergy"), to be converted into Series A Preferred Stock pursuant to the
Amended and Restated Agreement and Plan of Merger dated as of May 19, 1999 among
Devon Energy Corporation, an Oklahoma corporation,
<PAGE>
the Corporation, Devon Oklahoma Corporation, an Oklahoma corporation, and
PennzEnergy).. Accumulated and unpaid dividends shall not bear interest.
Dividends shall be payable, in arrears, to holders of record as they appear in
the records of the Corporation at the close of business on the applicable record
date, which shall be the 15th day of the calendar month in which the applicable
Dividend Payment Date falls or such other date designated by the Board of
Directors of the Corporation for the payment of dividends that is not more than
30 nor less than 10 days prior to such Dividend Payment Date. Any dividend
payable on the Series A Preferred Stock for any dividend period that is shorter
or longer than a full quarterly period shall be computed on the basis of a 360-
day year consisting of twelve 30-day months.
If, prior to 18 months after June 2, 1998 (the date of the original
issuance of the Converted PZE Preferred Stock), one or more amendments to the
Internal Revenue Code of 1986, as amended (the "Code"), are enacted that change
the percentage of the dividends received deduction (currently 70%) as specified
in section 243(a)(1) of the Code or any successor provision (the "Dividends
Received Percentage"), the amount of each dividend payable (if declared) per
share of Series A Preferred Stock for dividend payments made on or after the
effective date of such change in the Code will be adjusted by multiplying the
amount of the dividend payable described above (before adjustment) by the factor
determined by the following formula (the "DRD Formula"), and rounding the result
to the nearest cent (with one-half cent rounded up):
1- .35(1-.70)
-------------
1- .35(1-DRP)
For the purposes of the DRD Formula, "DRP" means the Dividends Received
Percentage (expressed as a decimal) applicable to the dividend in question;
provided, however, that if the Dividends Received Percentage applicable to the
dividend in question shall be less than 50%, then the DRP shall equal .50. No
amendment to the Code, other than a change in the percentage of the dividends
received deduction set forth in section 243(a)(1) of the Code or any successor
provision thereto, will give rise to such an adjustment. Notwithstanding the
foregoing provisions, if, with respect to any such amendment, the Corporation
receives either an unqualified opinion of nationally recognized independent tax
counsel selected by the Corporation or a private letter ruling or similar form
of authorization from the Internal Revenue Service ("IRS") to the effect that
such amendment does not apply to a dividend payable on the Series A Preferred
Stock, then such amendment will not result in the adjustment provided for
pursuant to the DRD Formula with respect to such dividend (including, if
applicable, any adjustment that would otherwise result in the payment of Post-
Declaration Date Dividends or Additional Dividends as defined below). Any such
opinion shall be based upon the legislation amending or establishing the
Dividends Received Percentage or upon a published pronouncement of the IRS
addressing such legislation. Unless the context otherwise requires, references
to dividends in this Certificate of Designations will mean dividends as adjusted
by the DRD Formula. The Corporation's calculation of the dividends payable, as
so adjusted and as certified accurate as to calculation and reasonable as to
method by the independent certified public accountants then regularly engaged by
the Corporation, shall be final and not subject to review absent manifest error.
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Notwithstanding anything contained in the preceding paragraph, if any
such amendment to the Code which reduces the Dividends Received Percentage is
enacted after the dividend payable on a Dividend Payment Date has been declared
but before such Dividend Payment Date, the amount of the dividend payable on
such Dividend Payment Date will not be increased; instead, an additional
dividend (a "Post-Declaration Date Dividend") equal to the excess, if any, of
(x) the product of the dividend paid by the Corporation on such Dividend Payment
Date and the factor determined in accordance with the DRD Formula (with the DRP
used in the DRD Formula equal to the greater of the Dividend Received Percentage
applicable to the dividend in question and .50) over (y) the dividend paid by
the Corporation on such Dividend Payment Date, will accrue and will be payable
(if declared) on the next succeeding Dividend Payment Date to holders of Series
A Preferred Stock on the record date applicable to the next succeeding Dividend
Payment Date or, if the Series A Preferred Stock is called for redemption prior
to such record date, to holders of Series A Preferred Stock on the applicable
redemption date, as the case may be, in addition to any other amounts payable on
such date.
If any such amendment to the Code is enacted that reduces the
Dividends Received Percentage and the reduction in the Dividends Received
Percentage retroactively applies to a Dividend Payment Date as to which the
Corporation previously paid dividends on the Series A Preferred Stock or to a
dividend payment date as to which PennzEnergy previously paid dividends on the
Converted PZE Preferred Stock (each, an "Affected Dividend Payment Date"),
additional dividends (the "Additional Dividends") will accrue and will be
payable (if declared) on the next succeeding Dividend Payment Date (or, if such
amendment is enacted after the dividend payable on such Dividend Payment Date
has been declared, on the second succeeding Dividend Payment Date following the
date of enactment) to holders of record on the record date applicable to such
succeeding Dividend Payment Date or, if the Series A Preferred Stock is called
for redemption prior to such record date, to holders of Series A Preferred Stock
on the applicable redemption date, as the case may be, in an amount equal to the
sum, for all Affected Dividend Payment Dates, of the excess of (x) the product
of the dividend paid by the Corporation (or PennzEnergy, as applicable) on such
Affected Dividend Payment Date and the factor determined in accordance with the
DRD Formula (with the DRP used in the DRD Formula equal to the greater of the
Dividends Received Percentage and .50 applied to such Affected Dividend Payment
Date) over (y) the dividend paid by the Corporation (or PennzEnergy, as
applicable) on such Affected Dividend Payment Date. The Corporation will only
make one payment of Additional Dividends for any such amendment.
Notwithstanding the foregoing, no adjustment in the dividends payable
by the Corporation shall be made, and no Post-Declaration Date Dividends or
Additional Dividends shall be payable by the Corporation, in respect of the
enactment of any amendment to the Code 18 months or more June 2, 1998.
In the event that the amount of dividends payable per share of the
Series A Preferred Stock is adjusted pursuant to the DRD Formula and/or Post-
Declaration Date Dividends or Additional Dividends are to be paid, the
Corporation shall give notice of each such adjustment and, if applicable, any
Post-Declaration Date Dividends and Additional Dividends to the holders of
Series A Preferred Stock.
3
<PAGE>
No dividends may be declared or paid or set apart for payment on any
stock of the Company ranking on a parity with the Series A Preferred Stock with
respect to the payment of dividends unless there shall also be or have been
declared and paid or set apart for payment on the Series A Preferred Stock
dividends for all dividend payment periods of the Series A Preferred Stock
ending on or before the dividend payment date of such parity stock, ratably in
proportion to the respective amounts of dividends (x) accumulated and unpaid or
payable on such parity stock, on the one hand, and (y) accumulated and unpaid
through the dividend payment period or periods of the Series A Preferred Stock
next preceding such dividend payment date, on the other hand.
Except as set forth in the preceding paragraph, unless full cumulative
dividends on the Series A Preferred Stock have been paid through the most
recently completed quarterly dividend period for the Series A Preferred Stock,
no dividends (other than in Common Stock of the Corporation) may be paid or
declared and set apart for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Series A Preferred Stock as to dividends, nor may any Common Stock or
any other stock of the Corporation ranking junior to or on a parity with the
Series A Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or available for a
sinking fund for the redemption of any shares of such stock; provided, however,
that any moneys theretofore deposited in any sinking fund with respect to any
such stock in compliance with the provisions of such sinking fund may thereafter
be applied to the purchase or redemption of such stock in accordance with the
terms of such sinking fund, regardless of whether at the time of such
application full cumulative dividends upon shares of the Series A Preferred
Stock outstanding to the most recent Dividend Payment Date shall have been paid
or declared and set apart for payment) by the Corporation; provided that any
such junior or parity stock or Common Stock may be converted into or exchanged
for stock of the Corporation ranking junior to the Series A Preferred Stock as
to dividends.
3. Liquidation Preference. The shares of Series A Preferred Stock
shall rank, as to rights to distributions on liquidation, dissolution or winding
up of the Corporation, prior to the shares of Common Stock and any other stock
of the Corporation ranking junior to the Series A Preferred Stock as to rights
upon liquidation, dissolution or winding up of the Corporation, so that in the
event of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Series A Preferred Stock shall be
entitled to receive out of the assets of the Corporation legally available for
distribution to its stockholders, an amount equal to $100 per share, plus an
amount equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid on the shares of Series A Preferred Stock to the date of
payment (including any Post-Declaration Date Dividends and Additional
Dividends), before any distribution of assets is made to holders of shares of
Common Stock or any other class or series of stock of the Corporation that ranks
junior to the Series A Preferred Stock as to rights to distributions upon
liquidation, dissolution or winding up. The holders of the Series A Preferred
Stock shall not be entitled to receive the preferential amounts as aforesaid
until the liquidation preference of any other stock of the Corporation ranking
senior to the Series A Preferred Stock as to rights to distributions upon
liquidation, dissolution or winding up shall have been paid (or a sum set aside
therefor sufficient to provide for payment) in full. After payment of the full
amount of the preferential amounts as aforesaid, the holders of shares of Series
A Preferred Stock will not be entitled to any further participation in any
distribution of
4
<PAGE>
assets by the Corporation. If, upon any liquidation, dissolution or winding up
of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of shares of Series A Preferred Stock and any
stock ranking on a parity with the Series A Preferred Stock as to rights to
distributions on liquidation, dissolution or winding up of the Corporation shall
be insufficient to pay in full the preferential amounts to which such stock
would be entitled, then such assets, or the proceeds thereof, shall be
distributable among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full. For the purposes hereof, neither a consolidation or merger of
the Corporation with or into any other corporation, nor a merger of any one or
more other corporations with or into the Corporation, nor a sale, lease,
exchange or transfer of all or substantially all of the Corporation's assets
shall be considered a liquidation, dissolution or winding up of the Corporation.
4. Conversion. The Series A Preferred Stock is not convertible into,
or exchangeable for, other securities or property.
5. Voting Rights. The Series A Preferred Stock, except as provided
herein or as otherwise from time to time required by law, shall have no voting
rights. Whenever, at any time or times, the equivalent of six quarterly
dividends, whether or not consecutive, on the outstanding shares of Series A
Preferred Stock or on any stock ranking on a parity with the Series A Preferred
Stock with respect to the payments of dividends shall be in arrears, the number
of directors of the Corporation shall be increased by two (without duplication
of any increase made pursuant to the terms of any other series of Preferred
Stock) and the holders of the Series A Preferred Stock shall have the right,
with holders of shares of any one or more other series of Preferred Stock
outstanding at the time upon which like voting rights have been conferred and
are exercisable ("Voting Parity Stock"), voting together as a class, to vote for
the election of two directors (hereinafter the "Preferred Directors" and each a
"Preferred Director") to fill such newly created directorships at a special
meeting called at the request of holders of Series A Preferred Stock and/or
Voting Parity Stock entitled to cast not less than 25% of the votes entitled to
be cast by all such Series A Preferred Stock and Voting Parity Stock outstanding
(provided that no such special meeting shall be called during the period within
60 days immediately prior to the date fixed for the next annual meeting of
stockholders) or at the Corporation's next annual meeting of stockholders, and
at each subsequent annual meeting of stockholders until such right shall
terminate as hereinafter provided. Such voting right shall continue until all
dividends accumulated on such shares of Preferred Stock on which voting rights
have been conferred, including the Series A Preferred Stock, for the past
dividend periods and the then current dividend period shall have been fully paid
or declared and a sum sufficient for the payment thereof set aside for payment,
whereupon such right shall terminate, subject to revesting in the event of each
and every subsequent default of the character above mentioned. Upon any
termination of the right of the holders of shares of Series A Preferred Stock
and Voting Parity Stock as a class to vote for directors as provided above, the
term of office of all Preferred Directors then in office shall terminate
immediately and the authorized number of directors shall be reduced by the
number of Preferred Directors elected pursuant hereto. Any vacancy created by
the removal of any Preferred Director may be filled only by the affirmative vote
of the holders of shares of Series A Preferred Stock voting separately as a
class (together with the holders of shares of Voting Parity Stock). If the
office of any Preferred Director becomes vacant for any reason other than
removal from office, the remaining Preferred Director
5
<PAGE>
may choose a successor who shall hold office for the unexpired term in respect
of which such vacancy occurred. At elections for such directors, each holder of
shares of Series A Preferred Stock shall be entitled to one vote for each share
held (the holders of shares of any other class or series of Voting Parity Stock
being entitled to such number of votes, if any, for each share of such stock
held as may be granted to them).
