SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ASHLAND INC.
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(Exact name of registrant as specified in its charter)
KENTUCKY 61-0122250
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(State of incorporation or organization) (I.R.S. Employer
Identification No.)
1000 ASHLAND DRIVE, RUSSELL, KENTUCKY 41169
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Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
To Be So Registered Each Class Is To Be Registered
- ------------------- ------------------------------
Rights to Purchase Series A New York Stock Exchange
Participating Cumulative Chicago Stock Exchange
Preferred Stock
If this Form relates to the registration of a class of debt securities and
is effective upon filing pursuant to General Instruction A.(c)(1), please
check the following box. [ ]
If this Form relates to the registration of a class of debt securities and
is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933 pursuant
to General Instruction A.(c)(2), please check the following box. [ ]
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
---------------
(Title of Class)
<PAGE>
Item 1. DESCRIPTION OF SECURITIES TO BE REGISTERED
On May 16, 1996, the Board of Directors of Ashland Inc. (the
"Company") declared a dividend of one Right for each outstanding share of
Common Stock, par value $1.00 per share, of the Company (the "Common
Shares"). The Rights will be issued to the holders of record of Common
Shares outstanding at the close of business on May 16, 1996, and with
respect to Common Shares issued thereafter until the Distribution Date (as
defined below) and in certain circumstances with respect to Common Shares
issued after the Distribution Date. Each Right, when it becomes exercisable
as described below, will entitle the registered holder to purchase from the
Company one-thousandth (1/1000) of a share of Series A Participating
Cumulative Preferred Stock, without par value, of the Company (the
"Preferred Shares") at a price of $140 (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement
dated as of May 16, 1996 (the "Rights Agreement"), between the Company and
Harris Trust and Savings Bank, as Rights Agent (the "Rights Agent"), a copy
of which is filed herewith as Exhibit 4(a).
Until the earlier of (a) such time as the Company learns that a person
or group (including any affiliate or associate of such person or group) has
acquired, or has obtained the right to acquire, beneficial ownership of 15%
or more of the outstanding Common Shares (such person or group being an
"Acquiring Person"), unless provisions preventing accidental triggering of
the Rights apply, and (b) the close of business on such date, if any, as
may be designated by the Board of Directors of the Company following the
commencement of, or first public disclosure of an intent to commence, a
tender or exchange offer by any person other than the Company, its
subsidiaries or benefit plans for 15% of the outstanding Common Shares, if
upon consummation of such tender or exchange offer such person could be the
beneficial owner of more than 15% of the outstanding Common Shares (the
earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced by the evidences of ownership for Common Shares
registered in the names of the holders thereof (which evidences for Common
Shares shall also be deemed to be Right Certificates, as defined below) and
not by separate Right Certificates. Therefore, on and after May 16, 1996,
and until the Distribution Date, the Rights will be transferred
<PAGE>
with and only with the Common Shares and each transfer of Common Shares
also will transfer the associated Rights.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date (and to each initial record holder of certain Common
Shares originally issued after the Distribution Date), and such separate
Right Certificates alone will thereafter evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire on May 16, 2006 (the "Expiration Date"), unless earlier redeemed by
the Company as described below.
The number of Preferred Shares or other securities issuable upon
exercise of the Rights is subject to adjustment from time to time in the
event of any change in the Common Shares or the Preferred Shares, whether
by reason of stock dividends, stock splits, recapitalizations, mergers,
consolidations, combinations or exchanges of securities, split-ups,
split-offs, spin-offs, liquidations, other similar changes in
capitalization, any distribution or issuance of cash, assets, evidences of
indebtedness or subscription rights, options or warrants to holders of
Common Shares or Preferred Shares.
The Preferred Shares are authorized to be issued in fractions which
are an integral multiple of one-thousandth (1/1000) of a Preferred Share.
The Company may, but is not required to, issue fractions of shares upon the
exercise of Rights, and in lieu of fractional shares, the Company may issue
certificates or utilize a depository arrangement as provided by the terms
of the Preferred Shares and, in the case of fractions other than
one-thousandth (1/1000) of a Preferred Share or integral multiples thereof,
may make a cash payment based on the market price of such shares.
In the event the Company is acquired in a merger or other business
combination by an Acquiring Person or an associate or affiliate of an
Acquiring Person that is a publicly traded corporation or 50% or more of
the Company's assets or assets representing 50% or more of the Company's
revenues or cash flow are sold, leased, exchanged or
<PAGE>
otherwise transferred (in one or more transactions) to an Acquiring Person
or an associate or affiliate of an Acquiring Person that is a publicly
traded corporation, each Right will entitle its holder (subject to the next
paragraph) to purchase, for the Purchase Price, that number of common
shares of such corporation which at the time of the transaction would have
a market value of twice the Purchase Price. In the event the Company is
acquired in a merger or other business combination by an Acquiring Person
or an associate or affiliate of an Acquiring Person that is not a publicly
traded entity or 50% or more of the Company's assets or assets representing
50% or more of the Company's revenues or cash flow are sold, leased,
exchanged or otherwise transferred (in one or more transactions) to an
Acquiring Person or an associate or affiliate of an Acquiring Person that
is not a publicly traded entity, each Right will entitle its holder
(subject to the next paragraph) to purchase, for the Purchase Price, at
such holder's option, (a) that number of shares of the surviving
corporation in the transaction with such entity (which surviving
corporation could be the Company) which at the time of the transaction
would have a book value of twice the Purchase Price, (b) that number of
shares of such entity which at the time of the transaction would have a
book value of twice the Purchase Price or (c) if such entity has an
affiliate which has publicly traded common shares, that number of common
shares of such affiliate which at the time of the transaction would have a
market value of twice the Purchase Price.
Any Rights that are at any time beneficially owned by an Acquiring
Person (or any affiliate or associate of an Acquiring Person) will be null
and void and nontransferable and any holder of any such Right (including
any purported transferee or subsequent holder) will be unable to exercise
or transfer any such Right.
At any time prior to the earlier of (a) such time as a person or group
becomes an Acquiring Person and (b) the Expiration Date (as defined in the
Rights Agreement), the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price (in cash or Common Shares or
other securities of the Company deemed by the Board of Directors to be at
least equivalent in value) of $.01 per Right (which amount shall be subject
to adjustment as provided in the Rights Agreement) (the "Redemption
Price").
<PAGE>
Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption
Price. Within 10 business days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of
such redemption to the holders of the then outstanding Rights by mail. Each
such notice of redemption will state the method by which payment of the
Redemption Price will be made.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
At any time prior to the Distribution Date, the Company may, without
the approval of any holder of the Rights, supplement or amend any provision
of the Rights Agreement (including the date on which the Distribution Date
shall occur, the time during which the Rights may be redeemed or the terms
of the Preferred Shares), except that no supplement or amendment shall be
made which reduces the Redemption Price (other than pursuant to certain
adjustments therein) or provides for an earlier Expiration Date. From and
after the Distribution Date and subject to applicable law, the Company may
amend the Rights Agreement without the approval of any holders of Right
Certificates (a) to cure any ambiguity or to correct or supplement any
provision contained in the Rights Agreement which may be defective or
inconsistent with any other provision of the Rights Agreement or (b) to
make any other provisions 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). Any supplement or amendment adopted during any
period after any person or group has become an Acquiring Person but prior
to the Distribution Date shall be null and void unless such supplement or
amendment could have been adopted under the prior sentence from and after
the Distribution Date.
The Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, the Articles of Amendment of the
Articles of Incorporation of the Company specifying the terms of the
Preferred Shares
<PAGE>
and the form of Right Certificate (are filed herewith as exhibits and
are incorporated herein by reference. The foregoing description of the
Rights and the Preferred Shares is qualified by reference to such exhibits.
<PAGE>
Item 2. EXHIBITS
Exhibit
Number Title
- ------ -----
3 Second Restated Articles of Incorporation of Ashland Inc.,
as amended May 16, 1996.
4(a) Rights Agreement dated as of May 16, 1996, between Ashland
Inc. and Harris Trust and Savings Bank, as Rights Agent.
4(b) Articles of Amendment to the Second Restated Articles of
Incorporation of Ashland Inc. creating the Series A
Participating Cumulative Preferred Stock (contained
within Exhibit 3 hereto).
4(c) Form of Right Certificate (contained within Exhibit 4(a)
hereto).
5 Opinion of Wyatt, Tarrant & Combs.
23 Consent of Wyatt, Tarrant & Combs (contained within
Exhibit 5 hereto).
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to
be signed on its behalf by the undersigned, thereto duly authorized.
ASHLAND INC.
by /s/ Thomas L. Feazell
--------------------------------
Thomas L. Feazell
Senior Vice President, General
Counsel and Secretary
Date: May 16, 1996
<PAGE>
INDEX OF EXHIBITS
Exhibit
Number Title
- ------ -----
3 Second Restated Articles of Incorporation of Ashland Inc.,
as amended May 16, 1996.
4(a) Rights Agreement dated as of May 16, 1996, between Ashland
Inc. and Harris Trust and Savings Bank, as Rights Agent.
4(b) Articles of Amendment to the Second Restated Articles of
Incorporation of Ashland Inc. creating the Series A
Participating Cumulative Preferred Stock (contained
within Exhibit 3 hereto).
4(c) Form of Right Certificate (contained within Exhibit 4(a)
hereto).
5 Opinion of Wyatt, Tarrant & Combs.
23 Consent of Wyatt, Tarrant & Combs (contained within
Exhibit 5 hereto).
EXHIBIT 3
[ASHLAND LOGO]
ASHLAND INC.
SECOND RESTATED ARTICLES
OF INCORPORATION
(INCLUDING ALL AMENDMENTS THERETO)
As Effective May 16, 1996
<PAGE>
TABLE OF CONTENTS
RECORDING DATA
SECOND RESTATED ARTICLES OF INCORPORATION
ASHLAND INC.
