<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 9, 1995
REGISTRATION STATEMENT NO. 33-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
OG&E HOLDING CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
OKLAHOMA 6719 APPLIED FOR
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or Classification Code Number) Identification No.)
organization)
</TABLE>
101 NORTH ROBINSON, P.O. BOX 321, OKLAHOMA CITY, OKLAHOMA 73101 (405) 553-3000
(Address, including zip code, and telephone number, including
area code, of principal executive offices)
<TABLE>
<S> <C>
JAMES G. HARLOW, JR. PETER D. CLARKE
PRESIDENT AND CHIEF GARDNER, CARTON & DOUGLAS
EXECUTIVE OFFICER 321 NORTH CLARK STREET
OG&E HOLDING CORP. SUITE 3400
101 NORTH ROBINSON CHICAGO, ILLINOIS 60610
P.O. BOX 321 (312) 644-3000
OKLAHOMA CITY, OKLAHOMA 73101
(405) 553-3000
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the Registration Statement becomes effective and all conditions prerequisite
have been satisfied or waived.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, please check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM
PROPOSED AMOUNT OFFERING AMOUNT OF
TITLE OF EACH CLASS OF TO BE PRICE PER MAXIMUM AGGREGATE REGISTRATION
SECURITIES BEING REGISTERED REGISTERED UNIT OFFERING PRICE FEE
<S> <C> <C> <C> <C>
Common Stock, par value $.01 44,874,387
per share.................... shs.(1) $33.875(2) $1,520,119,859(2) $524,180(2)
</TABLE>
(1) Includes 40,374,387 shares (which is estimated to be at least as large as
the number of shares of Oklahoma Gas and Electric Company common stock
expected to be outstanding at the effective date of the exchange described
herein (the "Effective Date")) to be distributed in accordance with the
exchange described herein and 4,500,000 shares to be issued after the
Effective Date pursuant to a dividend reinvestment plan and certain employee
benefit plans. Pursuant to Rule 416(c), this Registration Statement also is
deemed to register an indeterminate amount of interests for the Retirement
Savings Plan. A post-effective amendment on Form S-8 will be filed in
connection therewith.
(2) The amounts are estimates made solely for the purpose of determining the
registration fee pursuant to Rule 457(f)(1) under the Securities Act of
1933, and are based on the average of the high and low prices of the common
stock of Oklahoma Gas and Electric Company as reported by The Wall Street
Journal as New York Stock Exchange Composite Transactions for August 4,
1995.
------------------------
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
OG&E HOLDING CORP.
Cross-Reference Sheet showing the location in the Proxy Statement/Prospectus
of information required to be included in the Proxy Statement/Prospectus
pursuant to Item 501(b) of Regulation S-K
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION LOCATION IN PROXY STATEMENT/PROSPECTUS
------------------------------------------------------------- --------------------------------------------------
<C> <C> <S> <C>
A. Information about the Transaction
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus................... Facing page from Form S-4; this cross-reference
sheet; Outside Front Cover Page of Proxy
Statement/Prospectus
2. Inside Front and Outside Back Cover Pages of
Prospectus....................................... "Documents Incorporated by Reference"; "Available
Information"; "Table of Contents"
3. Risk Factors, Ratio of Earnings to Fixed Charges
and Other Information............................ Outside Front Cover Page of Proxy
Statement/Prospectus; "Summary of Proposed
Holding Company Restructuring"; "Risk Factors";
"Proposed Holding Company Restructuring --
Reasons for the Formation of OG&E Holding, --
Certain Pro Forma Financial Information, --
Regulatory Matters, -- Appraisal Rights, --
Federal Tax Consequences"
4. Terms of the Transaction.......................... "Proposed Holding Company Restructuring -- Reasons
for the Formation of OG&E Holding --
Restructuring Plan, -- Comparative Shareowners'
Rights, -- Description of OG&E Holding Common
Stock, -- Agreement and Plan of Share
Acquisition, -- Amendment or Termination of Share
Acquisition Agreement, -- Conditions to the
Restructuring, -- Federal Tax Consequences, --
Exchange of Stock Certificates, -- Management of
OG&E Holding"
5. Pro Forma Financial Information................... "Proposed Holding Company Restructuring -- Certain
Pro Forma Financial Information"
6. Material Contacts With the Company Being
Acquired......................................... "Proposed Holding Company Restructuring --
Management of OG&E Holding, -- Regulatory
Matters"
7. Additional Information Required for Reoffering by
Persons and Parties Deemed To Be Underwriters.... *
8. Interests of Named Experts and Counsel............ "Legal Opinions"
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities... *
</TABLE>
<PAGE>
<TABLE>
<C> <C> <S> <C>
B. Information about the Registrant
10. Information With Respect to S-3 Registrants....... *
11. Incorporation of Certain Information by
Reference........................................ *
12. Information With Respect to S-2 or S-3
Registrants...................................... *
13. Incorporation of Certain Information by
Reference........................................ *
14. Information With Respect to Registrants Other Than
S-2 or S-3 Registrants........................... "Introduction"; "Proposed Holding Company
Restructuring -- Reasons for the Formation of
OG&E Holding"
C. Information about the Company Being Acquired
15. Information With Respect to S-3 Companies......... "Documents Incorporated by Reference"
16. Information With Respect to S-2 or S-3
Companies........................................ *
17. Information With Respect to Companies Other Than
S-2 or S-3 Companies............................. *
D. Voting and Management Information
18. Information if Proxies, Consents or Authorizations
Are To Be Solicited.............................. "Notice of Special Meeting of Shareowners";
"Introduction"; "Voting"; "Proposed Holding
Company Restructuring -- Appraisal Rights, --
Agreement and Plan of Share Acquisition, --
Management of OG&E Holding"; "Proposals of
Shareowners"
19. Information if Proxies, Consents or Authorizations
Are Not To Be Solicited in an Exchange Offer..... *
<FN>
------------------------
* Not applicable
</TABLE>
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
September , 1995
Dear Shareowner:
You are cordially invited to attend a special meeting of Oklahoma Gas and
Electric Company at 8:00 a.m. on Thursday, November 16, 1995, at the Company's
offices located at 101 North Robinson, Oklahoma City, Oklahoma.
At this meeting, shareowners will be asked to consider and vote on the
formation of a holding company structure for the Company. For the reasons stated
in the accompanying Proxy Statement, the Board of Directors believes that the
formation of the holding company is in the best interests of the Company and its
shareowners and recommends a vote "FOR" the formation of the holding company.
Even though you may own only a few shares, your proxy is important in making
up the total number of shares necessary to hold the meeting. Whether or not you
plan to attend the meeting, please fill out, sign and return your proxy card in
the envelope provided as soon as possible. Your cooperation will be appreciated.
Your continued interest in the Company is most encouraging and, on behalf of
the Board of Directors and employees of the Company, I want to express our
gratitude for your confidence and support.
Very truly yours,
JAMES G. HARLOW, JR.
CHAIRMAN OF THE BOARD AND
CHIEF EXECUTIVE OFFICER
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
NOTICE OF SPECIAL MEETING OF SHAREOWNERS
A Special Meeting of the Shareowners of Oklahoma Gas and Electric Company
(the "Company"), will be held at 8:00 a.m. on Thursday, November 16, 1995 at the
Company's offices located at 101 North Robinson, Oklahoma City, Oklahoma, for
the following purposes:
(1) To approve an Agreement and Plan of Share Acquisition, whereby OG&E
Holding Corp. will become the holding company parent of the Company and
the holders of Company Common Stock will become holders of OG&E Holding
Corp. Common Stock;
(2) To act upon such other matters as may properly come before the meeting.
The Board of Directors has fixed the close of business on September 19,
1995, as the record date for determination of shareowners entitled to notice of
and to vote at said meeting or any adjournment thereof. A list of such
shareowners will be available, as required by law, at the principal offices of
the Company at 101 North Robinson, Oklahoma City, Oklahoma 73102. Holders of
record on September 19, 1995, of the Company's Common Stock or 4% Cumulative
Preferred Stock (par value $20 per share) are entitled to vote on all matters
that may properly come before the meeting.
IF THE PROPOSED HOLDING COMPANY RESTRUCTURING IS APPROVED, HOLDERS OF THE
COMPANY'S COMMON STOCK WILL AUTOMATICALLY BECOME HOLDERS OF OG&E HOLDING CORP.'S
COMMON STOCK. IT WILL NOT BE NECESSARY FOR YOU TO EXCHANGE YOUR PRESENT STOCK
CERTIFICATES. In the future, as outstanding certificates of the Company's Common
Stock are presented for transfer or exchange, new certificates will be issued
bearing the name "OG&E Holding Corp."
As described under "Proposed Holding Company Restructuring -- Appraisal
Rights", holders of the Company's Common Stock are entitled to assert appraisal
rights under the provisions of Section 1091 of the Oklahoma General Corporation
Act included as Appendix C in the accompanying Proxy Statement/Prospectus.
Irma B. Elliott
Secretary
Dated: September , 1995
--------------------------------------------------------------------------------
IMPORTANT - YOUR PROXY CARD IS ENCLOSED IN THIS ENVELOPE
Shareowners are requested to complete, sign, date and return the proxy
promptly in the enclosed envelope. No postage is required for mailing in the
United States. Your cooperation will be greatly appreciated.
--------------------------------------------------------------------------------
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
OG&E HOLDING CORP.
101 NORTH ROBINSON
P.O. BOX 321
OKLAHOMA CITY, OKLAHOMA 73101
(405) 553-3000
This document is a Proxy Statement for the solicitation of the enclosed
proxy by the Board of Directors of Oklahoma Gas and Electric Company (the
"Company") at a Special Meeting of the Company's Shareowners to be held on
November 16, 1995 or any adjournment thereof. This document is also a Prospectus
of OG&E Holding Corp. ("OG&E Holding") for 44,874,387 shares of its Common
Stock, par value $.01 per share, offered hereby in connection with the formation
of a holding company structure for the Company, as described herein. This Proxy
Statement/Prospectus and the accompanying proxy were first released to
shareowners on or about September , 1995.
The Company proposes to form a holding company structure pursuant to an
Agreement and Plan of Share Acquisition, a copy of which is included as Appendix
A. Under the terms of the Agreement and Plan of Share Acquisition and subject to
the rights of Company common shareowners to exercise their appraisal rights as
described herein, all of the outstanding common stock, par value $2.50 per
share, of the Company (the "Company Common Stock") will be exchanged on a
share-for-share basis for OG&E Holding Common Stock (the "Share Acquisition").
Upon consummation of the Share Acquisition, each person that owned Company
Common Stock immediately prior to the Share Acquisition (other than shareowners
who properly exercise their appraisal rights) will own a corresponding number of
shares of the outstanding OG&E Holding Common Stock, and OG&E Holding will own
all of the outstanding Company Common Stock. See "Proposed Holding Company
Restructuring -- Restructuring Plan."
IF THE SHARE ACQUISITION IS IMPLEMENTED, IT WILL NOT BE NECESSARY FOR
HOLDERS OF COMPANY COMMON STOCK TO SURRENDER THEIR EXISTING STOCK CERTIFICATES
FOR STOCK CERTIFICATES OF OG&E HOLDING. SEE "PROPOSED HOLDING COMPANY
RESTRUCTURING -- EXCHANGE OF STOCK CERTIFICATES."
WHILE THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPROVAL OF THE RESTRUCTURING, SHAREOWNERS SHOULD CAREFULLY REVIEW THE
CONSIDERATIONS SET FORTH UNDER THE CAPTION "RISK FACTORS" ON PAGE 4.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS SEPTEMBER , 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and thus files reports,
proxy statements and other information with the Securities and Exchange
Commission (the "SEC"). Such reports, proxy statements and other information can
be inspected and copied at the public reference offices of the SEC (Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549; Seven World Trade Center, New
York, New York 10048; and Northwestern Atrium Center, 500 West Madison Street,
Chicago, Illinois 60661); and copies of such materials can be obtained from the
Public Reference Section of the SEC at its principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. In addition, reports, proxy
material and other information concerning the Company may be inspected at the
Library of the New York Stock Exchange, 20 Broad Street, New York, New York
10015, and the offices of the Pacific Stock Exchange, 301 Pine Street, San
Francisco, California 94104.
OG&E Holding has filed with the SEC a Registration Statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering the shares
of OG&E Holding's Common Stock offered hereby. This Proxy Statement/Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the SEC. For further information, reference is made to the Registration
Statement.
OG&E Holding will become subject to the same informational requirements as
the Company following the Share Acquisition, and will file reports, proxy
statements and other information with the SEC in accordance with the Exchange
Act. The Company will continue to be subject to such requirements following the
Share Acquisition.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the SEC (File No. 1-1097)
are incorporated in this Prospectus Proxy/Statement by reference and made a part
hereof: (i) the Annual Report on Form 10-K for the year ended December 31, 1994
as amended by the Form 10-K/A filed April 27, 1995 and the Form 10-K/A-2 filed
May 22, 1995 (the "1994 Form 10-K"); (ii) the Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995 and June 30, 1995; and (iii) the Current
Reports on Form 8-K dated July 26, 1995 and August 3, 1995.
The Company includes with its annual report on Form 10-K an exhibit
containing a description of its Common Stock, including a description of the
Rights to Purchase Series A Cumulative Preferred Stock that accompany each share
of Company Common Stock pursuant to a Rights Agreement, dated December 11, 1990.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the date of this Proxy
Statement/Prospectus and prior to the termination of the offer made by this
Proxy Statement/Prospectus, shall be deemed to be incorporated in this Proxy
Statement/Prospectus by reference and to be a part hereof from the respective
dates of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this Proxy
Statement/Prospectus shall be deemed to be modified or superseded for purposes
of this Proxy Statement/Prospectus to the extent that a statement contained in
this Proxy Statement/Prospectus or in any other subsequently filed document
which also is or is deemed to be incorporated by reference in this Proxy
Statement/Prospectus modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement/Prospectus.
AS DESCRIBED ABOVE, THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS
BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS ARE AVAILABLE UPON REQUEST DIRECTED TO MS. IRMA B. ELLIOTT, SECRETARY,
OKLAHOMA GAS AND ELECTRIC COMPANY, 101 NORTH ROBINSON STREET, P.O. BOX 321,
OKLAHOMA CITY, OKLAHOMA 73101; TELEPHONE (405) 553-3000. IN ORDER TO ENSURE
TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY NOVEMBER 9,
1995.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Proxy
Statement/Prospectus has been delivered, upon the written or oral request of
such person, by first class mail or other equally prompt means within one
business day of receipt of such request, a copy (without exhibits, except any
specifically incorporated by reference) of any and all of the documents referred
to above which have been or may be incorporated in this Proxy
Statement/Prospectus by reference. Requests for such documents should be
directed to the person indicated above.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
INTRODUCTION.............................................................................................. 1
VOTING.................................................................................................... 1
SUMMARY OF PROPOSED HOLDING COMPANY RESTRUCTURING......................................................... 2
RISK FACTORS.............................................................................................. 4
PROPOSED HOLDING COMPANY RESTRUCTURING.................................................................... 4
Reasons for the Formation of OG&E Holding............................................................... 4
Restructuring Plan...................................................................................... 6
Agreement and Plan of Share Acquisition................................................................. 7
Amendment or Termination of Share Acquisition Agreement................................................. 8
Conditions to the Restructuring......................................................................... 8
Certain Pro Forma Financial Information................................................................. 8
Federal Tax Consequences................................................................................ 10
Treatment of Preferred Stock and Debt Securities........................................................ 10
Reduction of Interest in Arklahoma...................................................................... 11
Regulatory Matters...................................................................................... 11
Appraisal Rights........................................................................................ 12
Exchange of Stock Certificates.......................................................................... 13
Dividend Policy......................................................................................... 13
Management of OG&E Holding.............................................................................. 14
Employee Benefit Plans.................................................................................. 14
Effective Time of Share Acquisition..................................................................... 15
Dividend Reinvestment and Stock Purchase Plan........................................................... 15
Other Effects of the Restructuring...................................................................... 15
Company Market Prices and Dividends..................................................................... 15
Comparative Shareowners' Rights......................................................................... 15
Description of OG&E Holding Common Stock................................................................ 17
LEGAL OPINIONS............................................................................................ 18
EXPERTS................................................................................................... 18
PROPOSALS OF SHAREOWNERS.................................................................................. 19
OTHER MATTERS............................................................................................. 19
Appendix A -- Agreement and Plan of Share Acquisition..................................................... A-1
Appendix B -- Form of Restated Certificate of Incorporation of OG&E Holding Corp.......................... B-1
Appendix C -- Provisions of Oklahoma General Corporation Act Relating to Appraisal Rights for
Shareholders............................................................................................. C-1
Appendix D -- Summary of Shareowner Rights Agreement of OG&E Holding Corp................................. D-1
</TABLE>
ii
<PAGE>
OKLAHOMA GAS AND ELECTRIC COMPANY
PROXY STATEMENT
---------------------
OG&E HOLDING CORP.
PROSPECTUS
---------------------
INTRODUCTION
This Prospectus of OG&E Holding is furnished in compliance with the
Securities Act with respect to the shares of Common Stock of OG&E Holding
offered hereby. This Proxy Statement of the Company is furnished in connection
with the solicitation of the enclosed proxy by the Board of Directors of the
Company for use at a Special Meeting of Shareowners to be held on November 16,
1995 and at any adjournment thereof. The cost of soliciting proxies will be
borne by the Company. In addition to the use of the mails, proxies may be
solicited personally or by telephone or telegram by officers and regular
employees of the Company. Morrow & Co. Inc., New York, New York, will assist in
solicitation of proxies and the Company will pay Morrow & Co. Inc. approximately
$ , plus expenses, for its services.
VOTING
At the meeting, it is intended that the first item in the accompanying
notice be presented. The Board of Directors of the Company does not know of any
other matters to be presented at the meeting. The General Corporation Act of
Oklahoma provides that the purpose of the meeting must be set forth in the
notice of the meeting. If any other matters are properly presented to the
meeting for action, the persons named in the accompanying proxy will vote upon
them in accordance with their best judgment. The owners of the Company's Common
Stock, par value $2.50 per share, and 4% Cumulative Preferred Stock, par value
$20 per share (the "4% Preferred Stock") are entitled to one vote on each matter
presented for a vote at the meeting for each $2.50 of par value (one vote per
share for the Common Stock and eight votes per share for the 4% Preferred Stock)
of stock held by such owners of record at the close of business on September 19,
1995. At September 19, 1995, shares of the Company's Common Stock and
423,663 shares of the 4% Preferred Stock were outstanding. The directors and
executive officers of the Company as a group own less than 0.5% of the issued
and outstanding shares of Company Common Stock and 4% Preferred Stock. Any
shareowner giving a proxy may revoke it before it is exercised by giving written
notice of its revocation to the Secretary of the Company, by filing with her
another proxy or by attending the Special Meeting and voting in person. All
proxies properly executed by shareowners and received by the Company prior to
the meeting will be voted and will be voted in accordance with the directions
made on the proxy and, if no directions are made, the proxy will be voted "FOR"
approval of the proposed holding company restructuring.
<PAGE>
SUMMARY OF PROPOSED
HOLDING COMPANY RESTRUCTURING
THE FOLLOWING SUMMARY IS INTENDED ONLY TO HIGHLIGHT CERTAIN INFORMATION
CONTAINED ELSEWHERE IN THIS PROXY STATEMENT/PROSPECTUS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION APPEARING ELSEWHERE
HEREIN.
PROPOSED RESTRUCTURING
OG&E Holding, an Oklahoma corporation, has been organized to become the
holding company parent of the Company, also an Oklahoma corporation. The
formation of the holding company structure will be achieved through a mandatory
share acquisition and exchange with the result that the common shareowners of
the Company (other than common shareowners who properly exercise their appraisal
rights as described herein) will become common shareowners of OG&E Holding on a
share-for-share basis, and OG&E Holding will become the sole common shareowner
of the Company. See "Proposed Holding Company Restructuring -- Agreement and
Plan of Share Acquisition" and "-- Appraisal Rights." The Company's Common Stock
currently trades along with associated Rights to Purchase Series A Cumulative
Preferred Stock of the Company (the "Company Rights"). OG&E Holding Common Stock
has similar rights to purchase Series A Preferred Stock of OG&E Holding (the
"OG&E Holding Rights") that trade along with the associated OG&E Holding Common
Stock. See the Summary of Shareowners Rights Agreement included as Appendix D.
In the restructuring, both the Company Rights and the OG&E Holding Rights will
be exchanged along with their respective shares of Common Stock. The Company's
issued and outstanding preferred stock will not be exchanged or converted in the
Share Acquisition and will continue as outstanding shares of preferred stock of
the Company.
Following the Share Acquisition, the Company will transfer the common stock
of Enogex Inc. to OG&E Holding as a dividend on the Company Common Stock held by
OG&E Holding. The reorganization pursuant to the Share Acquisition and the
subsequent transfer of Enogex Inc. to OG&E Holding are herein referred to as the
"Restructuring."
REASONS FOR THE RESTRUCTURING
The Board of Directors of the Company has identified the need to increase
the growth potential of the corporation to enhance shareowner value through
related new businesses. The holding company structure will provide greater
flexibility to take advantage of opportunities to develop or acquire other
businesses, thereby providing opportunities for increased earnings in an
increasingly competitive business environment. The holding company structure
also will clearly separate the Company's electric utility business from the
non-utility businesses of the other OG&E Holding subsidiaries for regulatory,
capital structure and other purposes. See "Proposed Holding Company
Restructuring -- Reasons for the Formation of OG&E Holding."
STOCK CERTIFICATES AND EXCHANGE LISTING
IT WILL NOT BE NECESSARY TO EXCHANGE YOUR COMPANY COMMON STOCK CERTIFICATES
FOR STOCK CERTIFICATES OF OG&E HOLDING. COMMON STOCK CERTIFICATES OF THE COMPANY
WILL AUTOMATICALLY REPRESENT THE CORRESPONDING SHARES OF COMMON STOCK OF OG&E
HOLDING UPON CONSUMMATION OF THE SHARE ACQUISITION.
Application will be made to list the OG&E Holding Common Stock on both the
New York and Pacific Stock Exchange when the Restructuring is complete.
FEDERAL TAX CONSEQUENCES
It is intended that the exchange of the Company's Common Stock for the
Common Stock of OG&E Holding in the Share Acquisition will not be taxable under
Federal income tax laws, and the Restructuring will not be consummated unless
the Company receives either an opinion of counsel or a ruling from the Internal
Revenue Service satisfactory to the Board of Directors of the Company with
respect to the tax consequences of the Share Acquisition. See "Proposed Holding
Company Restructuring -- Federal Tax Consequences."
2
<PAGE>
DIVIDEND POLICY
The Board of Directors expects that, following the Share Acquisition, OG&E
Holding initially will commence dividend payments on the OG&E Holding Common
Stock at a rate equal to the rate then being paid by the Company on the
Company's Common Stock and on approximately the same schedule. For the
foreseeable future, dividend payments will continue to depend primarily on the
earnings, financial condition, cash flow and capital requirements of the Company
and Enogex Inc. See "Proposed Holding Company Restructuring -- Dividend Policy."
REGULATORY MATTERS
Applications for approval of the Share Acquisition have been filed with the
Oklahoma Corporation Commission (the "Oklahoma Commission"), the Arkansas Public
Service Commission (the "Arkansas Commission") and the Federal Energy Regulatory
Commission ("FERC") under the Federal Power Act ("FPA"). No approval is required
from the SEC under the Public Utility Holding Company Act of 1935 (the "Holding
Company Act"), and, following the Restructuring, OG&E Holding will qualify for
an exemption from registration under the Holding Company Act. See "Proposed
Holding Company Restructuring -- Regulatory Matters."
VOTE REQUIRED
In order for the Restructuring to be approved, it must receive the favorable
vote of the holders of a majority of the outstanding shares of: (i) the
Company's Common Stock and 4% Preferred Stock voting together as one class and
(ii) the Company's Common Stock voting as a separate class.
APPRAISAL RIGHTS
Holders of the Company's Common Stock will have the right to have their
shares appraised and be paid the fair value of their shares. See "Proposed
Holding Company Restructuring -- Appraisal Rights."
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPROVAL OF THE RESTRUCTURING.
3
<PAGE>
RISK FACTORS
NON-UTILITY BUSINESS ACTIVITIES MAY INVOLVE MORE RISK. The Board of
Directors believes that the Restructuring is in the best interests of the
shareowners. Nevertheless, the future performance of OG&E Holding Common Stock
cannot be guaranteed. Following consummation of the Restructuring, OG&E Holding
will be able to issue securities for the purpose of financing non-utility
business opportunities without obtaining the prior approval of the Oklahoma
Commission. The Restructuring therefore will provide OG&E Holding with more
flexibility to pursue certain business opportunities that might involve a higher
degree of risk than would be permitted to be pursued by the Company as a
regulated electric utility. Pursuit of business opportunities with greater risk
could, in turn, have either a positive or an adverse effect on the value of a
shareowner's investment, depending upon the return realized from such
opportunities. To the extent that OG&E Holding engages in such business
activities, the market price of OG&E Holding's stock will be affected to a
lesser extent by the performance of the Company.
ENOGEX'S ACTIVITIES AND NEW NON-UTILITY BUSINESS ACTIVITIES WILL NOT BE
AVAILABLE AS SOURCES FOR DIVIDENDS ON COMPANY PREFERRED STOCK. Currently,
earnings from the Company's non-utility subsidiary, Enogex Inc., are available
as a source for dividends on the Company's preferred stock. As part of the
Restructuring, the Company is expected to transfer Enogex Inc. to OG&E Holding,
so that Enogex Inc. will be a direct subsidiary of OG&E Holding and not a
subsidiary of the Company. Also, after the Restructuring, OG&E Holding expects
to engage in non-utility business activities through Enogex and any new
unregulated subsidiaries of OG&E Holding. Such activities, and the assets
employed in connection therewith, will not be available to the holders of the
Company's preferred stock as a source of cash for the payment of dividends or
other amounts. The Company does not believe that these actions will impair the
Company's ability to pay dividends on the Company's preferred stock during the
foreseeable future. The Company's preferred stock will continue to have priority
over the Company's Common Stock as to the payment of dividends and upon any
liquidation, and will be on a parity with any additional preferred stock that
may be issued by the Company. Also, as indicated below under "Certain Pro Forma
Financial Information," the Company's consolidated ratio of earnings to combined
fixed charges and preferred stock dividends was 3.24 for the twelve months ended
June 30, 1995, and the Company's pro forma ratio of earnings to combined fixed
charges and preferred stock dividends (after giving effect to the transfer of
Enogex Inc. to OG&E Holding) was 3.30 for the twelve months ended June 30, 1995.
PROPOSED HOLDING COMPANY RESTRUCTURING
The Board of Directors of the Company unanimously considers it to be in the
best interests of the Company, its customers and its shareowners to change the
corporate structure of the Company with the Company becoming a subsidiary of a
new parent company, OG&E Holding, the present holders of the Company's Common
Stock becoming holders of the Common Stock of OG&E Holding and the Company's
subsidiary, Enogex Inc. (along with Enogex Inc.'s subsidiaries) being
transferred to, and becoming a subsidiary of, OG&E Holding. The holding company
structure is not a new concept. The holding company structure is a
well-established form of organization for companies conducting more than one
line of business, and many utilities have changed their corporate organization
to a holding company structure in the past several years.
OG&E Holding was formed as a new Oklahoma corporation with offices located
at 101 North Robinson, P.O. Box 321, Oklahoma City, Oklahoma 73101. Its phone
number is (405) 553-3000. OG&E Holding was formed for the purpose of becoming
the holding company for the Company and is conducting no business and has only
nominal assets and liabilities at this time. All of the currently outstanding
shares of OG&E Holding Common Stock are owned by the Company.
4
<PAGE>
REASONS FOR THE FORMATION OF OG&E HOLDING
GENERAL. The Board of Directors of the Company believes that the proposed
Restructuring, which is intended to provide long-term advantages through
increased flexibility, is in the best interests of the Company and its
shareowners and other investors, customers and employees.
The Company has identified the need to increase the growth potential of the
corporation to enhance shareowner value through related new businesses. The
holding company structure will give OG&E Holding greater flexibility to take
advantage of opportunities to develop or acquire other businesses, thereby
providing opportunities for increased earnings in an increasingly competitive
business environment. The Company could continue to pursue non-utility business
opportunities through Enogex Inc. or other unregulated subsidiaries of the
Company. The Company believes it is more desirable in the long-term, however, to
conduct such non-utility activities through a holding company structure.
As described under the subcaption, "Restructuring Plan," the Company's
current non-utility subsidiaries, Enogex Inc. and its subsidiaries (the "Enogex
Subsidiaries," and collectively with Enogex Inc., "Enogex"), will be transferred
to and become subsidiaries of OG&E Holding when the Restructuring is completed.
In addition, OG&E Holding may establish additional subsidiaries to engage in new
non-utility businesses.
Although the Company presently has not identified any significant investment
activities for OG&E Holding, it is expected that OG&E Holding will only develop
or acquire other businesses which are closely related to the Company's or
Enogex's core businesses of providing energy related services. These new
investments will offer the opportunity for greater earnings growth and mitigate
the limitations of being predominantly a regulated electric utility.
FLEXIBILITY. The holding company structure, by segregating Enogex and any
other new, non-utility businesses into corporations that will not be
subsidiaries of the Company, will provide greater flexibility to achieve
successful assimilation of such businesses.
The holding company structure will enable OG&E Holding to issue securities
for the purpose of financing non-utility businesses without obtaining the
approval of the Oklahoma Commission, thereby allowing OG&E Holding to respond to
competitive forces and pursue non-utility businesses in a timely manner. The new
corporate structure also will permit the use of financing techniques that are
more directly suited to the particular requirements, characteristics and risks
of non-utility businesses without affecting the capital structure or
creditworthiness of the Company. Moreover, under a holding company structure,
the capital structure of each non-utility subsidiary may be tailored to suit its
individual business.
SEPARATION. The holding company system will clearly separate the Company's
electric utility business from the non-utility business of the other OG&E
Holding subsidiaries. The separation of utility and non-utility activities will
(i) facilitate the allocation of expenses, (ii) protect the Company, its
preferred and debt security holders and its customers from the risks of
non-utility businesses, (iii) facilitate the regulation of the Company's utility
operations by the Oklahoma Commission, the Arkansas Commission and FERC and (iv)
permit the capital structure of the Company to be managed efficiently.
COMPETITION. With the passage of the Public Utility Regulatory Policies Act
of 1978 ("PURPA") and the Energy Policy Act of 1992 (the "Energy Act"), the
electric utility industry in general, including the Company, has experienced a
significant increase in the level of competition in the market for the
generation and sale of electricity. The Company has already been required under
PURPA to purchase substantial amounts of output from qualifying non-utility
generators. The Energy Act is designed to promote competition in the development
of wholesale power generation by reducing barriers to market entry under the
Holding Company Act for companies that wish to build,
5
<PAGE>
own and operate electric generating facilities. The Energy Act also promotes
competition by authorizing the FERC to require "wholesale wheeling" by public
utilities to provide utility and non-utility generators access to public utility
transmission facilities. The clear intent of the Energy Act is to permit
wholesale buyers of electricity to reach multiple sellers. The increased
competition facing the electric utility industry has been well documented and is
undoubtedly the most significant issue facing the industry today.
In order to respond effectively to this increased competition, the Company
has determined that it must position itself to explore and take advantage of new
and emerging business opportunities. Pursuit of these new opportunities will
play an important role in maintaining the long-term financial viability
necessary for the Company to continue to provide reliable services to its
customers.
EXISTING UTILITY BUSINESS. The Company's electric utility business is
expected to constitute the predominant part of OG&E Holding's earning power for
the foreseeable future. The Company's operations will be conducted with the same
assets and the same management, and will continue to be subject to the
jurisdiction of the Oklahoma Commission, the Arkansas Commission and the FERC.
The management and Board of Directors of the Company believe that the
Restructuring will have no adverse effect on the Company, its customers or the
holders of its preferred stock, first mortgage bonds and other debt securities,
or on the Company's Common Stock, which will be exchanged for OG&E Holding
Common Stock in the Share Acquisition.