So long as any shares of any Series A Preferred Stock remain
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least 66-2/3% of the shares of such Series A Preferred Stock:
(i) authorize, create or issue any capital stock of the
Corporation ranking, as to dividends or upon liquidation, dissolution or
winding up, prior to such Series A Preferred Stock, or reclassify any
authorized capital stock of the Corporation into any such shares of such
capital stock or issue any obligation or security convertible into or
evidencing the right to purchase any such shares of capital stock, or
(ii) amend, alter or repeal the certificate of designations for
such Series A Preferred Stock, or the Restated Certificate of Incorporation
of the Corporation, whether by merger, consolidation or otherwise, so as to
adversely affect the powers, preferences or special rights of such Series A
Preferred Stock (provided that no such adverse effect shall be deemed to
result if the Series A Preferred Stock is converted or exchanged in a
merger or consolidation into preferred stock of the corporation surviving
such merger or consolidation or of the corporation issuing any securities
into which Common Stock is converted or exchanged in such transaction if
the powers, preferences and rights of such preferred stock are not
different in an adverse respect from those of the Series A Preferred
Stock).
Any increase in the amount of authorized Common Stock, Preference Common Stock
or Preferred Stock, or any increase or decrease in the number of shares of any
series of Preference Common Stock or Preferred Stock or the authorization,
creation and issuance of other classes or series of Common Stock or other stock,
in each case ranking on a parity with or junior to the shares of Series A
Preferred Stock with respect to the payment of dividends and distributions upon
liquidation, dissolution or winding up, shall not be deemed to adversely affect
such powers, preferences or special rights.
The foregoing voting provisions shall not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required or upon
which the holders of Series A Preferred Stock shall be entitled to vote shall be
effected, all outstanding shares of Series A Preferred Stock shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust to effect such redemption.
6. Redemption. The shares of Series A Preferred Stock shall not be
redeemable prior to June 2, 2008. On and after such date, the Corporation, at
its option, may redeem shares of the Series A Preferred Stock, as a whole or in
part, at any time or from time to time, at a redemption price equal to $100 per
share, plus, in each case, an amount equal to all dividends (whether or not
earned or declared) accrued and accumulated and unpaid (including
6
<PAGE>
any Post-Declaration Date Dividends and Additional Dividends) to the date fixed
for redemption, without interest.
If full cumulative dividends on the Series A Preferred Stock have not
been paid or set apart for payment with respect of all prior dividend periods,
the Series A Preferred Stock may not be redeemed in part and the Corporation may
not purchase or acquire any shares of the Series A Preferred Stock otherwise
than pursuant to a purchase or exchange offer made on the same terms to all
holders of the Series A Preferred Stock. If fewer than all the outstanding
shares of Series A Preferred Stock are to be redeemed, the number of shares to
be redeemed shall be determined by the Board of Directors and the shares to be
redeemed shall be selected by lot or pro rata or by any other means determined
by the Board of Directors in its sole discretion to be equitable.
In the event the Corporation shall redeem shares of Series A Preferred
Stock, written notice of such redemption shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption date, to each holder of record of the shares to be redeemed at such
holder's address as the same appears on the stock books of the Corporation and
notice shall also be given by publication during the aforesaid period prior to
the redemption date in a newspaper of general circulation in the Borough of
Manhattan, the City of New York; provided, however, that no failure to give such
notice nor any defect therein shall affect the validity of the proceedings for
the redemption of any shares of Series A Preferred Stock to be redeemed except
as to the holder to whom the Corporation has failed to mail said notice or
except as to the holder whose notice was defective. Each such notice shall
state: (a) the redemption date; (b) the number of shares of Series A Preferred
Stock to be redeemed and, if less than all the shares held by such holder are to
be redeemed from such holder, the number of shares to be redeemed from such
holder; (c) the redemption price and any accumulated and unpaid dividends to the
redemption date; (d) the place or places where certificates for such shares are
to be surrendered for payment of the redemption price; and (e) that dividends on
the shares to be redeemed will cease to accrue on such redemption date (unless
the Corporation shall default in providing funds for the payment of the
redemption price of the shares called for redemption at the time and place
specified in such notice).
If a notice of redemption has been given pursuant to this Paragraph 6
and if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds, in trust for the pro rata benefit of the holders of the shares
of Series A Preferred Stock so called for redemption, then, notwithstanding that
any certificates for such shares have not been surrendered for cancellation, on
the redemption date dividends shall cease to accrue on the shares to be
redeemed, and at the close of business on the redemption date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest in or claims against the Corporation by virtue thereof and
shall have no voting or other rights with respect to such shares, except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the Corporation) of their certificates, and the shares evidenced thereby
shall no longer be outstanding. The Corporation's obligation to provide funds
for the payment of the redemption price (and any accumulated and unpaid
dividends to the redemption date) of the shares called for redemption shall be
deemed fulfilled if, on or before a redemption date, the Corporation shall
deposit, with a bank or trust company, or an affiliate of a bank or trust
company, having an office
7
<PAGE>
or agency in New York City and having a capital and surplus of at least
$50,000,000, such funds sufficient to pay the redemption price (and any
accumulated and unpaid dividends to the redemption date) of the shares called
for redemption, in trust for the account of the holders of the shares to be
redeemed (and so as to be and continue to be available therefor), with
irrevocable instructions and authority to such bank or trust company that such
funds be delivered upon redemption of the shares of Series A Preferred Stock so
called for redemption.
Subject to applicable escheat laws, any moneys so set aside by the
Corporation and unclaimed at the end of two years from the redemption date shall
revert to the general funds of the Corporation, after which reversion the
holders of such shares so called for redemption shall look only to the general
funds of the Corporation for the payment of the amounts payable upon such
redemption. Any interest accrued on funds so deposited shall be paid to the
Corporation from time to time.
Shares of Series A Preferred Stock that have been issued and
reacquired in any manner, including shares purchased or redeemed, shall (upon
compliance with any applicable provisions of the laws of the State of Delaware)
have the status of authorized and unissued shares of the class of Preferred
Stock undesignated as to series and may be redesignated and reissued as part of
any series of the preferred stock.
7. Amendment of Resolution. The Board reserves the right from time to
time to increase or decrease the number of shares that constitute the Series A
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this Certificate of Designations within the
limitations provided by law, this resolution and the Restated Certificate of
Incorporation.
8. Rank. Any stock of any class or classes or series of the
Corporation shall be deemed to rank:
(a) prior to shares of the Series A Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if the
holders of stock of such class or classes or series shall be entitled by the
terms thereof to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of shares of the Series A Preferred Stock;
(b) on a parity with shares of the Series A Preferred Stock, either as
to dividends or upon liquidation, dissolution or winding up, or both, whether or
not the dividend rates, dividend payment dates, or redemption or liquidation
prices per share thereof are different from those of the Series A Preferred
Stock, if the holders of stock of such class or classes or series shall be
entitled by the terms thereof to the receipt of dividends or of amounts
distributed upon liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or liquidation prices, without
preference or priority of one over the other as between the holders of such
stock and the holders of shares of Series A Preferred Stock; and
8
<PAGE>
(c) junior to shares of the Series A Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, or both, if such class
or classes or series shall be Common Stock or if the holders of the Series A
Preferred Stock shall be entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in preference or priority to the holders of stock of such class or classes or
series.
The Series A Preferred Stock shall rank, as to dividends and upon
liquidation, dissolution or winding up, senior to the Corporation's Series A
Junior Participating Preferred Stock.
IN WITNESS WHEREOF, the undersigned has executed this Certificate and
does affirm the foregoing as true this 17th day of August, 1999.
/s/ J. LARRY NICHOLS
____________________________________________
By: J. Larry Nichols
Title: President and Chief Executive Officer
9
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EXHIBIT 4.5
AMENDING SUPPORT AGREEMENT
THIS AMENDING SUPPORT AGREEMENT is entered into as of August 17, 1999,
among Devon Energy Corporation, a Delaware corporation ("New Devon"), Devon
Energy Corporation (Oklahoma) (formerly Devon Energy Corporation, an Oklahoma
corporation) ("Old Devon"), and Northstar Energy Corporation, an Alberta
corporation ("Northstar").
RECITALS
WHEREAS, pursuant to an arrangement effected by Articles of Arrangement
dated December 10, 1998 filed pursuant to the Business Corporations Act
(Alberta) (the "Act"), the issued and outstanding common shares of Northstar
were exchanged for issued and outstanding Exchangeable Shares of Northstar (the
"Exchangeable Shares").
WHEREAS the Plan of Arrangement and the Articles of Amendment of Northstar
set forth the rights, privileges, restrictions and conditions (collectively the
"Exchangeable Share Provisions") attaching to the Exchangeable Shares.
WHEREAS Old Devon and Northstar executed and delivered a Support Agreement
dated December 10, 1998 (the "Support Agreement").
WHEREAS Old Devon, New Devon, Devon Oklahoma Corporation ("Devon Oklahoma")
and PennzEnergy Company entered into a Merger Agreement dated May 19, 1999
pursuant to which Devon Oklahoma, a wholly-owned subsidiary of Old Devon, agreed
to merge into Old Devon, with Old Devon becoming a wholly-owned subsidiary of
New Devon and PennzEnergy Company agreed to merge into New Devon.
WHEREAS upon the merger becoming effective on August 17, 1999, inter alia:
(i) the holders of Devon Common Stock (as that term is defined in the Support
Agreement) received shares of the common stock of New Devon; and (ii) Old Devon
became a wholly-owned subsidiary of New Devon.
WHEREAS the Exchangeable Share Provisions were amended with the approval of
the holders of the Exchangeable Shares in accordance with the Act to change the
definition of "Devon" to refer to New Devon.
WHEREAS Section 1.1 of the Support Agreement by its terms incorporates the
defined terms of the Exchangeable Share Provisions into the Support Agreement;
WHEREAS it is necessary to substitute Old Devon with New Devon in the
Support Agreement and amend the Support Agreement pursuant to Section 3.2 of
the Support Agreement to maintain the equivalence of the Exchangeable Shares and
the Devon Common Stock.
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties agree as
follows:
1 New Devon shall be substituted as a party to the Support Agreement in the
place and stead of Old Devon effective as of the date hereof with all of
the rights and obligations of Old Devon under the Support Agreement.
2 New Devon hereby agrees with Old Devon and Northstar that it shall and will
from time to time and at all times hereafter be bound by and observe,
perform and fulfill each and every covenant, agreement, term, condition and
stipulation on the part of Old Devon in the Support Agreement.
<PAGE>
3 Northstar hereby consents to and accepts New Devon as a party of the
Support Agreement and agrees the Support Agreement shall continue in full
force and effect with New Devon substituted as a party thereto in the place
and stead of Old Devon.
4 For greater certainty, the "Exchangeable Share Provisions" referred to in
the recitals to the Support Agreement shall be deemed to include any
amendment thereto made from time to time.
5 This Agreement shall be construed and enforced in accordance with the laws
of the Province of Alberta and the laws of Canada applicable therein.
6 Except as specifically provided for in this Agreement, the Support
Agreement shall continue in full force and effect with New Devon
substituted as a party thereto in the place and stead of Old Devon.
IN WITNESS WHEREOF, New Devon, Old Devon and Northstar have caused
this agreement to be signed by their respective officers thereunder duly
authorized, all as of the date first written above.