<TABLE>
<CAPTION>
Date Filed In Date
Office of Recorded in Number of
Secretary Office of Shares
of State County Clerk Authorized -
Document of Kentucky Clerk Explanation
- ----------------- --------------- ---------------------- ------------------
<S> <C> <C> <C>
1. Second Restated January 29, 1987 Boyd Co., KY - January 30,000,000 shares
Articles of 30, 1987, Arts. of Inc., Cumulative Preferred
Incorporation Book 25, Page 461; Stock, no par value;
Greenup Co., KY - January 150,000,000 shares
30, 1987, Arts. of Inc., Common Stock, $1 par
Book 9, Page 543 value
2. Certificate and January 29, 1987 Boyd Co., KY - January 10,000,000 shares
Statement, etc. 30, 1987, Arts. of Inc., initially issuable
Establishing and Book 25, Page 470;
Designating Greenup Co., KY - January
Cumulative 30, 1987, Arts. of Inc.,
Preferred Stock, Book 9, Page 552
Series of
1987, etc. of AOI
3. Amendment No. 1 January 28, 1988 Boyd Co., KY - January New Article X
29, 1988, Arts. of Inc.,
Book 25, Page 954;
Greenup Co., KY - January
29, 1988, Arts. of Inc.,
Book 10, Page 169
4. Amendment No. 2 January 27, 1989 Boyd Co., KY - January New Article XI
30, 1989, Arts. of Inc.,
Book 26, Page 522;
Greenup Co., KY - January
30, 1989, Arts. of Inc.,
Book 10, Page 423
5. Amendment No. 3 May 18, 1993 Boyd Co., KY - May 6,000,000 shares of
18, 1993, Arts. of Inc., $3.125 Cumulative
Book 30, Page 59; Convertible
Greenup Co., KY - May Preferred Stock,
18, 1993, Arts. of Inc., no par value
Book 12, Page 322
6. Amendment No. 4 January 27, 1995 Boyd Co., KY - January 27, New Article I
1995, Arts. of Inc.,
Book 31, Page 320;
Greenup Co., KY -
January 27, 1995, Arts.
of Inc., Book 13,
Page 147
7. Amendment No. 5 May 16, 1996 Boyd Co., KY - May 16, 500,000 shares initially
1996, Arts. of Inc., issuable of Series A
Book ___, Page ____; Participating Cumulative
Greenup Co., KY - Preferred Stock
May 16, 1996, Arts.
of Inc., Book ___,
Page ____
</TABLE>
<PAGE>
[STAMP]
ORIGINAL COPY
FILED
SECRETARY OF STATE OF KENTUCKY
FRANKFORT, KENTUCKY
JANUARY 29, 1987
12:45 PM
SECOND RESTATED ARTICLES OF INCORPORATION
OF
ASHLAND OIL, INC.
Pursuant to Section 271A.320 of the Kentucky Business Corporation Act,
Ashland Oil, Inc., pursuant to a resolution duly adopted by its Board of
Directors, hereby adopts the following Second Restated Articles of
Incorporation (hereinafter called the "Articles of Incorporation"):
ARTICLE I
The name of the corporation is Ashland Oil, Inc. (hereinafter called the
"Company" or the "Corporation").
ARTICLE II
The purpose for which the Company is organized is the transaction of
any or all lawful businesses for which corporations may be organized under
the Kentucky Business Corporation Act, or any act amendatory thereof,
supplemental thereto or substituted therefor (hereinafter called the
"Act"), and to do all things necessary, convenient, proper or desirable in
connection with or incident to any of the Company's businesses.
ARTICLE III
A. The Company shall have all the powers conferred upon a corporation
organized under the Act and shall have all powers necessary, convenient or
desirable in order to fulfill and further the purpose of the Company.
B. The Company shall have the power to purchase shares of the stock of
the Company to the extent of unreserved and unrestricted capital and earned
surplus of the Company and to any greater extent permitted by the Act.
C. The Board of Directors of the Company may distribute to the
shareholders of the Company a portion of the Company's assets, in cash or
property, out of capital surplus of the Company and from any other source
permitted by the Act.
ARTICLE IV
A. The aggregate number of shares which the Company is authorized to
issue is 30,000,000 shares of Cumulative Preferred Stock, without par value
(hereinafter called the "Preferred Stock"), and 150,000,000 shares of
Common Stock, par value $1.00 per share (hereinafter called the "Common
Stock").
B. Preferred Stock
(1) To the extent permitted by the Act, the Board of Directors
is authorized, by resolution, to cause the Preferred Stock to be
divided into and issued from time to time in one or more series and
to fix and determine the designation and number of shares, and the
relative rights and preferences of the shares, of each such series,
and to change shares of one series that have been redeemed or
reacquired into shares of another series.
(2) All shares of Preferred Stock shall rank equally and be
identical in all respects except as to the relative rights and
preferences of any series fixed and determined by the Board of
Directors, which may vary to the extent permitted by the Act.
<PAGE>
(3) The Preferred Stock shall be preferred over the Common
Stock as to payment of dividends. Before any dividends or
distributions (other than dividends or distributions payable in
Common Stock) on the Common Stock shall be declared and set apart for
payment or paid, the holders of shares of each series of Preferred
Stock shall be entitled to receive dividends (either in cash, shares
of Common Stock or Preferred Stock, or otherwise) when, as and if
declared by the Board of Directors, at the rate and on the date or
dates fixed in the resolution adopted by the Board of Directors
establishing such series, and no more. With respect to each series of
Preferred Stock, the dividends on each share of such series shall be
cumulative from the date of issue of such share unless some other
date is fixed in the resolution adopted by the Board of Directors
establishing such series. Accruals of dividends shall not bear
interest.
(4) The Preferred Stock shall be preferred over the Common
Stock as to assets so that the holders of each series of Preferred
Stock shall be entitled to be paid, upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company and before any
distribution is made to the holders of Common Stock, the amount fixed
in the resolution adopted by the Board of Directors establishing such
series, but in such case the holders of such series of Preferred
Stock shall not be entitled to any other or further payment. If upon
any such liquidation, dissolution or winding up of the Company its
net assets shall be insufficient to permit the payment in full of the
respective amounts to which the holders of all outstanding Preferred
Stock are entitled, the entire remaining net assets of the Company
shall be distributed among the holders of each series of Preferred
Stock in amounts proportionate to the full amounts to which the
holders of each such series are respectively so entitled. For
purposes of this paragraph (4), the voluntary sale, lease, exchange
or transfer of all or substantially all of the Company's property or
assets to, or its consolidation or merger with, one or more
corporations shall not be deemed to be a voluntary or involuntary
liquidation, dissolution or winding up of the Company.
(5) All shares of any series of Preferred Stock shall be
redeemable to the extent permitted by the Act and fixed in the
resolution adopted by the Board of Directors establishing such
series. All shares of any series of Preferred Stock shall be
convertible into shares of Common Stock or into shares of any other
series of Preferred Stock to the extent permitted by the Act and
fixed in the resolution adopted by the Board of Directors
establishing such series.
(6) Unless otherwise provided herein or by the Act, or unless
otherwise provided in the resolution adopted by the Board of
Directors establishing any series of Preferred Stock, the holders of
shares of Preferred Stock shall be entitled to one vote for each
share of Preferred Stock held by them on all matters properly
presented to shareholders, the holders of Common Stock and the
holders of all series of Preferred Stock voting together as one
class.
(7) So long as any shares of Preferred Stock are outstanding,
the Company shall not:
(a) Redeem, purchase or otherwise acquire any shares of
Common Stock if at the time of making such redemption, purchase
or acquisition, the Company shall be in default with respect to
any dividends accrued on, or any obligation to retire, shares
of Preferred Stock.
(b) Without the affirmative vote or consent of the
holders of at least 66 2/3 percent of the number of shares of
Preferred Stock at the time outstanding, voting or consenting
(as the case may be) separately as a class without regard to
series, given in person or by proxy, either in writing or by
resolution adopted at a meeting called for the purpose, (i)
create any class of stock ranking prior to the Preferred Stock
as to dividends or upon liquidation or increase the authorized
number of shares of any such class of stock or (ii) alter or
change any of the provisions of these Articles of Incorporation
so as adversely to affect the relative rights and preferences
of the Preferred Stock or (iii) increase the authorized number
of shares of Preferred Stock.
(c) Without the affirmative vote or consent of the
holders of at least 66 2/3 percent of the number of shares of
any series of Preferred Stock at the time outstanding, voting
or consenting (as the case may be) separately as a series,
given in person or by proxy, either in writing or by resolution
adopted at a meeting called for the purpose, alter or change
any of the provisions of these Articles of Incorporation so as
adversely to affect the relative rights and preferences of such
series.
2
<PAGE>
C. Common Stock
(1) The holders of Common Stock of the Company shall be
entitled to one vote for each share of Common Stock held by them on
all matters properly presented to shareholders, except as otherwise
provided herein or by the Act.
(2) Subject to the preferential rights of Preferred Stock set
forth herein or in the resolution adopted by the Board of Directors
establishing any series of Preferred Stock, such dividends (either in
cash, shares of Common Stock or Preferred Stock, or otherwise) as may
be determined by the Board of Directors may be declared and paid on
the Common Stock from time to time in accordance with the Act.
D. No holder of shares of any class of stock of the Company shall
have any preemptive right to subscribe to stock, obligations, warrants,
subscription rights or other securities of the Company of any class,
whether now or hereafter authorized.
ARTICLE V
The Company shall have perpetual existence.
ARTICLE VI
Subject to the restriction that the number of directors shall not be
less than the number required by the laws of the Commonwealth of Kentucky,
the number of directors may be fixed, from time to time, pursuant to the
By-laws of the Company.
The members of the Board of Directors (other than those who may be
elected by the holders of any class or series of capital stock of the
Company having a preference over the Common Stock as to dividends or upon
liquidation pursuant to the terms of these Articles of Incorporation or of
such class or series of stock) shall be classified (so long as the Board of
Directors shall consist of at least nine members pursuant to the By-laws),
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
By-laws of the Company, one class to be originally elected for a term
expiring at the annual meeting of the shareholders to be held in 1987,
another class to be originally elected for a term expiring at the annual
meeting of the shareholders to be held in 1988, and another class to be
originally elected for a term expiring at the annual meeting of the
shareholders to be held in 1989, with each class to hold office until the
successors of such class are elected and qualified. At each annual meeting
of the shareholders, the date of which shall be fixed by or pursuant to the
By-laws of the Company, 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.