RESTRUCTURING PLAN
The current corporate structure of the Company is as follows:
<TABLE>
<S> <C> <C>
The Company
Arklahoma Enogex Inc. OG&E Holding
(34% owned by
the Company)
Enogex Subsidiaries
</TABLE>
The Company and OG&E Holding will enter into an Agreement and Plan of Share
Acquisition (the "Share Acquisition Agreement") under which, subject to
shareowner approval and the satisfaction of certain other conditions discussed
elsewhere (see "Conditions to the Restructuring"), the Company will become a
subsidiary of OG&E Holding through a mandatory share acquisition and exchange.
Under the Share Acquisition Agreement, the issued shares of the Company's Common
Stock will be exchanged on a share-for-share basis for the Common Stock of OG&E
Holding, subject to the rights of common shareowners of the Company to exercise
appraisal rights. See "Proposed Holding Company Restructuring -- Appraisal
Rights." A copy of the Share Acquisition Agreement is included as Appendix A to
this Proxy Statement/Prospectus and is incorporated herein by reference. It is
intended that the Restructuring will not have any Federal income tax
consequences to present holders of the Company's Common Stock who do not
exercise their appraisal rights or to the holders of the Company's Preferred
Stock. See "Federal Tax Consequences."
6
<PAGE>
In order to facilitate the creation of the holding company structure, the
Company will reduce its equity ownership in The Arklahoma Corporation
("Arklahoma") from 34% to below 5% immediately prior to the consummation of the
Restructuring. See "Reduction of Interest in Arklahoma." Immediately following
the Share Acquisition, the Company will transfer the common stock of Enogex Inc.
to OG&E Holding as a dividend on the Company Common Stock then held by OG&E
Holding.
When the Restructuring is complete, the corporate structure will be as
follows:
<TABLE>
<S> <C> <C>
OG&E Holding
Enogex The Company
Enogex Subsidiaries Arklahoma
(less than 5% interest)
</TABLE>
AGREEMENT AND PLAN OF SHARE ACQUISITION
The Share Acquisition Agreement has been approved by the Boards of Directors
of the Company and OG&E Holding, and these corporations will execute the Share
Acquisition Agreement, subject to its approval by the holders of the outstanding
Common Stock and 4% Preferred Stock of the Company as described below. In the
Share Acquisition:
(1) each share of the Company's Common Stock (including the Company
Rights that trade therewith) issued immediately prior to the effective time
of the Share Acquisition will be exchanged for one share of the Common Stock
of OG&E Holding (including the OG&E Holding Rights that will trade
therewith);
(2) the shares of the Company's Preferred Stock issued and outstanding
immediately prior to the effective time of the Share Acquisition will not be
converted or otherwise affected by the Share Acquisition; and
(3) each share of the Company's Common Stock (including the Compay
Rights that trade therewith) issued and outstanding immediately prior to the
effective time of the Share Acquisition will be owned by OG&E Holding after
the Share Acquisition, except in the case of shareowners who properly
exercise their appraisal rights. See "Proposed Holding Company Restructuring
-- Appraisal Rights."
As a result of the Share Acquisition, the Company will become a subsidiary
of OG&E Holding, and all of the OG&E Holding Common Stock outstanding
immediately after the effective time of the Share Acquisition will be owned by
the holders of the Company's Common Stock outstanding at the effective time of
the Share Acquisition (other than shares owned by shareowners who properly
exercise their appraisal rights) in the same proportion as their present
ownership of Company Common Stock.
7
<PAGE>
In order for the Share Acquisition to be approved under Oklahoma Law and the
Company's Restated Certificate of Incorporation, it must receive the favorable
votes of the holders of at least a majority of the outstanding shares of: (i)
the Company's Common Stock and 4% Preferred Stock, voting together as one class
and (ii) the Company's Common Stock, voting as a separate class.
AMENDMENT OR TERMINATION OF SHARE ACQUISITION AGREEMENT
The Share Acquisition Agreement provides that the Boards of Directors of the
Company and OG&E Holding may mutually consent to amend any of the terms of, or
to waive any of the conditions to, the Share Acquisition Agreement before the
Share Acquisition is completed and before or after shareowner approval, provided
that such amendment or waiver will not, in the opinion of the Board of Directors
of the Company, have any materially adverse effect on the shareowners of the
Company.
Pursuant to its terms, the Share Acquisition Agreement may be terminated by
OG&E Holding's Board of Directors at any time prior to becoming effective, if
the Board determines that consummation of the Share Acquisition would not be in
the best interests of the shareowners.
CONDITIONS TO THE RESTRUCTURING
The obligations of the Company and OG&E Holding to effect the Restructuring
are subject to the satisfaction of the following conditions:
(1) requisite approval of the Share Acquisition by the holders of the
Company's Common Stock and 4% Preferred Stock;
(2) approval for listing the Common Stock of OG&E Holding by the New
York Stock Exchange ("NYSE") and the Pacific Stock Exchange ("PSE") upon
official notice of issuance;
(3) reduction by the Company of its equity ownership in Arklahoma from
34% to below 5% (see "Reduction of Interest in Arklahoma"); and
(4) receipt of all consents, approvals and authorizations required from
governmental and regulatory authorities (see "Regulatory Matters").
CERTAIN PRO FORMA FINANCIAL INFORMATION
Pursuant to the Restructuring, Enogex Inc. will become a subsidiary of OG&E
Holding and the Company will have no subsidiaries except for its equity
interest, if any, in Arklahoma. As a result, any dividends generated by Enogex
Inc. will be paid to OG&E Holding and not the Company. The
8
<PAGE>
following table summarizes certain unaudited pro forma financial effects of the
Restructuring, as of June 30, 1995 and for the twelve months then ended, which
in the opinion of management, reflect all adjustments necessary for a fair
presentation.
<TABLE>
<CAPTION>
THE COMPANY, ADJUSTMENTS AND THE COMPANY, OG&E HOLDING,
CONSOLIDATED ELIMINATIONS(1)(2) PRO FORMA CONSOLIDATED
AS REPORTED ------------------- ------------- PRO FORMA
------------- (UNAUDITED) (UNAUDITED) -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
BALANCE SHEET -- AS OF JUNE 30, 1995
Assets
Net property, plant and equipment............ $ 2,330,006 $ (275,115) $ 2,054,891 $ 2,330,006
Other property and investments,
at cost..................................... 8,321 (1,346) 6,975 8,321
Current assets............................... 292,005 3,293 295,298 292,005
Deferred charges............................. 130,482 (13,861) 116,621 130,482
------------- ---------- ------------- -------------
Total Assets............................. $ 2,760,814 $ (287,029) $ 2,473,785 $ 2,760,814
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
Capitalization and Liabilities
Capitalization:
Common Stock and retained earnings......... $ 889,745 $ (103,708) $ 786,037 $ 889,745
Cumulative preferred stock................. 49,973 -- 49,973 49,973
Long-term debt............................. 731,215 (6,100) 725,115 731,215
------------- ---------- ------------- -------------
Total Capitalization..................... 1,670,933 (109,808) 1,561,125 1,670,933
------------- ---------- ------------- -------------
Current liabilities.......................... 427,798 (108,514) (319,284) 427,798
Deferred credits and other liabilities....... 662,083 (68,707) 593,376 662,083
------------- ---------- ------------- -------------
Total Capitalization and Liabilities....... $ 2,760,814 $ (287,029) $ 2,473,785 $ 2,760,814
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
STATEMENTS OF INCOME FOR TWELVE MONTHS ENDED
JUNE 30, 1995
Operating revenues........................... $ 1,275,189 $ (131,389) $ 1,143,800 $ 1,275,189
Operating expenses........................... 1,084,627 (110,574) 974,053 1,084,627
------------- ---------- ------------- -------------
Operating income............................. 190,562 (20,815) 169,747 190,562
------------- ---------- ------------- -------------
Other income and deductions.................. (1,905) 540 (1,365) (1,905)
Interest charges............................. 74,057 (8,584) 65,473 74,057
Net income................................... 114,600 (11,691) 102,909 114,600
Preferred dividend requirements.............. 2,317 -- 2,317 2,317
------------- ---------- ------------- -------------
Earnings available for common................ $ 112,283 $ (11,691) $ 100,592 $ 112,283
------------- ---------- ------------- -------------
------------- ---------- ------------- -------------
Ratio of earnings to fixed charges(4).......... 3.36 -- 3.43 3.24
Ratio of earnings to combined fixed charges and
preferred stock dividends(4).................. 3.24 -- 3.30 3.24
<FN>
------------------------
1. Subsidiary assets, liabilities, equity and results of operations have been
eliminated from consolidated Company amounts to reflect the transfer of
ownership and control of all consolidated subsidiaries from the Company to
OG&E Holding.
2. After the transaction, the Company will not retain ownership of the
subsidiary currently being consolidated. Consequently, intercompany
transactions between the Company and its current consolidated subsidiary
have not been eliminated in the pro forma financial statements.
</TABLE>
The most significant intercompany transactions are transmission fees and
related charges to the Company from Enogex, its subsidiary whose core
business has been to transport natural gas to the Company power plants. The
amount of these charges were $44.6 million for the 12 months ended June 30,
1995.
9
<PAGE>
<TABLE>
<S> <C>
3. As a part of the Restructuring, the Company is expected to reduce its
equity interest in Arklahoma. This reduction has not been reflected in the
pro forma financial information presented above. As of June 30, 1995, the
Company's investment in Arklahoma was less than $300,000 and, for the
twelve months ended June 30, 1995, the Company derived less than .002% of
its earnings from its share of the earnings of Arklahoma.
4. For purposes of these ratios, "Earnings" consist of the aggregate of net
income, taxes on income, investment tax credit (net) and fixed charges.
"Fixed charges" consist of interest on long-term debt, related
amortization, interest on short term borrowings, a calculated portion of
rents considered to be interest and pre-tax dividend requirements on
subsidiary preferred stock. Following the Restructuring, the Company's
preferred stock will be preferred stock of a subsidiary for purposes of
calculating the fixed charges of OG&E Holding. The ratio of earnings to
combined fixed charges and preferred stock dividends is computed by
dividing earnings by the sum of fixed charges plus preferred stock dividend
requirements before income taxes. Preferred stock dividend requirements
before income taxes represent the pre-income tax amount computed at the
effective rate for the applicable period.
</TABLE>
FEDERAL TAX CONSEQUENCES
The Board of Directors does not intend for the Restructuring to occur until
it receives a satisfactory ruling from the Internal Revenue Service ("IRS") or
an opinion of counsel to the effect that for federal income tax purposes:
(1) no gain or loss will be recognized by a non-dissenting holder of the
Company's Common Stock upon the exchange of the Company's Common Stock
(including the Company Rights) solely for OG&E Holding's Common Stock
(including the OG&E Holding Rights) in the Restructuring;
(2) the basis of OG&E Holding's Common Stock received by a holder of the
Company's Common Stock on the date of the Share Acquisition in the aggregate
will be the same as the basis of the Company's Common Stock exchanged for
OG&E Holding's Common Stock in the Share Acquisition;
(3) the holding period of OG&E Holding's Common Stock received by a
holder of the Company's Common Stock will include the holding period of the
Company's Common Stock exchanged for OG&E Holding's Common Stock in the
Share Acquisition, provided that the Company's Common Stock was held as a
capital asset on the date of the Share Acquisition;
(4) no gain or loss will be recognized by OG&E Holding in connection
with the Restructuring;
(5) the consummation of the Restructuring will not result in the
termination of the existence of the affiliated group of corporations of
which the Company has been the common parent and the Company will be
included in the affiliated group of corporations of which OG&E Holding will
become the common parent corporation; and
(6) the exchange of the Company's Common Stock for cash through the
exercise of appraisal rights by a holder of the Company's Common Stock will
be a taxable transaction with respect to such holder for Federal income tax
purposes.
The preceding discussion of Federal income tax consequences is a general
summary of the anticipated Federal income tax consequences. Shareowners are
urged to consult their own tax advisers with regard to the Federal, state and
local tax consequences of the Restructuring.
TREATMENT OF PREFERRED STOCK AND DEBT SECURITIES
The Restructuring will not result in any change in the outstanding series of
the Company's 4% Preferred Stock or Cumulative Preferred Stock (par value $100
per share) (collectively, the "Preferred Stock"). The Board of Directors'
decision to have the Preferred Stock continue unchanged as securities of the
Company is based, in part, on a desire not to alter the nature of the investment
represented by such stock or possibly foreclose further issuances of such stock
to help meet the Company's future capital requirements. The Company's Preferred
Stock will retain its currently existing preferences for full liquidation value
and accrued dividends.
10
<PAGE>
Since the Company's electric utility operations will continue to constitute
the major part of the consolidated assets and earning power of OG&E Holding, it
is believed that the Preferred Stock will retain its current investment ratings
as well as its qualification for legal investment for certain investors. After
the Restructuring is consummated, the Company will continue to be a reporting
company under the Exchange Act. While annual meetings of the Company's
shareowners will continue to be held after the Restructuring is consummated,
proxies from holders of 4% Preferred Stock for the election of directors and
other matters not requiring a class vote of such holders may not be solicited,
because the shares of the Company's Common Stock held by OG&E Holding will have
sufficient voting power to take action and any vote by the holders of 4%
Preferred Stock would not affect the outcome of the vote.
The Preferred Stock, outstanding first mortgage bonds and other debt
instruments of the Company and the terms thereof will not be changed in the
Restructuring, will remain the obligations of the Company and will not be
assumed by OG&E Holding.
REDUCTION OF INTEREST IN ARKLAHOMA
The Company currently owns approximately 34% of the common stock of
Arklahoma, which was organized by the Company and two other public utilities to
own and lease certain transmission facilities in Arkansas and Oklahoma. The
principal properties of Arklahoma currently consist of electrical transmission
facilities, including a 161KV transmission line extending 166 miles from
Boudinot Tap near Tahlequah, Oklahoma, to Substation "A" located at Lake
Catherine, Arkansas. For each of the three years in the period ended December
31, 1994, the Company derived less than .002% of its income from its share of
the earnings of Arklahoma. The Company intends to reduce its equity ownership in
Arklahoma to below 5%. This disposition will have the benefit of facilitating
OG&E Holding's status as an exempt holding company under Section 3(a)(1) of the
Holding Company Act, as the Company will not need to seek approval of the SEC
under the Holding Company Act to effect the Restructuring.
REGULATORY MATTERS
The new holding company structure will provide clear delineation of
regulatory jurisdictions. As a subsidiary of OG&E Holding, the Company will
continue to be the same electric utility it is today, serving communities and
contiguous rural and suburban territories in Oklahoma and western Arkansas, and
will continue to be regulated by the Oklahoma Commission, the Arkansas
Commission and the FERC. OG&E Holding, as the non-utility parent corporation,
will not be directly regulated by the Oklahoma Commission, the Arkansas
Commission or the FERC. Transactions and contracts between the Company and OG&E
Holding will be subject to review by the Oklahoma Commission and possibly other
regulatory bodies.
The Company and OG&E Holding believe that upon consummation of the
Restructuring, OG&E Holding will be entitled to an exemption from regulation by
the SEC as a "registered holding company" under the Holding Company Act. Prior
approval of the SEC under the Holding Company Act will, however, be required if
OG&E Holding proposes to acquire, directly or indirectly, additional utility
subsidiaries. SEC policies regarding the scope of permissible non-utility
activities of a public utility holding company are subject to change (see
below), but guidelines established in prior decisions of the SEC and proposed
rules by the SEC require OG&E Holding to remain engaged primarily and
predominantly in the electric business and to limit the size of its activities
outside of such business relative to OG&E Holding as a whole.
Under the Holding Company Act and current SEC policies, there are also
limitations on the extent to which OG&E Holding could expand the utility
business of the Company (either directly or through a subsidiary) outside of
Oklahoma. If any limitations regarding diversification or location of businesses
were exceeded, OG&E Holding's exempt status under the Holding Company Act could
be jeopardized. OG&E Holding has no present intention to engage in any activity
which would require it to register as a holding company and thereby subject it
to regulation under the Holding Company Act.
11
<PAGE>
In June 1995, the SEC issued a report recommending significant revisions to,
or limited repeal of, the Holding Company Act. The Company, however, cannot
predict whether Congress will take any such action. Pending such action, the SEC
indicated that it would revise its rules and interpretations to modernize and
simplify holding company regulation. At this time, however, the Company cannot
predict the impact of such actions on the Company or OG&E Holding.
The Company has filed applications with the FERC, the Oklahoma Commission
and the Arkansas Commission requesting approval of the Restructuring. Receipt of
favorable rulings from these regulatory bodies must be obtained in order to
consummate the Restructuring. As part of its application to the Oklahoma
Commission, the Company agreed to provide the Oklahoma Commission access to
certain books and records of OG&E Holding and to furnish the Oklahoma Commission
various reports and financial information regarding OG&E Holding. In addition,
the Company agreed to establish guidelines regulating intercompany transactions,
whereby distinct and separate accounting and financial records will be
maintained and fully documented for each entity within the holding company
system. This will enable the Company, among other things, to maintain a
separation of costs between the Company and the non-utility businesses. The
structure of intercompany transactions also will be regulated pursuant to these
guidelines to ensure that the non-utility businesses are not subsidized by the
Company and its customers. Accordingly, transfers or sales of assets from the
Company to OG&E Holding or other subsidiaries generally would be priced under
the guidelines at the greater of cost or fair market value, while transfers or
sales of assets to the Company from OG&E Holding or other subsidiaries generally
would be priced at the lower of cost or fair market value.
APPRAISAL RIGHTS
The following discussion of appraisal rights under the Oklahoma General
Corporation Act (the "OGCA") does not purport to be complete and is qualified in
its entirety by reference to the provisions of Sections 1090.1 and 1091 of the
OGCA included as Appendix C hereto. The Company hereby undertakes to supply a
complete copy of Sections 1090.1 and 1091 upon written request to: Ms. Irma B.
Elliott, Secretary, Oklahoma Gas and Electric Company, P.O. Box 321, 101 North
Robinson, Oklahoma City, Oklahoma 73101.
Any holder of Common Stock who is entitled to vote at the Special Meeting
and who (i) has complied with the procedural steps specified below and (ii) has
neither voted in favor of the Share Acquisition nor consented thereto in
writing, is entitled to an appraisal by an Oklahoma district court of the fair
value of his or her shares. If a shareowner wishes to demand the appraisal of
his or her shares such shareowner must deliver to the Company, before the vote
is taken at the Special Meeting, a written demand for appraisal of his or her
shares (the "Demand"). Such Demand must state the shareowner's identity and the
shareowner's intention to demand appraisal. A PROXY OR VOTE AGAINST THE
RESTRUCTURING IS NOT SUFFICIENT TO CONSTITUTE SUCH A DEMAND; THE DEMAND MUST BE
SEPARATE.
Within ten days after the effective date of the Share Acquisition (the
"Effective Date"), the Company must notify each shareowner who has made a Demand
in compliance with the foregoing requirements and who has not voted in favor of
or consented to the Share Acquisition that the Share Acquisition has become
effective. Any such shareowner who has filed a Demand may withdraw such Demand
at any time within 60 days of the Effective Date and accept the shares of Common
Stock of OG&E Holding offered in exchange for his or her Company Common Stock
pursuant to the terms of the Share Acquisition. Any shareowner who has complied
with the foregoing requirements and who is entitled to assert appraisal rights
may request in writing, within 120 days after the Effective Date, a statement
from the Company setting forth (i) the aggregate number of shares not voted in
favor of the Share Acquisition and with respect to which appraisal has been
demanded and (ii) the aggregate number of holders of such shares. The Company is
required to mail such statement to the shareowner within 10 days of the receipt
of the shareowner's written request.
Within 120 days after the Effective Date, the Company or any shareowner who
has made a Demand in compliance with the foregoing requirements and who is
entitled to assert appraisal rights, may file a petition (the "Petition") in an
Oklahoma district court demanding a determination of the
12
<PAGE>
value of the Company's Common Stock. The Company then must file with such court
a list (the "List") of the names and addresses of all shareowners who have
submitted Demands and with whom agreements as to the value of their shares has
not been reached. This List must be filed within 20 days of being served with a
copy of the Petition. Notice of the time and place for the hearing on the
Petition will be sent to each shareowner on the List and will be published at
least one week prior to the hearing in a newspaper of general circulation in
Oklahoma City.
At the hearing, the court will determine which shareowners are entitled to
appraisal rights and may require such shareowners to submit their share
certificates for notation of the pending appraisal proceedings. The court may
dismiss from the appraisal proceedings any shareowner who fails to comply with
such request. After determining who is entitled to appraisal rights, the court
will appraise the shares and determine their fair value and a fair rate of
interest to be paid on such fair value. In determining the fair value, the court
will consider all relevant factors, but will exclude any element of value
arising from the accomplishment or expectation of the Share Acquisition.
Shareowners whose names appear on the List may participate in all proceedings
until such time as the court determines they are not entitled to appraisal
rights. The court will direct the Company to pay such fair value and fair
interest to the shareowners entitled thereto, upon the surrender of their share
certificates.
The court may apportion the costs of the appraisal proceedings among the
parties as it deems equitable, including charging the expenses incurred by any
shareowner pro rata among all the shares entitled to appraisal. From and after
the Effective Date, no shareowner who has submitted a Demand will be entitled to
vote such shares for any purpose or to receive dividends or other distributions
on such shares, except dividends or distributions payable to shareowners of
record as of a date prior to the Effective Date, provided that if no Petition is
filed within the 120-day time period specified above, or if the shareowner
withdraws his or her Demand within the 60-day time period specified above or
with the approval of the Company, then such shareowner's appraisal rights will
cease.
Shareowners contemplating exercising appraisal rights under Oklahoma law are
urged to read carefully the provisions of Sections 1090.1 and 1091 of the OGCA
included as Appendix C hereto.
THE EXCHANGE OF SHARES FOR CASH BY A SHAREOWNER WHO PERFECTS HIS OR HER
RIGHT TO APPRAISAL IS EXPECTED TO BE A TAXABLE TRANSACTION FOR FEDERAL INCOME
TAX PURPOSES. SEE "FEDERAL TAX CONSEQUENCES."
EXCHANGE OF STOCK CERTIFICATES
IF THE RESTRUCTURING IS EFFECTED, IT WILL NOT BE NECESSARY FOR HOLDERS OF
THE COMPANY'S COMMON STOCK TO EXCHANGE EXISTING STOCK CERTIFICATES FOR
CERTIFICATES OF OG&E HOLDING'S COMMON STOCK. THE CERTIFICATES WHICH PRESENTLY
REPRESENT OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK WILL AUTOMATICALLY
REPRESENT THE SAME NUMBER OF SHARES OF OG&E HOLDING'S COMMON STOCK. FOLLOWING
THE RESTRUCTURING, AS PRESENTLY OUTSTANDING COMPANY COMMON STOCK CERTIFICATES
ARE PRESENTED FOR TRANSFER OR EXCHANGE, NEW CERTIFICATES BEARING THE NAME "OG&E
HOLDING CORP." WILL BE ISSUED.
DIVIDEND POLICY
OG&E Holding does not now, nor does it intend after the Restructuring to,
conduct directly any business operations from which it will derive any revenues.
OG&E Holding plans to obtain funds for its own operations from dividends paid to
OG&E Holding on the stock of its various subsidiaries and possibly from payments
made by the subsidiaries for services rendered by OG&E Holding.
Initially, the funds required by OG&E Holding to enable it to pay dividends
on its Common Stock are expected to be derived from dividends paid by the
Company on its Common Stock and by Enogex on its common stock. Following the
Share Acquisition, it is anticipated that the quarterly dividends on OG&E
Holding's Common Stock will commence at a rate equal to the rate then being paid
by the Company on the Company's Common Stock and will be paid on approximately
the same dates. The ability of OG&E Holding to pay dividends on its Common Stock
in the immediate future will continue
13
<PAGE>
to be largely dependent upon the financial condition and capital requirements of
the Company and Enogex, as well as the covenants of debt instruments limiting
the ability of the Company to pay dividends.
The Company's Trust Indenture, as supplemented, securing the Company's first
mortgage bonds contains a covenant limiting the Company's ability to pay
dividends. It provides in substance that retained earnings of the Company equal
to the sum of (1) the amount by which the aggregate of (a) provisions for
retirement and depreciation and (b) expenditures for maintenance, during the
period from June 1, 1955 to the last date for which a statement of income is
available, is less than 15% of gross operating revenues (after deducting cost of
electricity purchased for resale, rentals paid for utility property and the
portion of gross operating revenues attributable to increases since January 6,
1975 in the Company's cost of fuel used in electric generation) for that period
and (2) the amount, if any, by which all of the consideration paid by the
Company in acquiring any shares of its Common Stock during the above period
exceeds $217,301,128 plus any consideration received by the Company from the
sale after September 30, 1991 of its Common Stock shall not be available for the
payment of cash dividends on the Common Stock of the Company. At the present
time, the Company does not expect this restriction to affect its payment of
dividends.
In addition, under the Company's Restated Certificate of Incorporation,
unless the capital represented by the Company's Common Stock (including premiums
on capital stock and retained earnings accounts) is 25% or more of total capital
(which also includes debt maturing more than one year after date of issue),
dividends (other than dividends payable in Common Stock) or distributions on, or
acquisitions for value of, Company Common Stock may not exceed 75% of net income
for the preceding twelve-month period after deducting dividends accruing on
Preferred Stock during the period; and if less than 20%, may not exceed 50% of
such net income. No portion of the retained earnings of the Company is presently
restricted by this provision. The Company's Restated Certificate of
Incorporation further provides that no dividend may be declared or paid on the
Common Stock until all amounts required to be paid or set aside for any sinking
fund for the redemption or purchase of Cumulative Preferred Stock, par value $25
per share, have been paid or set aside. Currently, no shares of Cumulative
Preferred Stock, par value $25 per share, are outstanding. At the present time,
the Company does not expect this restriction to affect its payment of dividends.
Payment of dividends on the Company's Preferred Stock is expected to
continue at the specified rates. The payment of these dividends in the future
will continue to be dependent upon the earnings and financial condition of the
Company. Upon consummation of the Restructuring, the activities and assets of
Enogex will not be available as a source for the payment of dividends on the
Company's Preferred Stock.
MANAGEMENT OF OG&E HOLDING
The Directors of the Company are expected to become the Directors of OG&E
Holding upon consummation of the Restructuring. In the future, however, the
Company and OG&E Holding may have different directors.
The current executive officers of OG&E Holding who will continue to serve as
such following the Restructuring are:
<TABLE>
<S> <C>
J.G. Harlow, Jr..................... President and Chief Executive Officer
Vice President, Secretary and
A.M. Strecker....................... Treasurer
</TABLE>
The current executive officers of the Company will continue to serve as such
following the Restructuring.
EMPLOYEE BENEFIT PLANS
Prior to the consummation of the Restructuring, the Company will take all
necessary action to amend (a) the Company's Directors' Deferred Compensation
Plan to refer to OG&E Holding's Common Stock rather than the Company's Common
Stock, (b) the Company's Restricted Stock Plan to
14
<PAGE>
refer to OG&E Holding's Common Stock rather than the Company's Common Stock, (c)
the Company's Employee Stock Ownership Plan to refer to OG&E Holding's Common
Stock rather than the Company's Common Stock and (d) the Company's Retirement
Savings Plan, to refer to OG&E Holding's Common Stock rather than the Company's
Common Stock. The Plans are also expected to be amended to permit participation
by employees of OG&E Holding and, if appropriate, one or more of the Plans,
including the Restricted Stock Plan, may be assumed by OG&E Holding.
EFFECTIVE TIME OF SHARE ACQUISITION
The Share Acquisition will be made effective by filing the Certificate of
Share Acquisition with the Secretary of State of Oklahoma when all conditions to
the Share Acquisition have been waived or satisfied.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
Following the effectiveness of the Share Acquisition, OG&E Holding will
assume the Company's existing Automatic Dividend Reinvestment and Stock Purchase
Plan. Participants in such plan will be able to make initial purchases of shares
of OG&E Holding Common Stock, reinvest their dividends on OG&E Holding Common
Stock and Company Preferred Stock to purchase additional shares of OG&E Holding
Common Stock and to make optional payments to acquire additional shares of such
stock.
OTHER EFFECTS OF THE RESTRUCTURING
Approval of the Share Acquisition by the holders of the Company's Common
Stock and 4% Preferred Stock will also be deemed to constitute approval of (a)
the Restated Certificate of Incorporation of OG&E Holding included as Appendix B
(see "Comparative Shareowners' Rights"), and (b) the amendments to the Company's
employee benefit plans described under the subcaption "Employee Benefit Plans,"
including the assumption by OG&E Holding of the Restricted Stock Plan.
COMPANY MARKET PRICES AND DIVIDENDS
The Company's Common Stock is listed and traded on the NYSE and the PSE. The
following table sets forth the high and low sale prices for the Company's Common
Stock and dividends paid per share for the periods indicated as reported in
published financial sources:
<TABLE>
<CAPTION>
DIVIDENDS
PAID PER
HIGH LOW SHARE
--------- --------- ----------
<S> <C> <C> <C>
1993
First Quarter............................................................. $ 35 7/8 $ 33 $0.66 1/2
Second Quarter............................................................ 37 5/8 33 3/4 0.66 1/2
Third Quarter............................................................. 38 5/8 34 0.66 1/2
Fourth Quarter............................................................ 38 5/8 32 7/8 0.66 1/2
1994
First Quarter............................................................. $ 37 1/4 $ 33 1/2 $0.66 1/2
Second Quarter............................................................ 36 1/2 29 3/8 0.66 1/2
Third Quarter............................................................. 34 3/8 29 5/8 0.66 1/2
Fourth Quarter............................................................ 34 1/4 32 0.66 1/2
1995
First Quarter............................................................. $ 36 1/4 $ 32 9/16 $0.66 1/2
Second Quarter............................................................ 36 3/8 33 1/4 0.66 1/2
Third Quarter (through August 4, 1995).................................... 35 3/8 33 5/8
</TABLE>
COMPARATIVE SHAREOWNERS' RIGHTS
The rights of holders of the Company's Common Stock and OG&E Holding's
Common Stock are governed by the Oklahoma General Corporation Act and the
respective certificates of incorporation and by-laws of the corporations. If the
Restructuring is consummated, the rights of the present holders of the Company's
Common Stock thereafter will be determined by the Oklahoma General Corporation
Act and OG&E Holding's charter documents. The text of OG&E Holding's Restated
Certificate of Incorporation, in the form it will be in as of the effective date
of the Share Acquisition (the "OG&E Holding Certificate of Incorporation"), is
included as Appendix B of this Proxy Statement/Prospectus.
15
<PAGE>
The rights of holders of OG&E Holding's Common Stock will be virtually the
same as the present rights of the holders of the Company's Common Stock. The
OG&E Holding Certificate of Incorporation contains the same "Fair Price" and
"Classified Board" provisions that were adopted by the Company's shareowners to
address takeover concerns and the same indemnification and limitation on
directors' liability provisions that were adopted by the Company's shareowners
to enhance the Company's ability to attract and retain qualified directors and
officers.
One difference between the Company's Restated Certificate of Incorporation
(the "Company Certificate of Incorporation") and the OG&E Holding Certificate of
Incorporation is with respect to capital stock. The OG&E Holding Certificate of
Incorporation authorizes the issuance of 125,000,000 shares of Common Stock,
compared to 100,000,000 shares of Common Stock authorized by the Company
Certificate of Incorporation. Additional shares of OG&E Holding Common Stock
(including the additional 25,000,000 authorized in the OG&E Holding Certificate
of Incorporation) could be issued for any proper corporate purpose authorized by
the Board of Directors of OG&E Holding. The availability of additional
authorized shares will enable the OG&E Holding Board to act with flexibility
when and as the need arises to issue additional shares in the future without the
delays necessitated by a shareowner vote. Among the reasons for issuing shares
would be to increase OG&E Holding's capital through sales of OG&E Holding Common
Stock, to undertake acquisitions and to fund dividend reinvestment and employee
benefit plans.