DEVON ENERGY CORPORATION
/s/ J. Larry Nichols
By:_________________________________
DEVON ENERGY CORPORATION (OKLAHOMA)
/s/ J. Larry Nichols
By:_________________________________
NORTHSTAR ENERGY CORPORATION
/s/ John Richels
By:_________________________________
/s/ Don A. Garner
By:_________________________________
<PAGE>
EXHIBIT 4.2
- - --------------------------------------------------------------------------------
DEVON DELAWARE CORPORATION
(TO BE RENAMED
DEVON ENERGY CORPORATION)
AND
BANKBOSTON, N.A.,
RIGHTS AGENT
________________
RIGHTS AGREEMENT
DATED AS OF AUGUST 17, 1999
- - --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Section 1. Certain Definitions................................................. 1
Section 2. Appointment of Rights Agent......................................... 8
Section 3. Issue of Rights Certificates........................................ 8
Section 4. Form of Rights Certificates......................................... 10
Section 5. Countersignature and Registration................................... 10
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates............ 11
Section 7. Exercise of Rights; Purchase Price.................................. 12
Section 8. Cancellation and Destruction of Rights Certificates................. 14
Section 9. Reservation and Availability of Capital Stock....................... 14
Section 10. Preferred Stock Record Date......................................... 15
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.................................................... 16
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......... 23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 24
Section 14. Fractional Rights and Fractional Shares............................. 26
Section 15. Rights of Action.................................................... 27
Section 16. Agreement of Rights Holders......................................... 28
Section 17. Rights Certificate Holder Not Deemed a Stockholder.................. 28
Section 18. Concerning the Rights Agent......................................... 29
Section 19. Merger or Consolidation or Change of Name of Rights Agent........... 29
Section 20. Duties of Rights Agent.............................................. 30
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 21. Change of Rights Agent.............................................. 32
Section 22. Issuance of New Rights Certificates................................. 32
Section 23. Redemption and Termination.......................................... 33
Section 24. Exchange............................................................ 34
Section 25. Notice of Certain Events............................................ 35
Section 26. Notices............................................................. 36
Section 27. Supplements and Amendments.......................................... 36
Section 28. Successors.......................................................... 37
Section 29. Determinations and Actions by the Board of Directors, etc........... 37
Section 30. Benefits of this Agreement.......................................... 37
Section 31. Severability........................................................ 38
Section 32. Governing Law....................................................... 38
Section 33. Counterparts........................................................ 38
Section 34. Descriptive Headings................................................ 38
</TABLE>
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<PAGE>
Exhibit A - Form of Certificate of Designations of Series A Junior
Participating Preferred Stock
Exhibit B - Form of Rights Certificate
-iii-
<PAGE>
RIGHTS AGREEMENT
This Rights Agreement, dated as of August 17, 1999 (the "Agreement"),
between Devon Delaware Corporation (to be renamed Devon Energy Corporation), a
Delaware corporation (the "Company"), and BankBoston, N.A., a national banking
association (the "Rights Agent"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company has authorized the
issuance of one Right in respect of, and to be issued together with, each share
of common stock, par value $0.10 per share, of the Company (the "Common Stock")
issued to holders of Common Stock, par value $.10 per share ("Old Devon Common
Stock"), of Devon Energy Corporation, an Oklahoma corporation ("Old Devon") and
to holders of Common Stock, par value $0.83-1/3 per share ("PennzEnergy Common
Stock") of PennzEnergy Company, a Delaware corporation ("PennzEnergy") upon
conversion of such Old Devon Common Stock and PennzEnergy Common Stock in the
seriatim mergers (together, the "Merger") of Devon Oklahoma Corporation, an
Oklahoma corporation ("Devon Oklahoma"), with and into Old Devon and PennzEnergy
with and into the Company pursuant to the Amended and Restated Agreement and
Plan of Merger dated as of May 19, 1999, as amended, among Old Devon, the
Company, Devon Oklahoma and PennzEnergy (the "Merger Agreement"); and; has
authorized the issuance of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for each share of Common
Stock of the Company issued (whether originally issued or delivered from the
Company's treasury) between the effective time of the second of such seriatim
mergers (the "Merger Effective Time") and the earlier of the Distribution Date
(as hereinafter defined) and the Expiration Date (as hereinafter defined), and,
in certain circumstances provided for in Section 22 hereof, after the
Distribution Date, each Right initially representing the right to purchase one
Fractional Share (as hereinafter defined) of Series A Junior Participating
Preferred Stock of the Company, upon the terms and subject to the conditions
hereinafter set forth (the "Rights"); and
WHEREAS, in the Merger the Certificate of Incorporation of the Company
will be amended and restated to, among other things, change the name of the
Company to Devon Energy Corporation;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding, but shall not
include any Exempt Person; provided, however, that a Person shall not be or
become an Acquiring Person if such Person, together with its Affiliates and
Associates, shall become the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely as a result of a reduction in the number of
shares of Common Stock or
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<PAGE>
Exchangeable Shares outstanding due to the repurchase of Common Stock or
Exchangeable Shares by the Company or Northstar unless and until such time as
such Person or any Affiliate or Associate of such Person shall purchase or
otherwise become the Beneficial Owner of additional shares of Common Stock
(including as a result of becoming the Beneficial Owner of additional
Exchangeable Shares) constituting 1% or more of the then outstanding shares of
Common Stock or any other Person (or Persons) who is (or collectively are) the
Beneficial Owner of shares of Common Stock (including as a result of becoming
the Beneficial Owner of additional Exchangeable Shares) constituting 1% or more
of the then outstanding shares of Common Stock shall become an Affiliate or
Associate of such Person, unless, in either such case, such Person, together
with all Affiliates and Associates of such Person, is not then the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding; and
provided, further, that if the Board of Directors, with the concurrence of a
majority of the members of the Board of Directors who are not, and are not
representatives, nominees, Affiliates or Associates of, such Person or an
Acquiring Person, determines in good faith that a Person that would otherwise be
an "Acquiring Person" has become such inadvertently (including, without
limitation, because (i) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual knowledge of the consequences of
such Beneficial Ownership under this Agreement) and without any intention of
changing or influencing control of the Company, and if such Person as promptly
as practicable divested or divests itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Agreement and provided,
further, that the trustee from time to time (the "Trustee") under the Voting and
Exchange Trust Agreement (the "Voting and Exchange Trust Agreement") by and
among the Company (as successor to Old Devon), Northstar Energy Corporation and
the Trustee shall not, and the Trustee's Affiliates and Associates shall not, be
deemed an Acquiring Person pursuant to this Section solely as a result of the
transactions contemplated by the Voting and Exchange Trust Agreement, including,
without limitation, the issuance to the Trustee of the Voting Share (as defined
in the Voting and Exchange Trust Agreement).
"Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement.
"Associate" shall mean, with reference to any Person, (1) any
corporation, firm, partnership, association, unincorporated organization or
other entity (other than the Company or a Subsidiary of the Company) of which
such Person is an officer or general partner (or officer or general partner of a
general partner) or is, directly or indirectly, the Beneficial Owner of 10% or
more of any class of equity securities, (2) any trust or other estate in which
such Person has a substantial beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity and (3) any relative or
spouse of such Person, or any relative of such spouse, who has the same home as
such Person.
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<PAGE>
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) that such Person or any of such Person's Affiliates or Associates,
directly or indirectly, is the "beneficial owner" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement) or otherwise has
the right to vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this subparagraph (i) 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 or consent given in response to a public (i.e., not including a
solicitation exempted by Rule 14a-2(b)(2) of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement) 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 then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report);
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right or obligation to acquire
(whether such right or obligation is exercisable or effective immediately
or only after the passage of time or the occurrence of an event) pursuant
to any agreement, arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange rights, other 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
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, 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 or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) or (p) hereof in connection
with an adjustment made with respect to any Original Rights; or
(iii) that are beneficially owned, directly or indirectly, by (A) 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 or consent
as described in the proviso to subparagraph (i) of this definition) or
disposing of any voting securities of the Company or Exchangeable Shares or
(B) any group (as that term is used in Rule 13d-5(b) of the General Rules
and Regulations under the Exchange Act) of which such Person is a member;
provided, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own," any securities
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acquired through such Person's participation in good faith in a firm commitment
underwriting (including, without limitation, securities acquired pursuant to
stabilizing transactions to facilitate a public offering in accordance with
Regulation M promulgated under the Exchange Act, or to cover overallotments
created in connection with a public offering) until the expiration of forty days
after the date of such acquisition. For purposes of this Agreement, "voting" a
security shall include voting, granting a proxy, acting by consent, making a
request or demand relating to corporate action (including, without limitation,
calling a stockholder meeting) or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act as in effect on the date of this
Agreement) in respect of such security.
Notwithstanding any other provision of this Agreement, whenever reference is
made in this Agreement to Beneficial Ownership of, or a Person beneficially
owning, a specified percentage of the outstanding shares of Common Stock
(including for purposes of determining whether any Person is an Acquiring
Person), such percentage shall be computed by treating each outstanding
Exchangeable Share as though it were an outstanding share of Common Stock (both
for purposes of determining the number of shares of Common Stock Beneficially
Owned by such Person and the number of shares of Common Stock outstanding),
provided, however, that Exchangeable Shares held by the Company or any
Subsidiary of the Company (including Northstar) shall not be deemed to be
outstanding for such purpose.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in The Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
"close of business" on any given date shall mean 5:00 p.m., eastern
time, on such date; provided, however, that if such date is not a Business Day,
it shall mean 5:00 p.m., eastern time, on the next succeeding Business Day.
"Closing Price" of a security for any day shall mean the last sales
price, regular way, on such day or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, on such day,
in either case as reported in the principal transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange, or, if such security is not listed or admitted to trading on the New
York Stock Exchange, on the principal national securities exchange on which such
security is listed or admitted to trading, or, if such security is not listed or
admitted to trading on any national securities exchange but sales price
information is reported for such security, as reported by NASDAQ or such other
self-regulatory organization or registered securities information processor (as
such terms are used under the Exchange Act) that then reports information
concerning such security, or, if sales price information is not so reported, the
average of the high bid and low asked prices in the over-the-counter market on
such day, as reported by NASDAQ or such other entity, or, if on such day such
security is not quoted by any such entity, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Company, or, if on such day
no market maker is making a market in such security, the fair value of such
security on such day as determined in good faith by the Board of Directors of
the Company.
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"Common Stock" shall mean the common stock, par value $0.10 per share,
of the Company, except that "Common Stock" when used with reference to equity
interests issued by 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.
"Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Company" shall mean the Person named as the "Company" in the preamble
of this Agreement until a successor Person shall have become such or until a
Principal Party shall assume, and thereafter be liable for, all obligations and
duties of the Company hereunder, pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor Person or
Principal Party.
"Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
"Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
"Distribution Date" shall mean the earlier of (i) the close of
business on the tenth day (or, if such Stock Acquisition Date results from the
consummation of a Permitted Offer, such later date as may be determined by the
Company's Board of Directors as set forth below before the Distribution Date
occurs) after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Merger Effective Time, the close of business
on the Merger Effective Time) or (ii) the close of business on the tenth
Business Day (or such later date as may be determined by the Company's Board of
Directors as set forth below before the Distribution Date occurs) after the date
that a tender offer or exchange offer by any Person (other than any Exempt
Person) 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 as then in effect,
if upon consummation thereof, such Person would be an Acquiring Person, other
than a tender or exchange offer that is determined before the Distribution Date
occurs to be a Permitted Offer. The Board of Directors of the Company may, to
the extent set forth in the preceding sentence, defer the date set forth in
clause (i) or (ii) of the preceding sentence to a specified later date or to an
unspecified later date to be determined by a subsequent action or event (but in
no event to a date later than the close of business on the tenth day after the
first occurrence of a Triggering Event).
"Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchangeable Shares" shall mean the Exchangeable Shares of Northstar.
"Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
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"Exempt Person" shall mean the Company, any Subsidiary of the Company
(including Old Devon and Northstar), any employee benefit plan of the Company or
of any Subsidiary of the Company, and any Person organized, appointed or
established by the Company for or pursuant to the terms of any such plan or for
the purpose of funding any such plan or funding other employee benefits for
employees of the Company or any Subsidiary of the Company.
"Expiration Date" shall mean the earliest of (i) the Final Expiration
Date, (ii) the time at which the Rights are redeemed as provided in Section 23
hereof, (iii) the time at which the Rights expire pursuant to Section 13(d)
hereof and (iv) the time at which all Rights then outstanding and exercisable
are exchanged pursuant to Section 24 hereof.
"Final Expiration Date" shall mean the close of business on August 17,
2009.
"Flip-In Event" shall mean an event described in Section 11(a)(ii)
hereof.
"Flip-In Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Flip-Over Event" shall mean any event described in clause (x), (y) or
(z) of Section 13(a) hereof, but excluding any transaction described in Section
13(d) hereof that causes the Rights to expire.
"Fractional Share" with respect to the Preferred Stock shall mean one
one-hundredth of a share of Preferred Stock.
"Merger" shall have the meaning set forth in the recitals clause at
the beginning of this Agreement.
"Merger Effective Time" shall have the meaning set forth in the
recitals clause at the beginning of this Agreement.
"NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotations System.
"Northstar" shall mean Northstar Energy Corporation, an Alberta
corporation.
"Original Rights" shall have the meaning set forth in the definition
of "Beneficial Owner."