Subject to any requirements of law and the rights of any class or
series of capital stock of the Company having a preference over the Common
Stock as to dividends or upon liquidation pursuant to the terms of these
Articles of Incorporation or of such class or series of stock (and
notwithstanding the fact that a lesser percentage may be specified by law,
these Articles of Incorporation or the terms of such class or series), the
affirmative vote of the holders of 80 percent or more of the voting power
of the then outstanding voting stock of the Company, voting together as a
single class, shall be required to remove any director without cause. For
purposes of this Article VI, "cause" shall mean the willful and continuous
failure of a director to substantially perform such director's duties to
the Company, other than any such failure resulting from incapacity due to
physical or mental illness, or the willful engaging by a director in gross
misconduct materially and demonstrably injurious to the Company. As used in
these Articles of Incorporation, "voting stock" shall mean shares of
capital stock of the Company entitled to vote generally in an election of
directors.
Subject to any requirements of law and the rights of any class or
series of capital stock of the Company having a preference over the Common
Stock as to dividends or upon liquidation pursuant to the terms of these
Articles of Incorporation or of such class or series of stock, newly
created directorships resulting from any
3
<PAGE>
increase in the number of directors may be filled by the Board of
Directors, or as otherwise provided in the By-laws, and any vacancies on
the Board of Directors resulting from death, resignation, removal or other
cause shall only 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, or by a sole remaining director, or as otherwise
provided in the By-laws. Any director elected in accordance with the
preceding sentence 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.
ARTICLE VII
In furtherance and not in limitation of the powers conferred upon it
by law, the Board of Directors is expressly authorized to:
A. adopt any By-laws that the Board of Directors may deem necessary
or desirable for the efficient conduct of the affairs of the Company,
including, but not limited to, provisions governing the conduct of, and the
matters which may properly be brought before, annual or special meetings of
the shareholders and provisions specifying the manner and extent to which
prior notice shall be given of the submission of proposals to be considered
at any such meeting or of nominations for election of directors to be held
at any such meeting; and
B. repeal, alter or amend the By-laws.
In addition to any requirements of law and any other provisions of
these Articles of Incorporation or the terms of any class or series of
capital stock having a preference over the Common Stock as to dividends or
upon liquidation (and notwithstanding the fact that a lesser percentage may
be specified by law, these Articles of Incorporation or the terms of such
class or series), the affirmative vote of the holders of 80 percent or more
of the voting power of the then outstanding voting stock of the Company,
voting together as a single class, shall be required to amend, alter or
repeal any provision of the By-laws.
ARTICLE VIII
A. A higher than majority vote of shareholders for certain Business
Combinations shall be required as follows:
(1) In addition to any affirmative vote otherwise required by
law or these Articles of Incorporation or the terms of any class or
series of capital stock of the Company having a preference over the
Common Stock as to dividends or upon liquidation (and notwithstanding
the fact that a lesser percentage may be specified by law, these
Articles of Incorporation or the terms of such class or series) and
except as otherwise expressly provided in Section B of this Article
VIII:
(a) any merger or consolidation of the Company or any
Subsidiary with an Interested Shareholder or with any other
corporation, whether or not itself an Interested Shareholder,
which is, or after such merger or consolidation would be, an
Affiliate of an Interested Shareholder who was an Interested
Shareholder prior to the transaction;
(b) any sale, lease, transfer, or other disposition,
other than in the ordinary course of business, in one
transaction or a series of transactions in any twelve-month
period, to any Interested Shareholder or any Affiliate of an
Interested Shareholder, other than the Company or any
Subsidiary, of any assets of the Company or any Subsidiary
having, measured at the time the transaction or transactions
are approved by the Board of Directors, an aggregate book value
as of the end of the Company's most recently ended fiscal
quarter of 5 percent or more of the total market value of the
outstanding stock of the Company or of its net worth as of the
end of its most recently ended fiscal quarter;
(c) the issuance or transfer by the Company or any
Subsidiary, in one transaction or a series of transactions in
any twelve-month period, of any equity securities of the
Company or any Subsidiary which have an aggregate market value
of 5% or more of the total market value of the outstanding
stock
4
<PAGE>
of the Company, determined as of the end of the Company's most
recently ended fiscal quarter prior to the first such issuance
or transfer, to any Interested Shareholder or any Affiliate of
any Interested Shareholder, other than the Company or any
Subsidiary, except pursuant to the exercise of warrants or
rights to purchase securities offered pro rata to all holders
of the Company's voting stock or any other method affording
substantially proportionate treatment to the holders of voting
stock;
(d) the adoption of any plan or proposal for the
liquidation or dissolution of the Company in which anything
other than cash will be received by an Interested Shareholder
or any Affiliate of an Interested Shareholder; or
(e) any reclassification of securities, including any
reverse stock split; any recapitalization of the Company; any
merger or consolidation of the Company with any Subsidiary; or
any other transaction which has the effect, directly or
indirectly, in one transaction or a series of transactions, of
increasing by 5 percent or more the proportionate amount of the
outstanding shares of any class of equity securities of the
Company or any Subsidiary which is directly or indirectly
beneficially owned by any Interested Shareholder or any
Affiliate of any Interested Shareholder;
shall require the recommendation of the Board of Directors and the
affirmative vote of the holders of at least (i) 80 percent of the
voting power of the then outstanding voting stock of the Company,
voting together as a single class, and (ii) two-thirds of the voting
power of the then outstanding voting stock other than voting stock
beneficially owned by the Interested Shareholder who is, or whose
Affiliate is, a party to the Business Combination or by an Affiliate
or Associate of such Interested Shareholder, voting together as a
single class.
(2) The term "Business Combination" as used in this Article
VIII shall mean any transaction which is referred to in any one or
more of clauses (a) through (e) of paragraph (1) of Section A of this
Article VIII.
B. The provisions of Section A of this Article VIII shall not be
applicable to any Business Combination, and such Business Combination shall
require only such affirmative vote (if any) as is required by law, any
other provision of these Articles of Incorporation or the terms of any
class or series of capital stock of the Company having a preference over
the Common Stock as to dividends or upon liquidation, if all conditions
specified in either of the following paragraphs (1) or (2) are met:
(1) The Business Combination shall have been approved by
resolution by a majority of the Continuing Directors at a meeting of
the Board of Directors at which a quorum consisting of at least a
majority of the then Continuing Directors was present; or
(2) All the following five conditions have been met:
(a) The aggregate amount of the cash and the market value
as of the Valuation Date of consideration other than cash to be
received per share by holders of Common Stock in such Business
Combination is at least equal to the highest of the following:
(i) the highest per share price, including any
brokerage commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Shareholder for any
shares of Common Stock (a) within the two-year period
immediately prior to the Announcement Date or (b) in the
transaction in which it became an Interested Shareholder,
whichever is higher;
(ii) the market value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is
higher; and
(iii) the price per share equal to the market value
per share of Common Stock determined pursuant to clause
(ii) immediately preceding, multiplied by the fraction
resulting from (a) the highest per share price, including
any brokerage commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Shareholder for any
shares of Common Stock acquired by it within the two-year
period immediately prior to the Announcement Date, over
(b) the market value per share of Common Stock on the
first day in such two-year period on which the Interested
Shareholder acquired any shares of Common Stock.
5
<PAGE>
(b) The aggregate amount of the cash and the market value
as of the Valuation Date of consideration other than cash to be
received per share by holders of shares of any class or series
of outstanding stock other than Common Stock is at least equal
to the highest of the following, whether or not the Interested
Shareholder has previously acquired any shares of a particular
class or series of stock:
(i) the highest per share price, including any
brokerage commissions, transfer taxes and soliciting
dealers' fees, paid by the Interested Shareholder for any
shares of such class of stock acquired by it (a) within
the two-year period immediately prior to the Announcement
Date or (b) in the transaction in which it became an
Interested Shareholder, whichever is higher;
(ii) the highest preferential amount per share to
which the holders of shares of such class of stock are
entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company;
(iii) the market value per share of such class of
stock on the Announcement Date or on the Determination Date,
whichever is higher; and
(iv) the price per share equal to the market value
per share of such class of stock determined pursuant to
clause (iii) immediately preceding, multiplied by the
fraction resulting from (a) the highest per share price,
including any brokerage commissions, transfer taxes and
soliciting dealers' fees, paid by the Interested
Shareholder for any shares of any class of voting stock
acquired by it within the two-year period immediately
prior to the Announcement Date over (b) the market value
per share of the same class of voting stock on the first
day in such two-year period on which the Interested
Shareholder acquired any shares or the same class of
voting stock.
(c) In making any price calculation under paragraph (2)
of this Section B, appropriate adjustments shall be made to
reflect any reclassification or stock split (including any
reverse stock split), stock dividend, recapitalization,
reorganization or any similar transaction which has the effect
of increasing or reducing the number of outstanding shares of
the stock. The consideration to be received by holders of any
class or series of outstanding stock is to be in cash or in the
same form as the Interested Shareholder has previously paid for
shares of the same class or series of stock. If the Interested
Shareholder has paid for shares of any class of stock with
varying forms of consideration, the form of consideration for
such class of stock shall be either in cash or the form used to
acquire the largest number of shares of such class or series of
stock previously acquired by it.
(d) After the Interested Shareholder has become an
Interested Shareholder and prior to the consummation of such
Business Combination:
(i) there shall have been no failure to declare and
pay at the regular date thereof any full periodic
dividends, whether or not cumulative, on any outstanding
Preferred Stock of the Company or other capital stock
entitled to a preference over the Common Stock as to
dividends or upon liquidation;
(ii) there shall have been no reduction in the
annual rate of dividends paid on the Common Stock, except
as necessary to reflect any subdivision of the Common
Stock, and no failure to increase the annual rate of
dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or other similar transaction which has the
effect of reducing the number of outstanding shares of
Common Stock; and
(iii) the Interested Shareholder did not become the
beneficial owner of any additional shares of stock of the
Company except as part of the transaction which resulted
in such Interested Shareholder or by virtue of
proportionate stock splits or stock dividends.
