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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-A
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
Pogo Producing Company
(Exact name of registrant as specified in its charter)
Delaware 74-1659398
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
5 Greenway Plaza, Suite 2700
Houston, Texas 77046-0504
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Series A Junior Participating New York Stock Exchange
Preferred Stock Purchase Rights Pacific Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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Item 1. Description of Registrant's Securities to be Registered.
On April 26, 1994, the Board of Directors of Pogo
Producing Company (the "Company") declared a dividend of one right
to purchase preferred stock ("Right") for each outstanding share of the
Company's Common Stock, par value $1.00 per share ("Common
Stock"), to stockholders of record at the close of business on May 20,
1994. Each Right entitles the registered holder to purchase from the
Company a unit consisting of one one-hundredth of a share (a "Unit")
of Series A Junior Participating Preferred Stock, par value $1.00 per
share (the "Preferred Stock"), at a purchase price of $80 per Unit,
subject to adjustment (the "Purchase Price"). The description and
terms of the Rights are set forth in a Rights Agreement dated as of
April 26, 1994 (the "Rights Agreement") between the Company and
Harris Trust Company of New York, as Rights Agent.
Initially, the Rights will be attached to all certificates
representing outstanding shares of Common Stock, and no separate
certificates for the Rights ("Rights Certificates") will be distributed.
The Rights will separate from the Common Stock and a "Distribution
Date" will occur upon the earlier of (i) ten days following a public
announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the date of the announcement being the "Stock
Acquisition Date"), or (ii) ten business days (or such later date as may
be determined by the Company's Board of Directors before the
Distribution Date occurs) following the commencement of a tender
offer or exchange offer that would result in a person's becoming an
Acquiring Person. Until the Distribution Date, (a) the Rights will be
evidenced by the Common Stock certificates (together with a copy of
this Summary of Rights or bearing the notation referred to below) and
will be transferred with and only with such Common Stock certificates,
(b) new Common Stock certificates issued after May 20, 1994 will
contain a notation incorporating the Rights Agreement by reference and
(c) the surrender for transfer of any certificate for Common Stock
(with or without a copy of this Summary of Rights) will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on April 26, 2004, unless
earlier redeemed or exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Common Stock as of
the close of business on the Distribution Date and, from and after the
Distribution Date, the separate Rights Certificates alone will represent
the Rights. All shares of Common Stock issued prior to the
Distribution Date will be issued with Rights. Shares of Common Stock
issued after the Distribution Date in connection with certain employee
benefit plans or upon conversion of certain securities will be issued
with Rights. Except as otherwise determined by the Board of
Directors, no other shares of Common Stock issued after the
Distribution Date will be issued with Rights.
In the event (a "Flip-In Event") that a person becomes
an Acquiring Person (except pursuant to a tender or exchange offer for
all outstanding shares of Common Stock at a price and on terms that a
majority of the independent directors of the Company determines to be
fair to and otherwise in the best interests of the Company and its
stockholders (a "Permitted Offer")), each holder of a Right will
thereafter have the right to receive, upon exercise of such Right, a
number of shares of Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a Current
Market Price (as defined in the Rights Agreement) equal to two times
the exercise price of the Right. Notwithstanding the foregoing,
following the occurrence of any Flip-In Event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person (or by certain related
parties) will be null and void in the circumstances set forth in the
Rights Agreement. However, Rights are not exercisable following the
occurrence of any Flip-In Event until such time as the Rights are no
longer redeemable by the Company as set forth below.
For example, at an exercise price of $80 per Right, each
Right not owned by an Acquiring Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its
holder to purchase $160 worth of Common Stock (or other
consideration, as noted above), based upon its then Current Market
Price, for $80. Assuming that the Common Stock had a Current
Market Price of $20 per share at such time, the holder of each valid
Right would be entitled to purchase 8 shares of Common Stock for
$80.
In the event (a "Flip-Over Event") that, at any time on
or after the Stock Acquisition Date, (i) the Company is acquired in a
merger or other business combination transaction (other than certain
mergers that follow a Permitted Offer), or (ii) 50% or more of the
Company's assets or earning power is sold or transferred, each holder
of a Right (except Rights that previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise, a
number of shares of common stock of the acquiring company having a
Current Market Price equal to two times the exercise price of the
Right. Flip-In Events and Flip-Over Events are collectively referred to
as "Triggering Events."
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Stock, (ii) if holders of
the Preferred Stock are granted certain rights or warrants to subscribe
for Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at least
1% of the Purchase Price. No fractional Units are required to be
issued and, in lieu thereof, an adjustment in cash may be made based
on the market price of the Preferred Stock on the last trading date prior
to the date of exercise. Pursuant to the Rights Agreement, the
Company reserves the right to require prior to the occurrence of a
Triggering Event that, upon any exercise of Rights, a number of Rights
be exercised so that only whole shares of Preferred Stock will be
issued.
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right, payable, at the option of the
Company, in cash, shares of Common Stock or such other
consideration as the Board of Directors may determine. After the
redemption period has expired, the Company's right of redemption may
be reinstated prior to the occurrence of any Triggering Event if (i) an
Acquiring Person reduces its beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company and (ii) there are no other
Acquiring Persons. Immediately upon the effectiveness of the action of
the Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to
receive the $.01 redemption price.