"Permitted Offer" shall mean a tender offer or an exchange offer for
all outstanding shares of Common Stock at a price and on terms determined, prior
to the time the Person making the offer or any Affiliate or Associate thereof is
an Acquiring Person, by at least a majority of the members of the Board of
Directors who are not officers or employees of the Company and who are not, and
are not representatives, nominees, Affiliates or Associates of, an Acquiring
Person or the person making the offer, after receiving advice from one or more
investment banking firms, to be (a) at a price and on terms that are fair to
stockholders and not inadequate (taking into account all
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factors that such members of the Board deem relevant including, without
limitation, prices that could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its stockholders.
"Person" shall mean any individual, firm, corporation, partnership,
limited liability company, association, trust, unincorporated organization or
other entity.
"Preferred Stock" shall mean shares of Series A Junior Participating
Preferred Stock, par value $1.00 per share, of the Company having the rights,
powers and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit A and, to the extent that there is 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, par
value $1.00 per share, of the Company designated for such purpose containing
terms substantially similar to the terms of the Series A Junior Participating
Preferred Stock.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Rights" shall have the meaning set forth in the recitals clause at
the beginning of this Agreement.
"Rights Agent" shall mean the Person named as the "Rights Agent" in
the preamble of this Agreement until a successor Rights Agent shall have become
such pursuant to the applicable provisions hereof, and thereafter "Rights Agent"
shall mean such successor Rights Agent. If at any time there is more than one
Person appointed by the Company as Rights Agent pursuant to the applicable
provisions of this Agreement, "Rights Agent" shall mean and include each such
Person.
"Rights Certificates" shall mean the certificates evidencing the
Rights.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
"Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition and Section 23, shall
include, without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
"Subsidiary" shall mean, with reference to any Person, any corporation
or other Person of which an amount of voting securities sufficient to elect at
least a majority of the directors or other persons performing similar functions
is beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
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"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Trading Day" with respect to a security shall mean a day on which the
principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business, or, if such
security is not listed or admitted to trading on any national securities
exchange but is quoted by NASDAQ, a day on which NASDAQ reports trades, or, if
such security is not so quoted, a Business Day.
"Triggering Event" shall mean any Flip-In Event or any Flip-Over
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent (i) to act as agent for the Company and (ii) to take certain
actions in respect of the holders of the Rights (who, in accordance with Section
3 hereof, shall prior to the Distribution Date also be the holders of the Common
Stock)(although it is expressly agreed that the Rights Agent shall not act as
agent for such holders) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from time to
time appoint such Co-Rights Agents as it may deem necessary or desirable, upon
ten (10) days' prior written notice to the Rights Agent. The Rights Agent shall
have no duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-Rights Agent.
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date, (x) the Rights will be evidenced by
the certificates for Common Stock registered in the names of the holders of the
Common Stock 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 a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date (other than any Person referred to in the
first sentence of Section 7(e)), at the address of such holder shown on the
records of the Company, one or more Rights Certificates, evidencing one Right
for each share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock 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) One Right will be issued in respect of each share of Common Stock
issued in the Merger. Certificates issued for shares of Common Stock that are
so issued or shall be transferred or exchanged after the Merger Effective Time
but prior to the earlier of the Distribution Date or the Expiration Date shall
also be deemed to be certificates for Rights, and shall bear the legend referred
to in paragraph (c) of this Section 3.
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(c) Rights shall be issued in respect of all shares of Common Stock
that are issued (whether originally issued or delivered from the Company's
treasury) after the Merger Effective Time but prior to the earlier of the
Distribution Date or the Expiration Date or, in certain circumstances provided
in Section 22 hereof, after the Distribution Date. Certificates issued for
shares of Common Stock that shall so become outstanding or shall be transferred
or exchanged after the Merger Effective Time but prior to the earlier of the
Distribution Date or the Expiration Date shall also be deemed to be certificates
for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Devon Energy
Corporation (the "Company") and BankBoston, N.A. (the "Rights Agent") dated
as of August 17, 1999 as it may from time to time be supplemented or
amended (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 Rights may be redeemed, may be exchanged, may
expire or may be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company or the Rights Agent 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, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO
IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), AND CERTAIN
TRANSFEREES THEREOF, WILL BECOME NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or 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.
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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), when, as and if issued,
shall be substantially in the form set forth in Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or quotation system
on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the date on which the Merger
Effective Time occurs and on their face shall entitle the holders thereof to
purchase such number of Fractional Shares of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price per Fractional
Share (or, as set forth in this Agreement, for other securities), 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) or Section
22 hereof that represents Rights beneficially owned by a Person described in the
first sentence of Section 7(e), and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any such Rights, shall contain (to the extent feasible) the
following legend, modified as applicable to apply to such Person:
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 [will] [have] become null and void in the circumstances and with the
effect specified in Section 7(e) of such Agreement.
The provisions of Section 7(e) of this Agreement shall be operative whether or
not the foregoing legend is contained on any such Rights Certificate. The
Company shall give notice to the Rights Agent promptly after it becomes aware of
the existence of any Acquiring Person or any Associate or Affiliate thereof.
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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 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 Certificate 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 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 certificate number 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), Section
13(d), Section 14 and Section 24 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 Rights Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number
of Fractional Shares 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 Rights Certificates surrendered then entitled such holder
(or former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Rights 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) thereof or of the Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon the Rights Agent shall, subject
to Section 4(b), Section 7(e), Section 13(d), Section 14
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and Section 24 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 by the holder of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer,
split-up, combination or exchange of 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, subject to Section 4(b), Section 7(e), Section
13(d), Section 14 and Section 24, 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.
(a) Subject to Section 7(e) hereof, 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 at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly completed and 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 Fractional Shares of Preferred Stock (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 Expiration Date.
(b) The Purchase Price for each Fractional Share of Preferred Stock
pursuant to the exercise of a Right shall initially be $185.00, and shall be
subject to adjustment from time to time as provided in Sections 11 and 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 on the reverse
side thereof duly executed, accompanied by payment, with respect to each Right
so exercised, of the Purchase Price per Fractional 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 Fractional Shares 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, in its sole discretion,
shall have elected to deposit the shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing interests in such number of
Fractional
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Shares of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct the
depositary agent to comply with such 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) may be made in cash or by certified
check, cashier's or official bank check or bank draft payable to the order of
the Company or the Rights Agent. 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) or Section 13(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 and
when appropriate. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon 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 fewer 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 Triggering Event, any Rights beneficially
owned by or transferred to (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person other than any such Person that became such pursuant to a
Permitted Offer and the Board of Directors in good faith determines was not
involved in and did not cause or facilitate, directly or indirectly, such
Triggering Event, (ii) a direct or indirect transferee of such Rights from such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after such Triggering Event or (iii) a direct or indirect transferee of such
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with such Triggering Event and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
such Acquiring Person (or such Affiliate or Associate) to holders of equity
interests in such Acquiring Person (or such Affiliate or Associate) or to any
Person with whom such Acquiring Person (or such Affiliate or Associate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer that the Board of Directors of the Company determines
is part of a plan, arrangement or understanding that has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void without
any further action, no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise, and such Rights shall not be transferable. The Company shall use all
reasonable efforts to ensure 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 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.
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(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled 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
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled 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 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, 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 any shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of the Rights are listed on any national
securities exchange or quoted on any trading system, 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, or quoted on such system, upon official notice of issuance upon such
exercise. Following the occurrence of a Triggering Event, the Company will use
its best efforts to list (or continue the listing of) the Rights and the
securities issuable and deliverable upon the exercise of the Rights on one or
more national securities exchanges or to cause the Rights and the securities
purchasable upon exercise of the Rights to be reported by NASDAQ or such other
transaction reporting system then in use.
(c) The Company shall use its best efforts to (i) prepare and file, as
soon as practicable following the first occurrence of a Flip-In Event or, if
applicable, as soon as practicable following the earliest date after the first
occurrence of a Flip-In Event on which the consideration
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to be delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement (including in accordance with Section 11(a)(iii)
hereof), a registration statement on an appropriate form under the Securities
Act with respect to the securities purchasable upon exercise of the Rights, (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
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration Date. 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 various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 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. In addition, if the Company shall determine that the Securities Act
requires an effective registration statement under the Securities Act following
the Distribution Date, the Company may temporarily suspend the exercisability of
the Rights until such time as such a registration statement has been declared
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or any required
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 ensure that all Fractional Shares of Preferred Stock
(and, following the occurrence of a Triggering Event, 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 that may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for a number of Fractional Shares of Preferred Stock (or 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 that 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 Fractional Shares
of Preferred Stock (or 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 Rights surrendered for exercise or to issue or deliver
any certificates for a number of Fractional Shares of Preferred Stock (or 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.
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Section 10. Preferred Stock Record Date. Each Person in whose name
any certificate for a number of Fractional Shares of Preferred Stock (or 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 shares (fractional or otherwise) of Preferred Stock (or 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 upon which the Preferred Stock (or
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 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, as such, 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 or
other securities subject to purchase upon exercise of each Right and the number
of Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a)(i) In the event the Company shall at any time (A) declare a
dividend on the outstanding shares of Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock,
(C) combine the outstanding shares of Preferred Stock into a smaller number
of shares or (D) otherwise reclassify the outstanding shares of 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 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, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
that 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) Subject to Sections 23 and 24 of this Agreement, in the
event any Person shall, at any time after the Merger Effective Time, become
an Acquiring Person,
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unless the event causing such Person to become an Acquiring Person is (1) a
Flip-Over Event or (2) an acquisition of shares of Common Stock pursuant to
a Permitted Offer (provided that this clause (2) shall cease to apply if
such Acquiring Person thereafter becomes the Beneficial Owner of any
additional shares of Common Stock other than pursuant to such Permitted
Offer or a transaction set forth in Section 13(a) or 13(d) hereof), then,
(x) the Purchase Price shall be adjusted to be the Purchase Price
immediately prior to the first occurrence of a Flip-In Event multiplied by
the number of Fractional Shares of Preferred Stock for which a Right was
exercisable immediately prior to such first occurrence and (y) each holder
of a Right (except as provided below in Section 11(a)(iii) and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at a price equal to the Purchase Price in accordance with the terms
of this Agreement, in lieu of shares of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result obtained by
dividing the Purchase Price by 50% of the Current Market Price per share of
Common Stock on the date of such first occurrence (such number of shares,
the "Adjustment Shares"); provided that the Purchase Price and the number
of Adjustment Shares shall be further adjusted as provided in this
Agreement to reflect any events occurring after the date of such first
occurrence.
(iii) In the event that the number of shares of Common Stock
that are authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall, to the extent permitted by applicable law and
regulation, (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (computed using the Current
Market Price used to determine the number of Adjustment Shares) (the
"Current Value") over (2) the Purchase Price (such excess is herein
referred to as the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon the
exercise of the Rights and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) Common Stock or other
equity securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock (including, without limitation, the
Preferred Stock) that the Board of Directors of the Company has determined
to have the same value as shares of Common Stock (such shares of preferred
stock are herein 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, where such
aggregate value has been determined by the Board of Directors of the
Company based upon the advice of a nationally recognized investment banking
firm selected by the Board of Directors of the Company; provided, however,
if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within 30 days following the later of (x) the
first occurrence of a Flip-In 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 "Flip-In Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
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Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the 30-day period set forth
above may be extended to the extent necessary, but not more than 90 days
after the Flip-In Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent
that the Company or the Board of Directors determines that some action need
be taken pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the event of
any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the Common
Stock shall be the Current Market Price per share of the Common Stock on
the Flip-In Trigger Date and the value of any Common Stock Equivalent shall
be deemed to have the same value as the 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 45 calendar days after
such record date) Preferred Stock (or shares having substantially 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 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 shares of Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock that 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 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 that would then be in effect if such
record date had not been fixed.
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(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
or surviving corporation) of evidences of indebtedness, 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
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 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 with the Rights
Agent and shall be binding on 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 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 that 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 of Common Stock of a Person on any date shall be
deemed to be the average of the daily Closing Prices per share of such
Common Stock for the 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 Common Stock on any date
shall be deemed to be the average of the daily Closing Prices per share of
such Common Stock for the 10 consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market
Price per share of Common Stock is determined during a period following the
announcement of (A) a dividend or distribution on such Common Stock other
than a regular quarterly cash dividend or the dividend of the Rights, or
(B) any subdivision, combination or reclassification of such 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 30 Trading Day or 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. If the Common Stock 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 of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share (or Fractional 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 11(d) (other than the last sentence thereof). If
the Current Market Price per share (or Fractional Share) of Preferred Stock
cannot be determined in the manner provided above or if the Preferred Stock
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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 100
(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 Common Stock. If neither the 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 of Directors of the Company, 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 Price of a Fractional Share of Preferred
Stock shall be equal to the Current Market Price of one share of Preferred
Stock divided by 100.