The Company's Certificate of Incorporation authorizes the issuance of: (i)
675,000 shares of 4% Preferred Stock of which 423,663 are issued and
outstanding, (ii) 1,865,000 shares of cumulative preferred stock, par value $100
per share (the "$100 Preferred Stock"), of which 415,000 shares are issued and
outstanding and (iii) 4,000,000 shares of cumulative preferred stock, par value
$25 per share (the "$25 Preferred Stock"), of which no shares are issued and
outstanding. The holders of 4% Preferred Stock are entitled to one vote per
$2.50 par value (eight votes per share) on all matters presented to a vote of
shareowners, while the $25 Preferred Stock and $100 Preferred Stock have limited
voting rights, including the right to elect directors upon a failure to pay
dividends for a continued period of time. The Company's ability to issue
additional preferred stock is restricted by its Certificate of Incorporation.
The Company may not issue additional preferred stock without an affirmative vote
of the holders of two-thirds of each class of the outstanding preferred stock
unless net income available for the payment of interest is at least equal to one
and one-half times the sum of the annual interest and preferred stock dividend
requirements on all preferred stock of the Company that will be outstanding
after the issuance of the preferred stock proposed to be issued.
OG&E Holding is authorized to issue 5,000,000 shares of preferred stock,
without par value ("OG&E Holding Preferred Stock"). Although OG&E Holding has
created a series of preferred stock in connection with the adoption of a
shareowner rights plan (see below), no OG&E Holding Preferred Stock will be
outstanding at the time of, or as a result of, the Restructuring, and OG&E
Holding has no present plan to issue OG&E Holding Preferred Stock. Management of
OG&E Holding cannot foresee whether or when OG&E Holding might issue any
Preferred Stock authorized in the OG&E Holding Certificate of Incorporation.
OG&E Holding Preferred Stock may be issued in the future in such series as
may be designated by OG&E Holding's Board of Directors. In creating any such
series, OG&E Holding's Board of Directors has the authority (as does the
Company's Board of Directors in issuing additional series of $100 Preferred
Stock or $25 Preferred Stock) to fix the rights and preferences of each such
series with respect to, among other things, the dividend rate, redemption
provisions, liquidation preferences, and sinking fund provisions. The ability of
OG&E Holding's Board of Directors to designate preferential rights of OG&E
Holding Preferred Stock as to dividends, sinking funds or redemption or in
connection with any liquidation, dissolution or winding-up of OG&E Holding could
diminish funds otherwise available to the holders of OG&E Holding's Common Stock
to the same extent that the current ability of the Company's Board of Directors
to designate such preferential rights in issuing additional $100 Preferred Stock
or $25 Preferred Stock could diminish funds otherwise available to the holders
of the Company's Common Stock.
16
<PAGE>
OG&E Holding's Board is also given the authority to fix conversion rights
and voting rights for any new series of Preferred Stock (including the right to
elect directors upon a failure to pay dividends), provided that no share of OG&E
Holding Preferred Stock can have more than one vote per share. The issuance of
OG&E Holding Preferred Stock with voting rights could decrease the relative
voting power of the holders of OG&E Holding's Common Stock. The Company's Board
of Directors believes, however, that the additional flexibility in structuring
possible future financings and acquisitions and in meeting other possible future
corporate needs that is provided by delegating to OG&E Holding's Board of
Directors the authority to designate varying rights is in the best interests of
the shareowners. Neither the holders of OG&E Holding's Common Stock nor any
future holders of OG&E Holding Preferred Stock will have any preemptive rights
with respect to future issuance of securities of OG&E Holding.
Shares of authorized but unissued OG&E Holding Common Stock and/or OG&E
Holding Preferred Stock (the rights and preferences of which can be established
by the Board of Directors as described above) could be issued in an effort to
dilute the share ownership and voting power of a shareowner desiring to acquire
control of OG&E Holding, which might have the effect of discouraging or making
less likely such a change in control. Such shares could also be issued to
purchasers who would support the Board of Directors in opposing a takeover
proposal that the Board of Directors has determined not to be in the best
interests of OG&E Holding and its shareowners. OG&E Holding Preferred Stock
could also be issued with class voting rights, conversion rights and preferences
that might impede such a takeover proposal. It should be emphasized, however,
that OG&E Holding does not currently have any specific plans to issue any shares
of stock other than in connection with the Restructuring and that many of the
actions described in this paragraph are currently possible through the Company's
issuance of additional Common Stock.
In December 1990, the Company adopted a shareowners rights agreement
designed to protect shareowners' interests in the event that the Company is ever
confronted with an unfair or inadequate acquisition proposal. Pursuant to this
agreement, the Company declared a dividend distribution of one "right" for each
share of Company Common Stock. Each right entitles the holder to purchase from
the Company one one-hundredth of a share of new preferred stock of the Company
under certain circumstances. The rights may be exercised if a person or group
announces its intention to acquire, or does acquire, 20% or more of the
Company's Common Stock. Under certain circumstances, the holders of the rights
will be entitled to purchase either shares of Common Stock of the Company or
common stock of the acquirer at a reduced percentage of market value. The rights
will expire on December 11, 2000. The rights automatically trade with the shares
of Common Stock with which they are associated and will be exchanged along with
the Company Common Stock for shares of OG&E Holding Common Stock and the
associated rights to purchase preferred stock of OG&E Holding, described below,
pursuant to the Share Acquisition.
OG&E Holding has adopted a shareowners rights agreement that is virtually
identical to the Company's rights agreement. A summary of the OG&E Holding
rights agreement is included as Appendix D to this Proxy Statement/Prospectus.
DESCRIPTION OF OG&E HOLDING COMMON STOCK
The holders of OG&E Holding's Common Stock have one vote for each share
held. Subject to the possible prior rights of holders of OG&E Holding's
Preferred Stock that may be issued in the future (described above), holders of
OG&E Holding's Common Stock are entitled to receive such dividends as may be
declared from time to time by the OG&E Holding Board of Directors out of funds
legally available therefor and to share pro-rata in any distribution to
shareowners. See "Dividend Policy." OG&E Holding's Common Stock is not subject
to redemption and does not have any conversion or sinking fund provisions. OG&E
Holding's Common Stock issuable in the Restructuring will be fully paid and
non-assessable.
The OG&E Holding Certificate of Incorporation also contains "fair price"
provisions, which require that mergers and certain other business combinations
or transactions involving OG&E
17
<PAGE>
Holding and any substantial (10% or more) holder of OG&E Holding's Voting Stock
(as defined below) must be approved by the holders of at least 80% of the voting
power of OG&E Holding's outstanding Voting Stock unless the transaction is
either approved by a majority of the members of the Board of Directors who are
unaffiliated with the substantial holder or certain minimum price and procedural
requirements are met. Any amendment to the foregoing provisions must be approved
by the holders of at least 80% of the voting power of OG&E Holding's outstanding
Voting Stock. OG&E Holding's Voting Stock consists of outstanding shares of OG&E
Holding generally entitled to vote in the election of directors and, when the
Restructuring is completed, will consist of OG&E Holding's Common Stock.
Subject to any voting rights of the holders of OG&E Holding Preferred Stock
that may be issued in the future, the OG&E Holding Certificate of Incorporation
and By-Laws contain provisions stating that: (a) the Board of Directors shall be
divided into three classes, as nearly equal in number as possible, each of
which, after an interim arrangement, will serve for three years, with one class
being elected each year, (b) directors may be removed only with the approval of
the holders of at least 80% of the voting power of the shares of OG&E Holding
generally entitled to vote, (c) any vacancy on the Board of Directors shall be
filled by the remaining directors then in office, though less than a quorum, (d)
advance notice of introduction by shareowners of business at annual shareowners
meetings and of shareowner nominations for the election of directors shall be
given and that certain information be provided with respect to such matters, (e)
shareowner action may be taken only at an annual meeting of shareowners or a
special meeting of shareowners called by the President or the Board of Directors
and, except as otherwise mandated by Oklahoma law, may not be effected without
such a meeting by any consent in writing by such shareowners, and (f) the
foregoing provisions may be amended only by the approval of the holders of at
least 80% of the voting power of the shares of OG&E Holding generally entitled
to vote. These provisions along with the "fair price" provisions discussed
above, may deter attempts to change control of OG&E Holding (by proxy contest,
tender offer or otherwise) and will make more difficult a change in control of
OG&E Holding that is opposed by OG&E Holding's Board of Directors. As indicated
above, these provisions are the same provisions that previously were adopted by
the Company's shareowners.
The Transfer Agent and Registrar for the Company's Common Stock and OG&E
Holding's Common Stock is Liberty Bank and Trust Company of Oklahoma City, N.A.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
APPROVAL OF THE RESTRUCTURING.
LEGAL OPINIONS
Legal opinions in connection with OG&E Holding's Common Stock issued under
the Share Acquisition Agreement will be rendered by Gardner, Carton & Douglas,
Chicago, Illinois, and Rainey, Ross, Rice & Binns, Oklahoma City, Oklahoma,
counsel for the Company and OG&E Holding. Matters pertaining to local law will
be passed upon only by Rainey, Ross, Rice & Binns, Oklahoma City, Oklahoma, and
as to these matters, Gardner, Carton & Douglas will rely on their opinion.
As of July 31, 1995, members of the firm of Rainey, Ross, Rice & Binns,
Oklahoma City, Oklahoma owned a beneficial interest in 5,492 shares of Common
Stock of the Company, which upon consummation of the Restructuring will be 5,492
shares of OG&E Holding's Common Stock.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference in this Proxy Statement/Prospectus and elsewhere in this Registration
Statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included or incorporated by reference herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
18
<PAGE>
PROPOSALS OF SHAREOWNERS
Any shareowner proposal intended to be presented at the 1996 Annual Meeting
of the Company (or OG&E Holding if the Restructuring is consummated) must be
received by the Company (or OG&E Holding) on or before November 30, 1995.
Proposals received by that date that are proper for consideration at the Annual
Meeting and otherwise conforming to the rules of the SEC will be included in the
1996 proxy statement.
OTHER MATTERS
At the Special Meeting, it is intended that the first item set forth in the
accompanying notice and described in this Proxy Statement/Prospectus will be
presented. Should any other matter be properly presented at the meeting, the
persons named in the accompanying proxy will vote upon them in accordance with
their best judgment.
ANY SHAREOWNER MAY OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S 1994 FORM
10-K BY SUBMITTING A REQUEST IN WRITING TO: MS. IRMA B. ELLIOTT, SECRETARY,
OKLAHOMA GAS AND ELECTRIC COMPANY, P.O. BOX 321, 101 NORTH ROBINSON, OKLAHOMA
CITY, OKLAHOMA 73101
No person has been authorized to give any information or to make any
representation not contained in this Proxy Statement/Prospectus. If given or
made, such information or representation must not be relied upon as having been
authorized by either OG&E Holding or the Company. This Proxy
Statement/Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy shares of OG&E Holding's Common Stock by any person in any
jurisdiction or in any circumstance in which such offer would be unlawful.
Neither the delivery of this Proxy Statement/Prospectus nor any distribution of
the securities to which this Proxy Statement/Prospectus relates shall, under any
circumstances create any inference that there has been no change in the affairs
of either the Company or OG&E Holding since the date of this Proxy
Statement/Prospectus.
19
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF SHARE ACQUISITION
THIS AGREEMENT AND PLAN OF SHARE ACQUISITION (this "Agreement") is between
OKLAHOMA GAS AND ELECTRIC COMPANY, an Oklahoma corporation ("OG&E"), the company
whose shares will be acquired pursuant to the Share Acquisition described
herein, and OG&E HOLDING CORP., an Oklahoma corporation ("Holding Company"), the
acquiring company. OG&E and Holding Company are hereinafter referred to,
collectively, as the "Companies."
WITNESSETH:
WHEREAS, the authorized capital stock of OG&E consists of (a) 100,000,000
shares of Common Stock, par value $2.50 per share ("OG&E Common Stock"), of
which shares are issued and outstanding, (b) 675,000 shares of 4%
Cumulative Preferred Stock, par value $20 per share, of which 423,663 shares are
issued and outstanding (the "4% Preferred Stock"), (c) 4,000,000 shares of
Cumulative Preferred Stock, par value $25 per share, of which no shares are
issued and outstanding and (d) 1,865,000 shares of Cumulative Preferred Stock,
par value $100 per share, of which 415,000 shares are issued and outstanding
(the "$100 Preferred Stock");
WHEREAS, Holding Company is a wholly-owned subsidiary of OG&E with
authorized capital stock consisting of (a) 125,000,000 shares of Common Stock,
par value $.01 per share ("Holding Company Common Stock"), of which 10 shares
are issued and outstanding and owned of record by OG&E and (b) 5,000,000 shares
of Preferred Stock, par value $.01 per share, of which no shares are issued and
outstanding;
WHEREAS, each share of OG&E Common Stock also represents a Right to purchase
one-
hundredth of a share of OG&E's Series A Cumulative Preferred Stock, par value
$25 per share, in accordance with the Rights Agreement, dated December 11, 1990,
between OG&E and The Liberty National Bank and Trust Company of Oklahoma City,
and all references herein to OG&E Common Stock shall include such Rights;
WHEREAS, each share of Holding Company Common Stock also represents a Right
to purchase one-hundredth of a share of Holding Company's Series A Preferred
Stock, par value $.01 per share, in accordance with the Rights Agreement, dated
August 7, 1995, between Holding Company and The Liberty Bank and Trust Company
of Oklahoma City, N.A., and all references herein to Holding Company Common
Stock shall include such Rights;
WHEREAS, the Boards of Directors of the respective Companies deem it
desirable and in the best interests of the Companies and their shareowners that
Holding Company acquire each share of issued and outstanding OG&E Common Stock
and that such OG&E Common Stock be exchanged for a share of Holding Company
Common Stock with the result that Holding Company becomes the owner of all
outstanding OG&E Common Stock, all on the terms and conditions hereinafter set
forth;
WHEREAS, the execution and delivery of this Agreement by OG&E and Holding
Company and the Share Acquisition (as hereinafter defined) and the related
transactions have been approved, to the extent required, by orders,
authorizations or approvals, of the Oklahoma Corporation Commission, the
Arkansas Public Service Commission and the Federal Energy Regulatory Commission
under the Federal Power Act;
WHEREAS, the Internal Revenue Service has issued a ruling and the Companies
have received an opinion of tax counsel with respect to certain federal income
tax consequences concerning the Share Acquisition and related transactions;
WHEREAS, OG&E has obtained all necessary regulatory and other approvals to
permit it to own less than 5% of the total outstanding shares of The Arklahoma
Corporation; and
A-1
<PAGE>
WHEREAS, the Boards of Directors of OG&E and Holding Company have
recommended that their respective shareowners approve the Share Acquisition and
this Agreement.
NOW, THEREFORE, in consideration of the premises, and of the agreements,
covenants and conditions hereinafter contained, the parties hereto agree with
respect to the acquisition and exchange provided for herein (the "Share
Acquisition") that at the Effective Time (as hereinafter defined) each share of
OG&E Common Stock issued and outstanding immediately prior to the Effective Time
will be acquired by the Holding Company and exchanged for one share of Holding
Company Common Stock, and that the terms and conditions of the Share Acquisition
and the method of carrying the same into effect are as follows:
ARTICLE I.
Subject to the satisfaction of the conditions and obligations of the parties
hereto, the Share Acquisition will be effective upon the filing with the
Secretary of State of Oklahoma (the "Secretary of State") of a Certificate of
Share Acquisition (the "Certificate") with respect to the Share Acquisition or
at such later time as may be stated in the Certificate (the time at which the
Share Acquisition becomes effective being referred to herein as the "Effective
Time").
ARTICLE II.
At the Effective Time:
1. subject to the provisions of item 4 below, each share of OG&E Common
Stock issued and outstanding immediately prior to the Effective Time shall be
acquired by the Holding Company and shall be exchanged for one share of Holding
Company Common Stock, which shall thereupon be fully paid and non-assessable;
2. the Holding Company shall become the owner and holder of each issued and
outstanding share of OG&E Common Stock so exchanged;
3. each share of Holding Company Common Stock issued and outstanding
immediately prior to the Effective Time shall be cancelled and shall thereupon
constitute an authorized and unissued share of Holding Company Common Stock; and
4. the former owners of OG&E Common Stock shall be entitled only to receive
shares of Holding Company Common Stock as provided herein or to their appraisal
rights under 18 O.S. Section1090.1 and 18 O.S. Section1091.
Outstanding shares of OG&E 4% Preferred Stock and outstanding shares of OG&E
$100 Preferred Stock shall not be exchanged or otherwise affected in connection
with the Share Acquisition. Each share of OG&E 4% Preferred Stock issued and
outstanding immediately prior to the Effective Time shall continue to be issued
and outstanding following the Share Acquisition and to be a share of OG&E 4%
Preferred Stock. Each share of OG&E $100 Preferred Stock issued and outstanding
immediately prior to the Effective Time shall continue to be issued and
outstanding following the Share Acquisition and to be a share of OG&E $100
Preferred Stock of the applicable series designation.
ARTICLE III.
The consummation of the Share Acquisition is subject to the following
conditions precedent:
1. the satisfaction of the respective obligations of the parties hereto in
accordance with the terms and conditions herein contained;
2. the adoption of this Agreement by the requisite vote of the holders of
the OG&E Common Stock and OG&E 4% Preferred Stock and by the requisite vote of
the shareowner of the Holding Company pursuant to the Oklahoma General
Corporation Act (the "Act");
A-2
<PAGE>
3. the execution and filing of the Certificate with the Secretary of State
pursuant to the Act;
4. the approval for listing, upon official notice of issuance, by the New
York Stock Exchange and the Pacific Stock Exchange, of the Holding Company
Common Stock to be issued in accordance with this Agreement;
5. the consummation of the transaction referred to in the eighth Whereas
clause hereof; and
6. the receipt of such orders, authorizations, approvals or waivers from
all jurisdictive regulatory bodies, boards or agencies, in addition to the
orders or approvals referred to in the sixth Whereas clause hereof, which are
required in connection with the Share Acquisition and related transactions.
ARTICLE IV.
This Agreement may be amended, modified or supplemented, or compliance with
any provision or condition hereof may be waived, at any time, before or after
the approval by the shareowners of either or both of the Companies, by the
mutual consent of the Boards of Directors of OG&E and the Holding Company;
provided, however, that no such amendment, modification, supplement or waiver
shall be made or effected subsequent to approval by the shareowners of this
Agreement, if such amendment, modification, supplement or waiver would, in the
judgment of the Board of Directors of OG&E materially and adversely affect the
shareowners of OG&E.
This Agreement may be terminated and the Share Acquisition and related
transactions abandoned at any time prior to the time the Certificate is filed
with the Secretary of State, if the Board of Directors of the Holding Company
determines, in its sole discretion, that consummation of the Share Acquisition
would be inadvisable or not in the best interests of the Holding Company or its
shareowners.
ARTICLE V.
This Agreement shall be submitted to the holders of OG&E Common Stock and
OG&E 4% Preferred Stock and to the shareowner of the Holding Company for
approval as provided by the Act. The affirmative vote of the holders of a
majority of the outstanding OG&E Common Stock and OG&E 4% Preferred Stock voting
together as one voting group and the affirmative vote of the holders of a
majority of the OG&E Common Stock voting as a separate voting group are required
for the adoption of this Agreement. The affirmative vote of the holder of a
majority of the outstanding shares of Holding Company Common Stock is required
for the adoption of this Agreement.
ARTICLE VI.
Following the Effective Time, other than holders of certificates theretofore
representing shares of OG&E Common Stock who perfect their appraisal rights
under 18 O.S. Section1090.1 and 18 O.S. Section1091, each holder of an
outstanding certificate or certificates theretofore representing shares of OG&E
Common Stock may, but shall not be required to, surrender the same to Holding
Company for cancellation and reissuance of a certificate or certificates in such
holder's name or for cancellation and transfer, and each such holder or
transferee will be entitled to receive a certificate or certificates
representing the same number of shares of Holding Company Common Stock as the
shares of OG&E Common Stock previously represented by the certificate or
certificates surrendered. Until so surrendered or presented for transfer, each
outstanding certificate which, immediately prior to the Effective Time,
represented OG&E Common Stock (other than certificates held by holders of OG&E
Common Stock who have perfected their appraisal rights under 18 O.S.
Section1090.1 and 18 O.S. Section1091), shall be deemed and treated for all
corporate purposes to represent the ownership of the same number of shares of
Holding Company Common Stock as though such surrender or transfer and exchange
had taken place. The holders of OG&E Common Stock at the Effective Time shall
have no right to have their shares of OG&E Common Stock transferred on the stock
transfer books of OG&E, and such stock transfer books shall be deemed to be
closed for this purpose at the Effective Time.
A-3
<PAGE>
IN WITNESS, both OG&E and Holding Company, pursuant to authorization given
by the Boards of Directors, have caused this Agreement to be executed by a duly
authorized officer and the corporate seals to be affixed and attested by the
Secretaries as of .
OKLAHOMA GAS AND ELECTRIC COMPANY
By:
--------------------------------------
PRESIDENT
ATTEST:
--------------------------------------
SECRETARY
(SEAL)
OG&E HOLDING CORP.
By:
--------------------------------------
PRESIDENT
ATTEST:
--------------------------------------
SECRETARY
(SEAL)
A-4
<PAGE>
APPENDIX B
FORM OF RESTATED
CERTIFICATE OF INCORPORATION
OF
OG&E HOLDING CORP.
I.
The name of this corporation shall be "OG&E Holding Corp."
II.
The address of its Registered Office in the State of Oklahoma is 101 North
Robinson, in the City of Oklahoma City, County of Oklahoma and the name of its
Registered Agent at such address is Mr. A.M. Strecker.
III.
The purpose for which this corporation is formed is to engage in any lawful
act or activity for which corporations may be organized under the general
corporation law of Oklahoma.
IV.
A. AUTHORIZED CAPITAL STOCK. The total number of shares which the
corporation shall have the authority to issue shall be 130,000,000 shares, of
which 125,000,000 shares shall be Common Stock, par value $.01 per share, and
5,000,000 shares shall be Preferred Stock, par value $.01 per share.
B. COMMON STOCK. The Board of Directors is hereby authorized to cause
shares of Common Stock, par value $.01 per share, to be issued from time to time
for such consideration as may be fixed from time to time by the Board of
Directors, or by way of stock split pro rata to the holders of the Common Stock.
The Board of Directors may also determine the proportion of the proceeds
received from the sale of such stock which shall be credited upon the books of
the corporation to Capital or Capital Surplus.
Each share of the Common Stock shall be equal in all respects to every other
share of the Common Stock. Subject to any special voting rights of the holders
of Preferred Stock fixed by or pursuant to the provisions of Section C of this
Article IV, the shares of Common Stock shall entitle the holders thereof to one
vote for each share upon all matters upon which shareholders have the right to
vote.
No holder of shares of Common Stock shall be entitled as such as a matter of
right to subscribe for or purchase any part of any new or additional issue of
stock, or securities convertible into stock, of any class whatsoever, whether
now or hereafter authorized, and whether issued for cash, property, services or
otherwise.
After the requirements with respect to preferential dividends on Preferred
Stock (fixed by or pursuant to the provisions of Section C of this Article IV),
if any, shall have been met and after the corporation shall have complied with
all the requirements, if any, with respect to the setting aside of sums as
sinking funds or redemption or purchase accounts (fixed by or pursuant to the
provisions of Section C of this Article IV) and subject further to any other
conditions which may be fixed by or pursuant to the provisions of Section C of
this Article IV, then, but not otherwise, the holders of Common Stock shall be
entitled to receive dividends, if any, as may be declared from time to time by
the Board of Directors.
B-1
<PAGE>
After distribution in full of the preferential amount (fixed by or pursuant
to the provisions of Section C of this Article IV), if any, to be distributed to
the holders of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or winding up of the
corporation, the holders of the Common Stock shall be entitled to receive all
the remaining assets of the corporation, tangible and intangible, of whatever
kind available for distribution to shareholders, ratably in proportion to the
number of shares of Common Stock held by each.
C. PREFERRED STOCK. Shares of Preferred Stock may be divided into and
issued in such series, on such terms and for such consideration as may from time
to time be determined by the Board of Directors of the corporation. Each series
shall be so designated as to distinguish the shares thereof from the shares of
all other series and classes. All shares of Preferred Stock shall be identical,
except as to variations between different series in the relative rights and
preferences as permitted or contemplated by the next succeeding sentence.
Authority is hereby vested in the Board of Directors of the corporation to
establish out of shares of Preferred Stock which are authorized and unissued
from time to time one or more series thereof and to fix and determine the
following relative rights and preferences of shares of each such series:
(1) the distinctive designation of, and the number of shares which shall
constitute, the series and the "stated value" or "nominal value," if any,
thereof;
(2) the rate or rates of dividends applicable to shares of such series,
which rate or rates may be expressed in terms of a formula or other method
by which such rate or rates shall be calculated from time to time, and the
dividend periods, including the date or dates on which dividends are
payable;
(3) the price at and the terms and conditions on which shares of such
series may be redeemed;
(4) the amount payable upon shares of such series in the event of the
involuntary liquidation of the corporation;
(5) the amount payable upon shares of such series in the event of the
voluntary liquidation of the corporation;
(6) sinking fund provisions for the redemption or purchase of shares of
such series;
(7) the terms and conditions on which shares of such series may be
converted, if such shares are issued with the privilege of conversion;
(8) the voting powers, if any, of the holders of shares of the series
which may, without limiting the generality of the foregoing, include (i) the
right to one or less than one vote per share on any or all matters voted
upon by the shareholders and (ii) the right to vote, as a series by itself
or together with other series of Preferred Stock or together with all series
of Preferred Stock as a class, upon such matters, under such circumstances
and upon such conditions as the Board of Directors may fix, including,
without limitation, the right, voting as a series by itself or together with
other series of Preferred Stock or together with all series of Preferred
Stock as a class, to elect one or more directors of this corporation in the
event there shall have been a failure to pay dividends on any one or more
series of Preferred Stock or under such other circumstances and upon such
conditions as the Board of Directors may determine; provided, however, that
in no event shall a share of Preferred Stock have more than one vote; and
(9) any other such rights and preferences as are not inconsistent with
the Oklahoma General Corporation Act.
No holder of any share of any series of Preferred Stock shall be entitled to
vote for the election of directors or in respect of any other matter except as
may be required by the Oklahoma General Corporation Act, as amended, or as is
permitted by the resolution or resolutions adopted by the Board of Directors
authorizing the issue of such series of Preferred Stock.
B-2
<PAGE>
D. OTHER PROVISIONS
(1) The relative powers, preferences, and rights of each series of Preferred
Stock in relation to the powers, preferences and rights of each other series of
Preferred Stock shall, in each case, be as fixed from time to time by the Board
of Directors in the resolution or resolutions adopted pursuant to authority
granted in Section C of this Article IV, and the consent by class or series vote
or otherwise, of the holders of the Preferred Stock or such of the series of the
Preferred Stock as are from time to time outstanding shall not be required for
the issuance by the Board of Directors of any other series of Preferred Stock
whether the powers, preferences and rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the powers,
preferences and rights of such outstanding series, or any of them, provided,
however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of the holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
(2) Subject to the provisions of paragraph 1 of this Section D, shares of
any series of Preferred Stock may be issued from time to time as the Board of
Directors shall determine and on such terms and for such consideration as shall
be fixed by the Board of Directors.
(3) Common Stock may be issued from time to time as the Board of Directors
shall determine and on such terms and for such consideration as shall be fixed
by the Board of Directors.
(4) No holder of any of the shares of any class or series of shares or
securities convertible into such shares of any class or series of shares, or of
options, warrants or other rights to purchase or acquire shares of any class or
series of shares or of other securities of the corporation shall have any
preemptive right to purchase, acquire, subscribe for any unissued shares of any
class or series or any additional shares of any class or series to be issued by
reason of any increase of the authorized capital stock of the corporation of any
class or series, or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for shares of any class or series,
or carrying any right to purchase or acquire shares of any class or series, but
any such unissued shares, additional authorized issue of shares of any class or
series of shares or securities convertible into or exchangeable for shares, or
carrying any right to purchase or acquire shares, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons, firms,
corporations or associations, and upon such terms, as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(5) The corporation reserves the right to increase or decrease its
authorized capital shares, or any class or series thereof or to reclassify the
same and to amend, alter, change or repeal any provision contained in the
Certificate of Incorporation or in any amendment thereto, in the manner now or
hereafter prescribed by law, but subject to such conditions and limitations as
are hereinbefore prescribed, and all rights conferred upon shareholders in the
Certificate of Incorporation of this corporation, or any amendment thereto, are
granted subject to this reservation.
V.
The name and mailing address of the sole incorporator is:
Ms. Nina Zalenski
321 North Clark Street, Suite 3300
Chicago, Illinois 60610
B-3
<PAGE>
VI.
A. VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS.
(1) In addition to any affirmative vote required by law or this Article VI
or any other Article hereof, and except as otherwise expressly provided in
Section B of this Article VI:
(a) any merger or consolidation of the corporation or any Subsidiary (as
hereinafter defined) with (i) any Interested Shareholder (as hereinafter
defined) or (ii) any other corporation (whether or not itself an Interested
Shareholder) which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Shareholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with any
Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets of the corporation or any Subsidiary having an aggregate Fair Market
Value of $25,000,000 or more; or
(c) the issuance or transfer by the corporation or any Subsidiary (in
one transaction or a series of transactions) of any securities of the
corporation or any Subsidiary to any Interested Shareholder or any Affiliate
of any Interested Shareholder in exchange for cash, securities or other
property (or a combination thereof) having an aggregate Fair Market Value of
$25,000,000 or more, other than the issuance of securities upon the
conversion of convertible securities of the corporation or any Subsidiary
which were not acquired by such Interested Shareholder (or such Affiliate)
from the corporation or a Subsidiary; or
(d) the adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested Shareholder; or
(e) any reclassification of securities (including any reverse stock
split), or recapitalization of the corporation, or any merger or
consolidation of the corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an
Interested Shareholder) which has the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any class or
series of stock or securities convertible into stock of the corporation or
any Subsidiary which is directly or indirectly owned by any Interested
Shareholder or any Affiliate of any Interested Shareholder;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then outstanding shares of stock of the corporation entitled to
vote generally in the election of directors (the "Voting Stock"), voting
together as a single class (it being understood that for purposes of this
Article VI, each share of the Voting Stock shall have the number of votes
granted to it pursuant to Article IV hereof). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law, by any provision hereof, or in any
agreement with any national securities exchange or otherwise.
(2) The term "Business Combination" as used in this Article VI shall mean
any transaction which is referred to in any one or more subparagraphs (a)
through (e) of paragraph 1 of this Section A.
B. WHEN HIGHER VOTE IS NOT REQUIRED. The provisions of Section A of this
Article VI shall not be applicable to any particular Business Combination, and
such Business Combination shall require only such affirmative vote as is
required by law and any other provision of any Article hereof, if all of the
conditions specified in either of the following paragraphs 1 and 2 are met:
(1) The Business Combination shall have been approved by a majority of the
Disinterested Directors (as hereinafter defined).
B-4
<PAGE>
(2) All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market Value (as
hereinafter defined) as of the date of the consummation of the Business
Combination of any consideration other than cash to be received per share by
holders of Common Stock in such Business Combination shall be at least equal
to the higher of the following:
I. (if applicable) the Highest Per Share Price (as hereinafter
defined) (including the brokerage commissions, transfer taxes and
soliciting dealers' fees) paid in order to acquire any shares of Common
Stock beneficially owned by the Interested Shareholder which were
acquired beneficially by such Interested Shareholder (X) within the
two-year period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or (Y) in
the transaction in which it became an Interested Shareholder, whichever
is higher; and
II. the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Shareholder
became an Interested Shareholder (such later date is referred to in this
Article VI as the "Determination Date"), whichever is higher.
(b) The aggregate amount of the cash and the Fair Market Value as of the
date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of shares of any class or
series of outstanding Voting Stock other than the Common Stock shall be at
least equal to the highest of the following (it being intended that the
requirements of this subparagraph (b) shall be required to be met with
respect to every such class or series of outstanding Voting Stock, whether
or not the Interested Shareholder beneficially owns any shares of a
particular class or series of Voting Stock):
I. (if applicable) the Highest Per Share Price (as hereinafter
defined) (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid in order to acquire any shares of such
class or series of Voting Stock beneficially owned by the Interested
Shareholder which were acquired beneficially by such Interested
Shareholder (X) within the two-year period immediately prior to the
Announcement Date or (Y) in the transaction in which it became an
Interested Shareholder, whichever is higher;
II. (if applicable) the highest preferential amount per share to
which the holders of shares of such class or series of Voting Stock are
entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation; and
III. the Fair Market Value per share of such class or series of
Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher.