At any time after the occurrence of a Flip-In Event and
prior to a person's becoming the beneficial owner of 50% or more of
the shares of Common Stock then outstanding, the Company may
exchange the Rights (other than Rights owned by an Acquiring Person
or an affiliate or an associate of an Acquiring Person, which will have
become void), in whole or in part, at an exchange ratio of one share of
Common Stock, and/or other equity securities deemed to have the same
value as one share of Common Stock, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the Rights should not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company
or for the common stock of the acquiring company as set forth above
or are exchanged as provided in the preceding paragraph.
Other than certain provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company
prior to the Distribution Date. Thereafter, the provisions of the Rights
Agreement may be amended by the Board of Directors in order to cure
any ambiguity, defect or inconsistency, to make changes that do not
materially adversely affect the interests of holders of Rights (excluding
the interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement; provided, however, that no
amendment to lengthen the time period governing redemption shall be
made at such time as the Rights are not redeemable.
The Rights will have certain anti-takeover effects. The
Rights will cause substantial dilution to any person or group that
attempts to acquire the Company without the approval of the
Company's Board of Directors. As a result, the overall effect of the
Rights may be to render more difficult or discourage any attempt to
acquire the Company even if such acquisition may be favorable to the
interests of the Company's stockholders. Because the Company's
Board of Directors can redeem the Rights or approve a Permitted
Offer, the Rights should not interfere with a merger or other business
combination approved by the Board of Directors of the Company.
The form or Rights Agreement between the Company
and Harris Trust Company of New York, as rights agent, specifying
the terms of the Rights, which includes as Exhibit A the form of
Certificate of Designations of Series A Junior Participating Preferred
Stock, as Exhibit B the form of Rights Certificate and as Exhibit C the
form of Summary of Rights to Purchase Preferred Stock are attached
hereto as exhibits and incorporated herein by reference. The foregoing
description of the Rights is qualified by reference to such exhibits.
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Item 2. Exhibits.
4. Rights Agreement dated as of April 26, 1994 between Pogo
Producing Company and Harris Trust Company of New York,
as Rights Agent. The Rights Agreement includes as Exhibit
A the form of Certificate of Designations of Series A Junior
Participating Preferred Stock, as Exhibit B the form of Rights
Certificate and as Exhibit C the form of Summary of Rights to
Purchase Preferred Stock.
99. Press Release of Pogo Producing Company dated April 26, 1994.
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Pogo Producing Company
Signature
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
Pogo Producing Company
(Registrant)
By: /s/ D. STEPHEN SLACK
Name: D. Stephen Slack
Title: Senior Vice President,
Chief Financial Officer
and Treasurer
Date: APRIL 26, 1994
POGO PRODUCING COMPANY
and
HARRIS TRUST COMPANY OF NEW YORK,
Rights Agent
________________
Rights Agreement
Dated as of April 26, 1994
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TABLE OF CONTENTS
Section 1. Certain Definitions . . . . . . 1
Section 2. Appointment of Rights Agent . . 7
Section 3. Issue of Rights Certificates. . 7
Section 4. Form of Rights Certificates . . 8
Section 5. Countersignature and Registration 9
Section 6. Transfer, Split-Up, Combination and
Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or
Stolen Rights Certificates. . . 10
Section 7. Exercise of Rights; Purchase Price 11
Section 8. Cancellation and Destruction of
Rights Certificates. . . . . . .13
Section 9. Reservation and Availability of
Capital Stock . . . . . . . . . 13
Section 10. Preferred Stock Record Date . . . 15
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or
Number of Rights. . . . . . . . 15
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 . . . . . . . . . . . . . 23
Section 14. Fractional Rights and Fractional
Shares . . . . . . . . . . . . . 26
Section 15. Rights of Action. . . . . . . . . 27
Section 16. Agreement of Rights Holders . . . 27
Section 17. Rights Certificate Holder Not
Deemed a Stockholder . . . . . . 28
Section 18. Concerning the Rights Agent . . . 28
Section 19. Merger or Consolidation or
Change of Name of Rights Agent . 29
Section 20. Duties of Rights Agent. . . . . . 29
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Section 21. Change of Rights Agent. . . . . . 31
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
Exhibit A - Form of Certificate of Designations of Series A
Junior Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Stock
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RIGHTS AGREEMENT
This Rights Agreement, dated as of April 26, 1994
(the "Agreement"), between Pogo Producing Company, a Delaware
corporation (the "Company"), and Harris Trust Company of New
York, a New York corporation (the "Rights Agent"),
W I T N E S S E T H:
WHEREAS, on April 26, 1994 (the "Rights
Dividend Declaration Date"), the Board of Directors of the
Company authorized and declared a dividend of one Right for each
share of common stock, par value $1.00 per share, of the Company
(the "Common Stock") outstanding at the close of business on May
20, 1994 (the "Record Date"), 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 Record Date
and the earlier of the Distribution Date (as hereinafter defined) and
the expiration or redemption of the Rights, and, in certain
circumstances, after the Distribution Date, each Right initially
representing the right to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock of the Company, upon
the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein set forth, the parties
hereby agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms 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 20% or more of the shares of
Common Stock then outstanding, but shall not include any Exempt
Person; provided, however, that a Person shall not become an
Acquiring Person if such Person, together with its Affiliates and
Associates, shall become the Beneficial Owner of 20% 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 outstanding
due to the repurchase of Common Stock by the Company, unless
and until such time as such Person or any Affiliate or Associate of
such Person shall purchase or otherwise become the Beneficial
Owner of additional shares of Common Stock 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 constituting 1% or more of the
then outstanding shares of Common Stock shall become an Affiliate
or Associate of such Person.