(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 1% in the Purchase Price; provided, however,
that any adjustments that 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 to the nearest ten-thousandth of a Fractional 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 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) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive in respect of such Right any shares of capital stock other
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), (f), (g), (h), (i), (j), (k) and (m) hereof, 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 Fractional Shares 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 Fractional Shares of
Preferred Stock (calculated to the nearest one ten-thousandth of a Fractional
Share) obtained by (i) multiplying (x) the number of Fractional Shares of
Preferred Stock covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to
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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 Fractional Shares 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 Fractional Shares 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 ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least
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 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 Fractional Shares 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 Fractional Share and the number of
Fractional Shares that 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 par value, if any, or the stated capital of
the number of Fractional Shares of Preferred Stock or of the number of shares of
Common Stock or other securities issuable upon exercise of a Right, the Company
shall take any corporate action that 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 Fractional Shares of Preferred Stock or such number
of shares of Common Stock or other securities at such adjusted Purchase Price.
(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
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such record date the number of Fractional Shares of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of Fractional Shares 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 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 that 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
that there is an Acquiring Person, (i) consolidate with any other Person, (ii)
merge with or into any other Person, or (iii) sell, lease or transfer (or permit
one or more Subsidiaries to sell, lease or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons, if (x) at the time of or immediately
after such consolidation, merger, sale, lease or transfer there are any rights,
warrants or other instruments or securities of the Company or any other Person
outstanding or agreements, arrangements or understandings in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or immediately after
such consolidation, merger, sale, lease or transfer, the stockholders or other
equity owners 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 or
Associates, or (z) the identity, form or nature of organization of the Principal
Party (including, without limitation, the selection of the Person that will be
the Principal Party as a result of the Company's entering into one or more
consolidations, mergers, sales, leases, transfers or transactions with more than
one party) would preclude or limit the exercise of Rights or otherwise diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action if the purpose of
such action is to, or if at the time such action is taken it is reasonably
foreseeable that such action will, diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
(p) Notwithstanding Section 3(c) hereof or any other provision of this
Agreement to the contrary, in the event that the Company shall at any time after
the Merger Effective Time and
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prior to the Distribution Date (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, (iii) combine the outstanding shares of
Common Stock into a smaller number of shares or (iv) otherwise reclassify the
outstanding shares of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter with Rights,
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
"Adjustment Fraction") the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock outstanding immediately following the occurrence of such event. In lieu of
such adjustment in the number of Rights associated with one share of Common
Stock, the Company may elect to adjust the number of Fractional Shares of
Preferred Stock purchasable upon the exercise of one Right and the Purchase
Price. If the Company makes such election, the number of Rights associated with
one share of Common Stock shall remain unchanged, and the number of Fractional
Shares of Preferred Stock purchasable upon exercise of one Right and the
Purchase Price shall be proportionately adjusted so that (i) the number of
Fractional Shares of Preferred Stock purchasable upon exercise of a Right
following such adjustment shall equal the product of the number of Fractional
Shares of Preferred Stock purchasable upon exercise of a Right immediately prior
to such adjustment multiplied by the Adjustment Fraction and (ii) the Purchase
Price following such adjustment shall equal the product of the Purchase Price
immediately prior to such adjustment multiplied by the Adjustment Fraction.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate and (c) mail a
brief summary thereof to each registered holder of a Rights Certificate (or, if
prior to the Distribution Date, to each registered holder of a certificate
representing shares of Common Stock) in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained.
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, from and after the time an Acquiring Person has
become such, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person, and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person shall consolidate with, or merge with or 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 the Company or any other Person or cash or any
other property, or (z) the Company shall sell, lease or otherwise transfer (or
one or more of its Subsidiaries shall sell, lease or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any wholly owned Subsidiary of the Company or any combination thereof in one
or more transactions each of which complies (and all of which together comply)
with Section 11(o) hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made so that:
(i) the Purchase Price shall be adjusted to be the Purchase Price immediately
prior to the first occurrence of a Triggering Event multiplied by the number of
Fractional Shares of Preferred Stock for which a Right was exercisable
immediately prior to such first occurrence; (ii) on and after the Distribution
Date, 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 Purchase
Price in accordance with the terms of this Agreement, in lieu of shares of
Preferred Stock or Common Stock of the Company, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable shares of
Common Stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by dividing the Purchase Price
by 50% of the Current Market Price per share of the Common Stock of such
Principal Party on the date of consummation of such Flip-Over Event; provided
that the Purchase Price and the number of shares of Common Stock of such
Principal Party issuable upon exercise of each Right shall be further adjusted
as provided in this Agreement to reflect any events occurring after the date of
such first occurrence of a Triggering Event or after the date of such Flip-Over
Event, as applicable; (iii) such Principal Party shall thereafter be liable for,
and shall assume, by virtue of such Flip-Over Event, all the obligations and
duties of the Company pursuant to this Agreement; (iv) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Flip-Over Event; (v) 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 (vi) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the occurrence of any Flip-Over Event.
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(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), (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, or, if there is more than one
such issuer, the issuer the Common Stock of which has the greatest
aggregate market value, or (B) if no securities are so issued, (x) the
Person that survives such consolidation or is the other party to the merger
and survives such merger, or, if there is more than one such Person, the
Person the Common Stock of which has the greatest aggregate market value or
(y) if the Person that is the other party to the merger does not survive
the merger, the Person that does survive the merger (including the Company
if it survives); and
(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 or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets or
earning power so transferred, or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, the Person the
Common Stock of which has the greatest aggregate market value;
provided, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act, and if (1) 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; (2) such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of all of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value; and (3) such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a "Subsidiary" of both
or all of such joint venturers and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any Flip-Over Event unless each
Principal Party (or Person that may become a Principal Party as a result of such
Flip-Over Event) shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and each 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 such Flip-Over Event, the
Principal Party at its own expense will
(i) prepare and file a registration statement under the Securities Act
with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate
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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 Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the "blue sky"
laws of such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts, if the Common Stock of the Principal
Party is or shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Stock
of the Principal Party shall not be listed on a national securities
exchange, to cause the Rights and the securities purchasable upon exercise
of the Rights to be reported by NASDAQ or such other transaction reporting
system then in use; and
(iv) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates that 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 Flip-Over Event
shall occur at any time after the occurrence of a Flip-In Event, the Rights that
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a Permitted
Offer (or a wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such transaction is not less than the
price per share of Common Stock paid to all holders of Common Stock whose shares
were purchased pursuant to such Permitted Offer, and (iii) the form of
consideration being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
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 or scrip evidencing fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the Closing Price
of one Right for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
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(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than, except as provided in Section 7(c) hereof,
fractions that are integral multiples of a Fractional Share of Preferred Stock)
upon exercise of the Rights or to distribute certificates or scrip evidencing
fractional shares of Preferred Stock (other than, except as provided in Section
7(c) hereof, fractions that are integral multiples of a Fractional Share of
Preferred Stock). Interests in fractions of shares of Preferred Stock in
integral multiples of a Fractional Share of Preferred Stock may, at the election
of the Company in its sole discretion, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the shares of Preferred Stock
represented by such depositary receipts. In lieu of fractional shares of
Preferred Stock that are not integral multiples of a Fractional 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 one one-hundredth of the Closing Price of
a share of Preferred Stock 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 or scrip evidencing 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 equal to the same fraction of the
Closing Price of one share of Common Stock for the Trading Day immediately prior
to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent pursuant
to Section 18 hereof, 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, where applicable, the Company; and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such 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.
After a Triggering Event, holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred by them in
any action to enforce the provisions of this Agreement.
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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 not be evidenced
by Rights Certificates and will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the form of assignment set forth on the reverse side thereof and the
certificate contained therein duly completed and 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 shall 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 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 Fractional
Shares of Preferred Stock or any other securities of the Company that may at any
time be issuable upon 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 25 hereof),
or to 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.
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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 reasonable disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability 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 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, after proper inquiry or examination, to be
genuine and to be signed, executed and, where necessary, guaranteed, 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 business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the 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 full force provided in the Rights Certificates and in this Agreement.
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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 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, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct. In no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action.
(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
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 receipt of actual knowledge 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 Preferred Stock
or Common Stock or other securities to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Preferred Stock or Common
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Stock or other securities 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 any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
omission, default, neglect or misconduct; provided, however, that 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.
(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 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and the Preferred Stock, by registered or
certified mail, and to the registered holders, if any, of the Rights
Certificates
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by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent (with or without cause) upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and the Preferred Stock, by registered or
certified mail, and to the registered holders of the Rights Certificates, if
any, 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. Notwithstanding the foregoing provisions of this
Section 21, in no event shall the resignation or removal of a Rights Agent be
effective until a successor Rights Agent shall have been appointed and have
accepted such appointment. If the Company shall fail to make such appointment
within a period of 30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the registered holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the Rights Agent or the 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 corporation 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 conduct a stock transfer or corporate trust business in the State of New
York), in good standing, which is authorized under such laws to exercise
corporate trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000 or (b) an affiliate of a corporation 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 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.
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 its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the 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 Expiration Date, 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 on or prior
to the Distribution Date, or upon the exercise, conversion or exchange of
securities issued by the Company on or prior to the Distribution Date, 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
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appropriate number of Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such 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 day
following the first date of public announcement of the occurrence of a Flip-In
Event (or, if such date shall have occurred prior to the Merger Effective Time,
the close of business on the tenth day following the Merger Effective Time) and
(ii) the Expiration Date, cause the Company to redeem all but not less than all
the then outstanding Rights at a redemption price of $0.01 per Right, as such
amount may be appropriately adjusted, if necessary, to reflect any stock split,
stock dividend or similar transaction (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, that the Rights may
not be redeemed following any merger to which the Company is a party that (i)
occurs when there is an Acquiring Person and (ii) was not approved prior to such
merger by the Board of Directors of the Company and by the stockholders of the
Company at a stockholders' meeting. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Flip-In 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 Common Stock (based on the Current Market
Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the redemption of the Rights (the
effectiveness of which action may be conditioned on the occurrence of one or
more events or on the existence of one or more facts or may be effective at some
future time), evidence of which shall be 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
effectiveness of the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the registered 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 Company for the Common Stock. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
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<PAGE>
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time and from time to time after the occurrence of a Flip-In Event, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock or Common Stock Equivalents or any combination
thereof, at an exchange ratio of one share of Common Stock, or such number of
Common Stock Equivalents or units representing fractions thereof as would be
deemed to have the same value as one share of Common Stock, per Right,
appropriately adjusted, if necessary, to reflect any stock split, stock dividend
or similar transaction (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors may not
effect such exchange at any time after (i) any Person (other than an Exempt
Person), together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the shares of Common Stock then outstanding
or (ii) the occurrence of a Flip-Over Event.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to and in
accordance with subsection (a) of this Section 24 (the effectiveness of which
action may be conditioned on the occurrence of one or more events or on the
existence of one or more facts or may be effective at some future time) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock and/or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the registered holders of
such Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock and/or Common Stock Equivalents for Rights will be effected and, in the
event of any partial exchange, the number of Rights that will be exchanged. Any
partial exchange shall be effected as nearly pro rata as possible based on the
number of Rights (other than Rights that have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock that are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit an exchange of Rights as contemplated in accordance with
this Section 24, the Company may, at its option, take all such action as may be
necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates or scrip evidencing fractional shares
of Common Stock upon exchange of the Rights. In lieu of such fractional shares
of Common Stock, the Company shall pay to the registered holders of Rights with
regard to which such fractional shares of Common Stock
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<PAGE>
would otherwise be issuable an amount in cash equal to the same fraction of the
value of a whole share of Common Stock. For purposes of this Section 24, the
value of a whole share of Common Stock shall be the Closing Price per share of
Common Stock for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24, and the value of any Common Stock Equivalent shall
be deemed to have the same value as the Common Stock on such date.
Section 25. 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 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 wholly owned Subsidiary of
the Company in a transaction that complies with Section 11(o) hereof), or to
effect any sale, lease or other transfer of all or substantially all the
Company's assets to any other Person or Persons (other than a wholly owned
Subsidiary of the Company in a transaction that 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
record of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, lease, transfer, liquidation, dissolution or winding up is to take place
and the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at least 20 days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least 20
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier. The failure to give notice required by this Section 25 or
any defect therein shall not affect the legality or validity of the action taken
by the Company or the vote upon any such action.