The provisions of clauses (i) and (ii) immediately preceding shall
not apply if neither an Interested Shareholder nor any Affiliate or
Associate of an Interested Shareholder voted as a director of the Company
in a manner inconsistent with such clauses and the Interested Shareholder,
within ten days after any act or failure to act inconsistent with such
clauses, notifies the Board of Directors of the Company in writing that the
Interested Shareholder disapproves thereof and requests in good faith that
the Board of Directors rectify such act or failure to act.
6
<PAGE>
(e) After the Interested Shareholder has become an
Interested Shareholder, the Interested Shareholder shall not
have received the benefit, directly or indirectly, except
proportionately as a shareholder, of any loans, advances,
guarantees, pledges or other financial assistance provided by
the Company or any Subsidiary, whether in anticipation of or in
connection with such Business Combination or otherwise.
C. For purposes of this Article VIII:
(1) "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 December 1, 1985
(the term "registrant" in such Rule 12b-2 meaning in this case the
Company).
(2) "Announcement Date" means the first general public announcement
of the proposal or intention to make a proposal of the Business Combination
or its first communication generally to shareholders of the Company,
whichever is earlier.
(3) "Beneficial owner" when used with respect to any voting stock,
means a person who, individually or with any Affiliate or Associate has:
(i) the right to acquire voting stock, whether such right is
exercisable immediately or only after the passage of time and whether
or not such right is exercisable only after specified conditions are
met pursuant to any agreement, arrangement, or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise;
(ii) the right to vote voting stock pursuant to any agreement,
arrangement, or understanding; or
(iii) any agreement, arrangements, or understanding for the
purpose of acquiring, holding, voting or disposing of voting stock
with any other person who beneficially owns, or whose Affiliates or
Associates beneficially own, directly or indirectly, such shares of
voting stock.
(4) "Continuing Director" means any member of the Board of Directors
who is not an Affiliate or Associate of an Interested Shareholder or any of
its Affiliates, other than the Company or any Subsidiary, and who was a
director of the Company prior to the time the Interested Shareholder became
an Interested Shareholder, and any other member of the Board of Directors
who is not an Affiliate or Associate of an Interested Director or any of
its Affiliates, other than the Company or any Subsidiary, and was
recommended or elected by a majority of the Continuing Directors at a
meeting at which a quorum consisting of a majority of the Continuing
Directors is present.
(5) "Determination Date" means the date on which an Interested
Shareholder first became an Interested Shareholder.
(6) "Equity security" means:
(a) any stock or similar security, certificate of interest, or
participation in any profit-sharing agreement, voting trust
certificate, or certificate of deposit for the foregoing;
(b) any security convertible, with or without consideration,
into an equity security, or any warrant or other security carrying
any right to subscribe to or purchase an equity security; or
(c) any put, call, straddle, or other option, right or
privilege of acquiring an equity security from or selling an equity
security to another without being bound to do so.
(7) "Interested Shareholder" means any person, other than the Company
or any Subsidiary, who:
(a) is the beneficial owner, directly or indirectly, of 10 percent
or more of the voting power of the outstanding voting stock of the
Company; or
(b) is an Affiliate of the Company 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 percent or more of
the voting power of the then outstanding voting stock of the Company.
7
<PAGE>
For the purpose of determining whether a person is an Interested
Shareholder, the number of shares of voting stock deemed to be outstanding
shall include shares deemed owned by the person 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. Furthermore, any such beneficial ownership or voting
power arising solely out of a trustee or custodial relationship of any
person in connection with a Company "employee benefit or stock plan" shall
be excluded for purposes of determining whether or not any such person is
an Interested Stockholder. For purposes hereof, the term "employee benefit
or stock plan" of the Company shall mean any option, bonus, appreciation,
profit sharing, retirement, incentive, thrift, employee stock ownership,
dividend reinvestment, savings or similar plan of the Company.
(8) "Market value" means:
(a) in the case of stock, the highest closing sale price during
the 30 calendar 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 such
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 bid quotation with respect
to a share of such stock during the 30 calendar 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 quotation is available, the fair market value on the
date in question of a share of such stock as determined by a majority
of the Continuing Directors at a meeting of the Board of Directors at
which a quorum consisting of at least a majority of the then
Continuing Directors is present; and
(b) 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 Continuing Directors at a meeting of the Board
of Directors at which a quorum consisting of at least a majority of
the then Continuing Directors is present.
(9) "Subsidiary" means any corporation of which voting stock having a
majority of the votes entitled to be cast is owned, directly or indirectly,
by the Company.
(10) "Valuation Date" means:
(a) for a Business Combination voted upon by shareholders, the
later of the day prior to the date of the shareholders' vote or the
date 20 business days prior to the consummation of the Business
Combination; and
(b) for a Business Combination not voted upon by shareholders, the
date of the consummation of the Business Combination.
(11) "Voting Stock" means shares of capital stock of the Company
entitled to vote generally in an election of directors.
D. In addition to any requirements of law and any other provisions of
these Articles of Incorporation or the terms of any class or series of
capital stock of the Company entitled to a preference over the Common Stock
as to dividends or upon liquidation (and notwithstanding the fact that a
lesser percentage may be specified by law, these Articles of Incorporation
or the terms of such class or series), the affirmative vote of
(1) the holders of at least 80 percent of the voting power of
the then outstanding voting stock of the Company, voting together as
a single class, and
(2) the holders of at least two-thirds of the voting power of
the then outstanding voting stock of the Company other than the
Interested Shareholder, voting together as a single class,
shall be required to amend, alter or repeal, or adopt any provision
inconsistent with, this Article VIII.
8
<PAGE>
ARTICLE IX
In addition to any requirements of law and any other provisions of
these Articles of Incorporation or the terms of any class or series of
capital stock of the Company having a preference over the Common Stock as
to dividends or upon liquidation (and notwithstanding the fact that a
lesser percentage may be specified by law, these Articles of Incorporation
or the terms of such class or series), the affirmative vote of the holders
of 80 percent or more of the voting power of the then outstanding voting
stock of the Company, voting together as a single class, shall be required
to amend, alter or repeal, or adopt any provision inconsistent with, this
Article IX or Article VI or VII of these Articles of Incorporation. Subject
to the foregoing provisions of this Article IX and Section D of Article
VIII, the Company reserves the right from time to time to amend, alter,
change, add to or repeal any provision contained in these Articles of
Incorporation in any manner now or hereafter prescribed by law and in these
Articles of Incorporation, and all rights and powers at any time conferred
upon shareholders, directors and officers of the Company by these Articles
of Incorporation or any amendment thereof are subject to the provisions of
this Article IX and Section D of Article VIII.
The foregoing Second Restated Articles of Incorporation correctly set
forth without change the corresponding provisions sequentially renumbered
of the Restated Articles of Incorporation as heretofore amended, and
supersede the Restated Articles of Incorporation and all amendments
thereto.
Dated: January 29, 1987.
ASHLAND OIL, INC.
/Thomas L. Feazell/
-------------------------------
By: Thomas L. Feazell
Vice President
/John P. Ward/
-------------------------------
By: John P. Ward
Secretary
COMMONWEALTH OF KENTUCKY )
) SS:
COUNTY OF GREENUP )
I, Teresa F. Gabbard, a notary public, do hereby certify that on this
29th day of January, 1987, personally appeared before me JOHN P. WARD, who,
being duly sworn, declared that he is the Secretary of Ashland Oil, Inc.,
that he signed the foregoing document as such, and that the statements
contained therein are true.
My commission expires: October 9, 1989
/Teresa F. Gabbard/
-------------------------
Teresa F. Gabbard
Notary Public
Prepared by John P. Ward
1000 Ashland Drive
Russell, Kentucky
/John P. Ward/
- -----------------------------
John P. Ward
9
<PAGE>
[STAMP] [STAMP]
LODGED FOR RECORD ON LODGED FOR RECORD ON
THE 30 DAY OF JUNE THE 30 DAY OF JANUARY
1987 AT 9:57 AM. RECORDED 1987 AT 10:47 AM. RECORDED
IN ART OF INC. BOOK IN ART OF INC. BOOK
NO. 9 PAGE 552 NO. 25 PAGE 470
TAX ________ FEES $5.50 TAX $________ FEE $5.50
DONALD DAVIDSON, CLERK WILLIAM A. SELBEE, CLERK
GREENUP COUNTY BOYD COUNTY
BY JOAN BURNETT, D.C. BY: DONNA MARCUM, D.C.
<PAGE>
[STAMP]
ORIGINAL COPY
FILED
SECRETARY OF STATE OF KENTUCKY
FRANKFORT, KENTUCKY
JANUARY 29, 1987
12:50 PM
DREXELL R. DAVIS
ASHLAND OIL, INC.
CERTIFICATE AND STATEMENT OF RESOLUTION ESTABLISHING AND
DESIGNATING CUMULATIVE PREFERRED STOCK, SERIES
OF 1987, AND FIXING AND DETERMINING CERTAIN RIGHTS
THEREOF AND THE NUMBER OF SHARES INITIALLY ISSUABLE
KNOW ALL MEN BY THESE PRESENTS, that THOMAS L. FEAZELL, as a Vice
President, and JOHN P. WARD, as the Secretary, of ASHLAND OIL INC., a
Kentucky corporation (the "Company"), do hereby certify that at a meeting
of the Board of Directors of the Company duly called and held in accordance
with the laws of Kentucky and the By-laws of the Company on January 29,
1987, the following resolution establishing and designating the Series of
1987 of the Cumulative Preferred Stock of the Company and fixing and
determining certain rights thereof and the number of shares initially
issuable was duly adopted.
"RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company (the "Board of Directors")
by the Second Restated Articles of Incorporation of the Company (the
"Articles"), this Board of Directors hereby establishes and designates a
series of Cumulative Preferred Stock, without par value, of the Company and
fixes and determines the number of shares to be initially issuable in such
series and the relative rights and preferences thereof (in addition to the
relative rights and preferences thereof set forth in the Articles which are
applicable to Cumulative Preferred Stock of all series) as follows:
SECTION 1. Designation, Number of Shares and Stated Value. The shares
of such series shall be designated as "Cumulative Preferred Stock, Series
of 1987" (the "Series 1987 Preferred Stock"). The stated value per share of
the Series 1987 Preferred Stock shall be $25. The number of shares
initially issuable and constituting the Series 1987 Preferred Stock shall
be 10,000,000.