At any time prior to the Distribution Date, the Board
of Directors may, with respect to any specified Person or Persons,
determine to increase to a specified percentage greater than that set
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forth herein or decrease to a specified percentage lower than that
set forth herein, the level of Beneficial Ownership of Common
Stock at which such Person or Persons becomes an Acquiring
Person.
"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.
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) 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
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or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, or (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) hereof in connection with an adjustment made
with respect to any Original Rights; or
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except as set
forth in the proviso to subparagraph (i) of this definition) or
disposing of any voting securities of the Company;
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
acquired through such Person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
State of Texas are authorized or obligated by law or executive
order to close.
"close of business" on any given date shall mean
5:00 p.m., Houston time, on such date; provided, however, that if
such date is not a Business Day, it shall mean 5:00 p.m., Houston
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. If on such day no market maker is making a market in such
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security, the fair value of such security on such day as
determined in good faith by the Board of Directors of the Company
shall be used.
"Common Stock" shall mean the common stock, par
value $1.00 per share, of the Company, except that "Common
Stock" when used with reference to stock 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 before the Distribution Date occurs) after the Stock
Acquisition Date (or, if the tenth day after the Stock Acquisition
Date occurs before the Record Date, the close of business on the
Record Date) or (ii) the close of business on the tenth Business
Day (or such later date as may be determined by the Company's
Board of Directors 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, if upon consummation thereof, such
Person would be an Acquiring Person. 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.
"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.
"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, 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.
"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 April 26, 2004.
"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.
"NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotations System.
"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 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 representatives,
nominees, Affiliates or Associates of an Acquiring Person, after
receiving advice from one or more investment banking firms, to be
(a) at a price and on terms that are fair to stockholders (taking into
account all 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, 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
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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.
"Record Date" shall have the meaning set forth in
the recitals clause at the beginning of this Agreement.
"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.
"Rights Dividend Declaration Date" shall have the
meaning set forth in the recitals clause at the beginning of this
Agreement.
"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, 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.
"Substitution Period" shall have the meaning set
forth in Section 11(a)(iii) hereof.
"Summary of Rights" shall mean the Summary of
Rights to Purchase Preferred Stock sent pursuant to Section 3(b)
hereof.
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"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 to act as agent for the
Company and the holders of the Rights (who, in accordance with
Section 3 hereof, shall prior to the Distribution Date also be the
holders of the Common Stock) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date, (x) the Rights
will be evidenced (subject to the provisions of paragraph (b) of this
Section 3) 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, 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 Right 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) As promptly as practicable following the
Record Date, the Company will send a copy of a Summary of
Rights to Purchase Preferred Stock, in substantially the form
attached hereto as Exhibit C, by first-class, postage prepaid mail,
to each record holder of Common Stock as of the close of business
on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for Common
Stock outstanding as of the Record Date, until the Distribution Date
or the earlier surrender for transfer thereof or the Expiration Date,
the Rights associated with the shares of Common Stock represented
by such certificates shall be evidenced by such certificates for
Common Stock together with a copy of the Summary of Rights,
and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any of the
certificates for Common Stock outstanding on the Record Date,
with or without a copy of
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the Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificates.
(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 Record Date but
prior to the earlier of the Distribution Date or the expiration or
redemption of the Rights 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 Record Date but prior
to the earlier of the Distribution Date or the expiration or
redemption of the Rights 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 Pogo Producing
Company (the "Company") and Harris Trust
Company of New York (the "Rights Agent") dated
as of April 26, 1994 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 issued to, or held by, 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), whether currently held by or on
behalf of such Person or by any subsequent holder,
will become null and void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the expiration or
redemption of the Rights, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such
certificates alone, and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock represented by
such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse
thereof), 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
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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 Record Date and on their face shall entitle the
holders thereof to purchase such number of one one-hundredths of
a share of Preferred Stock as shall be set forth therein at the price
set forth therein (such exercise price per one one-hundredth of a
share, the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of
an Acquiring Person, (ii) a direct or indirect transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such or
(iii) a direct or indirect transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person's becoming such and
receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring Person (or its Affiliates
or Associates) to holders of equity interests in such Acquiring
Person (or its Affiliates or Associates) or to any Person with whom
such Acquiring Person (or its Affiliates or Associates) has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred
to in this sentence, shall contain (to the extent feasible) the
following legend, 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.