(b) In case any Flip-In Event or Flip-Over Event shall occur, then (i)
the Company shall as soon as practicable thereafter give to each registered
holder of a Rights Certificate (or if occurring prior to the Distribution Date,
the registered holders of Common Stock), in accordance with Section 26 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) or
Section 13(a) 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.
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<PAGE>
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Devon Energy Corporation
20 North Broadway, Suite 1500
Oklahoma City, Oklahoma 73102-8260
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 with the Company) as follows:
BankBoston, N.A.
c/o EquiServe Limited Partnership
150 Royall Street
Canton, Massachusetts 02021
Attention: Client 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 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 27. Supplements and Amendments. Except as provided in the
last sentence of this Section 27, at any time when the Rights are then
redeemable, the Company may in its sole and absolute discretion and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of any holders of Rights or
holders of Common Stock. At any time when the Rights are not redeemable, except
as provided in the last sentence of this Section 27, the Company may and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that 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 that the Company may deem necessary or
desirable; provided that no such amendment or supplement shall materially
adversely affect the interests of the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person); and further
provided that this Agreement may not be supplemented or amended pursuant to this
sentence to lengthen (A) a time period relating to when the Rights may be
redeemed or (B) any other time period unless the lengthening of such other time
period is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than any Acquiring Person
and its Affiliates and Associates). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
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<PAGE>
supplement or amendment is in compliance with the terms of this Section 27, the
Rights Agent shall execute such supplement or amendment; provided, however, that
the Rights Agent may, but shall not be obligated to, enter into any such
supplement or amendment that affects the Rights Agent's own rights, duties or
immunities under this Agreement. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made that
decreases the Redemption Price.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. 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 such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall, subject to the
last sentence of the definition of Beneficial Owner in Section 1, be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company (or, as set forth herein,
certain specified members thereof) shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors of the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.
Section 30. 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 Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
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
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<PAGE>
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, then, unless there has
occurred any merger referred to in the proviso to the first sentence of Section
23(a), 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 day
following the date of such determination by the Board of Directors of the
Company or, if earlier, immediately prior to any such merger. Without limiting
the foregoing, if any provision requiring that a determination be made by less
than the entire Board of Directors of the Company is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
such determination shall then be made by the entire Board of Directors of the
Company.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
DEVON DELAWARE CORPORATION
By /s/ J. Larry Nichols
________________________________
Name: J. Larry Nichols
Title: President
BANKBOSTON, N.A.
By /s/ Carol Mulvey-Eori
_________________________________
Name: Carol Mulvey-Eori
Title: Managing Director
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<PAGE>
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
DEVON ENERGY CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
DEVON ENERGY CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in
accordance with the provisions of the Restated Certificate of Incorporation of
the said Corporation, the said Board of Directors on August 17, 1999, 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 the
Restated Certificate of Incorporation, a series of Preferred Stock, par
value $1.00 per share, of the Corporation be and hereby is created, and
that the designation and number of shares thereof and the voting and other
powers, preferences and relative, participating, optional or other rights
of the shares of such series and the qualifications, limitations and
restrictions thereof are as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
1. Designation and Amount. There shall be a series of Preferred Stock
that shall be designated as "Series A Junior Participating Preferred Stock," and
the number of shares constituting such series shall be 1,000,000. Such number of
shares may be increased or decreased by resolution of the Board of Directors;
provided, however, that no decrease shall reduce the number of shares of Series
A Junior Participating Preferred Stock to less than the number of shares then
issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
A-1
<PAGE>
2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series A Junior Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Junior Participating Preferred Stock, in
preference to the holders of shares of any class or series of stock of the
Corporation ranking junior to the 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 1st day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) the Adjustment Number (as defined below) times the aggregate
per share amount of all cash dividends, and the Adjustment Number times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $0.10 per share, 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. The "Adjustment Number" shall initially be
100. In the event the Corporation shall at any time (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.
(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 Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A 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
A-2
<PAGE>
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Junior Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the payment
thereof.
3. Voting Rights. The holders of shares of Series A Junior
Participating Preferred Stock shall have the following voting rights:
(A) Each share of Series A Junior Participating Preferred Stock shall
entitle the holder thereof to a number of votes equal to the Adjustment Number
on all matters submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, in the Restated Certificate
of Incorporation or by law, the holders of shares of Series A Junior
Participating Preferred Stock, the holders of shares of any other class or
series entitled to vote with the Common 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
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") that shall extend until
such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series A Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, (1) the
number of Directors shall be increased by two, effective as of the time of
election of such Directors as herein provided, and (2) the holders of Preferred
Stock (including holders of the Series A Junior Participating Preferred Stock)
upon which these or like voting rights have been conferred and are exercisable
(the "Voting Preferred Stock") with dividends in arrears in an amount equal to
six quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect such two 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 at least one-third in number of the shares of Voting 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
Voting Preferred Stock of such voting right.
A-3
<PAGE>
(iii) Unless the holders of Voting 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 of the total number of shares
of Voting Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Voting Preferred Stock, which
meeting shall thereupon be called by the Chairman of the Board, the President, a
Vice President or the Secretary of the Corporation. Notice of such meeting and
of any annual meeting at which holders of Voting Preferred Stock are entitled to
vote pursuant to this paragraph (C)(iii) shall be given to each holder of record
of Voting 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 of the total number of shares of Voting 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, after the holders of Voting
Preferred Stock shall have exercised their right to elect Directors voting as a
class, (x) the Directors so elected by the holders of Voting 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 be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class or classes of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of a particular class or
classes of stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Voting Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Voting
Preferred Stock as a class shall terminate and (z) the number of Directors shall
be such number as may be provided for in the Restated Certificate of
Incorporation or By-Laws irrespective of any increase made pursuant to the
provisions of paragraph (C) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the Restated
Certificate of Incorporation or By-Laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
A-4
<PAGE>
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
(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; or
(iii) redeem or 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 Series A Junior Participating Preferred Stock, or to all such holders
and the holders of any such shares ranking on a parity therewith, upon such
terms as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
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 canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to any conditions and restrictions on issuance set forth
herein.
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
A-5
<PAGE>
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 $100 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) the Adjustment Number. Following the payment of the full
amount of the Series A Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series A Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series A Junior Participating
Preferred Stock and holders of shares of Common Stock shall, subject to the
prior rights of all other series of Preferred Stock, if any, ranking prior
thereto, 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 Series A Junior Participating 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, that
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 Common Stock.
(C) Neither the merger or consolidation of the Corporation into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of this Section
6, but the sale, lease or conveyance of all or substantially all the
Corporation's assets shall be deemed to be a liquidation, dissolution or winding
up of the Corporation within the meaning of this Section 6.
7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the Adjustment
Number times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged.
8. Redemption. (A) The Corporation, at its option, may redeem shares
of the Series A Junior Participating Preferred Stock in whole at any time and in
part from time to time, at a redemption price equal to the Adjustment Number
times the current per share market price (as such term is hereinafter defined)
of the Common Stock on the date of the mailing of the notice of redemption,
together with unpaid accumulated dividends to the date of such redemption. The
A-6
<PAGE>
"current per share market price" on any date shall be deemed to be the average
of the closing price per share of such Common Stock for the ten consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date; provided, however, that in the event that the current per share market
price of the Common Stock is determined during a period following the
announcement of (A) a dividend or distribution on the Common Stock other than a
regular quarterly cash dividend or (B) any subdivision, combination or
reclassification of such 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 such ten
Trading Day period, then, and in each such case, the current per share market
price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sales 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
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange but sales price information is reported for such security,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other self-regulatory organization or
registered securities information processor (as such terms are used under the
Securities Exchange Act of 1934, as amended) that then reports information
concerning the Common Stock, or, if sales price information is not so reported,
the average of the high bid and low asked prices in the over-the-counter market
on such day, as reported by NASDAQ or such other entity, or, if on any such date
the Common Stock is not quoted by any such entity, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Common Stock selected by the Board of Directors of the Corporation. If on
any such date no such market maker is making a market in the Common Stock, the
fair value of the Common Stock on such date as determined in good faith by the
Board of Directors of the Corporation shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the Common Stock is listed or admitted to trading is open for the transaction of
business, or, if the Common Stock is not listed or admitted to trading on any
national securities exchange but is quoted by NASDAQ, a day on which NASDAQ
reports trades, or, if the Common Stock is not so quoted, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of New
York are not authorized or obligated by law or executive order to close.
(B) In the event that fewer than all the outstanding shares of the
Series A Junior Participating Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be determined by lot or pro rata as may be
determined by the Board of Directors or by any other method that may be
determined by the Board of Directors in its sole discretion to be equitable.
(C) Notice of any such redemption shall be given by mailing to the
holders of the shares of Series A Junior Participating Preferred Stock to be
redeemed a notice of such redemption, first class postage prepaid, not later
than the fifteenth day and not earlier than the sixtieth day before the date
fixed for redemption, at their last address as the same shall appear upon the
books of the Corporation. Each such notice shall state: (i) the redemption date;
(ii) the number of shares to be
A-7
<PAGE>
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder; (iii) the
redemption price; (iv) the place or places where certificates for such shares
are to be surrendered for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on the close of
business on such redemption date. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the stockholder received such notice, and failure duly to give such notice by
mail, or any defect in such notice, to any holder of Series A Junior
Participating Preferred Stock shall not affect the validity of the proceedings
for the redemption of any other shares of Series A Junior Participating
Preferred Stock that are to be redeemed. On or after the date fixed for
redemption as stated in such notice, each holder of the shares called for
redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. If fewer than all the
shares represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(D) The shares of Series A Junior Participating Preferred Stock shall
not be subject to the operation of any purchase, retirement or sinking fund.
9. Ranking. The Series A Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise, and shall rank senior to the Common Stock
as to such matters.
10. Amendment. At any time that any shares of Series A Junior
Participating Preferred Stock are outstanding, the Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
11. Fractional Shares. Series A Junior Participating Preferred Stock
may be issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, the undersigned has executed this Certificate and
does affirm the foregoing as true this 17th day of August, 1999.
-----------------------------------------
President
A-8
<PAGE>
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER AUGUST 17, 2009 OR EARLIER IF REDEEMED OR EXCHANGED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR
TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO
LONGER BE TRANSFERABLE.
RIGHTS CERTIFICATE
DEVON ENERGY CORPORATION
This certifies that _____________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of August 17, 1999 as it may from time to time be
supplemented or amended (the "Rights Agreement"), between Devon Energy
Corporation, a Delaware corporation (the "Company"), and BankBoston, N.A., a
national banking association (the "Rights Agent"), to purchase from the Company
at any time prior to 5:00 p.m. (New York City time) on August 17, 2009 at the
principal office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one one-hundredth of a fully paid, nonassessable
share (a "Fractional Share") of Series A Junior Participating Preferred Stock
(the "Preferred Stock") of the Company, at a purchase price of $______ per one
one-hundredth of a share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate set forth on the reverse hereof duly executed. The Purchase Price
may be paid in cash or by certified check, cashier's or official bank check or
bank draft payable to the order of the Company or the Rights Agent. The number
of Rights evidenced by this Rights Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per Fractional Share set forth above, are the number and Purchase Price as of
August 17, 1999, 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 Rights
be exercised so that only whole shares of Preferred Stock will be issued.
B-1
<PAGE>
From and after the first occurrence of a Triggering Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by or transferred to (i) an Acquiring Person
or an Associate or Affiliate of an 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, concurrently with or after such
transfer, became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, such Rights shall, with certain exceptions, become null and
void in the circumstances set forth in the Rights Agreement, and no holder
hereof shall have any rights whatsoever with respect to such Rights from and
after the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities or assets that may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events.
This 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 Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company or the
Rights Agent.
This 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 Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Fractional Shares of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $0.01 per Right, payable, at the election of the
Company, in cash or shares of Common Stock or such other consideration as the
Board of Directors may determine, at any time prior to the earlier of the close
of business on (a) the tenth day following the first public announcement of the
occurrence of a Flip-In Event (as such time period may be extended or shortened
pursuant to the Rights Agreement) and (b) the Expiration Date (as such term is
defined in the Rights Agreement) or (ii) may be exchanged in whole or in part
for shares of the Company's Common Stock, par value $0.10 per share, and/or
other equity securities of the Company deemed to have the same value as shares
of Common Stock,
B-2
<PAGE>
at any time prior to a person's becoming the beneficial owner of 50% or more of
the shares of Common Stock outstanding or the occurrence of a Flip-Over Event.