(c) The consideration to be received by holders of a particular class or
series of outstanding Voting Stock (including Common Stock) shall be in cash
or in the same form as was previously paid in order to acquire beneficially
shares of such class or series of Voting Stock that are beneficially owned
by the Interested Shareholder and, if the Interested Shareholder
beneficially owns shares of any class or series of Voting Stock that were
acquired with varying forms of consideration, the form of consideration to
be received by holders of such class or series of Voting Stock shall be
either cash or the form used to acquire beneficially the largest number of
shares of such class or series of Voting Stock beneficially acquired by it
prior to the Announcement Date.
(d) After such Interested Shareholder has become an Interested
Shareholder and prior to the consummation of such Business Combination: (i)
except as approved by a majority of the Disinterested Directors, there shall
have been no failure to declare and pay at the regular dates therefor the
full amount of any dividends (whether or not cumulative) payable on any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation; (ii) there shall have been (x) no reduction
in the annual rate of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common Stock), except as
approved by
B-5
<PAGE>
a majority of the Disinterested Directors, and (y) an increase in such
annual rate of dividends (as necessary to prevent any such reduction) in the
event of any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which has the
effect of reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate was approved by a
majority of the Disinterested Directors; and (iii) such Interested
Shareholder shall have not become the beneficial owner of any additional
shares of Voting Stock except as part of the transaction which results in
such Interested Shareholder becoming an Interested Shareholder.
(e) After such Interested Shareholder has become an Interested
Shareholder, such Interested Shareholder shall not have received the
benefit, directly or indirectly (except proportionally as a stockholder), of
any loans, advances, guarantees, pledges or other financial assistance or
any tax credits or other tax advantages provided by the corporation, whether
in anticipation of or in connection with such Business Combination or
otherwise.
(f) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to
public shareholders of the corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
C. CERTAIN DEFINITIONS. For the purposes of this Article VI:
(1) A "person" shall mean any individual, firm, corporation or other entity.
(2) "Interested Shareholder" shall mean any person (other than the
corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly, of more than 10% of
the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the corporation and at any time within the
two-year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of 10% or more of the voting power of the
then outstanding Voting Stock; or
(c) is an assignee of or has otherwise succeeded to any shares of Voting
Stock that were at any time within the two-year period immediately prior to
the date in question beneficially owned by any Interested Stockholder, if
such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering within
the meaning of the Securities Act of 1933.
(3) A person shall be a "beneficial owner" of any Voting Stock:
(a) which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly; or
(b) which such person or any of its Affiliates or Associates has (i) the
right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote or direct the
vote pursuant to any agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purposes of acquiring,
holding, voting or disposing of any shares of Voting Stock.
(4) For the purposes of determining whether a person is an Interested
Shareholder pursuant to paragraph 2 of this Section C, the number of shares of
Voting Stock deemed to be outstanding shall
B-6
<PAGE>
include shares deemed owned through application of paragraph 3 of this Section C
but shall not include any other shares of Voting Stock which may be issuable
pursuant to any agreement, arrangement or understanding or upon exercise of
conversion rights, warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations, under the
Securities Exchange Act of 1934, as in effect on November 16, 1995.
(6) "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the corporation or by a
Subsidiary of the corporation or by the corporation and one or more
Subsidiaries; provided, however, that for the purposes of the definition of
Interested Shareholder set forth in paragraph 2 of this Section C, the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the corporation.
(7) "Disinterested Director" means any member of the Board of Directors of
the corporation who is unaffiliated with, and not a nominee or representative
of, the Interested Shareholder and was a member of the Board of Directors prior
to the time that the Interested Shareholder became an Interested Shareholder,
and any successor of a Disinterested Director who is unaffiliated with, and not
a nominee or representative of, the Interested Shareholder and who is
recommended to succeed a Disinterested Director by a majority of Disinterested
Directors then on the Board of Directors.
(8) "Fair Market Value" means: (a) in the case of stock, the highest closing
sale price during the 30-day period immediately preceding the date in question
of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape on
the New York Stock Exchange, or, if such stock is not listed on such Exchange,
on the principal United States securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such stock
is not listed on any such exchange, the highest closing sales price or bid
quotation with respect to a share of such stock during the 30-day period
preceding the date in question on the National Association of Securities
Dealers, Inc. Automated Quotations System or any system then in use, or if no
such quotations are available, the fair market value on the date in question of
a share of such stock as determined by a majority of the Disinterested Directors
in good faith, in each case with respect to any class of stock, appropriately
adjusted for any dividend or distribution in shares of such stock or any stock
split or reclassification of outstanding shares of such stock into a greater
number of shares of such stock or any combination or reclassification of
outstanding shares of such stock into a smaller number of shares of such stock;
and (b) in the case of stock of any class or series which is not traded on any
United States registered securities exchange nor in the over-the-counter market
or in the case of property other than cash or stock, the fair market value of
such property on the date in question as determined by a majority of the
Disinterested Directors in good faith.
(9) References to "Highest Per Share Price" shall in each instance, with
respect to any class of stock, reflect an appropriate adjustment for any
dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater number of
shares of such stock or any combination or reclassification of outstanding
shares of such stock into a smaller number of shares of such stock.
(10) In the event of any Business Combination in which the corporation
survives, the phrase "consideration other than cash to be received" as used in
subparagraphs (a) and (b) of paragraph 2 of Section B of this Article VI shall
include the shares of Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such shares.
D. POWERS OF THE BOARD OF DIRECTORS. A majority of the Disinterested
Directors of the corporation shall have the power and duty to determine, on the
basis of information known to them after reasonable inquiry, all facts necessary
to determine compliance with this Article VI, including without limitation, (a)
whether a person is an Interested Shareholder, (b) the number of shares of
Voting Stock
B-7
<PAGE>
beneficially owned by any person, (c) whether a person is an Affiliate or
Associate of another, (d) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the corporation or any Subsidiary in any Business
Combination has, an aggregate Fair Market Value of $25,000,000 or more and (e)
whether the requirements of Section B of this Article VI have been met.
E. NO EFFECT ON FIDUCIARY OBLIGATIONS OF INTERESTED SHAREHOLDERS. Nothing
contained in this Article VI shall be construed to relieve any Interested
Shareholder from any fiduciary obligation imposed by law.
F. AMENDMENT OR REPEAL. Notwithstanding any other provisions of this
Article VI or of any other Article hereof, or of the By-laws of the corporation
(and notwithstanding the fact that a lesser percentage may be specified from
time to time by law, this Article VI, any other Article hereof, or the By-laws
of the corporation), the provisions of this Article VI may not be altered,
amended or repealed in any respect, nor may any provision inconsistent therewith
be adopted, unless such alteration, amendment, repeal or adoption is approved by
the affirmative vote of the holders of at least 80% of the combined voting power
of the then outstanding Voting Stock, voting together as a single class.
VII.
A. ELECTION AND TERMS OF DIRECTORS. Except as may otherwise be provided in
or fixed by or pursuant to the provisions of Article IV hereof relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect directors under
specified circumstances, the directors shall be classified, with respect to the
time for which they severally hold office, into three classes, as nearly equal
in number as possible, as shall be provided in the manner specified in the
By-laws of the corporation, one class to be originally elected for a term
expiring at the annual meeting of shareholders to be held in 1996, another class
to be originally elected for a term expiring at the annual meeting of
shareholders to be held in 1997, and another class to be originally elected for
a term expiring at the annual meeting of shareholders to be held in 1998, with
each class to hold office until its successor is elected and qualified. At each
annual meeting of shareholders of the corporation and except as may otherwise be
provided in or fixed by or pursuant to the provisions of Article IV hereof
relating to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
directors under specified circumstances, the successors of the class of
directors whose term expires at that meeting shall be elected to hold office for
a term expiring at the annual meeting of shareholders held in the third year
following the year of their election.
B. SHAREHOLDER NOMINATION OF DIRECTOR CANDIDATES AND INTRODUCTION OF
BUSINESS. Advance notice of shareholder nominations for the election of
directors, and advance notice of business to be brought by shareholders before
an annual meeting of shareholders, shall be given in the manner provided in the
By-laws of the corporation.
C. NEWLY CREATED DIRECTORSHIPS AND VACANCIES. Except as may otherwise be
provided in or fixed by or pursuant to the provisions of Article IV hereof
relating to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation to elect
directors under specified circumstances: (i) newly created directorships
resulting from any increase in the number of directors and any vacancies on the
Board of Directors resulting from death, resignation, disqualification, removal
or other cause shall be filled by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of the Board
of Directors; (ii) any director elected in accordance with the preceding clause
(i) shall hold office for the remainder of the full term of the class of
directors in which the new directorship was created or the vacancy occurred and
until such director's successor shall have been elected and qualified; and (iii)
no decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
B-8
<PAGE>
D. REMOVAL. Except as may otherwise be provided in or fixed by or pursuant
to the provisions of Article IV hereof relating to the rights of the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under specified circumstances,
any director may be removed from office, with or without cause, only by the
affirmative vote of the holders of at least 80% of the combined voting power of
the then outstanding shares of the corporation's stock entitled to vote
generally, voting together as a single class. Whenever in this Article VII or in
Article VIII hereof or in Article IX hereof, the phrase "the then outstanding
shares of the corporation's stock entitled to vote generally" is used, such
phrase shall mean each then outstanding share of Common Stock and of any other
class or series of the corporation's stock that is entitled to vote generally in
the election of directors and whose voting privileges are not generally
restricted by any of the provisions of any Article hereof.
E. AMENDMENT OR REPEAL. Notwithstanding any other provisions of this
Article VII or of any other Article hereof or of the By-laws of the corporation
(and notwithstanding the fact that a lesser percentage may be specified from
time to time by law, this Article VII, any other Article hereof, or the By-laws
of the corporation), the provisions of this Article VII may not be altered,
amended or repealed in any respect, nor may any provision inconsistent therewith
be adopted, unless such alteration, amendment, repeal or adoption is approved by
the affirmative vote of the holders of at least 80% of the combined voting power
of the then outstanding shares of the corporation's stock entitled to vote
generally, voting together as a single class.
VIII.
Any action required or permitted to be taken by the shareholders of the
corporation must be effected at a duly called annual or special meeting of such
holders and, except as otherwise mandated by Oklahoma law, may not be effected
without such a meeting by any consent in writing by such holders. Except as
otherwise mandated by Oklahoma law and except as may otherwise be provided in or
fixed by or pursuant to the provisions of Article IV hereof relating to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation to elect directors under
specified circumstances, special meetings of shareholders of the corporation may
be called only by the Board of Directors pursuant to a resolution approved by a
majority of the entire Board of Directors or by the President of the
corporation. Notwithstanding any other provisions of this Article VIII or of any
other Article hereof or of the By-laws of the corporation (and notwithstanding
the fact that a lesser percentage may be specified from time to time by law,
this Article VIII, any other Article hereof, or the By-laws of the corporation),
the provisions of this Article VIII may not be altered amended or repealed in
any respect, nor may any provision inconsistent therewith be adopted, unless
such alteration, amendment, repeal or adoption is approved by the affirmative
vote of the holders of at least 80% of the combined voting power of the then
outstanding shares of the corporation's stock entitled to vote generally, voting
together as a single class.
IX.
The Board of Directors shall have power to adopt, amend and repeal the
By-laws of the corporation to the maximum extent permitted from time to time by
Oklahoma law; provided, however, that any By-laws adopted by the Board of
Directors under the powers conferred hereby may be amended or repealed by the
Board of Directors or by the shareholders having voting power with respect
thereto, except that, and notwithstanding any other provisions of this Article
IX or of any other Article hereof or of the By-laws of the corporation (and
notwithstanding the fact that a lesser percentage may be specified from time to
time by law, this Article IX, any other Article hereof or the By-laws of the
corporation), no provision of Section 1.1 of Article 1 of the By-Laws, or of
Section 4.2, Section 4.12 or Section 4.14 of Article IV of the By-laws, or of
Section 5.2 or Section 5.3 of the By-laws may be altered, amended or repealed in
any respect, nor may any provision inconsistent therewith be adopted, unless
such alteration, amendment, repeal or adoption is approved by the affirmative
vote of the holders of at least 80% of the combined voting power of the then
outstanding shares of the corporation's stock
B-9
<PAGE>
entitled to vote generally, voting together as a single class. Notwithstanding
any other provisions of this Article IX or of any other Article hereof or of the
By-laws of the corporation (and notwithstanding the fact that a lesser
percentage may be specified from time to time by law, this Article IX, any other
Article hereof or the By-laws of the corporation), the provisions of this
Article IX may not be altered, amended or repealed in any respect, nor may any
provision inconsistent therewith be adopted, unless such alteration, amendment,
repeal or adoption is approved by the affirmative vote of the holders of at
least 80% of the combined voting power of the then outstanding shares of the
corporation's stock entitled to vote generally, voting together as a single
class.
X.
A director of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the corporation or its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 1053 of the Oklahoma General Corporation
Act, or (iv) for any transaction from which the director derived any improper
personal benefit. If the Oklahoma General Corporation Act is amended after
approval by the shareholders of this Article to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the corporation shall be eliminated or limited to the
fullest extent permitted by the Oklahoma General Corporation Act, as so amended.
Any repeal or modification of the foregoing paragraph by the shareholders of
the corporation shall not adversely affect any right or protection of a director
of the corporation existing at the time of such repeal or modification.
XI.
A. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is
threatened to be made a party to or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or was a
director, officer or employee of the corporation or is or was serving at the
request of the corporation as a director, officer or employee of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan (hereinafter an
"indemnitee"), whether the basis of such proceeding is alleged action in an
official capacity as a director, officer or employee or in any other capacity
while serving as a director, officer or employee, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the Oklahoma
General Corporation Act, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the corporation to provide broader indemnification rights than such law
permitted the corporation to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith and such indemnification
shall continue as to an indemnitee who had ceased to be a director, officer or
employee and shall inure to the benefit of the indemnitee's heirs, executor and
administrators; provided, however, that, except as provided in Section B of this
Article XI with respect to proceedings to enforce rights to indemnification, the
corporation shall indemnify any such indemnitee in connection with a proceeding
(or part thereof) initiated by such indemnitee only if such proceeding (or part
thereof) was authorized by the Board of Directors of the corporation. Any person
who is or was a director or officer of a subsidiary of the corporation shall be
deemed to be serving in such capacity at the request of the corporation for
purposes of this Article XI. The right to indemnification conferred in this
Article shall include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its final disposition
(hereinafter an "advancement of expenses"); provided, however, that, if the
Oklahoma General Corporation Act requires, an advancement of expenses incurred
by an indemnitee in his or her capacity as a director or officer (and
B-10
<PAGE>
not in any other capacity in which service was or is rendered by such
indemnitee, including, without limitation, service with respect to an employee
benefit plan) shall be made only upon delivery to the corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter, a
"final adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this Article or otherwise. The rights to indemnification and
advancement of expenses conferred in this Section A shall be a contract right.
B. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under Section A of this
Article XI is not paid in full by the corporation within sixty days after a
written claim has been received by the corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall
be twenty days, the indemnitee may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim. If successful in whole or
in part in any such suit or in a suit brought by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
also shall be entitled to be paid the expense of prosecuting or defending such
suit. In (i) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
in (ii) any suit by the corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the corporation shall be entitled to
recover such expenses upon a final adjudication that, the indemnitee has not met
the applicable standard of conduct set forth in the Oklahoma General Corporation
Act. Neither the failure of the corporation (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Oklahoma General Corporation Act, nor an
actual determination by the corporation (including its Board of Directors,
independent legal counsel, or its shareholders) that the indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified or to such
advancement of expenses under this Article XI or otherwise shall be on the
corporation.
C. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the
advancement of expenses conferred in this Article XI shall not be exclusive of
any other right which any person may have or hereafter acquire under any
statute, these Articles of Incorporation, any By-law, any agreement, any vote of
shareholders or disinterested directors or otherwise.
D. INSURANCE. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the Oklahoma General Corporation Act.
E. INDEMNIFICATION OF AGENTS. The corporation may, to the extent authorized
from time to time by the Board of Directors, grant rights to indemnification and
to the advancement of expenses to any agent of the corporation and to any person
serving at the request of the corporation as an agent of another corporation or
of a partnership, joint venture, trust or other enterprise to the fullest extent
of the provisions of this Article XI with respect to the indemnification and
advancement of expenses of directors, officers and employees of the corporation.
F. REPEAL OR MODIFICATION. Any repeal or modification of any provision of
this Article XI by the shareholders of the corporation shall not adversely
affect any rights to indemnification and to advancement of expenses that any
person may have at the time of such repeal or modification with respect to any
acts or omissions occurring prior to such repeal or modification.
B-11
<PAGE>
XII.
Of the then unallotted shares of Preferred Stock described in Article IV
hereof, the Board of Directors on August 7, 1995, established a series of
Preferred Stock in the amount and with the designation, voting powers,
preferences and relative, participating, optional or other special rights and
the qualifications, limitations or restrictions as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated "Series A Preferred Stock" and the number of shares constituting such
series shall be 1,250,000. Shares of Series A Preferred Stock shall have a par
value of $.01 per share.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the possible prior and superior rights of the holders of any
shares of preferred stock of the Company ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, each holder of
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 that purpose: (i)
quarterly dividends payable in cash on January 20, April 20, July 20 and October
20 in each year (each such date being a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of such share of Series A Preferred Stock, in an amount per share (rounded to
the nearest cent) equal to the greater of (a) $5.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends declared on shares of the Common Stock of the
Company, par value $.01 per share (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 a share of Series A
Preferred Stock, and (ii) subject to the provision for adjustment hereinafter
set forth, quarterly distributions (payable in kind) on each Quarterly Dividend
Payment Date in an amount per share equal to 100 times the aggregate per share
amount 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 shares of 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 a share of Series A Preferred Stock. If the Quarterly Dividend Payment Date
is a Saturday, Sunday or legal holiday, then such Quarterly Dividend Payment
Date shall be the first immediately preceding calendar day which is not a
Saturday, Sunday or legal holiday. In the event that the Company shall at any
time after August 7, 1995 (the "Rights Declaration Date") (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding shares of Common Stock into a smaller number of shares, then in each
such case, the amount to which the holder of a share of Series A Preferred Stock
was entitled immediately prior to such event pursuant to the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator of
which shall be the number of shares of Common Stock that are outstanding
immediately after such event, and the denominator of which shall be the number
of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Company shall declare a dividend or distribution on shares of
Series A Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the shares of Common Stock (other than a
dividend payable in shares of Common Stock); PROVIDED, HOWEVER, 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 $5.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding share of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such share of Series A
Preferred Stock, unless the date of issuance of such share is prior to the
record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such share shall begin
B-12
<PAGE>
to accrue from the date of issuance of such share, or unless the date of
issuance is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A 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 shares of Series A Preferred Stock in an
amount less than the aggregate amount of all such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis
among all shares of Series A Preferred Stock at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
(D) Dividends payable on the Series A Preferred Stock for the initial
dividend period and for any period less than a full quarterly period, shall be
computed on the basis of a 360-day year of 30-day months.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the holder thereof
to one vote on all matters submitted to a vote of the shareholders of the
Company.
(B) Except as otherwise provided herein or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of shareholders of the
Company.
(C) If at the time of any annual meeting of shareholders for the election
of directors a "default in preference dividends" on the Series A Preferred Stock
shall exist, the holders of the Series A Preferred Stock shall have the right at
such meeting, voting together as a single class, to the exclusion of the holders
of Common Stock, to elect two (2) directors of the Company. Such right shall
continue until there are no dividends in arrears upon the Series A Preferred
Stock. Either or both of the two directors to be elected by the holders of the
Series A Preferred Stock may be to fill a vacancy or vacancies created by an
increase by the Board of Directors in the number of directors constituting the
Board of Directors. Each director elected by the holders of Preferred Stock (a
"Preferred Director") shall continue to serve as such director for the full term
for which he or she shall have been elected, notwithstanding that prior to the
end of such term a default in preference dividends shall cease to exist. Any
Preferred Director may be removed by, and shall not be removed except by, the
vote of the holders of record of the outstanding Series A Preferred Stock voting
together as a single class, at a meeting of the shareholders or of the holders
of Preferred Stock called for the purpose. So long as a default in preference
dividends on the Series A Preferred Stock shall exist, (i) any vacancy in the
office of a Preferred Director may be filled (except as provided in the
following clause (ii)) by an instrument in writing signed by the remaining
Preferred Director and filed with the Company and (ii) in the case of the
removal of any Preferred Director, the vacancy may be filled by the vote of the
holders of the outstanding Series A Preferred Stock voting together as a single
class, at the same meeting at which such removal shall be voted. Each director
appointed as aforesaid by the remaining Preferred Director shall be deemed, for
all purposes hereof, to be a Preferred Director. For the purposes hereof, a
"default in preference dividends" on the Preferred Stock shall be deemed to have
occurred whenever the amount of accrued and unpaid dividends upon the Series A
Preferred Stock shall be equivalent to six (6) full quarterly dividends or more,
and having so occurred, such default shall be deemed to exist thereafter until,
but only until, all accrued dividends on all Series A Preferred Stock then
outstanding shall have been paid to the end of the last preceding quarterly
dividend period. The provisions of this paragraph (C) shall govern the election
of Directors by holders of Series A Preferred Stock during any default in
preference dividends notwithstanding any provisions of the Company's Certificate
of Incorporation to the contrary.
B-13
<PAGE>
(D) Except as set forth herein, holders of shares of Series A 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 shares
of Common Stock as set forth herein) for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Until all accrued and unpaid dividends and distributions, whether or
not declared, on outstanding shares of Series A Preferred Stock shall have been
paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
junior stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of parity stock, except dividends paid ratably on shares of Series A
Preferred Stock and shares of all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of such Series A Preferred Stock and all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any junior stock, PROVIDED, HOWEVER, that the Company may at any time
redeem, purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any other junior stock;
(iv) purchase or otherwise acquire for consideration any shares of Series
A Preferred Stock or any shares of parity stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. REQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth in the Certificate of
Incorporation of the Company creating a series of Preferred Stock or any similar
shares or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, no distributions shall be made (i) to the holders of shares
of junior stock unless the holders of Series A Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $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, or (b) an amount per share equal to 100 times the aggregate per
share amount to be distributed to holders of shares of Common Stock or (ii) to
the holders of shares of parity stock, unless simultaneously therewith
distributions are made ratably on shares of Series A Preferred Stock and all
other shares of such parity stock in proportion to the total amounts to which
the holders of shares of Series A Preferred Stock are entitled under clause
(i)(a) of this Sentence and to which the holders of shares of such parity stock
are entitled, in each case, upon such liquidation, dissolution or winding up.
(B) In the event the Company shall at any time after the Rights Declaration
Date (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock, or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case, the aggregate amount to which holders of Series
A
B-14
<PAGE>
Preferred Stock were entitled immediately prior to such event pursuant to clause
(i)(b) of paragraph (A) of this Section 6 shall be adjusted by multiplying such
amount by a fraction, the numerator of which shall be the number of shares of
Commons Stock that are outstanding immediately after such event, and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case, each share of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the amount set forth in the immediately
preceding sentence with respect to the exchange or conversion of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event, and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable.
Section 9. RANKING. The shares of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Company as to the payment of
dividends and the distribution of assets, unless the terms of any such series or
class shall provide otherwise.
Section 10. AMENDMENT. The provisions of this Certificate of Designation
shall not hereafter be amended, either directly or indirectly, or through merger
or consolidation with another corporation, in any manner that would alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series A Preferred Stock, voting
separately as a class.
Section 11. FRACTIONAL SHARES. The Series A Preferred Stock may be issued
in fractions of a share, which fractions 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 Preferred Stock.
Section 12. CERTAIN DEFINITIONS. As used herein with respect to the Series
A Preferred Stock, the following terms shall have the following meanings:
(A) The term "junior stock" (i) as used in Section 4, shall mean the Common
Stock and any other class or series of capital stock of the Company hereafter
authorized or issued over which the Series A Preferred Stock has preference or
priority as to the payment of dividends, and (ii) as used in Section 6, shall
mean the Common Stock and any other class or series of capital stock of the
Company over which the Series A Preferred Stock has preference or priority in
the distribution of assets on any liquidation, dissolution or winding up of the
Company.
(B) The term "parity stock" (i) as used in Section 4, shall mean any class
or series of stock of the Company hereafter authorized or issued ranking PARI
PASSU with the Series A Preferred Stock as to dividends, and (ii) as used in
Section 6, shall mean any class or series of stock of the Company ranking PARI
PASSU with the Series A Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up.
B-15
<PAGE>
APPENDIX C
PROVISIONS OF OKLAHOMA GENERAL CORPORATION ACT
RELATING TO APPRAISAL RIGHTS FOR SHAREHOLDERS
1090.1 SHARE ACQUISITION
G. Any shareholder whose shares are to be acquired pursuant to an agreement
of acquisition adopted and approved in accordance with this section and who has
complied with the procedural steps specified in subsection D of Section 1091 of
this title for mergers and consolidations and who has neither voted in favor of
the share acquisition nor consented thereto in writing shall be entitled to an
appraisal by the district court of the fair value of his shares in compliance
with the same provisions and procedures and with the same rights and limitations
as set out in subsections E through K of Section 1091 of this title.
1091 APPRAISAL RIGHTS
A. Any shareholder of a corporation of this state who holds shares of stock
on the date of the making of a demand pursuant to the provisions of subsection D
of this section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with the provisions of subsection D of this section and who has neither
voted in favor of the merger or consolidation nor consented thereto in writing
pursuant to the provisions of Section 1073 of this title shall be entitled to an
appraisal by the district court of the fair value of his shares of stock under
the circumstances described in subsections B and C of this section. As used in
this section, the word "shareholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation. The provisions of this subsection shall be effective only with
respect to mergers or consolidations consummated pursuant to an agreement of
merger or consolidation entered into after November 1, 1988.
B. 1. Except as otherwise provided for in this subsection, appraisal
rights shall be available for the shares of any class or series of stock of a
constituent corporation in a merger or consolidation or of the acquired
corporation in a share acquisition, to be effected pursuant to the provisions of
Sections 1081, 1082, 1086, 1087, or 1091.1 of this title or Section 12 of this
act.
2. a. No appraisal rights under this section shall be available for the
shares of any class or series of stock which, at the record date fixed to
determine the shareholders entitled to receive notice of and to vote at the
meeting of shareholders to act upon the agreement of merger or consolidation,
were either:
(1) listed on a national securities exchange; or
(2) held of record by more than two thousand shareholders.
b. In addition, no appraisal rights shall be available for any shares
of stock of the constituent corporation surviving a merger if the merger did
not require for its approval the vote of the shareholders of the surviving
corporation as provided for in subsection F of Section 1081 of this title.
3. Notwithstanding the provisions of paragraph 2 of this subsection,
appraisal rights provided for in this section shall be available for the shares
of any class or series of stock of a constituent corporation if the holders
thereof are required by the terms of an agreement of merger or consolidation
pursuant to the provisions of Sections 1081, 1082, 1086 or 1087 of this title to
accept for such stock anything except:
a. shares of stock of the corporation surviving or resulting from such
merger or consolidation; or
C-1
<PAGE>
b. shares of stock of any other corporation which at the effective date
of the merger or consolidation will be either listed on a national
securities exchange or held of record by more than two thousand
shareholders; or
c. cash in lieu of fractional shares of the corporations described in
subparagraphs a and b of this paragraph; or
d. any combination of the shares of stock and cash in lieu of the
fractional shares described in subparagraphs a, b and c of this paragraph.
4. In the event all of the stock of a subsidiary Oklahoma corporation party
to a merger effected pursuant to the provisions of Section 1083 of this title is
not owned by the parent corporation immediately prior to the merger, appraisal
rights shall be available for the shares of the subsidiary Oklahoma corporation.
C. Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections D and E
of this section, shall apply as nearly as is practicable.
D. Appraisal rights shall be perfected as follows:
1. If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
shareholders, the corporation, not less than twenty (20) days prior to the
meeting, shall notify each of its shareholders entitled to such appraisal rights
that appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each shareholder electing to demand the appraisal of the shares of the
shareholder shall deliver to the corporation, before the taking of the vote on
the merger or consolidation, a written demand for appraisal of the shares of the
shareholder. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the shareholder and that the shareholder intends
thereby to demand the appraisal of the shares of the shareholder. A proxy or
vote against the merger or consolidation shall not constitute such a demand. A
shareholder electing to take such action must do so by a separate written demand
as herein provided. Within ten (10) days after the effective date of such merger
or consolidation, the surviving or resulting corporation shall notify each
shareholder of each constituent corporation who has complied with the provisions
of this subsection and has not voted in favor of or consented to the merger or
consolidation as of the date that the merger or consolidation has become
effective; or
2. If the merger or consolidation was approved pursuant to the provisions
of Section 1073 or 1083 of this title, the surviving or resulting corporation,
either before the effective date of the merger or consolidation or within ten
(10) days thereafter, shall notify each of the shareholders entitled to
appraisal rights of the effective date of the merger or consolidation and that
appraisal rights are available for any or all of the shares of the constituent
corporation, and shall include in such notice a copy of this section. The notice
shall be sent by certified or registered mail, return receipt requested,
addressed to the shareholder at the address of the shareholder as it appears on
the records of the corporation. Any shareholder entitled to appraisal rights
may, within twenty (20) days after the date of mailing of the notice, demand in
writing from the surviving or resulting corporation the appraisal of the shares
of the shareholder. Such demand will be sufficient if it reasonably informs the
corporation of the identity of the shareholder and that the shareholder intends
to demand the appraisal of the shares of the shareholder.
E. Within one hundred twenty (120) days after the effective date of the
merger or consolidation, the surviving or resulting corporation or any
shareholder who has complied with the provisions of subsections A and D of this
section and who is otherwise entitled to appraisal rights, may file a petition
in district court demanding a determination of the value of the stock of all
such shareholders.
C-2
<PAGE>
Provided, however, at any time within sixty (60) days after the effective date
of the merger or consolidation, any shareholder shall have the right to withdraw
the demand of the shareholder for appraisal and to accept the terms offered upon
the merger or consolidation. Within one hundred twenty (120) days after the
effective date of the merger or consolidation, any shareholder who has complied
with the requirements of subsections A and D of this section, upon written
request, shall be entitled to receive from the corporation surviving the merger
or resulting from the consolidation a statement setting forth the aggregate
number of shares not voted in favor of the merger or consolidation and with
respect to which demands for appraisal have been received and the aggregate
number of holders of such shares. Such written statement shall be mailed to the
shareholder within ten (10) days after the shareholder's written request for
such a statement is received by the surviving or resulting corporation or within
ten (10) days after expiration of the period for delivery of demands for
appraisal pursuant to the provisions of subsection D of this section, whichever
is later.
F. Upon the filing of any such petition by a shareholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which, within
twenty (20) days after such service, shall file in the office of the court clerk
of the district court in which the petition was filed a duly verified list
containing the names and addresses of all shareholders who have demanded payment
for their shares and with whom agreements as to the value of their shares have
not been reached by the surviving or resulting corporation. If the petition
shall be filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The court clerk, if so ordered by the
court, shall give notice of the time and place fixed for the hearing of such
petition by registered or certified mail to the surviving or resulting
corporation and to the shareholders shown on the list at the addresses therein
stated. Such notice shall also be given by one or more publications at least (1)
week before the day of the hearing, in a newspaper of general circulation
published in the City of Oklahoma City, Oklahoma, or such publication as the
court deems advisable. The forms of the notices by mail and by publication shall
be approved by the court, and the costs thereof shall be borne by the surviving
or resulting corporation.
G. At the hearing on such petition, the court shall determine the
shareholders who have complied with the provisions of this section and who have
become entitled to appraisal rights. The court may require the shareholders who
have demanded an appraisal for their shares and who hold stock represented by
certificates to submit their certificates of stock to the court clerk for
notation thereon of the pendency of the appraisal proceedings; and if any
shareholder fails to comply with such direction, the court may dismiss the
proceedings as to such shareholder.