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
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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 one one-hundredths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash
or other assets, as the case may be) as the Rights Certificate or
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 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
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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 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 one
one-hundredths of a share 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 one one-
hundredth of a share of Preferred Stock pursuant to the exercise of
a Right shall initially be $80, 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 one one-hundredth of a share
of Preferred Stock (or other shares, securities, cash or other assets,
as the case may be) to be purchased as set forth below and an
amount equal to any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly
(i)(A) requisition from any transfer agent of the shares of Preferred
Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of one one-
hundredths of a share of Preferred Stock to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company, 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 such number of one one-hundredths of a share of
Preferred Stock as are to be purchased (in
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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, cashiers 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) 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 less than all the Rights evidenced thereby,
a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement
to the contrary, from and after the first occurrence of a Flip-In
Event, any Rights beneficially owned by (i) an Acquiring Person
or an Associate or Affiliate of an Acquiring Person other than any
such Person that the Board of Directors in good faith determines
was not involved in and did not cause or facilitate, directly or
indirectly (including through any change in the Board of Directors),
such Flip-In Event, (ii) a direct or indirect transferee of such
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such 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 the Acquiring Person's becoming such 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 has determined 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 and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with,
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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.
(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 cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled
Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Capital
Stock.
(a) The Company covenants and agrees that it
will cause to be reserved and kept available out of its authorized
and unissued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and
unissued shares of 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 the 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 may be 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.
(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
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practicable following the earliest date after the first occurrence of
a Flip-In Event on which the consideration 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 one
one-hundredths of a share 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 one one-hundredths of a share 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 one
one-hundredths of a share 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 one one-hundredths of a share 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
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(any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each
Person in whose name any certificate for a number of one one-
hundredths of a share 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 after the Rights Dividend Declaration Date (A) declare
a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time
shall be entitled to receive, upon payment of the Purchase
Price then in effect, the aggregate number and kind 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
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dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this
Agreement, in the event any Person shall, at any time after
the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an
Acquiring Person is (1) a transaction set forth in Section
13(a) hereof or (2) an acquisition of shares of Common
Stock pursuant to a Permitted Offer, then, promptly
following the occurrence of such event, each holder of a
Right (except as provided below and in Section 7(e) hereof)
shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of
one one-hundredths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-
hundredths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of
a Flip-In Event and (y) dividing that product (which
product, following such first occurrence, shall thereafter be
the "Purchase Price" for each Right and for all purposes of
this Agreement) 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 (a) 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), or (b) the quotient
(the "Quotient") obtained by dividing the Purchase Price by
the number of Adjustment Shares issuable upon exercise of
a Right is less than the then par value per share of Common
Stock, 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 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
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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 Directors of the
Company shall determine in good faith that it is likely that
(a) sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights
or (b) a reduction in the par value per share of Common
Stock to an amount that is equal to or less than the Quotient
could be authorized, 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 or for the reduction
of such par value, as the case may be (such period, as it
may be extended, the "Substitution Period"). To the extent
that the Company 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 or reduction of par value 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 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
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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 which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date
for a distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or merger
in which the Company is the continuing 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 which would have been in effect if such
record date had not been fixed.
(d)(i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the "Current Market Price" per
share 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
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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 one
one-hundredth of a 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 one one-hundredth of a share) of Preferred
Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section
11(d), the "Current Market Price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal
to 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 one one-
hundredth of a 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 one-
millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which
mandates such adjustment or (ii) the Expiration Date.
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(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 one one-hundredths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections
11(b) and (c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-
hundredths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one
one-hundredths of a share of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price,
and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date
of any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one one-
hundredths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights
(calculated to the nearest 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
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<PAGE>
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 one one-hundredths of a share
of Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per one one-hundredth of a share and
the number of one-hundredths of a share 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 or
stated value, if any, of the number of one one-hundredths of a
share 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 one
one-hundredths of a share 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 such record date the number of
one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-hundredths of a
share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
their good faith judgment the Board of Directors of the Company
shall 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.
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(n) The Company covenants and agrees that it
shall not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof),
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 (other than the
Company and/or any of its Subsidiaries in one or more transactions
each of which complies (and all of which together comply) with
Section 11(o) hereof), 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
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) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and 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, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event
by a fraction (the "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
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adjust the number of one one-hundredths of a share 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 one one-hundredths of a share of
Preferred Stock purchasable upon exercise of one Right and the
Purchase Price shall be proportionately adjusted so that (i) the
number of one one-hundredths of a share of Preferred Stock
purchasable upon exercise of a Right following such adjustment
shall equal the product of the number of one one-hundredths of a
share 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 holder of
a Rights Certificate (or, if prior to the Distribution Date, to each
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.
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, on or after the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof), and the Company shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(o) hereof) 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 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) 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 then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and
issued, fully paid,
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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 (1) multiplying the then current Purchase Price by the
number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to the first
occurrence of a Flip-Over Event (or, if a Flip-In Event has
occurred prior to the first occurrence of a Flip-Over Event,
multiplying the number of such one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Flip-In Event by the Purchase
Price in effect immediately prior to such first occurrence), and
dividing that product (which, following the first occurrence of a
Flip-Over Event, shall be the Purchase Price for each Right and for
all purposes of this Agreement) by (2) 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; (ii) 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; (iii) 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; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Flip-Over Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), (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;
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<PAGE>
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 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
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(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.