No fractional shares of Preferred Stock are required to be issued upon
the exercise of any Right or Rights evidenced hereby (other than, except as set
forth above, fractions that are integral multiples of a Fractional Share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment may be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, 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 that may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _______
ATTEST: DEVON ENERGY CORPORATION
________________________ By ________________________________
Secretary Title:
Countersigned:
BANKBOSTON, N.A.
By: ________________________________
Authorized Signature
B-3
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer any Rights evidenced by the Rights Certificate.)
FOR VALUE RECEIVED ________________________________________ hereby sells,
assigns and transfers unto_____________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_________ Rights evidenced by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
__________________ Attorney, to transfer the said Rights on the books of the
within-named Company, with full power of substitution.
Dated: _________________, 199__
---------------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
B-4
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
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 an 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 Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or who is a direct or indirect
transferee of an Acquiring Person or of an Affiliate or Associate of an
Acquiring Person.
Dated: _____________, ______ ________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: DEVON ENERGY CORPORATION
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares (or other securities) 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 Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- - --------------------------------------------------------------------------------
(Please print name and address)
- - --------------------------------------------------------------------------------
Dated: ____________, _____
-----------------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
B-6
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this 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 an 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 Rights Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or who is a direct or indirect transferee of an
Acquiring Person or of an Affiliate or Associate of an Acquiring Person.
Dated: _____________, _____ ________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
NOTICE
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
<PAGE>
EXHIBIT 4.7
DEVON ENERGY CORPORATION
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
TRUSTEE
FIFTH SUPPLEMENTAL INDENTURE
DATED AS OF
AUGUST 17, 1999
TO
INDENTURE
DATED AS OF
DECEMBER 15, 1992
<PAGE>
THIS FIFTH SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of August 17, 1999, between Devon Energy Corporation, a Delaware
corporation (the "Company") (as successor by merger to PennzEnergy Company, a
Delaware corporation (formerly Pennzoil Company)), and Chase Bank of Texas,
National Association, a national banking association, incorporated and existing
under the laws of the United States of America (formerly known as Texas Commerce
Bank National Association), as Trustee (the "Trustee"), supplements the
Indenture dated as of December 15, 1992 (the "Indenture"), between the Company
and the Trustee, pursuant to which the Company's 4.90% Exchangeable Senior
Debentures due 2008 and 4.95% Exchangeable Senior Debentures due 2008 (the
"Securities") were issued and are currently outstanding.
RECITALS
WHEREAS, PennzEnergy Company ("PennzEnergy"), Devon Energy
Corporation, an Oklahoma corporation, Devon Delaware Corporation, a Delaware
corporation and a wholly owned subsidiary of Devon Energy Corporation ("Devon
Delaware"), and Devon Oklahoma Corporation, an Oklahoma corporation and a wholly
owned subsidiary of Devon Delaware, entered into an Amended and Restated
Agreement and Plan of Merger, dated as of May 19, 1999 (the "Merger Agreement"),
pursuant to which, on August 17, 1999 (the "Closing Date"), PennzEnergy merged
with and into Devon Delaware, with Devon Delaware surviving (the "Merger");
WHEREAS, Devon Delaware's name was changed to Devon Energy
Corporation;
WHEREAS, Section 801(1) of the Indenture requires that the Person into
which the Company is merged shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including all Additional
Amounts) on all the Securities and the performance of every covenant of the
Indenture on the part of the Company to be performed or observed.
WHEREAS, consistent with the terms of the Indenture, the Company has
duly determined to make, execute and deliver to the Trustee this Supplemental
Indenture providing for the assumption by the Company of the obligations under
the Indenture and the Securities;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
pursuant to Section 801(1) of the Indenture, the parties hereto hereby agree,
for the benefit of the respective Holders from time to time of the Securities,
as follows:
<PAGE>
SECTION ONE
DEFINITIONS
Capitalized terms used and not otherwise defined herein have the
respective meanings assigned to such terms in the Indenture.
SECTION TWO
ASSUMPTION
The Company hereby expressly assumes the due and punctual payment of the
principal of (and premium, if any) and interest (including all Additional
Amounts, if any) on all the Securities and the performance of every covenant of
the Indenture and all supplements to the Indenture on the part of the Company to
be performed or observed.
SECTION THREE
RATIFICATION
Except as expressly amended and supplemented herein, the Indenture, as
heretofore supplemented, shall remain unchanged and in full force and effect.
This Supplemental Indenture shall be construed as supplemental to the Indenture
and shall form a part thereof.
SECTION FOUR
GOVERNING LAW
This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed therein.
SECTION FIVE
COUNTERPARTS
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
2
<PAGE>
SECTION SIX
THE TRUSTEE
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental Indenture or for
or in respect of the recitals contained herein, all of which recitals are made
solely by the Company.
[SIGNATURE PAGE TO FOLLOW]
3
<PAGE>
IN WITNESS WHEREOF, Devon Energy Corporation has caused this Fifth
Supplemental Indenture to be duly executed and its seal to be affixed hereunto
and the same to be attested by its Secretary or an Assistant Secretary, and
Chase Bank of Texas, National Association, as Trustee, has caused this Fifth
Supplemental Indenture to be signed by one of its duly authorized officers as of
the day and year first above written.
DEVON ENERGY CORPORATION
[SEAL] By /s/ William T. Vaughn
--------------------------------
Name: William T. Vaughn
Title: Vice President-Finance
Attest:
/s/ Marian J. Moon
- - ------------------------------
Name: Marian J. Moon
Title: Corporate Secretary
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, Trustee
[SEAL] By /s/ Letha Glover
---------------------------------
Name: Letha Glover
Title: Assistant Vice President
Attest: and Trust Officer
/s/ Rebecca A. Newman
- - ------------------------------
Name: Rebecca A. Newman
Title: Vice President and
Trust Officer
[SIGNATURE PAGE TO FIFTH SUPPLEMENTAL INDENTURE]
<PAGE>
EXHIBIT 4.8
DEVON ENERGY CORPORATION
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
TRUSTEE
FIRST SUPPLEMENTAL INDENTURE
DATED AS OF
AUGUST 17, 1999
TO
INDENTURE
DATED AS OF
FEBRUARY 15, 1986
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of August 17, 1999, between Devon Energy Corporation, a Delaware
corporation (the "Company") (as successor by merger to PennzEnergy Company, a
Delaware corporation (formerly Pennzoil Company)), and Chase Bank of Texas,
National Association, a national banking association, incorporated and existing
under the laws of the United States of America (formerly known as Texas Commerce
Bank National Association (successor to Mellon Bank, N.A.)), as Trustee (the
"Trustee"), supplements the Indenture dated as of February 15, 1986 (the
"Indenture"), between the Company and the Trustee, pursuant to which the
Company's 10 5/8% Debentures due 2001, 10 1/8% Debentures due 2009, 9 5/8% Notes
due 1999 and 10 1/4% Debentures due 2005 (the "Securities") were issued and are
currently outstanding.
RECITALS
WHEREAS, PennzEnergy Company ("PennzEnergy"), Devon Energy
Corporation, an Oklahoma corporation, Devon Delaware Corporation, a Delaware
corporation and a wholly owned subsidiary of Devon Energy Corporation ("Devon
Delaware"), and Devon Oklahoma Corporation, an Oklahoma corporation and a wholly
owned subsidiary of Devon Delaware, entered into an Amended and Restated
Agreement and Plan of Merger, dated as of May 19, 1999 (the "Merger Agreement"),
pursuant to which, on August 17, 1999 (the "Closing Date"), PennzEnergy merged
with and into Devon Delaware, with Devon Delaware surviving (the "Merger");
WHEREAS, Devon Delaware's name was changed to Devon Energy
Corporation;
WHEREAS, Section 801(1) of the Indenture requires that the Person into
which the Company is merged shall expressly assume, by a supplemental indenture,
executed and delivered to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including all Additional
Amounts) on all the Securities and the performance of every covenant of the
Indenture on the part of the Company to be performed or observed.
WHEREAS, consistent with the terms of the Indenture, the Company has
duly determined to make, execute and deliver to the Trustee this Supplemental
Indenture providing for the assumption by the Company of the obligations under
the Indenture and the Securities;
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
In consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
pursuant to Section 801(1) of the Indenture, the parties hereto hereby agree,
for the benefit of the respective Holders from time to time of the Securities,
as follows:
<PAGE>
SECTION ONE
DEFINITIONS
Capitalized terms used and not otherwise defined herein have the
respective meanings assigned to such terms in the Indenture.
SECTION TWO
ASSUMPTION
The Company hereby expressly assumes the due and punctual payment of the
principal of (and premium, if any) and interest (including all Additional
Amounts, if any) on all the Securities and the performance of every covenant of
the Indenture and all supplements to the Indenture on the part of the Company to
be performed or observed.
SECTION THREE
RATIFICATION
Except as expressly amended and supplemented herein, the Indenture, as
heretofore supplemented, shall remain unchanged and in full force and effect.
This Supplemental Indenture shall be construed as supplemental to the Indenture
and shall form a part thereof.
SECTION FOUR
GOVERNING LAW
This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed therein.
SECTION FIVE
COUNTERPARTS
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
2
<PAGE>
SECTION SIX
THE TRUSTEE
The Trustee shall not be responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Supplemental Indenture or for
or in respect of the recitals contained herein, all of which recitals are made
solely by the Company.
[SIGNATURE PAGE TO FOLLOW]
3
<PAGE>
IN WITNESS WHEREOF, Devon Energy Corporation has caused this First
Supplemental Indenture to be duly executed and its seal to be affixed hereunto
and the same to be attested by its Secretary or an Assistant Secretary, and
Chase Bank of Texas, National Association, as Trustee, has caused this First
Supplemental Indenture to be signed by one of its duly authorized officers as of
the day and year first above written.
DEVON ENERGY CORPORATION
[SEAL] By /s/ William T. Vaughn
--------------------------------
Name: William T. Vaughn
Title: Vice President-Finance
Attest:
/s/ Marian J. Moon
- - --------------------------------
Name: Marian J. Moon
Title: Corporate Secretary
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, Trustee
[SEAL] By /s/ Letha Glover
--------------------------------
Name: Letha Glover
Title: Assistant Vice President
Attest: and Trust Officer
/s/ Rebecca A. Newman
- - --------------------------------
Name: Rebecca A. Newman
Title: Vice President and
Trust Officer
[SIGNATURE PAGE TO FIRST SUPPLEMENTAL INDENTURE]
<PAGE>
EXHIBIT 4.9
DESCRIPTION OF CAPITAL STOCK
General
The authorized capital stock of Devon consists of:
. 400,000,000 shares of common stock, par value $0.10 per share,
. 4,500,000 shares of preferred stock, par value $1.00 per share, and
. one share of special voting stock, par value $0.10 per share.
Common Stock
Holders of Devon common stock are entitled to receive dividends out of legally
available funds when and if declared by the Devon board of directors. Subject to
the rights of the holders of any outstanding shares of Devon preferred stock,
holders of shares of Devon common stock are entitled to cast one vote for each
share held of record on all matters submitted to a vote of stockholders. They
are not entitled to cumulative voting rights for the election of directors.
Except pursuant to the rights agreement, the shares of Devon common stock have
no preemptive, conversion or other rights to subscribe for or purchase any
securities of Devon. Upon liquidation or dissolution of Devon, the holders of
shares of Devon common stock are entitled to share ratably in any of Devon's
assets that remain after payment or provision for payment to creditors and
holders of preferred stock. All outstanding shares of Devon common stock are
fully paid and nonassessable.
Trust Convertible Preferred Securities
On July 3, 1996, Devon Financing Trust, a Delaware business trust sponsored by
Devon, issued 2,990,000 trust convertible preferred securities. The trust
convertible preferred securities are convertible into shares of Devon common
stock at the rate of 1.6393 shares of Devon common stock per trust convertible
preferred security. The conversion of the trust convertible preferred securities
may have a dilutive effect on the common stockholders of Devon and may affect
the market price of the shares of Devon common stock.