H. After determining the shareholders entitled to an appraisal, the court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
court shall take into account all relevant factors. In determining the fair rate
of interest, the court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any shareholder entitled to participate
in the appraisal proceeding, the court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the shareholder entitled to an appraisal. Any
shareholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to the provisions of subsection F of this section and who
has submitted the certificates of stock of the shareholder to the court clerk,
if such is required, may participate fully in all proceedings until it is
finally determined that the shareholder is not entitled to appraisal rights
pursuant to the provisions of this section.
I. The court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
shareholders entitled thereto. Interest may be simple or compound, as the court
may direct. Payment shall be so made to each such shareholder, in the case of
holders of uncertificated stock immediately, and in the case of holders of
shares represented by
C-3
<PAGE>
certificates upon the surrender to the corporation of the certificates
representing such stock. The court's decree may be enforced as other decrees in
the district court may be enforced, whether such surviving or resulting
corporation be a corporation of this state or of any other state.
J. The costs of the proceeding may be determined by the court and taxed
upon the parties as the court deems equitable in the circumstances. Upon
application of a shareholder, the court may order all or a portion of the
expenses incurred by any shareholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all of
the shares entitled to an appraisal.
K. From and after the effective date of the merger or consolidation, no
shareholder who has demanded the appraisal rights of the shareholder as provided
for in subsection D of this section shall be entitled to vote such stock for any
purpose or to receive payment of dividends or other distributions on the stock,
except dividends or other distributions payable to shareholders of record at a
date which is prior to the effective date of the merger or consolidation;
provided, however, that if no petition for an appraisal shall be filed within
the time provided for in subsection E of this section, or if such shareholder
shall deliver to the surviving or resulting corporation a written withdrawal of
the shareholder's demand for an appraisal and an acceptance of the merger or
consolidation, either within sixty (60) days after the effective date of the
merger or consolidation as provided for in subsection E of this section or
thereafter with the written approval of the corporation, then the right of such
shareholder to an appraisal shall cease. Provided, however, no appraisal
proceeding in the district court shall be dismissed as to any shareholder
without the approval of the court, and such approval may be conditioned upon
such terms as the court deems just.
L. The shares of the surviving or resulting corporation into which the
shares of such objecting shareholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
C-4
<PAGE>
APPENDIX D
SUMMARY OF SHAREOWNERS RIGHTS AGREEMENT
OF OG&E HOLDING
On August 7, 1995, the Board of Directors of OG&E Holding declared a
dividend of one Preferred Stock purchase right (a "Right" or "Rights") for each
outstanding share of Common Stock of OG&E Holding. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") between
OG&E Holding and Liberty Bank and Trust Company of Oklahoma City, N.A., as
Rights Agent (the "Rights Agent"). Initially, (i) the Rights will not be
exercisable, (ii) certificates will not be sent to shareowners, (iii) the Rights
will be evidenced by the OG&E Holding Common Stock certificates, (iv) the Rights
will automatically trade with the OG&E Holding Common Stock, (v) the Rights will
be transferred with and only with such OG&E Holding Common Stock certificates,
(vi) new OG&E Holding Common Stock certificates will contain a notation
incorporating the Rights Agreement by reference and (vii) the surrender for
transfer of any certificates for OG&E Holding Common Stock outstanding will also
constitute the transfer of the Rights associated with the OG&E Holding Common
Stock represented by such certificate. The Rights will become exercisable on the
"Distribution Date," which is the close of business on the earlier of:
(i) the tenth day after a public announcement (or, if earlier, the date a
majority of the Board of Directors of OG&E Holding becomes aware) that a
person or group of affiliated or associated persons acquired, or obtained
the right to acquire, beneficial ownership of Common Stock or other
securities of OG&E Holding representing 20% or more of the voting power
of all securities of OG&E Holding then outstanding generally entitled to
vote for the election of directors ("Voting Power") (such person or group
being called an "Acquiring Person" and such date of first public
announcement being called the "Stock Acquisition Date"), or
(ii) the tenth day after the commencement of, or public announcement of an
intention to commence, a tender or exchange offer the consummation of
which would result in the ownership of 20% or more of the outstanding
Voting Power (the earlier of the dates in clause (i) or (ii) being called
the "Distribution Date").
When the Rights initially become exercisable, each Right will entitle the
holder of record to purchase from OG&E Holding one one-hundredth of a share of
Series A Preferred Stock, par value $.01 per share ("Preferred Stock"), of OG&E
Holding, at a price of $95 per one one-hundredth of a share (the "Purchase
Price"), although the price and the securities to be purchased are subject to
adjustment as described below. As soon as practicable following the Distribution
Date, separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of OG&E Holding Common Stock as of the close of
business on the Distribution Date, and such separate certificates alone will
evidence the Rights from and after the Distribution Date.
Even if they have acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the Voting Power of OG&E Holding, each of the
following persons (an "Exempt Person") will not be deemed to be an Acquiring
Person: (i) the Company, any subsidiary of OG&E Holding, any employee benefit
plan or employee stock plan of OG&E Holding, of any subsidiary of OG&E Holding
or of the Company; and (ii) any person who becomes an Acquiring Person solely by
virtue of a reduction in the number of outstanding shares of OG&E Holding Common
Stock, unless and until such person shall become the beneficial owner of, or
make a tender offer for any additional shares of OG&E Holding Common Stock.
As stated above, the Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on December 11, 2000, unless
earlier redeemed or exchanged by OG&E Holding as described below. In order to
protect the value of the Rights to the holders, the Purchase Price and the
number of shares of Preferred Stock (or other securities or property) issuable
upon exercise of the Rights are subject to adjustment from time to time (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, OG&E Holding's Common Stock or Preferred
D-1
<PAGE>
Stock, (ii) upon the grant to holders of the OG&E Holding Preferred Stock of
certain rights or warrants to subscribe for OG&E Holding Preferred Stock or
convertible securities at less than the current market price of the OG&E Holding
Preferred Stock or (iii) upon the distribution to holders of the OG&E Holding
Preferred Stock of evidences of indebtedness or assets (excluding dividends
payable in OG&E Holding Preferred Stock) or of subscription rights or warrants
(other than those referred to above). These adjustments are called anti-dilution
provisions and are intended to ensure that a holder of Rights will not be
adversely affected by the occurrence of such events. With certain exceptions,
OG&E Holding is not required to adjust the Purchase Price until cumulative
adjustments require a change of at least 1% in the Purchase Price.
In the event (i) any person (other than an Exempt Person) becomes an
Acquiring Person (except pursuant to an offer for all outstanding shares of OG&E
Holding Common Stock that the independent directors determine prior to the time
such offer is made to be fair to and otherwise in the best interest of OG&E
Holding and its shareowners) or (ii) any Exempt Person who is the beneficial
owner of 20% or more of the outstanding Voting Power of OG&E Holding fails to
continue to qualify as an Exempt Person, then each holder of record of a Right,
other than the Acquiring Person, will thereafter have the right to receive, upon
payment of the Purchase Price, OG&E Holding Common Stock (or, in certain
circumstances, cash, property or other securities of OG&E Holding) having a
market value at the time of the transaction equal to twice the Purchase Price.
Rights are not exercisable following such event, however, until such time as the
Rights are no longer redeemable by OG&E Holding as set forth below. Any Rights
that are or were at any time, on or after the Distribution Date, beneficially
owned by an Acquiring Person shall become null and void.
For example, at a Purchase Price of $95 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 $190 worth of
OG&E Holding Common Stock (or other consideration, as noted above) for $95.
Assuming that the OG&E Holding Common Stock had a per share value of $40 at such
time, the holder of each valid Right would be entitled to purchase 4.75 shares
of OG&E Holding Common Stock for $95.
Subject to certain limited exceptions, if (i) OG&E Holding is acquired after
the Stock Acquisition Date in a merger or other business combination (in which
any shares of OG&E Holding's Common Stock are changed into or exchanged for
other securities or assets) or (ii) more than 50% of the assets or earning power
of OG&E Holding and its subsidiaries (taken as a whole) are sold or transferred
after the Stock Acquisition Date in one or a series of related transactions, the
Rights Agreement provides that proper provision shall be made so that each
holder of record of a Right will have the right to receive, upon payment of the
Purchase Price, that number of shares of common stock of the acquiring company
having a market value at the time of such transaction equal to two times the
Purchase Price.
To the extent that insufficient shares of Common Stock are available for the
exercise in full of the Rights, holders of Rights will receive upon exercise
shares of OG&E Holding Common Stock to the extent available and then other
securities of OG&E Holding, including units of shares of Preferred Stock with
terms substantially comparable to those of the OG&E Holding Common Stock,
property, debt securities, or cash, in proportions determined by OG&E Holding,
so that the aggregate value received is equal to twice the Purchase Price. OG&E
Holding, however, shall not be required to issue any cash, property or debt
securities upon exercise of the Rights to the extent their aggregate value would
exceed the amount of cash OG&E Holding would otherwise be entitled to receive
upon exercise in full of the then exercisable Rights.
No fractional shares of OG&E Holding Preferred Stock or OG&E Holding Common
Stock will be required to be issued upon exercise of the Rights and, in lieu
thereof, a payment in cash may be made to the holder of such Rights equal to the
same fraction of the current market value of a share of OG&E Holding Preferred
Stock or, if applicable, OG&E Holding Common Stock.
At any time until the earlier of (i) ten days after the Stock Acquisition
Date (subject to extension by the OG&E Holding Board of Directors) or (ii) the
date the Rights are exchanged pursuant to the
D-2
<PAGE>
Rights Agreement, OG&E Holding may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right (the "Redemption Price"). Immediately upon the
action of the Board of Directors of OG&E Holding authorizing redemption of the
Rights, the right to exercise the Rights will terminate, and the only right of
the holders of Rights will be to receive the Redemption Price without any
interest thereon.
At any time after any person becomes an Acquiring Person, the OG&E Holding
Board of Directors may, at its option, exchange all or part of the outstanding
Rights (other than Rights held by the Acquiring Person and certain related
parties) for shares of OG&E Holding Common Stock at an exchange ratio of one
share of OG&E Holding Common Stock per Right (subject to certain anti-dilution
adjustments). The OG&E Holding Board may not effect such an exchange, however,
at any time any person or group owns 50% or more of the Voting Power of OG&E
Holding. Immediately after the OG&E Holding Board orders such an exchange, the
right to exercise the Rights shall terminate and the holders of Rights shall
thereafter only be entitled to receive shares of OG&E Holding Common Stock at
the applicable exchange ratio.
Under presently existing federal income tax law, the issuance of the Rights
is not taxable to OG&E Holding or to shareowners and will not change the way in
which shareowners can presently trade OG&E Holding shares of Common Stock. If
the Rights should become exercisable, shareowners, depending on then existing
circumstances, may recognize taxable income.
The Rights Agreement may be amended by the Board of Directors of OG&E
Holding. After the Distribution Date, however, the provisions of the Rights
Agreement may be amended by the OG&E Holding Board only to cure any ambiguity,
to make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or an affiliate or associate of
an Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; PROVIDED, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not
redeemable. In addition, no supplement or amendment may be made which changes
the Redemption Price, the final expiration date, the Purchase Price or the
number of one one-hundredths of a share of OG&E Holding Preferred Stock for
which a Right is exercisable, unless at the time of such supplement or amendment
there has been no occurrence of a Stock Acquisition Date and such supplement or
amendment does not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an associate or affiliate of an
Acquiring Person).
Until a Right is exercised, the holder, as such, will have no rights as a
shareowner of the Company, including, without limitation, the right to vote or
to receive dividends. A copy of the Rights Agreement has been filed as an
exhibit to the Registration Statement of which this Proxy Statement/Prospectus
is a part. 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 in this summary description herein by reference.
D-3
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 1031 of Title 18 of the Annotated Oklahoma Statutes provides that
the Company and OG&E Holding may, and in some circumstances must, indemnify the
directors and officers of the Company and OG&E Holding against liabilities and
expenses incurred by any such person by reason of the fact that such person was
serving in such capacity, subject to certain limitations and conditions set
forth in the statute. Substantially similar provisions that require such
indemnification are contained in the Company's Restated Certificate of
Incorporation (filed as Exhibit 4.01 to the Company's Registration Statement No.
33-59805) and the OG&E Holding Certificate of Incorporation (included as
Appendix B to this Proxy Statement/Prospectus), which are incorporated herein by
this reference. The Company's Restated Certificate of Incorporation and the OG&E
Holding Certificate of Incorporation also contain provisions limiting the
liability of their officers and directors in certain instances. The Company and
OG&E Holding each have an insurance policy covering its directors and officers
against certain personal liability which may include liabilities under the
Securities Act of 1933, as amended.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-----------
<C> <S>
2.01 Plan and Agreement of Share Acquisition (included as Appendix A to the Proxy Statement/ Prospectus)
3(i) Certificate of Incorporation of OG&E Holding Corp.
3(ii) By-Laws of OG&E Holding Corp.
4.01 Rights Agreement, dated August 7, 1995 between OG&E Holding Corp. and Liberty Bank and Trust
Company of Oklahoma City, N.A., as Rights Agent.
5.01 Opinion of counsel as to legality of stock offered hereby
12.01 Computation of ratios
23.01 Consent of counsel
23.02 Consent of accountants
23.03 Consent of individuals named to become directors of OG&E Holding (to be filed by Amendment)
99.01 Form of Proxy card to be furnished to the shareowners of the Company
99.02 Restated Certificate of Incorporation of OG&E Holding Corp. as of the effective date of the
Restructuring (included as Appendix B to the Proxy Statement/Prospectus)
(b) No Financial Statement Schedules are required to be filed in connection with the registration
statement.
(c) No information provided pursuant to Item 4(b) is required to be filed in connection with this
registration statement.
</TABLE>
II-1
<PAGE>
ITEM 22. UNDERTAKINGS
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes as follows: that prior to any
public reoffering of the securities registered hereunder through use of a
prospectus which is part of this registration statement, by any person or party
who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings by persons
who may be deemed underwriters, in addition to the information called for by the
other Items of the applicable form.
The registrant undertakes that every prospectus (i) that is filed pursuant
to the paragraph immediately preceding, or (ii) that purports to meet the
requirements of section 10(a)(3) of the Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in the documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Oklahoma
City and State of Oklahoma on the 9th day of August, 1995.
OG&E HOLDING CORP.
(Registrant)
By James G. Harlow, Jr.
Pursuant to the Requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
James G. Harlow, Jr. Principal Executive Officer and August 9, 1995
Director
A. M. Strecker Principal Accounting and Financial August 9, 1995
Officer and Director
</TABLE>
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER PAGE
----------- -----
<C> <S> <C>
2.01 Plan and Agreement of Share Acquisition (included as Appendix A to the Proxy Statement/
Prospectus)................................................................................
3(i) Certificate of Incorporation of OG&E Holding Corp...........................................
3(ii) By-Laws of OG&E Holding Corp................................................................
4.01 Rights Agreement, dated August 7, 1995 between OG&E Holding Corp. and Liberty Bank and Trust
Company of Oklahoma City, N.A., as Rights Agent............................................
5.01 Opinion of counsel as to legality of stock offered hereby...................................
12.01 Computation of ratios.......................................................................
23.01 Consent of counsel..........................................................................
23.02 Consent of accountants......................................................................
23.03 Consent of individuals named to become directors of OG&E Holding (to be filed by
Amendment).................................................................................
99.01 Form of Proxy card to be furnished to the shareowners of the Company........................
99.02 Restated Certificate of Incorporation of OG&E Holding Corp. as of the effective date of the
Restructuring (included as Appendix B to the Proxy Statement/Prospectus)...................
</TABLE>
<PAGE>
Exhibit 3(i)
FEE: $1.00 per $1,000.00
On Authorized Capital CERTIFICATE OF
MINIMUM FEE: $50.00 INCORPORATION
(PROFIT)
FOR OFFICE USE ONLY
FILE IN DUPLICATE
PRINT CLEARLY
TO THE SECRETARY OF THE STATE OF OKLAHOMA:
<TABLE>
<CAPTION>
<S> <C>
1. The name of this corporation is:
OG&E Holding Corp.
----------------------------------------------------------------------------------------------------
(PLEASE REFER TO PROCEDURE SHEET FOR STATUTORY WORDS REQUIRED TO BE INCLUDED IN THE CORPORATE NAME.)
2. The address of the registered office in the State of Oklahoma and
the name of the registered agent at such address are:
A.M Strecker, 101 North Robinson, Oklahoma City, Oklahoma County, Oklahoma 73101
-----------------------------------------------------------------------------------------------
NAME NUMBER & STREET ADDRESS CITY COUNTY ZIP CODE
(P.O. BOXES ARE NOT ACCEPTABLE)
3. The duration of the corporation is:_______________________________________________
(PERPETUAL UNLESS OTHERWISE STATED)
4. The purpose or purposes for which the corporation is formed are:
to engage in any lawful act or activity for which corporations may be organized under
the general corporation law of Oklahoma.
5.A. The aggregate number of shares which the corporation shall have authority to issue,
the designation of each class, the number of shares of each class, and the
par value of the shares of each class are as follows:
NUMBER OF SHARES SERIES PAR VALUE PER SHARE
(OR, IF WITHOUT PAR VALUE, SO STATE)
COMMON 1,000 $.01
---------------------- -----------------------------------
PREFERRED 1,250,000 $.01
------------------- -----------------------------------
TOTAL NO. SHARES: 1,251,000 TOTAL AUTHORIZED CAPITAL: 12,510.00
---------- -------------------------
5.B The preferences and voting powers, restrictions or qualifications of the Shares of Stock are set
forth in Attachment A to the Certificate of Incorporation.
<PAGE>
6. If the powers of the incorporator(s) are to terminate upon the filing of the certificate of
incorporation, the names and mailing addresses of the persons who are to serve as directors:
NAME MAILING ADDRESS CITY STATE ZIP CODE
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
7. The name and mailing address of the incorporator(s):
NAME MAILING ADDRESS CITY STATE ZIP CODE
NINA ZALENSKI, 321 NORTH CLARK STREET, SUITE 3300, CHICAGO, ILLINOIS 60610
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------
</TABLE>
THE UNDERSIGNED, for the purpose of forming a corporation under the
laws of the State of Oklahoma, do make, file and record this Certificate, and
do certify that the facts herein stated are true, and have accordingly
hereunto set my hand this 3rd day of August, 1995.
/s/ Nina Zalenski
-----------------------
Signature
-----------------------
Signature
<PAGE>
ATTACHMENT A TO CERTIFICATE OF INCORPORATION OF
OG&E HOLDING CORP.
ARTICLE 5.B
A. AUTHORIZED CAPITAL STOCK. The total number of shares which the
corporation shall have the authority to issue shall be 1,251,000 shares, of
which 1,000 shares shall be Common Stock, par value $.01 per share, and
1,250,000 shares shall be Preferred Stock, par value $.01 per share.
B. COMMON STOCK. The Board of Directors is hereby authorized to cause
shares of Common Stock, without par value, to be issued from time to time for
such consideration as may be fixed from time to time by the Board of Directors,
or by way of stock split pro rata to the holders of the Common Stock. The Board
of Directors may also determine the proportion of the proceeds received from the
sale of such stock which shall be credited upon the books of the corporation to
Capital or Capital Surplus.
Each share of the Common Stock shall be equal in all respects to every
other share of the Common Stock. Subject to any special voting rights of the
holders of Preferred Stock fixed by or pursuant to the provisions of
Paragraph C of this Article 5.B, the shares of Common Stock shall entitle the
holders thereof to one vote for each share upon all matters upon which
shareholders have the right to vote.
No holder of shares of Common Stock shall be entitled as such as a matter
of right to subscribe for or purchase any part of any new or additional issue of
stock, or securities convertible into stock, of any class whatsoever, whether
now or hereafter authorized, and whether issued for cash, property, services or
otherwise.
After the requirements with respect to preferential dividends on Preferred
Stock (fixed by or pursuant to the provisions of Paragraph C of this Article
5.B), if any, shall have been met and after the corporation shall have complied
with all the requirements, if any, with respect to the setting aside of sums as
sinking funds or redemption or purchase accounts (fixed by or pursuant to the
provisions of Paragraph C of this Article 5.B) and subject further to any other
conditions which may be fixed by or pursuant to the provisions of Paragraph C of
this Article 5.B, then, but not otherwise, the holders of Common Stock shall be
entitled to receive dividends, if any, as may be declared from time to time by
the Board of Directors.
After distribution in full of the preferential amount (fixed by or pursuant
to the provisions of Paragraph C of this Article 5.B), if any, to be distributed
to the holders of Preferred Stock in the event of voluntary or involuntary
liquidation, distribution or sale of assets, dissolution or winding up of the
corporation, the holders of the Common Stock shall be entitled to receive all
the remaining assets of the corporation, tangible and intangible, of whatever
kind available for distribution to shareholders, ratably in proportion to the
number of shares of Common Stock held by each.
<PAGE>
C. PREFERRED STOCK. Shares of Preferred Stock may be divided into and
issued in such series, on such terms and for such consideration as may from time
to time be determined by the Board of Directors of the corporation. Each series
shall be so designated as to distinguish the shares thereof from the shares of
all other series and classes. All shares of Preferred Stock shall be identical,
except as to variations between different series in the relative rights and
preferences as permitted or contemplated by the next succeeding sentence.
Authority is hereby vested in the Board of Directors of the corporation to
establish out of shares of Preferred Stock which are authorized and unissued
from time to time one or more series thereof and to fix and determine the
following relative rights and preferences of shares of each such series:
(1) the distinctive designation of, and the number of shares which
shall constitute, the series and the "stated value" or "nominal value," if
any, thereof;
(2) the rate or rates of dividends applicable to shares of such
series, which rate or rates may be expressed in terms of a formula or other
method by which such rate or rates shall be calculated from time to time,
and the dividend periods, including the date or dates on which dividends
are payable;
(3) the price at and the terms and conditions on which shares of such
series may be redeemed;
(4) the amount payable upon shares of such series in the event of the
involuntary liquidation of the corporation;
(5) the amount payable upon shares of such series in the event of the
voluntary liquidation of the corporation;
(6) sinking fund provisions for the redemption or purchase of shares
of such series;
(7) the terms and conditions on which shares of such series may be
converted, if such shares are issued with the privilege of conversion;
(8) the voting powers, if any, of the holders of shares of the series
which may, without limiting the generality of the foregoing, include (i)
the right to one or less than one vote per share on any or all matters
voted upon by the shareholders and (ii) the right to vote, as a series by
itself or together with other series of Preferred Stock or together with
all series of Preferred Stock as a class, upon such matters, under such
circumstances and upon such conditions as the Board of Directors may fix,
including, without limitation, the right, voting as a series by itself or
together with other series of Preferred Stock or together with all series
of Preferred Stock as a class, to elect one or more directors of this
corporation in the event there shall have been a failure to pay dividends
on any one or more series of Preferred Stock or under such other
circumstances and upon such conditions as the Board of Directors may
determine; provided, however, that in no event shall a share of Preferred
Stock have more than one vote; and
2
<PAGE>
(9) any other such rights and preferences as are not inconsistent
with the Oklahoma General Corporation Act.
No holder of any share of any series of Preferred Stock shall be entitled
to vote for the election of directors or in respect of any other matter except
as may be required by the Oklahoma General Corporation Act, as amended, or as is
permitted by the resolution or resolutions adopted by the Board of Directors
authorizing the issue of such series of Preferred Stock.
D. OTHER PROVISIONS
(1) The relative powers, preferences, and rights of each series of
Preferred Stock in relation to the powers, preferences and rights of each other
series of Preferred Stock shall, in each case, be as fixed from time to time by
the Board of Directors in the resolution or resolutions adopted pursuant to
authority granted in Paragraph C of this Article 5.B, and the consent by class
or series vote or otherwise, of the holders of the Preferred Stock or such of
the series of the Preferred Stock as are from time to time outstanding shall not
be required for the issuance by the Board of Directors of any other series of
Preferred Stock whether the powers, preferences and rights of such other series
shall be fixed by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any of them,
provided, however, that the Board of Directors may provide in such resolution or
resolutions adopted with respect to any series of Preferred Stock that the
consent of the holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting thereon shall be
required for the issuance of any or all other series of Preferred Stock.
(2) Subject to the provisions of Section 1 of this Paragraph D, shares of
any series of Preferred Stock may be issued from time to time as the Board of
Directors shall determine and on such terms and for such consideration as shall
be fixed by the Board of Directors.
(3) Common Stock may be issued from time to time as the Board of Directors
shall determine and on such terms and for such consideration as shall be fixed
by the Board of Directors.
(4) No holder of any of the shares of any class or series of shares or
securities convertible into such shares of any class or series of shares, or of
options, warrants or other rights to purchase or acquire shares of any class or
series of shares or of other securities of the corporation shall have any
preemptive right to purchase, acquire, subscribe for any unissued shares of any
class or series or any additional shares of any class or series to be issued by
reason of any increase of the authorized capital stock of the corporation of any
class or series, or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for shares of any class or series,
or carrying any right to purchase or acquire shares of any class or series, but
any such unissued shares, additional authorized issue of shares of any class or
series of shares or securities convertible into or exchangeable for shares, or
carrying any right to purchase or acquire shares, may be issued and disposed of
pursuant to resolution of the Board of Directors
3
<PAGE>
to such persons, firms, corporations or associations, and upon such terms, as
may be deemed advisable by the Board of Directors in the exercise of its sole
discretion.
(5) The corporation reserves the right to increase or decrease its
authorized capital shares, or any class or series thereof or to reclassify the
same and to amend, alter, change or repeal any provision contained in the
Certificate of Incorporation or in any amendment thereto, in the manner now or
hereafter prescribed by law, but subject to such conditions and limitations as
are hereinbefore prescribed, and all rights conferred upon shareholders in the
Certificate of Incorporation of this corporation, or any amendment thereto, are
granted subject to this reservation.
4
<PAGE>
ATTACHMENT B TO CERTIFICATE OF INCORPORATION OF
OG&E HOLDING CORP.
ARTICLE 8
The Board of Directors shall have the power to adopt, amend and repeal the
By-laws of the corporation to the maximum extent permitted from time to time by
Oklahoma law; provided, however, that any By-laws adopted by the Board of
Directors under the powers conferred hereby may be amended or repealed by the
Board of Directors or by the stockholders having voting power with respect
thereto.
5
<PAGE>
Exhibit 3(ii)
BY-LAWS
OF
OG&E HOLDING CORP.
ARTICLE 1.
AMENDMENTS
Section 1.1. AMENDMENT OF BY-LAWS. Subject to the provisions of the
Corporation's Certificate of Incorporaton, these By-laws may be amended or
repealed at any regular meeting of the shareholders (or at any special meeting
thereof duly called for that purpose) by the holders of at least a majority of
the voting power of the shares represented and entitled to vote thereon at such
meeting at which a quorum is present; provided that in the notice of such
special meeting notice of such purpose shall be given. Subject to the laws of
the State of Oklahoma, the Corporation's Certificate of Incorporation and these
By-laws, the Board of Directors may by majority vote of those present at any
meeting at which a quorum is present amend these By-laws, or adopt such other
By-laws as in their judgment may be advisable for the regulation of the conduct
of the affairs of the Corporation.
ARTICLE 2.
OFFICES
Section 2.1. REGISTERED OFFICE. The Corporation shall continuously
maintain a registered office in the State of Oklahoma which may, but need not
be, the same as its place of business, and a registered agent whose business
office is identical with such registered office.
Section 2.2. OTHER OFFICES. The Corporation may also have offices at such
other places both within and without the State of Oklahoma as the Board of
Directors may from time to time determine or the business of the corporation may
require.
ARTICLE 3.
SHARES
Section 3.1. FORM OF SHARES. Shares either shall be represented by
certificates or shall be uncertificated shares.
3.1.1. SIGNING OF CERTIFICATES. Certificates representing
shares of the corporation shall be signed by the appropriate officers and
may be sealed with the seal or a facsimile of
<PAGE>
the seal of the Corporation if the corporation uses a seal. If a
certificate is countersigned by a transfer agent or registrar, other than
an employee of the corporation, any other signatures may be facsimile.
Each certificate representing shares shall be consecutively numbered or
otherwise identified, and shall also state the name of the person to whom
issued, the number and class of shares (with designation of series, if
any), the date of issue, that the corporation is organized under Oklahoma
law, and any other information required by law.
3.1.2. UNCERTIFICATED SHARES. Unless prohibited by the
Certificate of Incorporation, the Board of Directors may provide by
resolution that some or all of any class or series of shares shall be
uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until the certificate (or such documentation
as may be allowed under Section 3.2 below) has been surrendered to the
Corporation. Within a reasonable time after the issuance or transfer of
uncertificated shares, the Corporation shall send the registered owner
thereof a written notice of all information that would appear on a
certificate. Except as otherwise expressly provided by law, the rights and
obligations of the holders of uncertificated shares shall be identical to
those of the holders of certificates representing shares of the same class
and series.
3.1.3. IDENTIFICATION OF SHAREHOLDERS. The name and address of
each shareholder, the number and class of shares held and the date on which
the shares were issued shall be entered on the books of the Corporation.
The person in whose name shares stand on the books of the Corporation shall
be deemed the owner thereof for all purposes as regards the Corporation.
Section 3.2. LOST, STOLEN OR DESTROYED CERTIFICATES. If a certificate
representing shares has allegedly been lost, stolen or destroyed, the Board of
Directors may in its discretion, except as may be required by law, direct that a
new certificate be issued upon such identification and other reasonable
requirements as it may impose.
Section 3.3. TRANSFERS OF SHARES. Transfer of shares of the Corporation
shall be recorded on the books of the Corporation. Transfer of shares
represented by a certificate, except in the case of a lost or destroyed
certificate, shall be made on surrender for cancellation of the certificate for
such shares. A certificate presented for transfer must be duly endorsed and
accompanied by proper guaranty of signature or other appropriate assurances that
the endorsement is effective. Transfer of an uncertificated share shall be made
on receipt by the Corporation of an instruction from the registered owner or
other appropriate person. The instruction shall be in writing or a
communication in such form as may be agreed upon in writing by the Corporation.
2
<PAGE>
ARTICLE 4.
SHAREHOLDERS
Section 4.1. ANNUAL MEETING. The annual meeting of the shareholders for
the election of directors and the transaction of any other proper business shall
be held at a time and date to be annually designated by the Board of Directors.
Section 4.2. SPECIAL MEETINGS. Special meetings of the shareholders may
be called by the president, by the Board of Directors, by the holders of not
less than one-fifth of all the outstanding shares of the corporation entitled to
vote on the matter for which the meeting is called, or by such other officers or
persons as may be provided for in the articles of incorporation.
Section 4.3. PLACE OF MEETING. The Board of Directors may designate the
place of meeting for any annual or special meeting of shareholders. In the
absence of any such designation, the place of meeting shall be the principal
place of business of the Corporation.
Section 4.4. NOTICE OF MEETINGS. For all meetings of shareholders, a
written or printed notice of the meeting shall be delivered, personally or by
mail, to each shareholder of record entitled to vote at such meeting, which
notice shall state the place, date and hour of the meeting. For all special
meetings and when and as otherwise required by law, the notice shall state the
purpose or purposes of the meeting. The notice of the meeting shall be given
not less than 10 nor more than 60 days before the date of the meeting, or in the
case of a meeting involving a merger, consolidation, share exchange, dissolution
or sale, lease or an exchange of all or substantially all, of the property or
assets of the corporation not less than 20 nor more than 60 days before the date
of such meeting. If mailed, such notice shall be deemed to have been delivered
when deposited in the United States mail, postage prepaid, directed to the
shareholder at his or her address as it appears on the records of the
corporation. When a meeting is adjourned to another time or place, notice need
not be given of the adjourned meeting if the time and place thereof are
announced at the meeting at which the adjournment is taken unless otherwise
required by law.
Section 4.5. QUORUM OF SHAREHOLDERS. The holders of a majority of the
outstanding shares of the corporation entitled to vote on a matter, present in
person or represented by proxy, shall constitute a quorum for consideration of
such matters at any meeting of shareholders unless a greater or lesser number is
required by the certificate of incorporation. At any adjourned meeting at which
a quorum is present or represented, any business may be transacted which might
have been transacted at the original meeting, unless otherwise required by law.
Withdrawal of shareholders from any meeting shall not cause failure of a duly
constituted quorum at the meeting, unless otherwise required by law.