(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 one one-hundredth of a 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 one
one-hundredth of a share of Preferred Stock). Fractions of shares
of Preferred Stock in integral multiples of one one-hundredth of a
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 one one-hundredth of a share of
Preferred Stock, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the
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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.
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
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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, subject to the last sentence of Section 7(e)
hereof, 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 one one-hundredths of a share 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.
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 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
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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 reasonably believed by it, 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.
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:
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(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 negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Rights 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 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.
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(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 holders, if any, of the Rights Certificates 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 holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or
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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
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 Texas (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 or Texas), 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 or redemption of the Rights, the Company
(a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee
plan or arrangement granted or awarded 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 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
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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 Stock Acquisition Date (or,
if the Stock Acquisition Date shall have occurred prior to the
Record Date, the close of business on the tenth day following the
Record Date) and (ii) the Final Expiration Date, cause the
Company to redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount
may be appropriately adjusted, if necessary, to reflect any stock
split, stock dividend or similar transaction occurring after the
Rights Dividend Declaration Date (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 after a Flip-
In Event has occurred and (ii) was not approved by the Board of
Directors of the Company and by the stockholders of the Company
at a stockholders' meeting. If, following the occurrence of a Stock
Acquisition Date and following the expiration of the right of
redemption hereunder but prior to any Triggering Event, (i) a
Person who is an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, which did not
result in the occurrence of a Triggering Event such that such
Person is thereafter a Beneficial Owner of 10% or less of the
outstanding shares of Common Stock, and (ii) there are no other
Persons, immediately following the occurrence of the event
described in clause (i), who are Acquiring Persons, then the right
of redemption set forth in this Section 23(a) shall be reinstated and
thereafter be subject to the provisions of this Section 23.
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 (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 have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the 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 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,
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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.
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 first
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 occurring after the Rights Dividend
Declaration Date (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
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.
(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 (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 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 which 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
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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. 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 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 Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect
any sale, lease or other transfer (or to permit one or more of its
Subsidiaries to effect any sale, lease or other transfer), in one
transaction or a series of related transactions, of more than 50% of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions
each of which complies (and all of which together comply) 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
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<PAGE>
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 shall occur, then
(i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in
accordance with Section 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) hereof, and
(ii) all references in the preceding paragraph to Preferred Stock
shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 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:
Pogo Producing Company
5 Greenway Plaza, Suite 2700
Houston, Texas 77252-2504
Attention: Corporate Secretary
Subject to 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:
Harris Trust Company of New York
77 Water Street
New York, New York 10005
Attention: Vincent S. Romano
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. Prior
to the Distribution Date and subject to the penultimate sentence of
this Section 27, 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 certificates
representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate 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 Certificates in order (i) to
cure any ambiguity, (ii) to correct or supplement any provision
contained herein that may be defective or inconsistent
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<PAGE>
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
and that shall not materially adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person); provided, that
this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are
not then redeemable or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying
the rights of, and/or the benefits to, the holders of Rights (other
than any Acquiring Person and its Affiliates and Associates);
provided further, however, that this clause (B) shall not be
construed to prevent a supplement or amendment to lengthen the
time period relating to when the Rights may be redeemed if the
Board of Directors determines that such period should be
lengthened in order to allow additional time to determine whether
the redemption of the Rights is in the best interest of such holders
of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 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 or shortens the Final
Expiration Date. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of
the holders of Common Stock.
Section 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 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 hereof. 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
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<PAGE>
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
unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the
close of business on the tenth day following the date of such
determination by the Board of Directors of the Company. 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.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed, all as of the day and
year first above written.
POGO PRODUCING COMPANY
By /s/ PAUL G. VAN WAGENEN
Name: Paul G. Van Wagenen
Title: Chairman of the Board, President
and Chief Executive Officer
HARRIS TRUST COMPANY OF NEW YORK
By /s/ VINCENT S. ROMANO
Name: Vincent S. Romano
Title: Vice President
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<PAGE>
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
POGO PRODUCING COMPANY
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
POGO PRODUCING COMPANY, a corporation
organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section
103 thereof, 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, as amended, of the said Corporation,
the said Board of Directors on April 26, 1994, adopted the
following resolution creating a series of 433,334 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 433,334. 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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<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 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 last 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) $2.00 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 $1.00 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 after April 26, 1994 (the "Rights
Declaration Date") (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(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 $2.00 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
A-2
<PAGE>
Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Junior Participating Preferred Stock in an
amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on
a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more
than 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 or by
law, the holders of shares of Series A Junior Participating
Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C)(i) If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears in an
amount equal to six 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, all 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
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 neither such voting right nor the right of the holders
of any other series of Voting Preferred Stock, if any, to increase,
in certain cases, the authorized number of Directors shall be
exercised unless the holders of ten percent in number of 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. At any meeting at which the holders of
Voting Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting
as a class, to elect Directors to fill such vacancies, if any, in the
Board of Directors as may then exist up to two Directors or, if
such right is exercised at an
A-3
<PAGE>
annual meeting, to elect two Directors. If the number that may be so
elected at any special meeting does not amount to the required number,
the holders of the Voting Preferred Stock shall have the right to make such
increase in the number of Directors as shall be necessary to permit the
election by them of the required number. After the holders of the Voting
Preferred Stock shall have exercised their right to elect Directors
in any default period and during the continuance of such period,
the number of Directors shall not be increased or decreased except
by vote of the holders of Voting Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series A Junior Participating Preferred
Stock.