Preferred Stock
The Devon preferred stock may be issued in one or more series. The Devon board
may establish attributes of any series, including the designation and number of
shares in the series, dividend rates (cumulative or noncumulative), voting
rights, redemptions, conversion or preference rights, and any other rights and
qualifications, preferences and limitations or restrictions on shares of a
series. The issuance of preferred stock may have the effect of delaying,
deferring or preventing a change in control of Devon without any vote or action
by the stockholders and may adversely affect the voting and other rights of the
holders of shares of Devon common stock. The specific terms of a particular
series of preferred stock will be described in a certificate of designations
relating to that series. The Devon board has designated 1,500,000 shares of
preferred stock as Devon 6.49% cumulative preferred stock, series A. The Devon
board has also designated 1,000,000 shares of preferred stock as series A junior
participating preferred stock in connection with Devon's rights agreement.
<PAGE>
Special Voting Stock
One share of special voting stock, par value $0.10 per share, is authorized for
issuance by Devon and is outstanding. Except as otherwise required by law or
Devon's restated certificate of incorporation, the special voting share will
possess a number of votes equal to the number of outstanding exchangeable shares
from time to time not owned by Devon or any entity controlled by Devon for the
election of directors and on all other matters submitted to a vote of Devon
stockholders. The holders of shares of Devon common stock and the holder of the
special voting share will vote together as a single class on all matters. In the
event of a Devon liquidation event, all outstanding exchangeable shares will
automatically be exchanged for shares of Devon common stock, and the holder of
the special voting share will not be entitled to receive any assets of Devon
available for distribution to its stockholders. The holder of the special voting
share will not be entitled to receive dividends. At such time as the special
voting share has no votes attached to it because there are no exchangeable
shares outstanding not owned by Devon or an entity controlled by Devon, the
special voting share will be canceled.
Share Rights Plan
Under Devon's rights agreement, holders of shares of Devon common stock have one
right for each share of Devon common stock that they hold. The certificates
representing outstanding shares of Devon common stock also evidence one right
for each share. Initially, the rights will trade with the shares of Devon common
stock. Holders of exchangeable shares will receive one right with each share of
Devon common stock they receive upon exchange of their exchangeable shares. If
events generally associated with an unsolicited takeover attempt of Devon or
transactions involving a change of control occur (including an acquisition, or a
tender or exchange offer that would result in a bidder acquiring 15% or more of
Devon's voting securities), the rights will be distributed, will become
exercisable and will trade separately from the shares of Devon common stock.
The rights have antitakeover effects. They will cause substantial dilution to a
person or group that attempts to acquire Devon in a manner that causes the
rights to become exercisable. We believe, however, that the rights should not
affect any prospective offeror willing to negotiate with the Devon board or
interfere with any merger or other business combination approved by the Devon
board. The Devon board may redeem the rights for $0.01 per right. The terms of
the rights agreement may be amended by the Devon board without the consent of
the Devon stockholders or the holders of the rights.
<PAGE>
EXHIBIT 9
AMENDING VOTING AND EXCHANGE TRUST AGREEMENT
THIS AMENDING VOTING AND EXCHANGE TRUST AGREEMENT is entered into as of
August 17, 1999, among Devon Energy Corporation, a Delaware corporation ("New
Devon"), Devon Energy Corporation (Oklahoma), an Oklahoma corporation ("Old
Devon"), Northstar Energy Corporation, an Alberta corporation ("Northstar") and
CIBC Mellon Trust Company, a Canadian trust company ("Trustee").
RECITALS
WHEREAS, pursuant to an arrangement effected by Articles of Arrangement
dated December 10, 1998 filed pursuant to the Business Corporations Act
(Alberta) (the "Act"), the issued and outstanding common shares of Northstar
were exchanged for issued and outstanding Exchangeable Shares of Northstar (the
"Exchangeable Shares").
WHEREAS the Plan of Arrangement and the Articles of Amendment of Northstar
set forth the rights, privileges, restrictions and conditions (collectively the
"Exchangeable Share Provisions") attaching to the Exchangeable Shares.
WHEREAS Old Devon, Northstar and the Trustee executed and delivered a
Voting and Exchange Trust Agreement dated December 10, 1998 (the "Voting and
Exchange Trust Agreement").
WHEREAS Old Devon, New Devon, Devon Oklahoma Corporation ("Devon Oklahoma")
and PennzEnergy Company entered into a Merger Agreement dated May 19, 1999
pursuant to which Devon Oklahoma, a wholly-owned subsidiary of Old Devon, agreed
to merge into Old Devon, with Old Devon becoming a wholly-owned subsidiary of
New Devon, and PennzEnergy Company agreed to merge into New Devon.
WHEREAS upon the merger becoming effective on August 17, 1999, inter alia:
(i) the holders of Devon Common Stock (as that term is defined in the Voting and
Exchange Trust Agreement) received shares of the common stock of New Devon; (ii)
one share of New Devon Special Voting Stock was created and issued to the
Trustee and the Voting Share (as that term is defined in the Voting and Exchange
Trust Agreement) of Old Devon was cancelled; and (iii) Old Devon became a
wholly-owned subsidiary of New Devon.
WHEREAS the Exchangeable Share Provisions were amended with the approval of
the holders of the Exchangeable Shares in accordance with the Act to change the
definition of "Devon" to refer to New Devon.
WHEREAS Section 1.1 of the Voting and Exchange Trust Agreement by its terms
incorporates the defined terms of the Exchangeable Share Provisions into the
Voting and Exchange Trust Agreement;
WHEREAS it is necessary to substitute Old Devon with New Devon in the
Voting and Exchange Trust Agreement and amend the Voting and Exchange Trust
Agreement pursuant to Section 12.4 of the Voting and Exchange Trust Agreement to
maintain the equivalence of the Exchangeable Shares and the Devon Common Stock.
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties agree as
follows:
1 New Devon shall be substituted as a party to the Voting and Exchange Trust
Agreement in the place and stead of Old Devon effective as of the date
hereof with all of the rights and obligations of Old Devon under the Voting
and Exchange Trust Agreement.
<PAGE>
2
2 New Devon hereby agrees with Old Devon, Northstar and the Trustee that it
shall and will from time to time and at all times hereafter be bound by and
observe, perform and fulfill each and every covenant, agreement, term,
condition and stipulation on the part of Old Devon in the Voting and
Exchange Trust Agreement.
3 Northstar and the Trustee hereby consent to and accept New Devon as a party
of the Voting and Exchange Trust Agreement and agree the Voting and
Exchange Trust Agreement shall continue in full force and effect with New
Devon substituted as a party thereto in the place and stead of Old Devon.
4 The Trustee hereby accepts the substitution of the Voting Share under the
Voting and Exchange Trust Agreement.
5 For greater certainty: (i) the "Exchangeable Share Provisions" referred to
in the recitals to the Voting and Exchange Trust Agreement shall be deemed
to include any amendment thereto made from time to time; (ii) the "Devon
Special Voting Stock" referred to in the recitals to the Voting and
Exchange Trust Agreement shall be deemed to be the share of the Devon
Special Voting Stock of New Devon; and (iii) the "Support Agreement"
referred to in Section 1.1 of the Voting and Exchange Trust Agreement shall
be deemed to include any amendment thereto made from time to time.
6 This Agreement shall be construed and enforced in accordance with the laws
of the Province of Alberta and the laws of Canada applicable therein.
7 Except as specifically provided for in this Agreement, the Voting and
Exchange Trust Agreement shall continue in full force and effect with New
Devon substituted as a party thereto in the place and stead of Old Devon.
IN WITNESS WHEREOF, New Devon, Old Devon, Northstar and the Trustee
have caused this agreement to be signed by their respective officers thereunder
duly authorized, all as of the date first written above.
DEVON ENERGY CORPORATION
/s/ J. Larry Nichols
By:_________________________________
DEVON ENERGY CORPORATION (OKLAHOMA)
/s/ J. Larry Nichols
By:_________________________________
NORTHSTAR ENERGY CORPORATION
/s/ John Richels
By:_________________________________
/s/ Don A. Garner
By:_________________________________
CIBC MELLON TRUST COMPANY
/s/ Jacquie Fisher
By:_________________________________
/s/ Dareal McGeein
By:_________________________________
<PAGE>
EXHIBIT 99
[Devon Energy Corporation Logo] [PennzEnergy Company Logo]
- - --------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
CONTACT: VINCE WHITE JEANNE BUCHANAN
DEVON ENERGY CORPORATION PENNZENERGY COMPANY
(405) 552-4505 (713) 546-6444
Devon Energy and PennzEnergy Announce
COMPLETION OF MERGER
OKLAHOMA CITY, OKLAHOMA; HOUSTON, TEXAS, August 17, 1999 -- Devon Energy
Corporation (AMEX: DVN, TSE: NSX) and PennzEnergy Company (NYSE: PZE) today
announced that their merger has been completed. The merger was announced on May
20, 1999. Shareholders of both companies approved the merger at special
meetings of shareholders on August 17, 1999. More than 99 percent of the shares
represented at the Devon meeting were cast in favor of the merger. Of the
shares represented at the PennzEnergy meeting, approximately 92 percent were
cast in favor of the merger.
TERMS OF MERGER
In the merger, each PennzEnergy share was converted into 0.4475 shares of common
stock of the new Devon Energy Corporation. Each share of Devon common stock was
converted into one share of new Devon. PennzEnergy shareholders will own
approximately 31 percent of the combined company and Devon shareholders will own
approximately 69 percent.
THE NEW DEVON ENERGY CORPORATION
Devon Energy Corporation now ranks in the top 10 of all U.S.-based independent
oil and gas producers in terms of market capitalization, total proved reserves
and annual production. Key measures of Devon Energy Corporation include:
. Total capitalization of approximately $5.0 billion.
. Proved reserves, as of December 31,1998, of approximately 660 million barrels
of oil equivalent (MMBOE) (52 percent natural gas and 48 percent liquids).
. Net average daily production during 1998 of 230,000 barrels of oil equivalent
(60 percent natural gas and 40 percent liquids).
. U.S. operations concentrated in four core areas with year-end 1998 proved
reserves of 422 MMBOE.
<PAGE>
. One of the world's largest coal bed methane producers from Devon's stable San
Juan Basin reserves. Significant exposure to the developing Powder River Basin
and Raton Basin coal seam plays.
. One of the largest producers in the Gulf of Mexico with operations on 75
blocks. Interests in an additional 98 undeveloped blocks.
. Significant operations in the Western Canadian Sedimentary Basin. Year-end
1998 proved reserves of 144 MMBOE.
. International operations in the Caspian Sea region, Egypt and Venezuela.
Year-end 1998 proved reserves of 94 MMBOE, primarily in Azerbaijan.
. An aggregate 15 million net undeveloped acres, providing an extensive
inventory of exploration opportunities.
James L. Pate, Chairman of Devon Energy Corporation, said, "This merger has
created a powerful new independent energy company. Devon is now poised to take
advantage of substantial economies of scale, cost savings and opportunities for
strategic expansion. These synergies will result in improved value for all
shareholders of the new Devon."
"I am excited and eager to begin this new chapter in the life of Devon Energy
Corporation," said J. Larry Nichols, President and CEO of Devon. "This merger
is the largest in Devon's history. It carries with it more opportunities to
enhance shareholder value than anything we have accomplished to date. This is
truly a banner day and I want to welcome all our new shareholders to Devon."
EXCHANGE AND TRANSMITTAL OF SHARES
Shareholders of Devon and PennzEnergy will receive written instructions for
exchanging their current shares for shares of the new Devon Energy Corporation.
The exchange and transmittal process will begin promptly. Questions concerning
this process should be directed to the Exchange Agent, BankBoston, N.A., at its
toll free number (800) 733-5001.
FORWARD LOOKING STATEMENTS
This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission. Such statements are those concerning the
company's plans, expectations and objectives for future operations. All
statements, other than statements of historical facts, included in this press
release that address activities, events or developments that the company
expects, believes or anticipates will or may occur in the future are forward-
looking statements. Such statements are subject to a number of assumptions,
risks and uncertainties, many of which are beyond the control of the company.
Investors are cautioned that any such statements are not guarantees of future
performance and that actual results or developments may differ materially from
those projected in the forward-looking statements.
<PAGE>
Devon Energy Corporation is an independent energy company engaged in oil and gas
property acquisition, exploration and production. It is one of the top 10
public independent oil and gas companies in the United States and Canada, as
measured by oil and gas reserves. Devon's Canadian operations are primarily
conducted by its subsidiary, Northstar Energy Corporation, traded on the Toronto
Stock Exchange under the symbol NSX. Shares of the new Devon Energy Corporation
will continue to trade on the American Stock Exchange under the symbol DVN.
###