Section 4.6. MANNER OF ACTING. The affirmative vote of holders of a
majority of the shares represented at a meeting and entitled to vote on a matter
at which a quorum is present shall be valid action by the shareholders, unless
voting by a greater number of shareholders or voting by class or classes of
shareholders is required by law or the certificate of incorporation.
3
<PAGE>
Section 4.7. FIXING OF RECORD DATE. If no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, or in
order to make a determination of shareholders for any other proper purpose, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
If a record date is specifically set for the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders, or shareholders
entitled to receive payment of any dividend, or in order to make a determination
of shareholders for any other proper purpose, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than 60 days and, for a meeting of
shareholders, not less than 10 days, or in the case of a merger, consolidation,
share exchange, dissolution or sale, lease or exchange of assets, not less than
20 days, immediately preceding such meeting. When a determination of
shareholders entitled to vote at any meeting of shareholders has been made as
provided in this Section, such determination shall apply to any adjournment
thereof.
Section 4.8. VOTING LISTS. The officer or agent having charge of the
transfer book for shares of the Corporation shall make, within 20 days after the
record date for a meeting of shareholders or 10 days before such meeting,
whichever is earlier, a complete list of the shareholders entitled to vote at
such meeting, arranged in alphabetical order, with the address of and the number
of shares held by each, which list, for a period of 10 days prior to such
meeting, shall be kept on file at the registered office of the corporation and
shall be subject to inspection by any shareholders, and to copying at the
shareholder's expense, at any time during usual business hours. Such list shall
also be produced and kept open at the time and place of the meeting and shall be
subject to the inspection of any shareholder during the whole time of the
meeting. The original share ledger or transfer book, or a duplicate thereof
kept in the State of Oklahoma, shall be prima facie evidence as to who are the
shareholders entitled to examine such list or share ledger or transfer book or
to vote at any meeting of shareholders.
Section 4.9. PROXIES. A shareholder may appoint a proxy to vote or
otherwise act for him or her by signing an appointment form and delivering it to
the person so appointed. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. An
appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest in the shares or in the corporation generally.
Section 4.10. VOTING OF SHARES BY CERTAIN HOLDERS. Shares of a
corporation held by the Corporation in a fiduciary capacity may be voted and
shall be counted in determining the total number of outstanding shares entitled
to vote at any given time.
4.10.1. SHARES HELD BY CORPORATION. Shares registered in the
name of another corporation, domestic or foreign, may be voted by any
officer, agent, proxy or other legal representative authorized to vote such
shares under the laws of the state of incorporation of such corporation.
This Corporation shall treat the president or other person holding the
4
<PAGE>
chief executive office of such other corporation as authorized to vote such
shares. However, such other corporation may designate any other person or
any other holder of an office of the corporate shareholder to this
corporation as the person or officeholder authorized to vote such shares.
Such persons or offices indicated shall be registered by this Corporation
on the transfer books for shares and included in any voting list prepared
in accordance with Section 4.8 of this Article.
4.10.2. SHARES HELD BY FIDUCIARY. Shares registered in the name
of a deceased person, a minor ward or a person under legal disability may
be voted by his or her administrator, executor, or court appointed
guardian, either in person or by proxy, without a transfer of such shares
into the name of such administrator, executor, or court appointed guardian.
Shares registered in the name of a trustee may be voted by him or her,
either in person or by proxy.
4.10.3. SHARES HELD BY RECEIVER. Shares registered in the name
of a receiver may be voted by such receiver, and shares held by or under
the control of a receiver may be voted by such receiver without the
transfer thereof into his or her name if authority to do so is contained in
an appropriate order of the court by which such receiver was appointed.
4.10.4. SHARES PLEDGED. A shareholder whose shares are pledged
shall be entitled to vote such shares until the shares have been
transferred into the name of the pledgee, and thereafter the pledgee shall
be entitled to vote the shares so transferred.
Section 4.11. INSPECTORS. At any meeting of shareholders, the chairman of
the meeting may, or upon the request of any shareholder shall, appoint one or
more persons as inspectors for such meeting. Inspectors shall:
4.11.1. VOTE COUNT AND REPORT. Determine the validity and
effect of proxies; ascertain and report the number of shares represented at
the meeting; count all votes and report the results; and perform such other
acts as are required and appropriate to conduct all elections with
impartiality and fairness to the shareholders.
4.11.2. WRITTEN REPORTS. Each report shall be in writing and
such report shall be signed by the inspector or by a majority of them if
there be more than one inspector acting at such meeting. If there is more
than one inspector, the report of a majority shall be the report of the
inspectors. The report of the inspector or inspectors on the number of
shares represented at the meeting and the results of the voting shall be
prima facie evidence thereof.
Section 4.12. INFORMAL ACTION BY SHAREHOLDERS. Any action required to be
taken at any annual or special meeting of the shareholders of the Corporation,
or any other action which may be taken at a meeting of the shareholders, may
also be taken without such a meeting if a written consent, setting forth the
action so taken, shall be signed (i) by the holders of outstanding shares having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voting or
5
<PAGE>
(ii) by all of the shareholders entitled to vote with respect to the subject
matter thereof. If such consent is signed by less than all of the shareholders
entitled to vote, then such consent shall become effective only if at least 5
days prior to the execution of the consent a notice in writing is delivered to
all the shareholders entitled to vote with respect to the subject matter thereof
and, after the effective date of the consent, prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be delivered in writing to those shareholders who have not consented in writing.
Section 4.13. NOTICE TO SHAREHOLDERS NOT SIGNING. Prompt notice of the
taking of any action by less than unanimous written consent shall be given in
writing to those shareholders who have not consented in writing. In the event
that the action which is consented to is such as would have required the filing
of a certificate under any Section of the Oklahoma General Corporation Act if
such action had been voted on by the shareholders at a meeting thereof, the
certificate filed under such Oklahoma General Corporation Act Section shall
state, in lieu of any statement required by such Section concerning any vote of
shareholders, that written consent has been given in accordance with the
provisions of said Section and that written notice to non-consenting
shareholders has been given as provided by law.
Section 4.14. WAIVER OF NOTICE. Whenever any notice whatever is required
to be given under the provisions of the law, the certificate of incorporation or
these by-laws, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice. Attendance at any meeting
shall constitute waiver of notice thereof unless the person at the meeting
objects to the holding of the meeting because proper notice was not given.
ARTICLE 5.
DIRECTORS
Section 5.1. GENERAL POWERS AND QUALIFICATION. The business and affairs
of the Corporation shall be managed by or under the direction of the Board of
Directors. Directors need not be residents of the State of Oklahoma or
shareholders of the Corporation.
Section 5.2. NUMBER, TENURE AND RESIGNATION. The number of directors of
the Corporation shall be at least one. The number of directors may be increased
or decreased from time to time by resolution of shareholders or directors,
without further amendment to the by-laws; provided, however, that no decrease in
the number of directors shall have the effect of shortening the term of any
incumbent director. Each director shall hold office until the last to occur of
the next annual meeting of shareholders or until his or her successor is elected
and has qualified. A director may resign at any time by written notice to the
board, its chairman, or the president or secretary of the Corporation. The
resignation is effective on the date it bears, or its designated effective date.
Section 5.3. QUORUM OF DIRECTORS. A majority of the number of directors
fixed in Section 5.2 of this Article shall constitute a quorum for the
transaction of business at any meeting of the
6
<PAGE>
Board of Directors; provided, however, that if less than a majority of the
number of directors fixed in Section 5.2 of this Article is present at a
meeting, a majority of the directors present may adjourn the meeting at any time
without further notice, unless otherwise required by law.
Section 5.4. MANNER OF ACTING. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless the act of a greater number is required by law or these by-
laws.
Section 5.5. VACANCIES. Any vacancy occurring in the Board of Directors
and any directorship to be filled by reason of an increase in the number of
directors may be filled by election at an annual meeting or at a special meeting
of shareholders called for that purpose. A director elected to fill a vacancy
shall hold office until the next annual meeting of shareholders at which his or
his predecessor's term would have expired.
Section 5.6. REMOVAL OF DIRECTORS. One or more of the directors may be
removed, with or without cause, at a meeting of shareholders, by the affirmative
vote of the holders of a majority of the outstanding shares then entitled to
vote at an election of directors (or such greater percentage as may be provided
in the articles of incorporation), except as follows:
5.6.1 NOTICE OF MEETING No director shall be removed at a meeting of
shareholders unless the notice of such meeting shall state that a purpose
of the meeting is to vote upon the removal of one or more directors named
in the notice. Only the named director or directors may be removed at such
meeting.
Section 5.7. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this by-law, immediately
after, and at the same place as, the annual meeting of shareholders. The Board
of Directors may provide, by resolution, the place, date and hour for the
holding of additional regular meetings of the Board of Directors, without other
notice than such resolution.
Section 5.8. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the president, any two directors or any
one director if the Board of Directors consists of two or less members. The
person or persons authorized to call special meetings of the Board of Directors
may fix the place for holding any special meeting of the Board of Directors
called by them.
Section 5.9. NOTICE. Notice of any special meeting of the Board of
Directors shall be given at least two days prior to the meeting by written
notice delivered personally, by mail, cable, facsimile, telegram, or telex to
each director at his or her business address. If mailed, such notice shall be
deemed to have been delivered when deposited in the United States mail in a
sealed envelope so addressed, with postage prepaid thereon. If notice is given
by telegram, such notice shall be deemed to have been delivered when the
telegram is delivered to the telegraph company. If notice is given by telex,
such notice shall be deemed to have been delivered when the telex message is
delivered to the telex operator. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need be
specified in the
7
<PAGE>
notice or waiver of notice of such meeting. The attendance of a director at any
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 5.10. PRESUMPTION OF ASSENT. A director of the Corporation who
has been present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be conclusively presumed to have assented to the
action taken, unless his or her dissent shall have been entered in the minutes
of the meeting or unless he or she shall have filed his or her written dissent
to such action with the person acting as the secretary of the meeting before the
adjournment thereof, or shall have forwarded such dissent by registered mail or
certified mail to the secretary of the Corporation immediately after the
adjournment of the meeting. No director who voted in favor of any action may
dissent from such action after adjournment of the meeting.
Section 5.11. COMMITTEES. A majority of the directors may, by resolution
passed by a majority of the number of directors fixed by the shareholders under
Section 5.2 of this Article, create one or more committees and appoint members
of the board to serve on the committee or committees. Each committee shall have
two or more members, who serve at the pleasure of the board.
5.11.1. QUORUM. A majority of any committee shall constitute a
quorum and a majority of a quorum is necessary for committee action. A
committee may act by unanimous written consent without a meeting and,
subject to the provisions of the by-laws or action by the Board of
Directors, the committee, by majority vote of its members, shall fix the
time and place of meetings and the notice required therefor.
5.11.2. AUTHORITY AND RESTRICTIONS. To the extent specified by
the Board of Directors, each committee may exercise the authority of the
Board of Directors, provided, however, a committee may not exercise the
following powers:
5.11.3. AUTHORIZE DISTRIBUTIONS. Authorize distributions,
except for dividends to be paid with respect to shares of any preferred or
special classes or any series thereof;
5.11.4. ACT FOR SHAREHOLDERS. Approve or recommend to
shareholders any act which the Oklahoma General Corporation Act requires to
be approved by shareholders;
5.11.5. BOARD VACANCIES. Fill vacancies on the board or any of
its committees;
5.11.6. OFFICERS AND COMPENSATION. Elect or remove officers or
fix the compensation of any member of the committee;
5.11.7. BY-LAWS. Adopt, amend or repeal the by-laws;
5.11.8. MERGER. Approve a plan of merger not requiring
shareholder approval;
8
<PAGE>
5.11.9. SHARE REACQUISITION. Authorize or approve reacquisition
of shares, except according to a general formula or method prescribed by
the board;
5.11.10. SHARE SALE OR ISSUANCE. Authorize or approve the
issuance or sale, or contract for sale, of shares or determine the
designation and relative rights, preferences, and limitations of a series
of shares, except that the board may direct a committee to fix the specific
terms of the issuance or sale or contract for sale, or of the number of
shares to be allocated to particular employees under an employee benefit
plan; or
5.11.11. RESOLUTION OF BOARD. Amend, alter, repeal, or take
action inconsistent with any resolution or action of the Board of Directors
when the resolution or action of the Board of Directors by its terms states
that it shall not be amended, altered or repealed by action of a committee.
Section 5.12. INFORMAL ACTION BY DIRECTORS. Any action required by the
Oklahoma General Corporation Act to be taken at a meeting of the Board of
Directors of the Corporation, or any other action which may be taken at a
meeting of the Board of Directors or a committee thereof, may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors entitled to vote with respect to the subject
matter thereof, or by all members of such committee, as the case may be.
5.12.1. EFFECTIVE DATE. The consent shall be evidenced by one
or more written approvals, each of which sets forth the action taken and
bears the signature of one or more directors. All the approvals evidencing
the consent shall be delivered to the secretary to be filed in the
corporate records. The action taken shall be effective when all the
directors have approved the consent unless the consent specifies a
different effective date.
5.12.2. EFFECT OF CONSENT. Any consent signed by all the
directors or all the members of a committee shall have the same effect as a
unanimous vote, and may be stated as such in any document filed with the
Secretary of State under the Oklahoma General Corporation Act.
Section 5.13. MEETING BY CONFERENCE TELEPHONE. Members of the Board of
Directors or of any committee of the Board of Directors may participate in and
act at any meeting of the board or committee by means of conference telephone or
other communications equipment through which all persons participating in the
meeting can hear each other. Participation in such a meeting shall be
equivalent to attendance and presence in person at the meeting of the person or
persons so participating.
Section 5.14. COMPENSATION. The Board of Directors, by the affirmative
vote of a majority of the directors then in office, and irrespective of any
personal interest of any of its members, shall have authority to establish
reasonable compensation of all directors for services to the Corporation as
directors, officers, or otherwise.
9
<PAGE>
ARTICLE 6.
OFFICERS
Section 6.1. NUMBER. The officers of the Corporation may consist of a
president, one or several vice presidents, a treasurer, one or more assistant
treasurers (if elected by the Board of Directors), a secretary, one or more
assistant secretaries (if elected by the Board of Directors), and such other
officers as may be elected in accordance with the provisions of this Article.
Any two or more offices may be held by the same person.
Section 6.2. ELECTION AND TERM OF OFFICE. The officers of the Corporation
shall be elected annually by the Board of Directors at the first meeting of the
Board of Directors held after each annual meeting of shareholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as reasonably practicable. Subject to the provisions of
Section 6.3 hereof, each officer shall hold office until the last to occur of
the next annual meeting of the Board of Directors or until the election and
qualification of his or her successor.
Section 6.3. REMOVAL OF OFFICERS. Any officer elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed.
Section 6.4. VACANCIES; NEW OFFICES. A vacancy occurring in any office
may be filled and new offices may be created and filled, at any time, by the
Board of Directors.
Section 6.5. PRESIDENT AND CHIEF EXECUTIVE OFFICE. The president shall be
the chief executive officer of the Corporation. He or she shall be in charge of
the day to day business and affairs of the Corporation, subject to the direction
and control of the Board of Directors. He or she shall preside at all meetings
of the Board of Directors. He or she shall have the power to appoint such
agents and employees as in his or her judgment may be necessary or proper for
the transaction of the business of the Corporation. He or she may sign:
(i) with the secretary or other proper officer of the Corporation thereunto
authorized by the Board of Directors, stock certificates of the Corporation the
issuance of which shall have been authorized by the Board of Directors; and
(ii) any contracts, deeds, mortgages, bonds, or other instruments which the
Board of Directors has authorized to be executed, according to the requirements
of the form of the instrument.
Section 6.6. VICE PRESIDENT(S). The vice president (or in the event there
is more than one vice president, each of them) shall assist the president in the
discharge of his or her duties as the president may direct, and shall perform
such other duties as from time to time may be assigned to him or her (or them)
by the president or the Board of Directors. In the absence of the president,
the vice president (or vice presidents, in the order of their election), shall
perform the duties and exercise the authority of the president.
10
<PAGE>
Section 6.7. TREASURER. The treasurer shall have charge and custody of
and be responsible for all funds and securities of the Corporation, receive and
give receipts for moneys due and payable to the Corporation from any source
whatsoever, and deposit all such moneys in the name of the Corporation in such
banks, trust companies or other depositaries as shall be selected in accordance
with the provisions of Article 8 of these by-laws, have charge of and be
responsible for the maintenance of adequate books of account for the
Corporation, and, in general, perform all duties incident to the office of
treasurer and such other duties not inconsistent with these by-laws as from time
to time may be assigned to him or her by the president or the Board of
Directors.
Section 6.8. SECRETARY. The secretary shall keep the minutes of the
shareholders' and the Board of Directors' meetings, see that all notices are
duly given in accordance with the provisions of these by-laws or as required by
law, have general charge of the corporate records and of the seal of the
Corporation, have general charge of the stock transfer books of the Corporation,
keep a register of the post office address of each shareholder which shall be
furnished to the secretary by such shareholder, sign with the president, or any
other officer thereunto authorized by the Board of Directors, certificates for
shares of the Corporation, the issuance of which shall have been authorized by
the Board of Directors, and any contracts, deeds, mortgages, bonds, or other
instruments which the Board of Directors has authorized to be executed,
according to the requirements of the form of the instrument, and, in general,
perform all duties incident to the office of secretary and such other duties not
inconsistent with these by-laws as from time to time may be assigned to him or
her by the president or the Board of Directors.
Section 6.9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The Board of
Directors may elect one or more than one assistant treasurer and assistant
secretary. In the absence of the treasurer, or in the event of his or her
inability or refusal to act, the assistant treasurers, in the order of their
election, shall perform the duties and exercise the authority of the treasurer.
In the absence of the secretary, or in the event of his or her inability or
refusal to act, the assistant secretaries, in the order of their election, shall
perform the duties and exercise the authority of the secretary. The assistant
treasurers and assistant secretaries, in general, shall perform such other
duties not inconsistent with these by-laws as shall be assigned to them by the
treasurer or the secretary, respectively, or by the president or the Board of
Directors.
Section 6.10. COMPENSATION. The compensation of all directors and
officers shall be fixed from time to time by the Board of Directors. No officer
shall be prevented from receiving such compensation by reason of the fact that
he or she is also a director of the Corporation. All compensation so
established shall be reasonable and solely for services rendered to the
Corporation.
6.10.1. COMPENSATION AND EXPENSE DISALLOWANCE. Unless otherwise
provided by the Board of Directors, all payments made to a director or
officer of the Corporation, including, but not limited to salary,
commission, bonus, interest, travel and entertainment expenses and deferred
compensation payments, which shall be disallowed, in whole or in part, as a
deductible expense by the Internal Revenue Service, shall be reimbursed by
such director or officer of the Corporation to the full extent of such
disallowance. The proper
11
<PAGE>
corporate officers are authorized and directed to effect collection on
behalf of the Corporation for each amount disallowed. In lieu of a payment
by the director or officer, subject to the determination of the Board of
Directors, appropriate amounts may be withheld from future compensation
payments paid to such director or officer until the amount owed the
Corporation is recovered. This by-law shall be considered a term and
condition of employment for each director and officer of the Corporation,
unless specifically waived in writing by the Board of Directors.
ARTICLE 7.
INDEMNIFICATION BY CORPORATION
Section 7.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Corporation
shall, to the fullest extent to which it is empowered to do so and in accordance
with the procedures required by the Oklahoma General Corporation Act or any
other applicable laws, as may from time to time be in effect, indemnify any
person who was or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of the Corporation, or is or was serving at the request of the
Corporation as a director or officer of another Corporation, partnership, joint
venture, trust or other enterprise, against all expenses, including attorneys'
fees, judgments, fines and amounts incurred by him or her in connection with
such action, suit or proceeding.
Section 7.2. CONTRACT WITH THE CORPORATION. The provisions of Section 7.1
of this Article shall be deemed to be a contract between the Corporation and
each director or officer who serves in any such capacity at any time while said
Section 7.1 and the relevant provisions of the Oklahoma General Corporation Act
or other applicable laws, if any, are in effect, and any repeal or modification
of any such law or of said Section 7.1 shall not affect any state of facts then
or theretofore existing or any action, suit or proceeding theretofore existing
or thereafter brought or threatened based in whole or in part upon any such
state of facts. In the event a person entitled to indemnification under this
Article claims indemnification, the Corporation shall take all required action
to bring about a prompt and good faith determination of such person's right to
indemnification hereunder.
Section 7.3. INDEMNIFICATION OF EMPLOYEES AND AGENTS. Persons who are not
covered by the foregoing provisions of this Article and who are or were
employees or agents of the Corporation, or are or were serving at the request of
the Corporation as employees or agents of another Corporation, joint venture,
partnership, trust or other enterprise, may be indemnified to the extent the
Corporation is empowered to do so by the Oklahoma General Corporation Act or any
other applicable laws, when and as authorized at any time from time to time by
the Board of Directors in its sole discretion.
Section 7.4. ADVANCE OF EXPENSES. Expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the Corporation in advance
of the final disposition of
12
<PAGE>
such action, suit or proceeding upon receipt of a written agreement by or on
behalf of a director and an officer to undertake to repay such amount, unless it
shall ultimately be determined that he or she is entitled to be indemnified by
the corporation as authorized in this article. The provisions of this Section
shall apply to employees or agents when the Board of Directors has authorized
such indemnification under the provision of Section 7.3 hereof.
Section 7.5. OTHER RIGHTS OF INDEMNIFICATION. The indemnification
provided or permitted by this Article shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled by law, agreement
or otherwise, and shall continue as to a person who ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
Section 7.6. LIABILITY INSURANCE. The Corporation shall have the power to
purchase and maintain, on behalf of any person who is or was a director,
officer, employee or agent of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, insurance
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such whether or
not the Corporation would have the power to indemnify such person against such
liability under the provisions of this Article.
Section 7.7. REPORT TO SHAREHOLDERS. If the Corporation has paid
indemnity or has advanced expenses to a director, officer, employee, or agent,
the Corporation shall report the indemnification or advance in writing to the
shareholders with or before the notice of the next shareholders' meeting.
ARTICLE 8.
FISCAL MATTERS
Section 8.1. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 8.2. CONTRACTS. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument, in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
Section 8.3. LOANS AND INDEBTEDNESS. No substantial or material loans
shall be contracted on behalf of the Corporation and no evidences of
indebtedness shall be issued in its name unless authorized by a resolution of
the Board of Directors. Such authority may be general or confined to specific
instances.
Section 8.4. CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be
13
<PAGE>
signed by such officer or officers, agent or agents of the Corporation as the
Board of Directors shall from time to time designate.
Section 8.5. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositaries as the Board of Directors
may select.
ARTICLE 9.
GENERAL PROVISIONS
Section 9.1. DIVIDENDS AND DISTRIBUTIONS. The Board of Directors may from
time to time declare or otherwise authorize, and the Corporation may pay
distributions in money, shares or other property on its outstanding shares in
the manner and upon the terms, conditions and limitations provided by law or
certificate of incorporation.
Section 9.2. CORPORATE SEAL. The Board of Directors may provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the Corporation and the words "Corporate Seal, Oklahoma."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or in any manner reproduced.
Section 9.3. WAIVER OF NOTICE. Whenever any notice is required to be
given by law, certificate of incorporation or under the provisions of these by-
laws, a waiver thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
Section 9.4. HEADINGS. Section or paragraph headings are inserted herein
only for convenience of reference and shall not be considered in the
construction of any provision hereof.
14
<PAGE>
EXHIBIT 4.01
OG&E HOLDING CORP.
and
THE LIBERTY BANK AND TRUST COMPANY
OF OKLAHOMA CITY, N.A.
as Rights Agent
_____________________
RIGHTS AGREEMENT
Dated August 7, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3. Issuance of Right Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Countersignature and Registration.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates . . . . . . . . . . . . . . . . . .10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.. . . . . . . . . . . . . . .11
Section 8. Cancellation and Destruction of Right Certificates. . . . . . . . . . . . . . . . . . . . .13
Section 9. Reservation and Availability of Shares of Preferred Stock . . . . . . . . . . . . . . . . .14
Section 10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 11. Adjustments to Number and Kind of Shares, Number of Rights
or Purchase Price.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
Section 12. Certification of Adjustments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. . . . . . . . . . . .30
Section 14. Fractional Rights and Fractional Shares.. . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Section 17. Right Certificate Holder Not Deemed a Shareowner. . . . . . . . . . . . . . . . . . . . . .39
Section 18. Concerning the Rights Agent.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
Section 19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . .40
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Section 24. Notice of Proposed Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Section 26. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Section 27. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 28. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
Section 29. Benefits of this Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Section 30. Oklahoma Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Section 31. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Section 32. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Section 33. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
Section 34. Determination and Actions by the Board of Directors, etc. . . . . . . . . . . . . . . . . .53
Exhibit A -- Certificate of Designation
Exhibit B -- Form of Right Certificate
Exhibit C -- Form of Summary of Rights Agreement
</TABLE>
i
<PAGE>
RIGHTS AGREEMENT
This agreement ("Rights Agreement"), dated August 7, 1995, between
OG&E HOLDING CORP., an Oklahoma corporation (the "Company"), and The Liberty
Bank and Trust Company of Oklahoma City, N.A. (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company on August 7, 1995,
(i) authorized and declared a dividend distribution of one right (a "Right")
for each share of the common stock, par value $.01 per share ("Common
Stock"), of the Company outstanding as of the close of business on August
8, 1995 (the "Record Date"), and authorized the issuance of the Rights as
of the Record Date, each Right representing the right to purchase one
one-hundredth (1/100) of a share of Series A Preferred Stock, par value $.01
per share of the Company having the voting powers, designation, preferences
and relative rights described in the Certificate of Designation set forth as
Exhibit A hereto ("Preferred Stock") upon the terms and subject to the
conditions hereinafter set forth, and (ii) further authorized the issuance of
one Right with respect to each share of Common Stock of the Company that
shall become outstanding between the Record Date and the Distribution Date
(as defined herein);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner
of securities representing 20% or more of the Voting Power (other than as a
result of a Permitted Offer) or who was such a Beneficial Owner at any time
after the date hereof, whether or not such Person continues to be the
<PAGE>
Beneficial Owner of securities representing 20% or more of the Voting Power;
provided, however, that the term "Acquiring Person" shall not include an
Exempt Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended, as in
effect on the date hereof.
(d) Except in the case of an underwriter acting in such capacity
by agreement with the Company, a Person shall be deemed the "Beneficial
Owner" of, and shall be deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right or obligation to acquire
(whether such right or obligation is exercisable or effective
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing), or
upon the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, (1) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase
or exchange, (2) securities which such Person would have a right to
acquire on the exercise of Rights at any time prior to the occurrence
of a Triggering Event or (3) securities issuable upon exercise of
Rights from and after the occurrence of a Triggering Event if such
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 ("Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect to any
Original Rights; or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in
2
<PAGE>
writing); PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any securities under
this clause (B) if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or
consent given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person 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 described in
clause (B) of subparagraph (ii) of this paragraph (d)) or disposing
of any securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
Oklahoma City time, on such date; PROVIDED, HOWEVER, that if such date is not
a Business Day, it shall mean 5:00 P.M., Oklahoma City time, on the next
succeeding Business Day.
(g) "Common Stock", when used with reference to the Company,
shall mean the common stock (presently par value $.01 per share) of the
Company. "Common Stock", when used with reference to any Person other than
the Company, shall mean the capital stock with the greatest voting power or
the equity securities or other equity interest having the power to control or
direct the management of such Person or, if such Person is a Subsidiary of or
is controlled by another Person, the Person which ultimately controls such
first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(i) "Company" shall have the meaning set forth in the preamble.
3
<PAGE>
(j) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(n) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(o) "Exchange Ratio" shall have the meaning set forth in Section
28(a) hereof.
(p) "Exempt Person" shall mean:
(i) Oklahoma Gas and Electric Company, the Company,
any subsidiary of the Company, any employee benefit plan or employee
stock plan of the Company, of any subsidiary of the Company or of Oklahoma Gas
and Electric Company, or any person or entity organized, appointed, established
or holding Common Stock or other securities of the Company for or pursuant to
the terms of any such plan; and
(ii) any Person who becomes an Acquiring Person
solely by virtue of a reduction in the number of outstanding shares
of Common Stock; PROVIDED, HOWEVER, that such Person shall not be
an Exempt Person if, subsequent to such reduction, such Person
shall become the Beneficial Owner of, or commence a tender or
exchange offer for, any additional shares of Common Stock.
(q) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(r) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(s) "NYSE" shall mean the New York Stock Exchange.
(t) "Permitted Offer" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(u) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(v) "Preferred Stock" shall have the meaning set forth in the
preamble.
(w) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(x) "Purchase Price" shall have the meaning set forth in Section
7(b) hereof, except as otherwise provided in Section 11(a)(ii) and Section
13(a) hereof.
4
<PAGE>
(y) "Record Date" shall have the meaning set forth in the
preamble.
(z) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(aa) "Right" shall have the meaning set forth in the preamble.
(bb) "Rights Agent" shall have the meaning set forth in the
preamble.
(cc) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(dd) "Section 11(a)(ii) Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(ee) "Section 13 Event" shall mean any event described in clause
(i), (ii) or (iii) of Section 13(a) hereof.
(ff) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(gg) "Stock Acquisition Date" shall mean the first date of a
public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such or such earlier date as a majority of the Board of
Directors shall become aware of the existence of an Acquiring Person.
(hh) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ii) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or
other persons performing similar functions are beneficially owned, directly
or indirectly, by such Person and any corporation or other entity that is
otherwise controlled by such Person.
(jj) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(kk) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(ll) "Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13(a) hereof.
(mm) "Voting Power" shall mean the voting power of all securities
of the Company then outstanding generally entitled to vote for the election
of directors of the Company.
5
<PAGE>
Any determination required by the definitions contained in this
Section 1 shall be made by the Board of Directors of the Company in its good
faith judgment, which determination shall be binding on the Rights Agent and
the holders of the Rights.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the close of business on the earlier to occur of (i)
the tenth day following the Stock Acquisition Date or (ii) the tenth day
after the date of the commencement by any Person (other than an Exempt
Person) of, or the first public announcement of the intent of any Person
(other than an Exempt Person) to commence, a tender or exchange offer, upon
the successful consummation of which such Person, together with its
Affiliates and Associates, would be the Beneficial Owner of Common Stock
and/or other securities representing 20% or more of the Voting Power
(irrespective of whether any shares are actually purchased pursuant to such
offer) (the earliest of such dates, including any date that is after the date
of this Agreement and prior to the Record Date, being referred to herein as
the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c) hereof) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock and not by
separate certificates, and (y) each Right will be transferable only in
connection with the transfer of a share (subject to adjustment as hereinafter
provided) of Common Stock. As soon as practicable after the Distribution
Date, the Rights Agent will send, by first-class, postage prepaid mail, to
each record holder of the Common Stock as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a certificate in substantially the form of Exhibit B hereto ("Right
Certificate") evidencing one Right for each share of Common Stock so held,
subject to adjustment as herein provided. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to
Section 11(i) or
6
<PAGE>
Section 11(p) hereof, at the time of distribution of the
Right Certificate, the Company may elect to make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Right 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
Right Certificates.
(b) As soon as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"),
by 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.
(c) With respect to certificates for Common Stock outstanding as
of the Record Date, until the Distribution Date (or, if earlier, the
Expiration Date), the Rights will be evidenced by certificates for Common
Stock registered in the names of the holders thereof, 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
Distribution Date (or, if earlier, the Expiration Date), the surrender for
transfer of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the surrender for transfer of the Rights associated with the
Common Stock represented thereby.