(iii) Unless the holders of 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, the holders of Common
Stock, and other classes of stock of the Corporation if applicable,
shall continue to be entitled to elect the whole number of Directors
until the holders of Voting Preferred Stock shall have exercised
their right to elect two Directors voting as a class, after the
exercise of which right (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 (except as provided in paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders
of a particular class of stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of 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)(ii) of this Section 3 (such number
being subject, however, to change thereafter in
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<PAGE>
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.
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;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up)
to the Series A Junior Participating Preferred Stock; or
(iv) 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 such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
A-5
<PAGE>
(B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4, purchase
or otherwise acquire such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to 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 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 $100.00 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 receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other
series of Preferred Stock, if any, 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.
7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time
be similarly exchanged or changed in an amount per share equal to
the Adjustment Number times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind),
A-6
<PAGE>
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 "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 Texas 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
A-7
<PAGE>
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 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.
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 a majority 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.
A-8
<PAGE>
IN WITNESS WHEREOF, the undersigned have
executed and subscribed this Certificate and do affirm the foregoing
as true under the penalties of perjury this ___ day of _______,
199_.
__________________________
Vice President
Attest:
___________________
Secretary
A-9
<PAGE>
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER APRIL 26, 2004 OR EARLIER IF
REDEEMED OR EXCHANGED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY [WILL] [HAVE] BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
RIGHTS CERTIFICATE
POGO PRODUCING COMPANY
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 April 26, 1994 as it may from time to time be
supplemented or amended (the "Rights Agreement"), between Pogo
Producing Company, a Delaware corporation (the "Company"),
and Harris Trust Company of New York, a New York corporation
(the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 p.m. (Houston time) on April 26, 2004 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 of Series A Junior Participating
Preferred Stock (the "Preferred Stock") of the Company, at a
purchase price of $80 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, cashiers
or official bank check or bank draft payable to the order of the
Company or the Rights Agent. The number of Rights evidenced
_________________
* The portion of the legend in brackets shall be inserted only
if applicable and shall replace the preceding sentence.
B-1
<PAGE>
by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price
as of April 26, 1994, 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.
From and after the occurrence of a Flip-In Event (as
such term is defined in the Rights Agreement), if the Rights
evidenced by this Rights Certificate are beneficially owned by (i)
an Acquiring Person or an Affiliate or Associate 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 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 Flip-In 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 one one-hundredths of a share 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 $.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 Stock
Acquisition Date (as defined in the
B-2
<PAGE>
Rights Agreement) (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 $1.00 per
share, and/or other equity securities of the Company deemed to
have the same value as shares of Common Stock, at any time prior
to a person's becoming the beneficial owner of 50% or more of
the shares of Common Stock outstanding. After the expiration of
the redemption period, the Company's right of redemption may be
reinstated if (i) an Acquiring Person reduces its beneficial
ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the
Company and (ii) there are no other Acquiring Persons.
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 one one-hundredth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced
by depositary receipts), but in lieu thereof a cash payment 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.
B-3
<PAGE>
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of May 20, 1994
ATTEST: POGO PRODUCING COMPANY
________________________ By________________________________
Secretary Title:
Countersigned:
HARRIS TRUST COMPANY OF NEW YORK
By ________________________________
Authorized Signature
B-4
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED________________________________________ hereby sells,
assigns and transfers unto_______________________________________
_________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
__________________ Attorney, to transfer the within Rights
Certificate 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
entity acceptable to the Rights Agent and the Company.
B-5
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of 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: _____________, 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
entity acceptable to the Rights Agent and the Company.
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-6
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: POGO PRODUCING COMPANY
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: ____________, 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
entity acceptable to the Rights Agent and the Company.
B-7
<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: _____________, 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
entity acceptable to the Rights Agent and the Company.
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.
B-8
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On April 26, 1994, the Board of Directors of Pogo
Producing Company (the "Company") declared a dividend of one
right to purchase preferred stock ("Right") for each outstanding
share of the Company's Common Stock, par value $1.00 per share
("Common Stock"), to stockholders of record at the close of
business on May 20, 1994. Each Right entitles the registered
holder to purchase from the Company a unit consisting of one one-
hundredth of a share (a "Unit") of Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Stock"),
at a purchase price of $80 per Unit, subject to adjustment (the
"Purchase Price"). The description and terms of the Rights are set
forth in a Rights Agreement dated as of April 26, 1994 (the
"Rights Agreement") between the Company and Harris Trust
Company of New York, as Rights Agent.
Initially, the Rights will be attached to all certificates
representing outstanding shares of Common Stock, and no separate
certificates for the Rights ("Rights Certificates") will be distributed.
The Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) ten days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of
20% or more of the outstanding shares of Common Stock (the date
of the announcement being the "Stock Acquisition Date"), or
(ii) ten business days (or such later date as may be determined by
the Company's Board of Directors before the Distribution Date
occurs) following the commencement of a tender offer or exchange
offer that would result in a person's becoming an Acquiring
Person. Until the Distribution Date, (a) the Rights will be
evidenced by the Common Stock certificates (together with a copy
of this Summary of Rights or bearing the notation referred to
below) and will be transferred with and only with such Common
Stock certificates, (b) new Common Stock certificates issued after
May 20, 1994 will contain a notation incorporating the Rights
Agreement by reference and (c) the surrender for transfer of any
certificate for Common Stock (with or without a copy of this
Summary of Rights) will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on April 26, 2004,
unless earlier redeemed or exchanged by the Company as described
below.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of Common
Stock as of the close of business on the Distribution Date and, from
and after the Distribution Date, the separate Rights Certificates
alone will represent the Rights. All shares of Common Stock
issued prior to the Distribution Date will be issued with Rights.
Shares of Common Stock issued after the Distribution Date in
connection with certain employee benefit plans or upon conversion
of certain securities will be issued with Rights. Except as
otherwise determined by the Board of Directors, no other shares of
Common Stock issued after the Distribution Date will be issued
with Rights.
C-1
<PAGE>
In the event (a "Flip-In Event") that a person
becomes an Acquiring Person (except pursuant to a tender or
exchange offer for all outstanding shares of Common Stock at a
price and on terms that a majority of the independent directors of
the Company determines to be fair to and otherwise in the best
interests of the Company and its stockholders (a "Permitted
Offer")), each holder of a Right will thereafter have the right to
receive, upon exercise of such Right, a number of shares of
Common Stock (or, in certain circumstances, cash, property or
other securities of the Company) having a Current Market Price (as
defined in the Rights Agreement) equal to two times the exercise
price of the Right. Notwithstanding the foregoing, following the
occurrence of any Flip-In Event, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person (or by certain related
parties) will be null and void in the circumstances set forth in the
Rights Agreement. However, Rights are not exercisable following
the occurrence of any Flip-In Event until such time as the Rights
are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $80 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) following an event set forth in the preceding
paragraph would entitle its holder to purchase $160 worth of
Common Stock (or other consideration, as noted above), based
upon its then Current Market Price, for $80. Assuming that the
Common Stock had a Current Market Price of $20 per share at
such time, the holder of each valid Right would be entitled to
purchase 8 shares of Common Stock for $80.
In the event (a "Flip-Over Event") that, at any time
on or after the Stock Acquisition Date, (i) the Company is acquired
in a merger or other business combination transaction (other than
certain mergers that follow a Permitted Offer), or (ii) 50% or more
of the Company's assets or earning power is sold or transferred,
each holder of a Right (except Rights that previously have been
voided as set forth above) shall thereafter have the right to receive,
upon exercise, a number of shares of common stock of the
acquiring company having a Current Market Price equal to two
times the exercise price of the Right. Flip-In Events and Flip-Over
Events are collectively referred to as "Triggering Events."
The Purchase Price payable, and the number of
Units of Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or
a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible
securities at less than the current market price of the Preferred
Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above).
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price. No fractional Units
are required to be issued and, in lieu thereof, an adjustment in cash
may be made based on the market price of the Preferred Stock on
the last trading date prior to the date of exercise. Pursuant to the
Rights Agreement, the Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares
of Preferred Stock will be issued.
C-2
<PAGE>
At any time until ten days following the Stock
Acquisition Date, the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right, payable, at the option
of the Company, in cash, shares of Common Stock or such other
consideration as the Board of Directors may determine. After the
redemption period has expired, the Company's right of redemption
may be reinstated prior to the occurrence of any Triggering Event
if (i) an Acquiring Person reduces its beneficial ownership to 10%
or less of the outstanding shares of Common Stock in a transaction
or series of transactions not involving the Company and (ii) there
are no other Acquiring Persons. Immediately upon the
effectiveness of the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $.01
redemption price.
At any time after the occurrence of a Flip-In Event
and prior to a person's becoming the beneficial owner of 50% or
more of the shares of Common Stock then outstanding, the
Company may exchange the Rights (other than Rights owned by an
Acquiring Person or an affiliate or an associate of an Acquiring
Person, which will have become void), in whole or in part, at an
exchange ratio of one share of Common Stock, and/or other equity
securities deemed to have the same value as one share of Common
Stock, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights should not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Stock (or
other consideration) of the Company or for the common stock of
the acquiring company as set forth above or are exchanged as
provided in the preceding paragraph.
Other than certain provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the
Company prior to the Distribution Date. Thereafter, the provisions
of the Rights Agreement may be amended by the Board of
Directors in order to cure any ambiguity, defect or inconsistency,
to make changes that do not materially adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to lengthen the
time period governing redemption shall be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an exhibit to a
Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company and the
Rights Agent. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference
to the Rights Agreement, which is incorporated herein by
reference.