SECTION 2. Dividends or Distributions. (a) The dividend rate for
shares of the Series 1987 Preferred Stock shall be per share per annum the
amount of cash, securities or other property equal to the sum of the
Formula Amounts with respect to each quarterly dividend payable pursuant to
Section 2(b) hereof on the Series 1987 Preferred Stock. The Formula Amount
with respect to each such quarterly dividend payable shall be the greater
of (1) $1.25 or (2) the Formula Number then in effect times the aggregate
per whole share amount of (x) dividends payable in cash and (y) dividends
or distributions payable in assets, securities or other forms of non-cash
consideration (other than dividends or distributions solely in shares of
common stock, par value $1.00 of the Company or any stock into which such
common stock may be reclassified or changed as contemplated by the second
proviso of this Section 2(a) (the "Common Stock")), declared on the Common
Stock since the immediately preceding date on which a quarterly dividend
was payable under Section 2(b) hereof on the Series 1987 Preferred Stock (a
"Quarterly Dividend Payment Date") or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of
a share of Series 1987 Preferred Stock. For purposes of the preceding
sentence, the aggregate per whole share amount of all non-cash dividends or
distributions with respect to each quarterly payment of dividends on the
Series 1987 Preferred Stock shall be the cash amount equivalent to the fair
market value of all non-cash dividends or distributions as determined by
the Board of Directors, which determination shall be final and binding. On
or before the record date fixed or determined pursuant to Section 2(b)
hereof for each Quarterly Dividend Payment Date after the date of issuance
of any shares of the Series 1987 Preferred Stock, the Company shall submit
for filing with the Secretary of State of the Commonwealth of Kentucky a
certificate which sets forth the dividend payable for each share of the
Series 1987 Preferred Stock on such Quarterly Dividend Payment Date
determined in accordance with the provisions of this Section 2(a). As used
herein, the "Formula Number" shall be 10; provided, however, that if at any
time after January 29, 1987, the Company shall (i) pay a dividend
(regardless of when declared) or make a distribution, on its outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivide
(by a stock split or otherwise) or split the outstanding shares of Common
Stock into a larger number of shares of Common Stock, or (iii) combine (by
a reverse stock split or otherwise) the outstanding shares of Common Stock
into a smaller number of shares of Common Stock, then in each such event
the Formula Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which is
the number of shares that are outstanding
<PAGE>
immediately prior to such event (and rounding the result to the nearest
whole number); and provided further that if at any time after January 29,
1987, the Company shall reclassify or change the outstanding shares of
Common Stock into some other stock (including any such reclassification or
change in connection with a merger in which the Company is the surviving
corporation), then in such event the Formula Number shall be appropriately
adjusted to reflect such reclassification or change.
(b) Except as otherwise provided in the provisions of Article IV of
the Articles, and unless prohibited by Kentucky law, the Company shall
declare a dividend or distribution on the Series 1987 Preferred Stock as
provided in Section 2(a), out of funds legally available therefor,
immediately prior to the time it declares a dividend or distribution on the
Common Stock (other than a dividend or distribution in shares of Common
Stock), and such dividend or distribution on the Series 1987 Preferred
Stock shall (except as otherwise provided in Article IV of the Articles) be
payable on the same date on which the corresponding dividend or
distribution on the Common Stock is payable, to holders of shares of Series
1987 Preferred Stock of record at the close of business on the record date
fixed by the Board of Directors, which shall (except as otherwise provided
in Article IV of the Articles) be the same as the record date for the
corresponding dividend or distribution on the Common Stock; provided,
however, that, in the event no dividend or distribution (other than a
dividend or distribution in shares of Common Stock) shall have been
declared on the Common Stock during the three month period after any
Quarterly Dividend Payment Date (or with respect to the first Quarterly
Dividend Payment Date during the three month period after the first
issuance of any share or fraction of a share of Series 1987 Preferred
Stock), a dividend of $1.25 per share on the Series 1987 Preferred Stock
shall, unless prohibited by Kentucky law, nevertheless be payable, out of
funds legally available therefor, 30 days after the last day of such three
month period to holders of shares of Series 1987 Preferred Stock of record
at the close of business on the record date, which shall (except as
otherwise provided in Article IV of the Articles) be 5 days after the last
day of such three month period.
SECTION 3. Voting Rights. Except as otherwise provided in the
provisions of Article IV of the Articles and by the provisions of
applicable law, the holders of shares of Series 1987 Preferred Stock shall
have the following voting rights:
(a) Each holder of record of one whole share of the Series 1987
Preferred Stock shall be entitled to a number of votes equal to the
Formula Number then in effect on all matters on which holders of the
Common Stock or stockholders generally are entitled to vote. Each
holder of record of a fraction of a share of the Series 1987
Preferred Stock shall be entitled, for each one-tenth (1/10th) of a
share, to a number of votes equal to one-tenth (1/10th) of the
Formula Number then in effect on all matters on which holders of the
Common Stock or stockholders generally are entitled to vote; and
(b) The holders of shares of Series 1987 Preferred Stock and
the holders of shares of Common Stock shall vote together as one
class for the election of directors of the Company and on all other
matters submitted to a vote of stockholders of the Company.
SECTION 4. Liquidation Rights. Upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company, and before any
distribution is made to the holders of Common Stock, the holder of each
full share or fraction of a share of Series 1987 Preferred Stock shall be
entitled to be paid an amount equal to the accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, plus an amount per whole share equal to the greater of (1) $25 per
share or (2) the Formula Number then in effect times the aggregate amount
to be distributed per share to holders of Common Stock.
SECTION 5. Consolidation, Merger, etc. Except as otherwise provided
in Article IV of the Articles, in case the Company shall enter into any
consolidation, merger, combination or other transaction in which the
outstanding shares of Common Stock are exchanged for or changed into other
stock or securities, cash or any other property, then in any such case the
then outstanding shares of Series 1987 Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share equal to the
Formula Number then in effect times the aggregate amount of stock,
securities, cash or other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is exchanged or changed.
SECTION 6. No Redemption. Except as otherwise provided in Section 5, the
shares of Series 1987 Preferred Stock shall not be subject to redemption by
the Company or at the option of any holder of Series 1987 Preferred
2
<PAGE>
Stock; provided, however, that the Company may purchase or otherwise
acquire outstanding shares of Series 1987 Preferred Stock in the open
market or by offer to any holder or holders of shares of Series 1987
Preferred Stock.
SECTION 7. Fractional Shares. The Series 1987 Preferred Stock shall
be issuable upon exercise of the Rights issued pursuant to the Rights
Agreement dated as of May 15, 1986, between the Company and The Chase
Manhattan Bank, N.A., as Rights Agent, as amended, (a copy of which is
filed with the Securities and Exchange Commission), in whole shares or, at
the option of the Company, in any fraction of a share that is one-tenth
(1/10th) of a share or any integral multiple of such fraction. At the
election of the Company prior to the first issuance of a share or a
fraction of a share of Series 1987 Preferred Stock, either (1) certificates
may be issued to evidence any such authorized fraction of a share of Series
1987 Preferred Stock, or (2) any such authorized fraction of a share of
Series 1987 Preferred Stock may be evidenced by scrip or warrants in
registered form which shall entitle the holder thereof to receive a
certificate for a full share upon the surrender of such scrip or warrants
aggregating a full share. The holders of such scrip or warrants shall have
all the rights, privileges and preferences to which the holders of
fractional shares are entitled. In lieu of such fractional shares or scrip
or warrants, the Company may pay registered holders cash equal to the same
fraction of the current market value of a share of Series 1987 Preferred
Stock (if any are outstanding) or the equivalent number of shares of Common
Stock.
SECTION 8. Amendments. The Board of Directors reserves the right by
subsequent amendment of this resolution from time to time to increase and,
in its discretion, to decrease the number of shares issuable in this series
and in other respects to amend this resolution within the limitations
provided by Kentucky law and the Articles.
SECTION 9. Definitions. For purposes of this resolution, all terms
defined in the Articles shall have the same meaning herein, except as
otherwise specifically provided herein."
IN TESTIMONY WHEREOF, witness our signatures this 29th day of
January, 1987.
/Thomas L. Feazell/
----------------------------
Thomas L. Feazell
Vice President
/John P. Ward/
----------------------------
John P. Ward
Secretary
COMMONWEALTH OF KENTUCKY )
) SS:
COUNTY OF GREENUP )
I, Teresa F, Gabbard, a Notary Public, do hereby certify that on
this 29th day of January, 1987, personally appeared before me JOHN P. WARD,
who being by me first duly sworn, declared that he is the Secretary of
ASHLAND OIL,INC., and that he signed the foregoing document as Secretary of
the Company and that the statements therein contained are true.
/TERESA F. GABBARD/
------------------------------
Notary Public
[STAMP]
Prepared by: TERESA F. GABBARD
John P. Ward My Commission expires October 9, 1989
1000 Ashland Drive
Russell, Kentucky 41169
/John P. Ward/
- -------------------------------
John P. Ward
3
<PAGE>
[STAMP] [STAMP]
LODGED FOR RECORD ON LODGED FOR RECORD ON
THE 30 DAY OF JANUARY THE 30 DAY OF JANUARY
1987 AT 10:46 AM. RECORDED 1987 AT 9:56 AM. RECORDED
IN ART OF INC. BOOK IN ART OF INC. BOOK
NO. 25 PAGE 461 NO. 9 PAGE 543
TAX ________ FEES $14.50 TAX $________ FEE $14.50
WILLIAM A. SELBEE, CLERK DONALD L. DAVIDSON, CLERK
BOYD COUNTY GREENUP COUNTY
BY: DONNA MARCUM, D.C. BY JOAN BURNETT, D.C.
<PAGE>
[STAMP]
ORIGINAL COPY FILED
SECRETARY OF STATE OF KENTUCKY,
FRANKFORT, KENTUCKY
JAN 28, 1988
11:05 AM
BREMER EHRLER
SECRETARY OF STATE
AMENDMENT TO SECOND RESTATED
ARTICLES OF INCORPORATION
OF ASHLAND OIL, INC.