(d) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date and, in certain circumstances provided for in
Section 22 hereof, may be issued in respect of shares of Common Stock that
become outstanding after the Distribution Date. Certificates representing
such shares of Common Stock 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 a Rights Agreement between OG&E
7
<PAGE>
Holding Corp. and The Liberty Bank and Trust Company of Oklahoma
City, N.A. as Rights Agent, dated August 7, 1995 (the "Rights
Agreement"), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal
executive office of OG&E Holding Corp. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be
evidenced by this certificate. OG&E Holding Corp. will mail to
the holder of record of this certificate a copy of the Rights
Agreement, without charge, within five days after receipt of a
written request therefor. Under certain circumstances, as
provided in the Rights Agreement, Rights issued to or beneficially
owned by Acquiring Persons or their Associates or Affiliates (as
defined in the Rights Agreement) or any purported subsequent
holder of such Rights will become null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall,
until the Distribution Date, be evidenced by such certificates alone, and
registered holders of Common Stock shall also be the registered holders of
the associated Rights and the surrender for transfer of any such certificate
shall also constitute the surrender for transfer of the Rights associated
with the Common Stock represented thereby.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to
purchase shares 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
Rights Agreement, or as may be required to comply with any law or with any
rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof,
the Right Certificates evidencing the Rights, whenever issued, shall be dated
as of the Record Date, and on their face Right Certificates shall entitle the
holders thereof to purchase such number of one one-
8
<PAGE>
hundredth (1/100) of a share of Preferred Stock, or other securities or
property as provided herein, as the same may from time to time be adjusted as
provided herein, at the Purchase Price.
(b) Notwithstanding any other provisions of this Rights
Agreement, any Right Certificate that represents Rights that may be or may
have been at any time on or after the Distribution Date beneficially owned by
an Acquiring Person or any Affiliate or Associate thereof (or any purported
transferee of such Rights) may have impressed on, printed on, written on or
otherwise affixed to it the following legend:
The beneficial owner of the Rights represented by this Right
Certificate may be an Acquiring Person or an Affiliate or Associate
(as defined in the Rights Agreement) of an Acquiring Person or a
subsequent holder of such Right Certificate beneficially owned by
such Persons. Accordingly, under certain circumstances as provided
in the Rights Agreement, this Right Certificate and the Rights
represented hereby will be null and void.
The provisions of this Rights Agreement shall be operative whether or
not the foregoing legend is imprinted on any such Right 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 Right Certificates shall be signed or signed by
facsimile on behalf of the Company by the Chairman or President and the
Secretary or Treasurer or an Assistant Secretary or Assistant Treasurer, and
shall have affixed thereto the Company's seal or a facsimile thereof. The
Right Certificates shall be countersigned by the Rights Agent, manually, or
where permitted, in facsimile, and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed
any of the Right Certificates (either manually or by facsimile) shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates
nevertheless may be countersigned by the Rights Agent, issued and delivered
with the same force and effect as though
9
<PAGE>
the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates, the date of each of
the Right Certificates, and the certificate numbers for each of the Right
Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 14(b) and the last
three sentences of Section 11(a)(ii) 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 Right Certificate or Certificates may be (i)
transferred or (ii) split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to
purchase a like number of shares of Preferred Stock (or other securities, as
the case may be) as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer any Right Certificate shall surrender the Right Certificate at the
principal office or offices of the Rights Agent designated for such purpose,
with the form of assignment on the reverse side thereof duly endorsed (or
enclose with such Right Certificate a written instrument of transfer in a
form satisfactory to the Company and the Rights Agent), duly executed by the
registered holder thereof or his or her attorney duly authorized in writing,
and with such signature duly guaranteed. Any registered holder desiring to
split up, combine or exchange any Right Certificate shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be split up, combined or exchanged at
the principal office or offices of the
10
<PAGE>
Rights Agent designated for such purpose. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(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 Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, if requested by
the Company, reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation
of the Right Certificate if mutilated, the Company will execute and deliver a
new Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to the last three sentences of Section 11(a)(ii)
hereof or as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole at any time
after the Distribution Date, or in part from time to time after the
Distribution Date, upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed (with such
signature duly guaranteed), to the Rights Agent at the principal office or
offices of the Rights Agent designated for such purpose, together with
payment of the Purchase Price with respect to each Right exercised, subject
to adjustment as hereinafter provided, at or prior to the time (the
"Expiration Date") which is the earlier of (i) the close of business on
December 11, 2000 ("Final Expiration Date"), (ii) the action of the Board of
Directors of the Company ordering the redemption of Rights pursuant to
Section 23 hereof or (iii) the action of the Board of Directors of the
Company ordering the exchange of Rights pursuant to Section 28 hereof.
11
<PAGE>
(b) The purchase price for each one one-hundredth (1/100) of a
share of Preferred Stock (the "Purchase Price") issuable pursuant to the
exercise of a Right shall initially be $95 and, along with the number of
shares of Preferred Stock or other securities or consideration to be acquired
upon exercise of a Right, shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof. The Purchase Price shall be payable
in lawful money of the United States of America, in accordance with Section
7(c) hereof.
(c) Except as provided in Section 7(d) hereof, upon receipt of a
Right Certificate representing exercisable Rights with the form of election
to purchase duly executed, accompanied by payment of the Purchase Price or so
much thereof as is necessary for the shares to be purchased and an amount
equal to any applicable transfer tax, by cash, certified check or official
bank check payable to the order of the Company or the Rights Agent, the
Rights Agent, subject to Section 20(i) hereof, shall thereupon promptly (i)
(A) requisition from any transfer agent for the Preferred Stock certificates
(or certificates representing other securities, as the case may be) for the
number of shares of Preferred Stock (or other securities, as the case may be)
so elected to be purchased, and the Company will comply and hereby authorizes
and directs such 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 or other securities issuable upon exercise of the Rights
hereunder into a depositary, requisition from the depositary agent depositary
receipts representing such number of one one-hundredth of a share of
Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock or other securities 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 to be paid in lieu of
issuance of fractional shares in accordance with Section 14(b) hereof and
(iii) promptly after receipt of such Preferred Stock certificates (or
certificates representing other securities, as the case may be) or depositary
receipts cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names
as may be designated by such holder, and, when
12
<PAGE>
appropriate, after receipt promptly deliver such cash to or upon the order
of the registered holder of such Right Certificate. In the event that the
Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) or Section 28
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. In addition, in the case of an
exercise of the Rights by a holder pursuant to Section 11(a)(ii), the Rights
Agent shall return such Right Certificate to the registered holder thereof
after imprinting, stamping or otherwise indicating thereon that the rights
represented by such Right Certificate no longer include the rights provided
by Section 11(a)(ii) of the Rights Agreement and if less than all the Rights
represented by such Right Certificate were so exercised, the Rights Agent
shall indicate on the Right Certificate the number of Rights represented
thereby which continue to include the rights provided by Section 11(a)(ii).
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the
13
<PAGE>
Rights Agent shall so cancel and retire, any Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Company, or
shall, at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED
STOCK.
(a) The Company covenants and agrees that at all times it will
cause to be reserved and kept available, out of and to the extent of its
authorized and unissued shares of Preferred Stock not reserved for another
purpose (and, following the occurrence of a Triggering Event, other
securities) or shares of Preferred Stock not reserved for another purpose
(and, following the occurrence of a Triggering Event, other securities) held
in its treasury, the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, other securities) that, as provided in this
Agreement, will be sufficient to permit the exercise in full of all
outstanding Rights; PROVIDED, HOWEVER, that the Company shall not be required
to reserve and keep available shares of Common Stock or other securities
sufficient to permit the exercise in full of all outstanding Rights pursuant
to the adjustments set forth in Section 11(a)(ii), Section 11(a)(iii) or
Section 13 hereof unless, and only to the extent that, the Rights become
exercisable pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from
and after such time as the Rights become exercisable, the Rights and all
shares of Preferred Stock (and following the occurrence of a Triggering
Event, other securities) issued or reserved for issuance upon exercise
thereof to be listed by the NYSE or any other securities exchanges, upon
notice of issuance upon such exercise, and (ii) if then necessary to permit
the offer and issuance of such shares of Preferred Stock (and, following the
occurrence of a Triggering Event, other securities), register and qualify
such shares of Preferred Stock (and, following the occurrence of a Triggering
Event, other securities) under the Securities Act and any applicable state
securities or "blue sky" laws (to the extent exemptions therefrom are not
available), cause the related registration statement
14
<PAGE>
and qualifications to become effective as soon as possible after filing and
keep such registration statement and qualifications effective until the
Expiration Date. The Company may temporarily suspend, for a period of time
not to exceed 90 days, the exercisability of the Rights in order to prepare
and file a registration statement under the Securities Act and permit it to
become effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall
have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Preferred Stock (and
following the occurrence of a Triggering Event, other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates of
such shares (subject to payment of the Purchase Price in respect thereof), be
duly and validly authorized and issued and fully paid and nonassessable
shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Preferred Stock (or other securities, as the
case may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates for Preferred Stock (or other
securities, as the case may be) upon exercise of Rights in a name other than
that of, the registered holder of the Right Certificate, and the Company
shall not be required to issue or deliver a Right Certificate or certificate
for Preferred Stock (or other securities, as the case may be) to a person
other than such registered holder until any such tax shall have been paid (any
15
<PAGE>
such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for shares of Preferred
Stock (or other securities, as the case may be) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Stock (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
PROVIDED, HOWEVER, that if the date of such presentation and payment is a
date upon which the Preferred Stock transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock transfer books of the Company are open.
Section 11. ADJUSTMENTS TO NUMBER AND KIND OF SHARES, NUMBER OF
RIGHTS OR PURCHASE PRICE.
The number and kind of shares subject to purchase upon the exercise
of each Right, the number of Rights outstanding and the Purchase Price 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 Record Date (A) declare or pay any dividend on Preferred Stock
payable in shares of Preferred Stock, (B) subdivide or split the
outstanding shares of Preferred Stock into a greater number of
shares, (C) combine or consolidate the outstanding shares of
Preferred Stock into a smaller number of shares or effect a reverse
split of the outstanding shares of Preferred Stock 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
16
<PAGE>
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), 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, the holder thereof would have owned, or would be deemed to have
owned, upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person at any time after
the date of this Rights Agreement becomes an Acquiring Person,
other than pursuant to a tender or exchange offer for all
outstanding shares of Common Stock at a price and on terms that at
least a majority of the members of the Board of Directors of the
Company who are not officers of the Company and who are not
Acquiring Persons or Affiliates, Associates, nominees or
representatives of an Acquiring Person, determines prior to the
time such tender or exchange offer is made to be both adequate and
otherwise in the best interests of the Company, its shareowners
(other than the Acquiring Person or an Affiliate or Associate
thereof on whose behalf the offer is being made), and any other
constituency which may appropriately be considered (a "Permitted
Offer"), or any Exempt Person who is the beneficial owner of Common
Stock and/or other securities representing 20% or more of the
Voting Power shall fail to continue to qualify as an Exempt Person
(either of such events being herein referred to as a "Section
11(a)(ii) Event"), then, subject to
17
<PAGE>
Section 23(a) hereof, and except as otherwise provided in this
Section 11, each holder of a Right shall thereafter have a right to
receive for each Right, upon exercise thereof in accordance with
the terms of this Rights Agreement and payment of the Purchase
Price, in lieu of shares 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 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
Section 11(a)(ii) Event, and (y) dividing that product (such
product, following such first occurrence, shall be referred to as
the "Purchase Price" with respect to each Right 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 is herein called 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; and PROVIDED,
FURTHER, that if the transaction that would otherwise give rise to
the foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13 hereof
shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii). Notwithstanding the foregoing, from and after
the occurrence of a Section 11(a)(ii) Event, any Rights that are or
were beneficially owned by (x) the Acquiring Person or any
Associate or Affiliate of the Acquiring Person, (y) a transferee of
such Acquiring Person or any Associate or Affiliate who became a
transferee after the Acquiring Person became such or (z) a
transferee of such Acquiring Person or any such Associate or
Affiliate who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity
securities or to any Person with whom it has any continuing
agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has
determined is part of a plan, arrangement or understanding which
has the purpose or effect of avoiding the provisions
18
<PAGE>
of this paragraph, and subsequent transferees of such Persons,
shall be null and void without any further action and any purported
holder of such Rights shall thereafter have no rights whatsoever
with respect to such Rights under any provision of this Rights
Agreement. The Company shall use all reasonable effort to ensure
that the provisions of this Section 11(a)(ii) and of Section 4(b)
hereof are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. No Right
Certificate shall be issued pursuant to Section 3 hereof that
represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the provisions of this paragraph
or any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to any
Acquiring Person whose Rights would be void pursuant to the
provisions of this paragraph or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate;
and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void pursuant
to the provisions of this paragraph shall be cancelled.
(iii) In the event that the number of shares of
Common Stock which 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
Section 11(a)(ii) and the Rights shall become so exercisable, to
the extent permitted by applicable law and any agreements in effect
on the date hereof to which the Company is a party, the Company
shall: (A) determine the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value") and (B) with
respect to each Right, upon exercise of such Right, issue shares of
Common Stock to the extent available for the exercise in full of
such Right and, to the extent shares of Common Stock are not so
available, make adequate provision to substitute for the Adjustment
Shares not received upon exercise of such
19
<PAGE>
Right (1) other equity securities of the Company, including,
without limitation, shares, or units of shares, of preferred stock
irrespective of the voting rights associated with any units or
shares of preferred stock, which the Board of Directors of the
Company has deemed to have substantially the same value as shares
of Common Stock (such shares or units of shares of preferred stock
are herein called "Common Stock Equivalents"), (2) debt securities
of the Company, (3) other assets, (4) a reduction in the Purchase
Price, (5) cash, or (6) any combination of the foregoing, having a
value which, when added to the value of the shares of Common Stock
actually issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized independent
investment banking firm; 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 the Stock
Acquisition Date or the date on which the Company's right of
redemption pursuant to Section 23(a) expires then to the extent
permitted by applicable law and any agreement in effect on the date
hereof to which the Company is a party 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) or Common Stock Equivalents
and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the excess of the Current Value over the
Purchase Price; PROVIDED FURTHER that, notwithstanding anything
contained herein to the contrary, the Board of Directors may
determine that the aggregate value of any cash, debt securities and
other assets issued or distributed by the Company upon exercise of
the Rights shall not exceed the amount of cash that the Company
would be entitled to receive in payment of the Purchase Price upon
exercise in full of the then exercisable Rights; and PROVIDED
FURTHER that the Company shall have the option, but not the
obligation, to require actual payment of the Purchase Price upon
exercise of a Right only to the extent that the Purchase Price
exceeds
20
<PAGE>
the amount of cash that the holder of such Right would be
entitled to receive from the Company pursuant to this Section
11(a)(iii). If the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock or Common Stock Equivalents could
be authorized for issuance upon exercise in full of the Rights, the
30 day period set forth above may be extended to the extent
necessary, but not more than 90 days, in order that the Company may
seek shareowner approval for the authorization of such additional
shares (such 30 day period, as it may be extended, is herein called
the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first
and/or second sentence of this Section 11(a)(iii), the Company (x)
shall provide, subject to the last three sentences of Section
11(a)(ii) hereof, that such action shall apply uniformly to all
outstanding and exercisable Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Market Price per
share of the Common Stock on the Stock Acquisition Date and the per
share or per unit value of any Common Stock Equivalent shall be
deemed to equal the Current Market Price per share of the Common
Stock on such date. The Board of Directors may, but shall not be
required to, establish procedures to allocate the right to receive
Common Stock upon the exercise of the Rights among holders of
Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to all holders of
Common or Preferred Stock entitling them to subscribe for or purchase (for a
period expiring within 45 calendar days after such record date)
21
<PAGE>
Preferred Stock, shares having the same rights, privileges and preferences as
the Preferred Stock ("Equivalent Preferred Stock") or securities convertible
into Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or Equivalent Preferred Stock (or having a conversion price
per share, if a security convertible into Preferred Stock or Equivalent
Preferred Stock) less than the current market price per share of Preferred
Stock on such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall be
the number of shares of Preferred Stock outstanding on such record date, plus
the number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid by delivery of consideration part or all
of which may be in a form other than cash, the value of such non-cash
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. 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 corporation) of evidences of indebtedness, cash
(other than an ordinary dividend), assets (other than a dividend payable in
Preferred Stock, but
22
<PAGE>
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) 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 on any date shall be
deemed to be the average of the daily closing prices per share of
Common Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) 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 the Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of
the 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 the Common Stock is determined
during a period following the announcement by the issuer of such
Common Stock of (x) any dividend or distribution on Common Stock
(other than a regular quarterly cash dividend and other than the
Rights) or (y) any subdivision, combination or reclassification of
Common Stock, and the ex-
23
<PAGE>
dividend date for such dividend or distribution or the record date for
such subdivision, combination or reclassification occurs prior to the
expiration 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. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on
the NYSE or, if the shares of Common Stock are not listed or admitted
to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted sale price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc.,
Automated Quotations System or such other system then in use, or, if
on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any
such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good faith by
the Board of Directors of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, a Business Day. 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
24
<PAGE>
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
and the "current market price" per one one-hundredth of a share of
Preferred Stock shall be equal to the Current Market Price per share
of the Common Stock (as appropriately adjusted). 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.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent in the Purchase
Price; PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
ten-thousandth of a share, 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
25
<PAGE>
than the earlier of (i) three years from the date of the transaction which
mandates such adjustment, or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(i), Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock other 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 to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares of
Preferred Stock contained in Section 11(a), (b), (c), (e), (g), (h), (i),
(j), (k), (m) and (p) hereof, and the provisions of Sections 7, 9, 10, 13 and
14 hereof with respect to the Preferred Stock shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of fractional or
whole shares of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of fractional or whole shares of Preferred Stock (calculated to
the nearest ten-thousandth) obtained by (i) multiplying (x) the number of
fractional or whole shares 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 or any adjustment to the number of shares of Preferred
Stock for which a Right may be exercised, to adjust the number of Rights, in
lieu of any adjustment in the number of shares of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after
26
<PAGE>
the adjustment in the number of Rights shall be exercisable for the number of
fractional or whole shares of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price by the Purchase Price in effect immediately after such 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 date thereafter, but, if the Right Certificates have been
issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and 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 Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of shares or fraction
of a share which were expressed in the initial Right Certificates issued
hereunder.
27
<PAGE>
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any of the shares of
Preferred Stock, Common Stock or other securities issuable upon exercise of
the Rights, the Company shall take any corporate action, including using its
best efforts to obtain any required shareowner approvals, which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of Preferred Stock,
Common Stock or other securities at such adjusted Purchase Price. If upon
any exercise of the Rights, a holder is to receive a combination of Common
Stock and Common Stock Equivalents, a portion of the consideration paid upon
such exercise, equal to at least the then par value, if any, of a share of
Common Stock of the Company, shall be allocated as payment for each share of
Common Stock of the Company so received.
(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 shares of Preferred Stock and/or other securities of the Company, if
any, issuable upon such exercise over and above the shares of Preferred Stock
and/or other 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 of Preferred Stock and/or other 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 for cash
of any shares of Preferred Stock at less than the current market price, (iii)
issuance for cash of shares of Preferred Stock or securities
28
<PAGE>
which by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such shareowners.
(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), (ii) merge with or into any other
Person (other than a Subsidiary of the Company) or (iii) sell or transfer (or
permit any Subsidiary to sell or transfer), in one transaction or a series of
related transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person or Persons (other than the Company and/or any of
its Subsidiaries), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the shareowners of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates or (z) the form
or nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and
such other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section
26 hereof, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be afforded by
the Rights.
29
<PAGE>
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Record 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, or (iii) combine the outstanding shares
of Common Stock into a smaller number of shares, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator 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.
Section 12. CERTIFICATION OF ADJUSTMENTS. Whenever an
adjustment is made as provided in Sections 11 and 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts giving rise to such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Stock
a copy of such certificate and (c) mail a brief summary thereof to each
holder of record of a Right Certificate (or, if prior to the Distribution
Date, to each holder of record of a certificate representing shares of Common
Stock) in accordance with Section 25 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to give such notice shall not affect the
validity of or the force or effect of or the requirement for such adjustment.
The Rights Agent shall be fully protected in relying on any certificate
prepared by the Company pursuant to Sections 11 and 13 and on any adjustment
therein contained. Any adjustment to be made pursuant to Sections 11 and 13
of this Rights Agreement shall be effective as of the date of the event
giving rise to such adjustment.
30
<PAGE>
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER.
(a) In the event that, at any time on or after the Stock
Acquisition Date, directly or indirectly, (i) the Company shall consolidate
with, or merge with and into, any other Person or Persons (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) and the Company shall not be the surviving or continuing corporation
of such consolidation or merger or (ii) any Person or Persons (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with and 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 of the Company shall be
changed into or exchanged for stock or other securities of any other Person
or of the Company or cash or any other property or (iii) the Company or one
or more of its Subsidiaries shall sell or otherwise transfer to any other
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof) or any Affiliate or Associate of such Person, in
one or more transactions, or the Company or one or more of its Subsidiaries
shall sell or otherwise transfer to any Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o) hereof) in one
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), then, on the first occurrence of any such event, proper
provision shall be made so that (A) each holder of record of a Right (except
as otherwise provided in the last three sentences of Section 11(a)(ii)
hereof) shall thereafter have the right to receive, upon the exercise thereof
and payment of the then current Purchase Price in accordance with the terms
of this Rights Agreement, in lieu of Preferred Stock, such number of shares
of validly issued, fully paid and nonassessable and freely tradeable Common
Stock of the Principal Party (as defined herein) 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
31
<PAGE>
prior to the first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event hereof has occurred prior to the first occurrence of a
Section 13 Event, multiplying the Purchase Price in effect immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the number of one
one-hundredths of a share of Preferred Stock for which a right was
exercisable immediately prior to such first occurrence of a Section 11(a)(ii)
Event) and (2) dividing that product (such product, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase
Price" for all purposes of this Agreement) by 50% of the Current Market Price
(determined as provided in Section 11(d) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such Section 13
Event (or the fair market value on such date of other securities or property
of the Principal Party, as provided for herein); PROVIDED that the Purchase
Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
this Agreement to reflect any events occurring after the date of the first
occurrence of a Section 13 Event; (B) such Principal Party shall thereafter
be liable for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Rights Agreement; (C)
the term "Company" for all purposes of this Rights Agreement shall thereafter
be deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall only apply to such Principal
Party following the first occurrence of a Section 13 Event; and (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock in
accordance with Section 9 hereof) 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; PROVIDED, HOWEVER, that, upon the subsequent occurrence of any
merger, consolidation, sale of all or substantially all assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of
a Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property
32
<PAGE>
which such holder would have been entitled to receive had he or she, at the
time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party
shall take such steps (including, but not limited to, reservation of shares
of stock) as may be necessary to permit the subsequent exercise of the Rights
in accordance with the terms hereof for such cash, shares, rights, warrants
and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in
(i) or (ii) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the 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 market value or (B) if
no securities are so issued, (x) the Person that is the other party
to the merger and that survives said merger or, if there is more
than one such Person, the Person the Common Stock of which has the
greatest market value, (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) or (z)
the Person resulting from the consolidation; and
(ii) in the case of any transaction described in
(iii) of the first sentence in Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions 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,
whichever of such Persons as is the issuer of Common Stock having
the greatest market value of shares outstanding;
PROVIDED, HOWEVER, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section
12 of the Exchange Act, and (1) such
33
<PAGE>
Person is a direct or indirect Subsidiary of another Person the Common Stock
of which is and has been so registered, the term "Principal Party" shall
refer to such other Person, (2) if such Person is a Subsidiary, directly or
indirectly, or more than one Person, the Common Stocks of two or more of
which are and have been so registered, the term "Principal Party" shall refer
to whichever of such Persons is the issuer of the Common Stock having the
greatest market value of shares outstanding and (3) in case such Person is
owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such Person 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 consolidation, merger,
sale or transfer referred to in Section 13(a) unless prior thereto the
Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the requirements
of Sections 13(a) and (b) hereof shall promptly be performed in accordance
with their terms and that such consolidation, merger, sale or transfer of
assets shall not result in a default by the Principal Party under this Rights
Agreement as the same shall have been assumed by the Principal Party pursuant
to Sections 13(a) and (b) hereof and further providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party will:
(i) Prepare and file a registration statement
under the Securities Act, if necessary, with respect to the Rights
and the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration
statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times
meeting the
34
<PAGE>
requirements of the Securities Act) until the Final
Expiration Date, and similarly comply with applicable state
securities laws;
(ii) use its best efforts, if the Common Stock of
the Principal Party 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 listed by the NYSE or another national securities exchange;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of the first
refusal or preemptive rights in respect of the shares of Common
Stock of the Principal Party subject to purchase upon exercise of
outstanding Rights.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights shall thereafter continue to be
exercisable in the manner described in Section 13(a). The provisions of this
Section 13 shall similarly apply to all successive Section 13 Events.
(d) Furthermore, in case the Principal Party which is to be a
party to a transaction referred to in this Section 13 has a provision in any
of its authorized securities or in its charter or Bylaws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then
Current Market Price (determined pursuant to Section 11(d) hereof) or par
value per share or securities exercisable for, or convertible into, Common
Stock of such Principal Party at less than such then current market price
(other than to holders of Rights
35
<PAGE>
pursuant to this Section 13) or (ii) providing for any special payment, tax
or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of this Section 13, then, in
such event, the Company hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question of
such Principal Party shall have been cancelled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(e) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (i) and (ii) 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 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(e), all
Rights hereunder shall expire.
36
<PAGE>
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there may be paid to the holders of record
of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
then current market value of a whole Right. For the purposes of this Section
14(a), the then current market value of a Right shall be determined in the
same manner as the Current Market Price of a share of stock shall be
determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (or other securities, as the case may be) upon
exercise of the Rights or to distribute certificates which evidence
fractional shares. 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, 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 issuing fractions of
shares of Preferred Stock (or other securities, as the case may be), there
may be paid to the holders of record of Right Certificates at the time such
Right Certificates are exercised as herein provided an amount in cash equal
to the same fraction of the then current market value of a share of Preferred
Stock (or other securities, as the case may be). For purposes of this
Section 14(b), the then current market value of a share of Preferred Stock
(or other securities, as the case may be) shall be the current market price
thereof as determined pursuant to Section 11(d) hereof.
(c) The holder of a Right by the acceptance of a Right expressly
waives his or her right to receive any fractional Right or any fractional
shares upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement, except those rights of action vested in the Rights Agent
pursuant to Section 18 and 20 hereof, are vested
37
<PAGE>
in the respective holders of record of the Right Certificates (and, prior to
the Distribution Date, the holders of record of the Common Stock); and any
holder of record of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Stock), may, in his or her own behalf and for his or her own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company or any other Person to enforce, or otherwise
act in respect of, such holder's right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
rights would not have an adequate remedy at law for any breach of this
Agreement and, accordingly, that they will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right 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
purpose, duly endorsed or accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificate or the associated
Common Stock certificate made by anyone other than the Company or the Rights
Agent or the transfer agent of
38
<PAGE>
the Common Stock) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company, its directors, officers, employees and agents, 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.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREOWNER.
No holder of a Right, as such, shall be entitled to vote, receive
dividends in respect of or be deemed for any purpose to be the holder of
Preferred Stock or any other securities of the Company which may at any time
be issuable upon the exercise of the Rights, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a shareowner of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareowners at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareowners, or to receive dividends or subscription rights
in respect of any such stock or securities, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
39
<PAGE>
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 other disbursements incurred in the administration and execution of this
Rights 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, or breach of this Rights Agreement on the
part of the Rights Agent for anything done or omitted to be done by the
Rights Agent in connection with the acceptance and administration of this
Rights Agreement, including the cost 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 Rights Agreement in reliance upon
any Right Certificate, certificate for Common Stock or Preferred Stock or
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 Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, PROVIDED
that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In the case at the time such
40
<PAGE>
successor Rights Agent shall succeed to the agency created by this Rights
Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and
in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Right Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon
the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be bound.
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted to be taken by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter 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
41
<PAGE>
proved and established by a certificate signed by the Chairman, the
President, any Vice President or the Treasurer and by 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
Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct, or breach of this Rights
Agreement.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Rights Agreement or
in the Right Certificates (except its countersignature thereof) or be
required to verify the same, 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 Rights Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificates (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Rights Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or 13 hereof or responsible for
the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Rights Agreement or any Right Certificate or as to whether any shares of
Preferred Stock (or other securities, as the case may be) will, when 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,
42
<PAGE>
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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman, the President, any Vice President, the Secretary or any Assistant
Secretary, or 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 shareowner, 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 the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other entity.
(i) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the
reverse thereof, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 of such certificate,
the Rights Agent shall not take any further action with respect to such
requested exercise of 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 Rights Agreement upon 30 days' notice in writing mailed to the Company
and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of record of the Right Certificates by 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 by registered or certified mail, and to the
43
<PAGE>
holders of record of the Right Certificates by mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after 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 record of a Right Certificate
(who shall, with such notice, submit such holder's Right Certificate for
inspection by the Company), then the incumbent Rights Agent or the holder of
record of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or any State
thereof, 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
$50,000,000 or (b) an Affiliate controlled by 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 mail a notice thereof in writing to the registered holders
of the Right 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.
44
<PAGE>
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Rights Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board
of Directors to reflect any adjustment or change in the Purchase Price and
the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Rights Agreement. In addition, in connection with the
issuance or sale of shares of Common Stock following the Distribution Date
and prior to the Expiration Date, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) no such Right Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences
to the Company or the Person to whom such Right Certificate would be issued,
and (ii) no such Right 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.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (x) the close of business on the tenth day
following the Stock Acquisition Date (which date may be extended to the
extent permitted by Section 26 hereof), (y) the close of business on the
Final Expiration Date or (z) the date the Rights are exchanged pursuant to
Section 28 hereof, cause the Company to redeem all but not less than all the
then outstanding Rights at a redemption price of $0.01 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price").
The Company may, at its option, pay the
45
<PAGE>
Redemption Price in cash, shares of Common Stock (based on the "Current
Market Price," as defined in Section 11(d)(i) hereof, of the shares of Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors. Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption under this Section 23(a) has expired.
(b) In the case of a redemption under Section 23(a), immediately
upon the action of the Board of Directors of the Company ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price, without any
interest thereon. Within ten days after the action of the Board of Directors
ordering any such redemption of the Rights, the Company shall give notice of
such redemption of the Rights to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to the Rights Agent and to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
In the case of a redemption permitted under Section 23(a), the Company
may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of
the Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent of the Common Stock, and upon such action, all
outstanding Right Certificates shall be null and void without any further
action by the Company.
46
<PAGE>
Section 24. NOTICE OF PROPOSED ACTIONS.
(a) In case the Company, after the earlier of the Distribution
Date or the Stock Acquisition Date, shall propose (i) to pay any dividend to
the holders of record of its Preferred Stock payable in stock of any class or
to make any other distribution to the holders of record of its Preferred
Stock (other than a regular periodic cash dividend), or (ii) to offer to the
holders of record of its Preferred Stock options, warrants, or other rights
to subscribe for or to purchase shares of Preferred Stock (including any
security convertible into or exchangeable for Preferred Stock) or shares of
stock of any class or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) to effect any
reclassification of its Preferred Stock or any recapitalization or
reorganization of the Company, or (iv) to effect any consolidation or merger
with or into, or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one or
more transactions, of 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, 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 Right Certificate, in accordance with Section 25 hereof, notice
of such proposed action, which shall specify the record date for the purposes
of such dividend or distribution, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale or transfer of
assets, liquidation, dissolution, or winding up is to take place and the
record date for determining participation therein by the holders of record of
Preferred Stock or Common Stock, as the case may be, 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 10 days prior to the record date for
determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of record of Preferred Stock or Common Stock, as the
case may be, whichever shall be the earlier. The failure to give notice
required by this Section 24 or
47
<PAGE>
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 of the events referred to in Section 11(a)(ii)
occur or any of the transactions referred to in Section 13 of this Rights
Agreement are proposed, then, in any such case, the Company shall give to
each holder of Rights, in accordance with Section 25 hereof, notice of the
occurrence of such event or proposal of such transaction as promptly as
practicable which notice shall specify the proposed event and the
consequences of the event to holders of Rights under Section 11(a)(ii) or
Section 13 hereof, as the case may be, and, upon consummating such
transaction, shall similarly give notice thereof to each holder of Rights.
Section 25. NOTICES. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the holder of
record of any Right Certificate or Right to or on behalf of 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:
OG&E Holding Corp.
101 North Robinson
Oklahoma City, Oklahoma 73101
Attention: Treasurer
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by
the holder of record of any Right Certificate or Right 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:
The Liberty Bank and Trust
Company of Oklahoma City, N.A.