C-3
FOR IMMEDIATE RELEASE
Contact: Paul G. Van Wagenen
(713) 297-5001
POGO REPORTS INCREASED EARNINGS; GAS PRODUCTION UP
SHAREHOLDERS' RIGHTS PLAN ADOPTED
Houston, April 26, 1994-- Net income of Pogo Producing Company
(symbol: "PPP"- NYSE) for the first quarter of 1994 was $7,278,000 or $0.22
per share on revenues of $37,892,000, compared to first quarter 1993 income
of $7,160,000 or $0.22 per share on revenues of $34,681,000. The improved
quarterly revenues reflected increases in natural gas and oil production
levels and higher natural gas prices.
Paul G. Van Wagenen, Chairman and Chief Executive Officer of the
Houston-based oil and gas exploration and production company stated, "Pogo's
plan to increase its natural gas production has borne fruit. Our
natural gas sales rose 16 percent to an average of 113.7 million cubic feet
per day during the first three months of 1994, up from 98.3 million cubic feet
per day averaged during the first quarter of 1993." Total liquids production,
including plant products, for the first quarter of 1994 averaged 12,502
barrels per day, up 12 percent from an average of 11,160 barrels per day in
the 1993 three month period.
Crude oil and condensate prices in the first quarter averaged only
$13.90 per barrel compared to $19.20 in the first quarter of 1993. Natural
gas prices received by Pogo for the quarter just ended averaged $2.20 per Mcf
(thousand cubic feet), up from the $1.81 per Mcf recorded in the first quarter
of 1993.
Mr. Van Wagenen also said that the first quarter increase in total natural
gas production was related to its very successful recent exploration and
development operations in the Gulf of Mexico, especially at Eugene Island Block
295. As operator and 100% working interest owner, Pogo drilled five horizontal
natural gas wells in late 1993 into three different shallow horizons on Eugene
Island Block 295. Those wells were completed and put on stream, and first
production began near the end of February, 1994. Actual gross production rates
from that platform averaged 87 million cubic feet per day during March, 1994.
Net of royalties and other lease burdens, Pogo's March revenue interest at
Eugene Island Block 295 averaged between 55 and 60 million cubic feet per day.
Production from this block in the second quarter has continued at these high
rates.
The Company also announced today that its Board of Directors has
adopted a Rights Plan designed to protect company stockholders from coercive
or unfair takeover techniques. Terms of the Rights Plan provide for a
dividend distribution of one right for each outstanding share of common
stock of Pogo to holders of record at the close of business on May 20, 1994.
The rights would become exercisable only in the event, with certain
exceptions, that an acquiring party accumulates 20 percent or more of Pogo's
voting stock, or if a party announces an offer to acquire 20 percent or more.
The rights will expire on April 26, 2004. Each right will entitle the holder
to buy one one-hundredth of a share of a new series of preferred stock at a
price of $80. In addition, upon the occurrence of certain events, holders of
the rights would be entitled to purchase either Pogo stock or shares in an
"acquiring entity" at half of market value. Pogo would generally be
entitled to redeem the rights at one cent per right at any time until the
10th day (subject to extension by the Board of Directors) following the
time the rights become exercisable.
Commenting on the Rights Plan, Mr. Van Wagenen said, "The Board
of Directors is not aware of any effort of any kind to acquire control of the
Company. The Board believes that the Rights Plan represents a sound and
reasonable means of safeguarding the interests of the Company's
stockholders." Van Wagenen said the plan is similar to those adopted by a
number of other companies, and that details of the new Rights Plan will be
outlined in a letter to be mailed to stockholders following the May 20, 1994
record date.
Mr. Van Wagenen also said that Pogo's first quarter increase in total
natural gas production is related to its very successful recent exploration
and development operations in the Gulf of Mexico, especially at Eugene
Island Block 295. As previously reported, the Company, as operator and 100%
working interest owner, drilled five horizontal natural gas wells in late 1993
into three different shallow horizons on Eugene Island, Block 295. Those
wells were completed and put on stream and first production commenced near
the end of February, 1994. Actual gross production rates from that platform
averaged 87 million cubic feet per day during March, 1994. Net of royalties
and other lease burdens, Pogo's revenue interest in March at Eugene Island
Block 295 averaged between 55 and 60 million cubic feet per day.
A summary of first quarter financial results is as follows:
Three Months Ended
March 31
1994 1993
[Unaudited]
[In thousands, except per share amounts]
Revenues $ 37,892 $ 34,681
Net Income $ 7,278 $ 7,160
Earnings per share $ 0.22 $ 0.22
Weighted average number of
common stock and common stock
equivalent shares outstanding 33,253 32,818
Pogo Producing Company explores for, develops and produces oil and
natural gas. Headquartered in Houston, Pogo owns interests in 76 federal and
state lease blocks offshore from Louisiana and Texas in the Gulf of Mexico.
Pogo also owns approximately 93,000 gross leasehold acres in major oil and
gas provinces onshore in the United States and approximately 2.6 million gross
concession acres in the Kingdom of Thailand. Pogo is listed on the New York
and Pacific Stock Exchanges under the symbol PPP.