AMENDMENT NO. 1
KNOW ALL MEN BY THESE PRESENTS, that Thomas L. Feazell, as Vice
President, and John P. Ward, as Secretary of Ashland Oil, Inc., a Kentucky
corporation (the "Company") do hereby certify that, at a meeting on January
28, 1988 of the holders of its issued and outstanding stock, which meeting
was duly called upon notice of the specific purpose, the holders of a
majority of the outstanding stock entitled to vote adopted a new Article X
of the Second Restated Articles of Incorporation (the "Articles") of the
Company which reads in its entirety as follows:
Notwithstanding any right to indemnification provided by the
Act to any director, officer, employee or agent of the Company, the
Company may, but shall not be required to, to the maximum extent
permitted by law, indemnify any such person against costs and
expenses (including but not limited to attorneys' fees) and any
liabilities (including but not limited to judgments, fines, penalties
and settlements) paid by or imposed against any such person in
connection with any actual or threatened claim, action, suit or
proceeding, whether civil, criminal, administrative, legislative,
investigative or other (including any appeal relating thereto) and
whether made or brought by or in the right of the Company or
otherwise, in which any such person is involved, whether as a party,
witness, or otherwise, because he or she is or was a director,
officer, employee or agent of the Company or a director, officer,
partner, trustee, employee or agent of any other corporation,
partnership, employee benefit plan or other entity.
The indemnification authorized by this Article X shall not
supersede or be exclusive of any other right of indemnification which
any such person may have or hereafter acquire under any provision of
these Articles or the By-laws of the Company, agreement, vote of
shareholders or disinterested directors or otherwise. The Company may
take such steps as may be deemed appropriate by the Board of
Directors to provide indemnification to any such person, including,
without limitation, entering into contracts for indemnification
between the Company and individual directors, officers, employees or
agents which may provide rights to indemnification which are broader
or otherwise different than the rights authorized by this Article.
The Company may take such steps as may be deemed appropriate by the
Board of Directors to secure, subject to the occurrence of such
conditions or events as may be determined by the Board of Directors,
the payment of such amounts as are required to effect any
indemnification permitted or authorized by this Article, including,
without limitation, purchasing and maintaining insurance, creating a
trust fund, granting security interests or using other means
(including, without limitation, irrevocable letters of credit).
Any amendment or repeal of this Article X shall operate
prospectively only and shall not affect any action taken, or failure
to act, by the Company or any such person prior to such amendment or
repeal.
IN TESTIMONY WHEREOF, witness our signatures this 28th day of
January, 1988.
/Thomas L. Feazell/ /John P. Ward/
- ---------------------------------- ----------------------------------
Thomas L. Feazell, Vice President John P. Ward, Secretary
<PAGE>
COMMONWEALTH OF KENTUCKY )
) SS:
COUNTY OF GREENUP )
I, Valerie J. Parks, Notary Public, do hereby certify that on this
28th day of January, 1988, personally appeared before me JOHN P. WARD, who
being by me first duly sworn, declared that he is the Secretary of ASHLAND
OIL, INC., and that he signed the foregoing document as such and that the
statements therein contained are true.
/VALERIE J. PARKS/
----------------------------------
VALERIE J. PARKS
[STAMP]
VALERIE J. PARKS
Prepared by John P. Ward My Commission expires November 11,
1000 Ashland Drive, 1990
Russell, Kentucky
/John P. Ward/
- --------------------------------
John P. Ward
[STAMP] [STAMP]
LODGED FOR RECORD ON LODGED FOR RECORD ON
THE 29th DAY OF JANUARY THE 29 DAY OF JANUARY
1988 AT 10:55 AM. RECORDED 1988 AT 10:15 AM. RECORDED
IN ART OF INC. BOOK IN ART OF INC. BOOK
NO. 25 PAGE _________ NO. 10 PAGE 169
TAX ________FEES $5.50 TAX $________ FEE $5.50
WILLIAM A. SELBEE, CLERK DONALD L. DAVIDSON, CLERK
BOYD COUNTY GREENUP COUNTY
BY: D.R. MARCUM, D.C. BY: MARY STULTZ, D.C.
<PAGE>
[STAMP]
DATE: JANUARY 27, 1989
TIME: 2:02 PM
AMOUNT: $40.00
BREMER EHRLER
SECRETARY OF STATE
COMMONWEALTH OF KENTUCKY
ARTICLES OF AMENDMENT
TO
SECOND RESTATED ARTICLES OF INCORPORATION
OF ASHLAND OIL, INC.
AMENDMENT NO. 2
Pursuant to the provisions of Section 271B.10-060 of the Kentucky
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its Second Restated Articles of Incorporation:
FIRST: The name of the corporation is Ashland Oil, Inc.
SECOND: At a meeting of the Board of Directors held on November 3,
1988, the Board of Directors proposed that the Second Restated Articles of
Incorporation be amended by adding a new Article XI, and directed that the
proposed amendment be submitted to the shareholders with the affirmative
recommendation of the Board of Directors at a meeting of the company's
shareholders to be held on January 26, 1989 (the "Meeting"), which Meeting
was duly called upon notice of the specific purpose. The text of the new
Article XI is as follows:
ARTICLE XI
No director shall be personally liable to the Company or its
shareholders for monetary damages for breach of his duties as a
director except to the extent that the applicable law from time to
time in effect shall provide that such liability may not be
eliminated or limited.
Neither the amendment nor repeal of this Article XI shall
affect the liability of any director of the Company with respect to
any act or failure to act which occurred prior to such amendment or
repeal.
This Article XI is not intended to eliminate or limit any
protection otherwise available to the directors of the Company.
THIRD: There were 58,707,121 shares of Ashland Oil, Inc. Common
Stock, each of which was entitled to cast one vote, outstanding at December
8, 1988, the record date for the Meeting, which represent all of the shares
entitled to vote on such amendment.
FOURTH: There were 50,687,052 shares of Ashland Oil, Inc. Common Stock
indisputably represented at the Meeting.
FIFTH: The total number of votes cast for such amendment was 47,745,995
and the total number of votes cast against such amendment was 2,231,353.
Dated January 27, 1989.
ASHLAND OIL, INC.
/Thomas L. Feazell/
By: _____________________________
Thomas L. Feazell
Administrative Vice President
and General Counsel
and
/John P. Ward/
-----------------------------
John P. Ward
Secretary
<PAGE>
COMMONWEALTH OF KENTUCKY )
COUNTY OF GREENUP )
The foregoing instrument was acknowledged before me this 27th day of
January, 1989, by Thomas L. Feazell, Administrative Vice President and
General Counsel, and John P. Ward, Secretary, of ASHLAND OIL, INC., a
Kentucky corporation, on behalf of the corporation.
/Valerie J. Parks/
-------------------------------
Valerie J. Parks
Notary Public
[STAMP]
VALERIE J. PARKS
Prepared by John P. Ward My Commission Expires November 11,
1000 Ashland Drive 1990
Russell, Kentucky 41114
/John P. Ward/
- -------------------------
[STAMP]
LODGED FOR RECORD ON
THE 30 DAY OF JANUARY
1989 AT 9:40 AM. RECORDED
IN ART OF INC. BOOK
NO. 10 PAGE 423
TAX $________ FEE $5.50
DONALD L. DAVIDSON, CLERK
GREENUP COUNTY
BY JOAN BURNETT, D.C.
[STAMP]
NO.
LODGED FOR RECORD
THE 30 DAY OF JAN
1989 AT 10:25 AM RECORDED
IN ART OF INC BOOK
NO. 26 PAGE 522
<PAGE>
[STAMP]
RECEIVED & FILED CH $40.00
MAY 18 10:52 AM 93
BOB BABBAGE
SECRETARY OF STATE
COMMONWEALTH KENTUCKY
ARTICLES OF AMENDMENT
TO
SECOND RESTATED ARTICLES OF INCORPORATION
OF ASHLAND OIL, INC.
AMENDMENT NO. 3
Pursuant to the provisions of Section 271B.10-060 of the Kentucky
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to set forth the preferences, limitations and
relative rights of a series of shares of its Cumulative Preferred Stock, no
par value, under Article IV of its Second Restated Articles of
Incorporation:
FIRST: The name of the Corporation is Ashland Oil, Inc.
SECOND: The text of the amendment determining the terms of the series of
shares of the Cumulative Preferred Stock is as follows:
I. Designation of Series and Number of Shares to be Issuable Therein.
This series of the Cumulative Preferred Stock shall be designated $3.125
Cumulative Convertible Preferred Stock (hereinafter called the "Convertible
Preferred Stock"), of which 6,000,000 shares shall be issuable.
II. Rank. All shares of Convertible Preferred Stock shall rank prior,
both as to payment of dividends and as to distributions of assets upon
liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, to all of the Corporation's now or hereafter issued Common
Stock (the "Common Stock"), to all of the Corporation s Cumulative Preferred
Stock, Series of 1987, when and if issued, and to all of the Corporation s
hereafter issued capital stock ranking junior to the Convertible Preferred
Stock both as to the payment of dividends and as to distributions of assets
upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, when and if issued (the Common Stock, the Cumulative
Preferred Stock, Series of 1987, and any such other capital stock being herein
referred to as "Junior Stock").
III. Dividends. The holders of Convertible Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out
of funds at the time legally available therefor, dividends at the rate of
$3.125 per annum per share, and no more, which shall be fully cumulative,
shall accrue without interest from the date of the initial issuance of such
shares of Convertible Preferred Stock (on a daily basis whether or not such
amounts would be available at that time for distribution to holders of
shares of Convertible Preferred Stock) and shall be payable in cash
quarterly in arrears on March 15, June 15, September 15 and December 15 of
each year commencing June 15, 1993 (with respect to the period from such
date of initial issuance to June 15, 1993) (except that if any such date is
a Saturday, Sunday or legal holiday, then such dividend shall be payable on
the next day that is not a Saturday, Sunday or legal holiday) to holders of
record as they appear upon the stock transfer books of the Corporation on
such record dates, not more than sixty days nor less than ten days
preceding the payment dates for such dividends, as are fixed by the Board
of Directors (or, to the extent permitted by applicable law, a duly
authorized committee thereof). In no event shall any such dividend record
date be fixed less than (a) six business days prior to any date fixed for
the redemption of the Convertible Preferred Stock or (b) with respect to
the dividend payment date occurring on March 15, 1997, less than ten
business days prior to any date fixed for such redemption. For purposes
hereof, the term "legal holiday" shall mean any day on which banking
institutions are authorized to close in New York, New York and the term
"business day" shall mean any day other than a Saturday, Sunday or legal
holiday. Subject to the next paragraph of this Section III, dividends on
account of arrears for any past dividend period may be declared and paid at
any time, without reference to any regular dividend payment date. The
amount of dividends payable per share of Convertible Preferred Stock for
each quarterly dividend period shall be computed by dividing the annual
dividend amount by four. The amount of dividends payable for the initial
dividend period and any period shorter than a full quarterly period shall
be computed on the basis of a 360-day year of twelve 30-day months. No
interest shall be payable in respect of any dividend payment on the
Convertible Preferred Stock which may be in arrears.