Stock Transfer Department
Post Office Box 25848
Oklahoma City, Oklahoma 73125-0848
48
<PAGE>
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right
Certificate or Right shall be sufficiently given or made if sent by mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement without the approval of any holders
of Rights or certificates representing shares of Common Stock. From and
after the Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders
of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); PROVIDED, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable. Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of one one-hundredths
of a share of Preferred Stock for which a Right is exercisable, unless such
supplement or amendment is not made after the occurrence of a Triggering
Event and such supplement or amendment does not adversely
49
<PAGE>
affect the interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). 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 27. SUCCESSORS. All of the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 28. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii) hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Voting Power of the Company.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 28(a) hereof
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company 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, or
if prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. Any
50
<PAGE>
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 for
Rights will be effected and, in the event of any partial exchange, the number
of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become
void pursuant to the provisions of Section 11(a)(ii) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 28, the Company, at
its option, may substitute Preferred Stock (or Equivalent Preferred Stock, as
such term is defined in Section 11(b) hereof) for shares of Common Stock
exchangeable for Rights, at the initial rate of one one-hundredth of a share
of Preferred Stock (or Equivalent Preferred Stock) for each share of Common
Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 28,
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, there shall be paid to the registered holders of the Right
Certificates 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 current market value of a whole share of Common Stock. For the purposes
of this Section 28(e), the current market value of a whole share of Common
Stock shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 28.
Section 29. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this
Rights Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the record holders of the Right
Certificates (and, prior to the Distribution Date, the Common
51
<PAGE>
Stock) any legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the holders of record of the
Right Certificate (and, prior to the Distribution Date, the Common Stock).
Section 30. OKLAHOMA CONTRACT. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Oklahoma and for all purposes shall be
governed by and construed in accordance with the laws of such state
applicable to contracts to be made and performed entirely within such state.
Section 31. COUNTERPARTS. This Rights 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 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
several sections of this Rights Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 33. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
Section 34. DETERMINATION 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 or any other securities of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted
52
<PAGE>
to the Board, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement, and (ii) make
all determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the Rights
or to amend the Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Right Certificates and all other parties,
and (y) not subject the Board to any liability to the holders of the Right
Certificate.
53
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
Attest: OG&E HOLDING CORP.
By: By:
--------------------- -------------------------
Name: A.M. Strecker Name: J. G. Harlow, Jr.
Title: Secretary Chairman of the Board and Chief
Executive Officer
Attest: THE LIBERTY BANK
AND TRUST COMPANY OF
OKLAHOMA CITY, N.A.
By: By:
--------------------- -------------------------
Name: Name:
Title: Title:
54
<PAGE>
Exhibit A
CERTIFICATE OF THE VOTING POWERS, DESIGNATION,
PREFERENCES, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS THEREOF, WHICH HAVE NOT BEEN
SET FORTH IN THE CERTIFICATE OF
INCORPORATION OR IN ANY AMENDMENT THERETO
OF THE SERIES A PREFERRED STOCK
(Par Value $.01 Per Share)
OF
OG&E HOLDING CORP.
Pursuant to Section 1032 of the
General Corporation Law of the State of Oklahoma
The undersigned hereby certifies that the following resolution was adopted
by the Board of Directors of OG&E Holding Corp., an Oklahoma corporation (the
"Company"), pursuant to unanimous written consent on August 7, 1995:
RESOLVED, that pursuant to authority conferred on the Board of Directors of
the Company by its Certificate of Incorporation, a series of Preferred Stock,
par value $.01 per share, is created and the designation and amount thereof and
the voting powers, preferences and relative, participating, optional or other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof, are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated "Series A Preferred Stock" and the number of shares constituting such
series shall be 1,250,000. Shares of Series A Preferred Stock shall have a par
value of $.01 per share.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the possible prior and superior rights of the holders
of any shares of preferred stock of the Company ranking prior and superior to
the shares of Series A Preferred Stock with respect to dividends, each holder of
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 that purpose:
(i) quarterly dividends payable in cash on January 20, April 20, July 20 and
October 20 in each year (each such date being a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of such share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $5.00 or (b)
-1-
<PAGE>
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends declared on shares of the
Common Stock of the Company, par value $.01 per share (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 a share of Series A Preferred Stock, and (ii) subject to the provision for
adjustment hereinafter set forth, quarterly distributions (payable in kind) on
each Quarterly Dividend Payment Date in an amount per share equal to 100 times
the aggregate per share amount 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 shares of 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 a share of Series A Preferred Stock. If the
Quarterly Dividend Payment Date is a Saturday, Sunday or legal holiday, then
such Quarterly Dividend Payment Date shall be the first immediately preceding
calendar day which is not a Saturday, Sunday or legal holiday. In the event
that the Company shall at any time after August 7, 1995 (the "Rights
Declaration Date") (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock, or (iii) combine outstanding shares of Common Stock into a smaller
number of shares, then in each such case, the amount to which the holder of a
share of Series A Preferred Stock was entitled immediately prior to such event
pursuant to the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which shall be the number of shares of Common
Stock that are outstanding immediately after such event, and the denominator of
which shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Company shall declare a dividend or distribution on shares of
Series A Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the shares of Common Stock (other than a
dividend payable in shares of Common Stock); PROVIDED, HOWEVER, 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 $5.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding share of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of such share of Series A
Preferred Stock, unless the date of issuance of such share is prior to the
record date for the first Quarterly Dividend Payment Date, in which case,
dividends on such share shall begin to accrue from the date of issuance of such
share, or unless the date of issuance is a Quarterly Dividend Payment Date or is
a date after the record date for the determination of holders of shares of
Series A 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
shares of Series A Preferred Stock in an amount less than the aggregate amount
of all such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among
-2-
<PAGE>
all shares of Series A Preferred Stock at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
(D) Dividends payable on the Series A Preferred Stock for the initial
dividend period and for any period less than a full quarterly period, shall be
computed on the basis of a 360-day year of 30-day months.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the shareholders of
the Company.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of
shareholders of the Company.
(C) If at the time of any annual meeting of shareholders for the
election of directors a "default in preference dividends" on the Series A
Preferred Stock shall exist, the holders of the Series A Preferred Stock shall
have the right at such meeting, voting together as a single class, to the
exclusion of the holders of Common Stock, to elect two (2) directors of the
Company. Such right shall continue until there are no dividends in arrears upon
the Series A Preferred Stock. Either or both of the two directors to be elected
by the holders of the Series A Preferred Stock may be to fill a vacancy or
vacancies created by an increase by the Board of Directors in the number of
directors constituting the Board of Directors. Each director elected by the
holders of Preferred Stock (a "Preferred Director") shall continue to serve as
such director for the full term for which he or she shall have been elected,
notwithstanding that prior to the end of such term a default in preference
dividends shall cease to exist. Any Preferred Director may be removed by, and
shall not be removed except by, the vote of the holders of record of the
outstanding Series A Preferred Stock voting together as a single class, at a
meeting of the shareholders or of the holders of Preferred Stock called for the
purpose. So long as a default in preference dividends on the Series A Preferred
Stock shall exist, (i) any vacancy in the office of a Preferred Director may be
filled (except as provided in the following clause (ii)) by an instrument in
writing signed by the remaining Preferred Director and filed with the Company
and (ii) in the case of the removal of any Preferred Director, the vacancy may
be filled by the vote of the holders of the outstanding Series A Preferred Stock
voting together as a single class, at the same meeting at which such removal
shall be voted. Each director appointed as aforesaid by the remaining Preferred
Director shall be deemed, for all purposes hereof, to be a Preferred Director.
For the purposes hereof, a "default in preference dividends" on the Preferred
Stock shall be deemed to have occurred whenever the amount of accrued and unpaid
dividends upon the Series A Preferred Stock shall be equivalent to six (6) full
quarterly dividends or more, and having so occurred, such default shall be
deemed to exist thereafter until, but only until, all accrued dividends on all
Series A Preferred Stock then outstanding shall have been paid to the end of the
last preceding quarterly dividend
-3-
<PAGE>
period. The provisions of this paragraph (C) shall govern the election of
Directors by holders of Series A Preferred Stock during any default in
preference dividends notwithstanding any provisions of the Company's Certificate
of Incorporation to the contrary.
(D) Except as set forth herein, holders of shares of Series A
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
shares of Common Stock as set forth herein) for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Until all accrued and unpaid dividends and distributions, whether
or not declared, on outstanding shares of Series A Preferred Stock shall have
been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of junior
stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of parity stock, except dividends paid ratably on shares of Series A
Preferred Stock and shares of all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
such Series A Preferred Stock and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any junior stock, PROVIDED, HOWEVER, that the Company may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in exchange for
shares of any other junior stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock or any shares of parity stock, except in accordance
with a purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth in the Certificate of
-4-
<PAGE>
Incorporation of the Company creating a series of Preferred Stock or any similar
shares or as otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, no distributions shall be made (i) to the holders of
shares of junior stock unless the holders of Series A Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $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, or (b) an amount per share equal to 100 times the aggregate per
share amount to be distributed to holders of shares of Common Stock or (ii) to
the holders of shares of parity stock, unless simultaneously therewith
distributions are made ratably on shares of Series A Preferred Stock and all
other shares of such parity stock in proportion to the total amounts to which
the holders of shares of Series A Preferred Stock are entitled under clause
(i)(a) of this Sentence and to which the holders of shares of such parity stock
are entitled, in each case, upon such liquidation, dissolution or winding up.
(B) In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the aggregate amount to which holders of
Series A Preferred Stock were entitled immediately prior to such event pursuant
to clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted by
multiplying such amount by a fraction, the numerator of which shall be the
number of shares of Commons Stock that are outstanding immediately after such
event, and the denominator of which shall be the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case, each share of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is converted or
exchanged. In the event the Company shall at any time after the Rights
Declaration Date (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case, the amount set forth in the immediately
preceding sentence with respect to the exchange or conversion of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event, and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
-5-
<PAGE>
Section 8. REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. RANKING. The shares of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Company as to the payment of
dividends and the distribution of assets, unless the terms of any such series or
class shall provide otherwise.
Section 10. AMENDMENT. The provisions of this Certificate of
Designation shall not hereafter be amended, either directly or indirectly, or
through merger or consolidation with another corporation, in any manner that
would alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of at least a majority of the outstanding shares of Series A
Preferred Stock, voting separately as a class.
Section 11. FRACTIONAL SHARES. The Series A Preferred Stock may be
issued in fractions of a share, which fractions 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 Preferred Stock.
Section 12. CERTAIN DEFINITIONS. As used herein with respect to the
Series A Preferred Stock, the following terms shall have the following meanings:
(A) The term "junior stock" (i) as used in Section 4, shall mean the
Common Stock and any other class or series of capital stock of the Company
hereafter authorized or issued over which the Series A Preferred Stock has
preference or priority as to the payment of dividends, and (ii) as used in
Section 6, shall mean the Common Stock and any other class or series of capital
stock of the Company over which the Series A Preferred Stock has preference or
priority in the distribution of assets on any liquidation, dissolution or
winding up of the Company.
(B) The term "parity stock" (i) as used in Section 4, shall mean any
class or series of stock of the Company hereafter authorized or issued ranking
PARI PASSU with the Series A Preferred Stock as to dividends, and (ii) as used
in Section 6, shall mean any class or series of stock of the Company ranking
PARI PASSU with the Series A Preferred Stock in the distribution of assets on
any liquidation, dissolution or winding up.
-6-
<PAGE>
IN WITNESS WHEREOF, OG&E Holding Corp. has caused this Certificate
to be signed and attested on , 199 .
---------- ---
By:
-------------------
J.G. Harlow, Jr.
President and Chief Executive Officer
ATTEST:
By:
------------------
A.M. Strecker
Vice President, Secretary
and Treasurer
<PAGE>
EXHIBIT B
(Form of Right Certificate)
Certificate No. W- _________ Rights
NOT EXERCISABLE AFTER DECEMBER 11, 2000 OR EARLIER IF NOTICE
OF REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN THE EVENT
THAT THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO
A PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON OR A PURPORTED TRANSFEREE OF
THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY WILL BECOME NULL
AND VOID. [THE BENEFICIAL OWNER OF THE RIGHTS REPRESENTED BY
THIS RIGHT CERTIFICATE MAY BE AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE (AS DEFINED IN THE RIGHTS AGREEMENT) OF
AN ACQUIRING PERSON OR A SUBSEQUENT HOLDER OF SUCH RIGHT
CERTIFICATE BENEFICIALLY OWNED BY SUCH PERSONS. ACCORDINGLY,
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS
AGREEMENT, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY WILL BE NULL AND VOID.]
Right Certificate
OG&E HOLDING CORP.
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 August 7, 1995 ("Rights Agreement") between
OG&E Holding Corp., an Oklahoma corporation ("Company"), and The Liberty Bank
<PAGE>
and Trust Company of Oklahoma City, N.A. ("Rights Agent"), to purchase from
the Company prior to 5:00 P.M. (Oklahoma City time) on December 11, 2000, at
the office of the Rights Agent, or its successors as Rights Agent, in
Oklahoma City, Oklahoma, one one-hundredth of a fully paid and nonassessable
share of Series A Preferred Stock, par value $.01 per share ("Preferred
Stock"), of the Company at a purchase price of $95, as the same may from time
to time be adjusted in accordance with the Rights Agreement ("Purchase
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase and related Certificate duly executed.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon the exercise of the Rights evidenced by this
Right Certificate, as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are 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 of the
Rights Agent, the Company and the holders of record of the Right
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Copies of the Rights Agreement are on file at the
principal executive office of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent, may be exchanged for another
Right Certificate or Right Certificate of like tenor and date evidencing
Rights entitling the holder of record to purchase a like aggregate number of
shares of Preferred Stock as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall
-2-
<PAGE>
be exercised in part, the holder shall be entitled to receive, upon surrender
hereof, the Right Certificate indicating the remaining Rights represented
thereby or another Right Certificate or Right Certificates for the number of
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at
a redemption price of $0.01 per Right at any time prior to the earlier of the
close of business on (i) the tenth day following the Stock Acquisition Date
(as such time period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date (as such terms are defined in the Rights
Agreement), or under certain other conditions as specified in the Rights
Agreement.
No fractional shares of Preferred Stock shall be required to be issued
upon the exercise of any Right or Rights evidenced hereby, and in lieu
thereof, a cash payment will be made as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
rights of a shareowner of the Company or any right to vote for the election
of directors; or upon any matter submitted to shareowners at any meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting shareowners or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in
the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
-3-
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of __________________.
ATTEST: OG&E HOLDING CORP.
____________________________ By: ____________________________
Secretary Title:
Countersigned:
THE LIBERTY BANK AND
TRUST COMPANY OF OKLAHOMA CITY, N.A.,
Rights Agent
By ____________________________
Authorized signature
-4-
<PAGE>
(Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ______________ hereby sells, assigns and transfers unto
_____________________________________________________________________________.
Rights evidenced by this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
_________________ Attorney to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: __________________, _________
___________________________________
Signature
Signature Guaranteed:
-5-
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or any transferee of such Persons.
Dated: __________________, _________.
Signature
Signature Guaranteed:
-6-
<PAGE>
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
-7-
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
exercise the Right Certificate.)
To: OG&E HOLDING CORP.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Right Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights (or such other
securities of the Company or any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such share(s) be
issued in the name:
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 Right
Certificate, a new Right Certificate for the remaining such rights shall be
registered in the name of and delivered to:
Please insert social security
or other identifying number
_______________________________________
(Please print name and address)
_______________________________________
Dated: _________________, __________.
__________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
-8-
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] not acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate or Associate of
an Acquiring Person or any transferee of such Persons.
Dated: ________________, __________
Signature
Signature Guaranteed:
-9-
<PAGE>
EXHIBIT C
OG&E HOLDING CORP.
SUMMARY OF RIGHTS AGREEMENT
On August 7, 1995, the Board of Directors of OG&E Holding Corp. (the
"Company") declared a dividend of one Preferred Stock purchase right (a "Right"
or "Rights") for each outstanding share of Common Stock, par value $.01 per
share ("Common Stock"), of the Company. The dividend is payable as of the
close of business on August 8, 1995 (the "Record Date"), to shareowners
of record as of such Record Date. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the Company
and The Liberty Bank and Trust Company of Oklahoma City, N.A., as Rights
Agent (the "Rights Agent").
TRADING AND DISTRIBUTION OF RIGHTS
Initially, (i) the Rights will not be exercisable, (ii) certificates will
not be sent to shareowners, (iii) the Rights will be evidenced by the Common
Stock certificates, (iv) the Rights will automatically trade with the Common
Stock, (v) the Rights will be transferred with and only with such Common Stock
certificates, (vi) new Common Stock certificates will contain a notation
incorporating the Rights Agreement by reference and (vii) the surrender for
transfer of any certificates for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by
such certificate.
The Rights become exercisable on the "Distribution Date," which is the
close of business on the earlier of:
<PAGE>
(i) the tenth day after a public announcement (or, if earlier, the
date a majority of the Board of Directors of the Company becomes aware)
that a person or group of affiliated or associated persons acquired,
or obtained the right to acquire, beneficial ownership of Common Stock
or other securities of the Company representing 20% or more of the
voting power of all securities of the Company then outstanding generally
entitled to vote for the election of directors ("Voting Power") (such
person or group being called an "Acquiring Person" and such date of
first public announcement being called the "Stock Acquisition Date"), or
(ii) the tenth day after the commencement of, or public announcement of
an intention to commence, a tender or exchange offer the consummation
of which would result in the ownership of 20% or more of the outstanding
Voting Power (the earlier of the dates in clause (i) or (ii) being called
the "Distribution Date").
When the Rights initially become exercisable, each Right will entitle
the holder of record to purchase from the Company one one-hundredth of a share
of Series A Preferred Stock, par value $.01 per share ("Preferred Stock"), of
the Company, at a price of $95 per one one-hundredth of a share (the "Purchase
Price"), although the price and the securities to be purchased are subject to
adjustment as described below.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Company's Common Stock as of the close of business on
the Distribution Date, and such separate certificates alone will evidence the
Rights from and after the Distribution Date.
EXEMPT PERSONS
Even if they have acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the Voting Power of the Company, each of the
following persons (an "Exempt Person") will not be deemed to be an Acquiring
Person: (i) Oklahoma Gas and Electric Company, the Company, any subsidiary of
the Company, any employee benefit plan or employee stock plan of the Company,
of any subsidiary of the Company or of Oklahoma Gas
-2-
<PAGE>
and Electric Company; and (ii) any person who becomes an Acquiring Person solely
by virtue of a reduction in the number of outstanding shares of Common Stock,
unless and until such person shall become the beneficial owner of, or make a
tender offer for any additional shares of Common Stock.
EXERCISABILITY AND EXPIRATION
THE HOLDERS OF THE RIGHTS ARE NOT REQUIRED TO TAKE ANY ACTION UNTIL THE
RIGHTS BECOME EXERCISABLE. As stated above, the Rights are not exercisable
until the Distribution Date. The Rights will expire at the close of business
on December 11, 2000, unless earlier redeemed or exchanged by the Company as
described below.
ADJUSTMENTS
In order to protect the value of the Rights to the holders, the Purchase
Price and the number of shares of Preferred Stock (or other securities or
property) issuable upon exercise of the Rights are subject to adjustment from
time to time (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Company's Common Stock or Preferred
Stock, (ii) upon the grant to holders of the Preferred Stock of 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 dividends payable in Preferred Stock) or of subscription
rights or warrants (other than those referred to above).
These adjustments are called anti-dilution provisions and are intended
to ensure that a holder of Rights will not be adversely affected by the
occurrence of such events. With certain exceptions, the Company is not required
to adjust the Purchase Price until cumulative adjustments require a change of at
least 1% in the Purchase Price.
FLIP-IN EVENTS AND FLIP-OVER EVENTS
In the event (i) any person (other than an Exempt Person) becomes an
Acquiring Person (except pursuant to an offer for all outstanding shares of
Common Stock that the independent directors determine prior to the time
such offer is made to be fair to and otherwise in the best
-3-
<PAGE>
interest of the Company and its shareowners) or (ii) any Exempt Person who is
the beneficial owner of 20% or more of the outstanding Voting Power of the
Company fails to continue to qualify as an Exempt Person, then each holder of
record of a Right, other than the Acquiring Person, will thereafter have the
right to receive, upon payment of the Purchase Price, Common Stock (or, in
certain circumstances, cash, property or other securities of the Company) having
a market value at the time of the transaction equal to twice the Purchase Price.
Rights are not exercisable following such event, however, until such time as
the Rights are no longer redeemable by the Company as set forth below. Any
Rights that are or were at any time, on or after the Distribution Date,
beneficially owned by an Acquiring Person shall become null and void.
For example, at a Purchase Price of $95 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 $190 worth
of Common Stock (or other consideration, as noted above) for $95. Assuming
that the Common Stock had a per share value of $40 at such time, the holder
of each valid Right would be entitled to purchase 4.75 shares of Common Stock
for $95.
Subject to certain limited exceptions, if (i) the Company is acquired
after the Stock Acquisition Date in a merger or other business combination (in
which any shares of the Company's Common Stock are changed into or exchanged for
other securities or assets) or (ii) more than 50% of the assets or earning power
of the Company and its subsidiaries (taken as a whole) are sold or transferred
after the Stock Acquisition Date in one or a series of related transactions, the
Rights Agreement provides that proper provision shall be made so that each
holder of record of a Right will have the right to receive, upon payment
of the Purchase Price, that number of shares of common stock of the
acquiring company having a market value at the time of such transaction
equal to two times the Purchase Price.
To the extent that insufficient shares of Common Stock are available for
the exercise in full of the Rights, holders of Rights will receive upon exercise
shares of Common Stock to the extent
-4-
<PAGE>
available and then other securities of the Company, including units of shares
of Preferred Stock with terms substantially comparable to those of the Common
Stock, property, debt securities, or cash, in proportions determined by the
Company, so that the aggregate value received is equal to twice the Purchase
Price. The Company, however, shall not be required to issue any cash, property
or debt securities upon exercise of the Rights to the extent their aggregate
value would exceed the amount of cash the Company would otherwise be entitled
to receive upon exercise in full of the then exercisable Rights.
No fractional shares of Preferred Stock or Common Stock will be required
to be issued upon exercise of the Rights and, in lieu thereof, a payment in
cash may be made to the holder of such Rights equal to the same fraction of the
current market value of a share of Preferred Stock or, if applicable,
Common Stock.
REDEMPTION
At any time until the earlier of (i) ten days after the Stock Acquisition
Date (subject to extension by the Board of Directors) or (ii) the date the
Rights are exchanged pursuant to the Rights Agreement, the Company may redeem
the Rights in whole, but not in part, at a price of $0.01 per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Company authorizing redemption of the Rights, the right to exercise the
Rights will terminate, and the only right of the holders of Rights will be to
receive the Redemption Price without any interest thereon.
EXCHANGE OPTION
At any time after any person becomes an Acquiring Person, the Board of
Directors may, at its option, exchange all or part of the outstanding Rights
(other than Rights held by the Acquiring Person and certain related parties)
for shares of Common Stock at an exchange ratio of one share of Common Stock
per Right (subject to certain anti-dilution adjustments). The Board may not
effect such an exchange, however, at any time any person or group owns 50% or
more of the Voting Power of the Company. Immediately after the Board orders
such an exchange, the right
-5-
<PAGE>
to exercise the Rights shall terminate and the holders of Rights shall
thereafter only be entitled to receive shares of Common Stock at the applicable
exchange ratio.
OTHER PROVISIONS
Under presently existing federal income tax law, the issuance of the
Rights is not taxable to the Company or to shareowners and will not change the
way in which shareowners can presently trade the Company's shares of Common
Stock. If the Rights should become exercisable, shareowners, depending on then
existing circumstances, may recognize taxable income.
The Rights Agreement may be amended by the Board of Directors of the
Company. After the Distribution Date, however, the provisions of the Rights
Agreement may be amended by the Board only to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or an affiliate or associate
of an Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; PROVIDED, however, that no amendment to adjust the time
period governing redemption shall be made at such time as the Rights are not
redeemable. In addition, no supplement or amendment may be made which changes
the Redemption Price, the final expiration date, the Purchase Price or the
number of one one-hundredths of a share of Preferred Stock for which a Right is
exercisable, unless at the time of such supplement or amendment there has been
no occurrence of a Stock Acquisition Date and such supplement or amendment does
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an associate or affiliate of an Acquiring Person).
Until a Right is exercised, the holder, as such, will have no rights as
a shareowner of the Company, including, without limitation, the right to vote
or to receive dividends.
A copy of the Rights Agreement will be filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form S-4. A
copy of the Rights Agreement is available free of charge from either the Rights
Agent or the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety
-6-
<PAGE>
by reference to the Rights Agreement, which is incorporated in this summary
description herein by reference.
-7-
<PAGE>
Exhibit 5.01
[Rainey Ross Rice & Binns Letterhead]
August 9, 1995
OG&E Holding Corp.
101 North Robinson
Oklahoma City, Oklahoma 73101
Re: 44,874,387 shares of Common Stock,
par value $.01 per share, of OG&E Holding Corp.
Ladies and Gentlemen:
We have acted as counsel for OG&E Holding Corp. (the "Company") in
connection with the proposed issuance of the Common Stock referred to above
(the "Shares"). The Shares are the subject of the Company's Registration
Statement on Form S-4 (the "Registration Statement"), which is being filed
under the Securities Act of 1933, as amended, and to which this opinion is
attached as an Exhibit. As to certain questions of fact, we have relied upon
statements and certificates of certain officers of the Company and other
professionals retained by the Company. We have assumed the authenticity of
all documents submitted to us as originals, the genuineness of all
signatures, the legal capacity of all natural persons and the conformity to
the originals of all documents submitted to us as copies. We have examined
the following documents:
a) Certificate of Incorporation filed August 4, 1995.
b) Bylaws approved and adopted by the Board of Directors.
Based upon the foregoing and upon our general familiarity with the
properties and affairs of the Company, we are of the opinion that:
1. The Company is a validly organized and legally existing
corporation under the laws of the State of Oklahoma.
<PAGE>
OG&E Holding Corp.
August 9, 1995
Page 2
2. When, as and if (a) the Registration Statement becomes
effective pursuant to the provisions of the Securities Act of 1933, as
amended; (b) the Oklahoma Corporation Commission, the Arkansas Public Service
Commission, and the Federal Energy Regulatory Commission issue appropriate
orders authorizing the transactions contemplated by the Agreement and the
Plan of Share Acquisition (the "Agreement"), which is attached as Appendix A
to the Proxy Statement/Prospectus that forms a part of the Registration
Statement; (c) the transaction contemplated by the eighth "WHEREAS" clause of
the Agreement is consummated and duly approved by all necessary regulatory
authorities; (d) the Agreement and the transactions contemplated by the
Agreement are approved by the requisite vote of the holders of Common Stock
(par value $2.50 per share) and 4% Cumulative Preferred Stock (par value $20
per share) of Oklahoma Gas and Electric Company ("OG&E") and by OG&E as the
sole shareholder of the Company, (e) the Certificate of Share Acquisition is
duly filed with the Oklahoma Secretary of State, (f) the Shares are duly
issued by the Company in accordance with the Agreement and resolutions to be
adopted by the Board of Directors of the Company; (g) the Restated
Certificate of Incorporation of the Company as set forth in the Registration
Statement is duly authorized, executed and filed with the Oklahoma Secretary
of State, the Shares will be legally issued, fully paid, and non-assessable
shares of stock of the Company.
Respectfully,
RAINEY, ROSS, RICE & BINNS
By: /s/ Hugh D. Rice
-----------------------
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
SEC METHOD
Ratio of Earnings to Fixed Charges
Twelve months ended June 30, 1995
-----------------------------------------------------------------------------------------------------------------------------------
OG&E HOLDING CO.
CONSOLIDATED THE COMPANY CONSOLIDATED
AS REPORTED PRO FORMA PRO FORMA
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
EARNINGS:
Net Income $ 114,599,878 $ 102,909,000 $ 114,599,878
Plus Income Taxes:
Federal Income Taxes 58,785,059 58,648,000 58,785,059
State Income Taxes
Federal Deferred Taxes 10,310,010 6,966,000 10,310,010
State Deferred Taxes
Invest Tax Credit (5,149,860) (5,150,000) (5,149,860)
Taxes (below the line)
Plus Fixed Charges 75,810,951 67,227,010 79,589,956
Total Earnings $ 254,356,038 $ 230,600,010 $ 258,135,043
FIXED CHARGES:
Long-term debt interest $ 63,442,244 $ 61,284,000 $ 63,442,244
Amort. Disc & Exp
Amort. of Prem
Other interest expense 10,614,697 4,189,000 10,614,697
Calculated int on
leased property 1,754,010 1,754,010 1,754,010
Dividends declared - subsidary
preferred stock (grossed
up for taxes) 0 0 3,779,005
Total Fixed Charges $ 75,810,951 $ 67,227,010 $ 79,589,956
Ratio of Earnings to Fixed Charges 3.36 3.43 3.24
Dividends declared -
preferred stock (grossed-up
for taxes) 3,779,005 3,779,005 0
Combined fixed charges and
preferred stock dividends $ 79,589,956 $ 71,006,015 $ 79,589,956
Ratio of Earnings to Combined
Fixed Charges and preferred
stock dividends 3.24 3.30 3.24
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 23.01
CONSENT
We hereby consent to the use of our name in the Registration
Statement, including the accompanying Prospectus, of OG&E Holding Corp. to be
filed with the Securities and Exchange Commission and to which this consent
is filed as an Exhibit and to the use of our opinion filed as Exhibit 5.01 to
the Registration Statement.
RAINEY, ROSS, RICE & BINNS
Oklahoma City, Oklahoma
August 9, 1995 By: /s/ HUGH D. RICE
<PAGE>
EXHIBIT 23.01
We do hereby consent to the use of our name in the Registration
Statement and the accompanying Prospectus of OG&E Holding Corp. to be filed
with the Securities and Exchange Commission and to which this consent is
filed as an Exhibit.
Gardner, Carton & Douglas
August 9, 1995
<PAGE>
EXHIBIT 23.02
CONSENT
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement of our reports
dated January 26, 1995, included in the Oklahoma Gas and Electric Company
Form 10-K for the year ended December 31, 1994 and to all references to our
Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
Oklahoma City, Oklahoma
August 9, 1995
<PAGE>
EXHIBIT 99.01
OKLAHOMA GAS AND ELECTRIC COMPANY
SPECIAL MEETING OF SHAREOWNERS
NOVEMBER 16, 1995
P
The undersigned hereby appoints James G. Harlow, Jr., Herbert H.
Champlin, and Bill Swisher, and each of them severally, with full power of
substitution and with full power to act with or without the other, as the
R proxies of the undersigned to represent and to vote all shares of stock of
Oklahoma Gas and Electric Company held of record by the undersigned on
September 19, 1995, at a Special Meeting of Shareowners of the Company to
be held on November 16, 1995, and at all adjournments thereof, on all
O matters coming before said meeting.
THIS PROXY, WHICH IS SOLICITED BY THE BOARD OF DIRECTORS, WILL BE
X VOTED AS DIRECTED, IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
THE PROPOSAL NUMBERED 1 ON THE REVERSE SIDE OF THIS PROXY CARD.
Y
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE. Unless you attend and vote in person, you must sign and
return your proxy in order to have your shares voted at the meeting.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS BELOW. EACH JOINT OWNER SHOULD
SIGN. ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR OTHERS SIGNING IN A
REPRESENTATIVE CAPACITY SHOULD GIVE THEIR FULL TITLES.
PROXY NUMBER TOTAL COMMON 4% PREFERRED THE BOARD RECOMMENDS A VOTE FOR
SHARES INCLUDING SHARES THE PROPOSAL NUMBERED 1 BELOW.
REINVESTMENT PLAN
AND CUSTOMER
STOCK PLAN
X________________________/____/95___ 1. Proposal to approve an Agreement and
SIGNATURE OF SHAREOWNERS DATE Plan of Share Acquisition, whereby
OG&E Holding Corp. will become the
X________________________/____/95___ Holding Company parent of the Company
SIGNATURE OF SHAREOWNERS DATE and the holders of Company Common Stock
will become holders of OG&E Holding
common stock.
--------------------------------------
--------------------------------------
2. In their discretion, the proxies are
authorized to vote upon such other
business as may properly come before
the meeting.
--------------------------------------
--------------------------------------