No dividends or other distributions, other than dividends payable
solely in shares of Junior Stock, shall be
1
<PAGE>
declared, paid or set apart for payment on shares of Junior Stock or any
other capital stock of the Corporation ranking junior as to dividends to
the Convertible Preferred Stock (the Junior Stock and any such other class
or series of the Corporation's capital stock being herein referred to as
"Junior Dividend Stock"), unless and until all accrued and unpaid dividends
on the Convertible Preferred Stock for all dividend payment periods ending
on or before the payment date of such dividends or other distributions on
Junior Dividend Stock shall have been paid or declared and set apart for
payment.
No payment on account of the purchase, redemption, retirement or
other acquisition of shares of Junior Dividend Stock or any other class or
series of the Corporation's capital stock ranking junior to the Convertible
Preferred Stock as to distributions of assets upon liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary (the
Junior Stock and any other class or series of the Corporation's capital
stock ranking junior to the Convertible Preferred Stock as to such
distributions being herein referred to as "Junior Liquidation Stock") shall
be made unless and until all accrued and unpaid dividends on the
Convertible Preferred Stock for all dividend payment periods ending on or
before such payment for such Junior Dividend Stock or Junior Liquidation
Stock shall have been paid or declared and set apart for payment; provided,
however, that the restrictions set forth in this sentence shall not apply
to the purchase or other acquisition of Junior Dividend Stock or Junior
Liquidation Stock either (A) pursuant to any employee or director incentive
or benefit plan or arrangement (including any employment, severance or
consulting agreement) of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted or (B) in exchange solely for
Junior Stock.
No full dividends shall be declared, paid or set apart for payment on
shares of any class or series of the corporation's capital stock hereafter
issued ranking, as to dividends, on a parity with the Convertible Preferred
Stock (any such class or series of the Corporation's capital stock being
herein referred to as "Parity Dividend Stock") for any period unless full
cumulative dividends have been, or contemporaneously are, paid or declared
and set apart for such payment on the Convertible Preferred Stock for all
dividend payment periods ending on or before the payment date of such
dividends on Parity Dividend Stock. No dividends shall be paid on Parity
Dividend Stock except on dates on which dividends are paid on the
Convertible Preferred Stock. All dividends paid or declared and set apart
for payment on the Convertible Preferred Stock and the Parity Dividend
Stock shall be paid or declared and set apart for payment pro rata so that
the amount of dividends paid or declared and set apart for payment per
share on the Convertible Preferred Stock and the Parity Dividend Stock on
any date shall in all cases bear to each other the same ratio that accrued
and unpaid dividends to the date of payment on the Convertible Preferred
Stock and the Parity Dividend Stock bear to each other.
No payment on account of the purchase, redemption, retirement or
other acquisition of shares of Junior Stock, Parity Dividend Stock or any
class or series of the Corporation's capital stock ranking on a parity with
the Convertible Preferred Stock as to distributions of assets upon
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary (any such class or series of the Corporation's
capital stock being herein referred to as "Parity Liquidation Stock") shall
be made, and, other than dividends to the extent permitted by the preceding
paragraph, no distributions shall be declared, paid or set apart for
payment on shares of Parity Dividend Stock or Parity Liquidation Stock,
unless and until all accrued and unpaid dividends on the Convertible
Preferred Stock for all dividend payment periods ending on or before such
payment for, or the payment date of such distributions on, such Parity
Dividend Stock or Parity Liquidation Stock shall have been paid or declared
and set apart for payment; provided, however, that the restrictions set
forth in this sentence shall not apply to the purchase or other acquisition
of Parity Dividend Stock or Parity Liquidation Stock either (A) pursuant to
any employee or director incentive or benefit plan or arrangement
(including any employment, severance or consulting agreement) of the
Corporation or any subsidiary of the Corporation hereafter adopted or (B)
in exchange solely for Junior Stock.
Any reference to "distribution" contained in this Section III shall
not be deemed, except as expressly stated, to include any distribution made
in connection with any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary.
IV. Liquidation Preference. In the event of a liquidation, dissolution
or winding up of the Corporation,
2
<PAGE>
whether voluntary or involuntary, the holders of shares of Convertible
Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to shareholders an amount equal to
the dividends accrued and unpaid on such shares on the date of final
distribution to such holders, whether or not declared, without interest,
plus a sum equal to $50 per share, and no more, before any payment shall be
made or any assets distributed to the holders of shares of Junior
Liquidation Stock; provided, however, that such rights shall accrue to the
holders of shares of Convertible Preferred Stock only with respect to
assets (if any) remaining after the Corporation's payments with respect to
the liquidation preferences of the shares of any class or series of the
Corporation capital stock hereafter issued ranking prior to the Convertible
Preferred Stock as to distributions of assets upon such liquidation,
dissolution or winding up ("Senior Liquidation Stock") are fully met. The
entire assets of the Corporation available for distribution to shareholders
after the liquidation preferences of the shares of Senior Liquidation Stock
are fully met shall be distributed ratably among the holders of the
Convertible Preferred Stock and Parity Liquidation Stock in proportion to
the respective preferential amounts to which each is entitled (but only to
the extent of such preferential amounts). After payment in full of the
liquidation preferences of the shares of the Convertible Preferred Stock,
the holders of such shares shall not be entitled to any further
participation in any distribution of assets by the Corporation. The
voluntary sale, lease, exchange or transfer of all or substantially all of
the Company's property or assets to, or its consolidation or merger with,
one or more corporations shall not be deemed to be considered a voluntary
or involuntary liquidation, dissolution or winding up of the Corporation.
V. Redemption at Option of the Corporation. The Convertible Preferred
Stock may not be redeemed by the Corporation prior to March 25, 1997. On
and after such date, the Convertible Preferred Stock may be redeemed by the
Corporation, at its option on any date set by the Board of Directors, in
whole or in part at any time, subject to the limitations, if any, imposed
by the Kentucky Business Corporation Act, for an amount in cash equal to
the applicable price per share set forth for the date fixed for redemption
in the following table:
Date Fixed for Redemption
Price
On or after March 25, 1997 and on or before March 14,1998. $51.88
After March 14, 1998 and on or before March 14, 1999...... $51.56
After March 14, 1999 and on or before March 14, 2000...... $51.25
After March 14, 2000 and on or before March 14, 2001...... $50.94
After March 14, 2001 and on or before March 14, 2002...... $50.63
After March 14, 2002 and on or before March 14, 2003...... $50.31
Any date after March 14, 2003............................. $50.00
plus, in each case, an amount in cash equal to all per share dividends on
the Convertible Preferred Stock accrued and unpaid thereon, whether or not
declared, to but excluding the date fixed for redemption, such sum being
hereinafter referred to as the "Redemption Price".
In case of the redemption of less than all of the then outstanding
Convertible Preferred Stock, the Corporation shall designate by lot, or in
such other manner as the Board of Directors may determine to be fair, the
shares to be redeemed, or shall effect such redemption pro rata.
Notwithstanding the foregoing, the Corporation shall not redeem less than
all of the Convertible Preferred Stock at any time outstanding until all
dividends accrued and in arrears upon all Convertible Preferred Stock then
outstanding shall have been paid in full for all past dividend periods.
Not more than ninety nor less than thirty days prior to the date
fixed for redemption by the Board of Directors, notice thereof by first
class mail, postage prepaid, shall be given to the holders of record of the
shares of Convertible Preferred Stock to be redeemed, addressed to such
holders at their last addresses as shown upon the stock transfer books of
the Corporation. Each such notice of redemption shall specify the date
fixed for redemption, the Redemption Price, the place or places of payment,
that payment will be made upon presentation and surrender of the shares of
Convertible Preferred Stock, that on and after the date fixed for
redemption dividends will cease to accrue on such shares, the
then-effective conversion price pursuant to Section VI and that the right
of holders to convert shares of Convertible Preferred Stock shall terminate
at the close of business on
3
<PAGE>
the fifth business day prior to the date fixed for redemption (unless the
Corporation defaults in the payment of the Redemption Price).
Any notice that is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of shares of
Convertible Preferred Stock receives such notice; and failure to give such
notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings
for the redemption of any other shares of Convertible Preferred Stock. On
or after the date fixed for redemption as stated in such notice, each
holder of the shares called for redemption shall surrender the certificate
evidencing such shares to the Corporation at the place designated in such
notice and shall thereupon be entitled to receive payment of the Redemption
Price. If less than all the shares evidenced by any such surrendered
certificate are redeemed, a new certificate shall be issued evidencing the
unredeemed shares.
No fractional shares of Convertible Preferred Stock shall be issued
upon redemption of less than all Convertible Preferred Stock. If more than
one certificate evidencing shares of Convertible Preferred Stock shall be
held at one time by the same holder, the number of full shares issuable
upon redemption of less than all of such shares of Convertible Preferred
Stock shall be computed on the basis of the aggregate number of shares of
Convertible Preferred Stock so held. Instead of any fractional share of
Convertible Preferred Stock that would otherwise be issuable to a holder
upon redemption of less than all shares of Convertible Preferred Stock, the
Corporation shall pay a cash adjustment in respect of such fractional share
in an amount equal to the same fraction of the fair value per share of
Convertible Preferred Stock (as determined in good faith by the Board of
Directors or in any manner prescribed by the Board of Directors) at the
close of business on the date fixed for redemption.
Notice having been given as aforesaid, if, on the date fixed for
redemption, funds necessary for the redemption shall be available therefor
and shall have been deposited with a bank or trust company with irrevocable
instructions and authority to pay the Redemption Price to the holders of
the Convertible Preferred Stock, then, notwithstanding that the
certificates evidencing any shares so called for redemption shall not have
been surrendered, dividends with respect to the shares so called shall
cease to accrue on and after the date fixed for redemption, such shares
shall no longer be deemed outstanding, the holders thereof shall cease to
be shareholders of the Corporation and all rights whatsoever with respect
to the shares so called for redemption (except the right of the holders to
receive the Redemption Price without interest upon surrender of their
certificates therefor) shall terminate. If funds legally available for such
purpose are not sufficient for redemption of the shares of Convertible
Preferred Stock which were to be redeemed, then the certificates evidencing
such shares shall be deemed not to be surrendered, such shares shall remain
outstanding and the right of holders of shares of Convertible Preferred
Stock thereafter shall continue to be only those of a holder of shares of
the Convertible Preferred Stock.
The shares of Convertible Preferred Stock shall not be subject to the
operation of any mandatory purchase, retirement or sinking fund.
VI. Conversion Privilege.
(a) Right of Conversion. Each share of Convertible Preferred Stock
shall be convertible at the option of the holder thereof, at any time prior
to the close of business on the fifth business day prior to the date fixed
for redemption of such share as herein provided, into fully paid and
nonassessable shares of Common Stock, at the rate of that number of shares
of Common Stock for each full share of Convertible Preferred Stock that is
equal to $50 divided by the conversion price applicable per share of Common
Stock, or into such additional or other securities, cash or property and at
such other rates as required in accordance with the provisions of this
Section VI. For purposes of this resolution, the "conversion price"
applicable per share of Common Stock shall initially be equal to $32.343
and shall be adjusted from time to time in accordance with the provisions
of this Section VI.
(b) Conversion Procedures. Any holder of shares of Convertible Preferred
Stock desiring to convert such shares into Common Stock shall surrender the
certificate or certificates evidencing such shares of Convertible
4
<PAGE>
Preferred Stock at the office of the transfer agent for the Convertible
Preferred Stock, which certificate or certificates, if the Corporation
shall so require, shall be duly endorsed to the Corporation or in blank, or
accompanied by proper instruments of transfer to the Corporation or in
blank, accompanied by irrevocable written notice to the Corporation that
the holder elects so to convert such shares of Convertible Preferred Stock
and specifying the name or names (with address or addresses) in which a
certificate or certificates evidencing shares of Common Stock are to be
issued.
Subject to Section VI(l) hereof, no payments or adjustments in
respect of dividends on shares of Convertible Preferred Stock surrendered
for conversion or on account of any dividend on the Common Stock issued
upon conversion shall be made upon the conversion of any shares of
Convertible Preferred Stock and the holder will lose any right to payment
of dividends on the shares of Convertible Preferred Stock surrendered for
conversion.
The Corporation shall, as soon as practicable after such deposit of
certificates evidencing shares of Convertible Preferred Stock accompanied
by the written notice and compliance with any other conditions herein
contained, deliver at such office of such transfer agent to the person for
whose account such shares of Convertible Preferred Stock were so
surrendered, or to the nominee or nominees of such person, certificates
evidencing the number of full shares of Common Stock to which such person
shall be entitled as aforesaid, together with a cash adjustment in respect
of any fraction of a share of Common Stock as hereinafter provided. Such
conversion shall be deemed to have been made as of the date of such
surrender of the shares of Convertible Preferred Stock to be converted, and
the person or persons entitled to receive the Common Stock deliverable upon
conversion of such Convertible Preferred Stock shall be treated for all
purposes as the record holder or holders of such Common Stock on such date.
(c) Adjustment of Conversion Price. The conversion price at which a
share of Convertible Preferred Stock is convertible into Common Stock shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall pay or make a dividend or
other distribution on its Common Stock exclusively in Common Stock or
shall pay or make a dividend or other distribution on any other class
or series of capital stock of the Corporation which dividend or
distribution includes Common Stock, the conversion price in effect at
the opening of business on the day following the date fixed for the
determination of shareholders entitled to receive such dividend or
other distribution shall be reduced by multiplying such conversion
price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the
date fixed for such determination and the denominator shall be the
sum of such number of shares and the total number of shares
constituting such dividend or other, such reduction to become
effective immediately after the opening of business on the day
following the date fixed for such determination.
(ii) In case the Corporation shall pay or make a dividend or
other distribution on its Common Stock consisting exclusively of, or
shall otherwise issue to all holders of its Common Stock, rights or
warrants entitling the holders thereof to subscribe for or purchase
shares of Common Stock at a price per share less than the current
market price per share (determined as provided in subparagraph (vi)
of this Section VI(c)) of the Common Stock on the date fixed for the
determination of shareholders entitled to receive such rights or
warrants, the conversion price in effect at the opening of business
on the day following the date fixed for such determination shall be
reduced by multiplying such conversion price by a fraction of which
the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase
at such current market price and the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common
Stock so offered for subscription or purchase, such reduction to
become effective immediately after the opening of business on the day
following the date fixed for such determination. In case any rights
or warrants referred to in this subparagraph (ii) in respect of which
an adjustment shall have been made shall
5
<PAGE>
expire unexercised within 45 days after the same shall have been
distributed or issued by the Corporation, the conversion price shall
be readjusted at the time of such expiration to the conversion price
that would have been in effect if no adjustment had been made on
account of the distribution or issuance of such expired rights or
warrants. For the purposes of this Section VI(c)(ii), if both (A) a
Distribution Date (as such term is defined in the Rights Agreement)
and (B) an event set forth in Section 11(d)(i) or 13(a) of the Rights
Agreement shall have occurred, then the later to occur of such events
shall be deemed to constitute an issuance of rights to purchase
shares of the related common stock.
(iii) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the
conversion price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall
be proportionately reduced, and conversely, in case outstanding
shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the conversion price in effect at the
opening of business on the day following the day upon which such
combination becomes effective shall be proportionately increased,
such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the
day upon which such subdivision or combination becomes effective.
(iv) Subject to the last sentence of this subparagraph (iv), in
case the Corporation shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares
of any class or series of capital stock, cash or assets (including
securities, but excluding any rights or warrants referred to in
subparagraph (ii) of this Section VI(c), any dividend or distribution
paid exclusively in cash and any dividend or distribution referred to
in subparagraph (i) of this Section VI(c)), the conversion price
shall be reduced so that the same shall equal the price determined by
multiplying the conversion price in effect immediately prior to the
effectiveness of the conversion price reduction contemplated by this
subparagraph (iv) by a fraction of which the numerator shall be the
current market price per share (determined as provided in
subparagraph (vi) of this Section VI(c)) of the Common Stock on the
date fixed for the payment of such distribution (the "Reference
Date") less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors), on the
Reference Date, of the portion of the evidences of indebtedness,
shares of capital stock, cash and assets so distributed applicable to
one share of Common Stock and the denominator shall be such current
market price per share of the Common Stock, such reduction to become
effective immediately prior to the opening of business on the day
following the Reference Date. If the Board of Directors determines
the fair market value of any distribution for purposes of this
subparagraph (iv) by reference to the actual or when issued trading
market for any securities comprising such distribution, it must in
doing so consider the prices in such market over the same period used
in computing the current market price per share of Common Stock
pursuant to subparagraph (vi) of this Section VI(c). For purposes of
this subparagraph (iv), any dividend or distribution that includes
shares of Common Stock or rights or warrants to subscribe for or
purchase shares of Common Stock shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, cash,
assets or shares of capital stock other than such shares of Common
Stock or rights or warrants (making any further conversion price
reduction required by this subparagraph (iv) immediately followed by
(2) a dividend or distribution of such shares of Common Stock or such
rights or warrants (making any further conversion price reduction
required by subparagraph (i) or (ii) of this Section VI(c), except
(A) the Reference Date of such dividend or distribution as defined in
this subparagraph (iv) shall be substituted as "the date fixed for
the determination of shareholders entitled to receive such dividend
or other distribution or to exchange such Rights", "the date fixed
for the determination of shareholders entitled to receive such rights
or warrants" and "the date fixed for such determination" within the
meaning of subparagraphs (i) and (ii) of this Section VI(c) and (B)
any shares of Common Stock included in such dividend or distribution
shall not be deemed "outstanding at the close of business on the date
fixed for such determination" within the meaning of subparagraph (i)
of this Section VI(c)).
(v) In case the Corporation shall pay or make a dividend or
other distribution on its Common Stock exclusively in cash (excluding
(A) cash that is part of a distribution referred to in (iv) above
and, (B) in the
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case of any quarterly cash dividend on the Common Stock, the portion
thereof that does not exceed the per share amount of the next
preceding quarterly cash dividend on the Common Stock (as adjusted to
appropriately reflect any of the events referred to in subparagraphs
(i), (ii), (iii), (iv) and (v) of this Section VI(c)), or all of such
quarterly cash dividend if the amount thereof per share of Common
Stock multiplied by four does not exceed 15 percent of the current
market price per share (determined as provided in subparagraph (vi)
of this Section VI(c) of the Common Stock on the Trading Day (as
defined in Section VI(i) next preceding the date of declaration of
such dividend), the conversion price shall be reduced so that the
same shall equal the price determined by multiplying the conversion
price in effect immediately prior to the effectiveness of the
conversion price reduction contemplated by this subparagraph (v) by a
fraction of which the numerator shall be the current market price per
share (determined as provided in subparagraph (vi) of this Section
VI(c)) of the Common Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed and not excluded
as provided above applicable to one share of Common Stock and the
denominator shall be such current market price per share of the
Common Stock, such reduction to become effective immediately prior to
the opening of business on the day following the date fixed for the
payment of such distribution.
(vi) For the purpose of any computation under subparagraphs
(ii), (iv) and (v) of this Section VI(c), the current market price
per share of Common Stock on any date in question shall be deemed to
be the average of the daily Closing Prices (as defined in Section
VI(i)) for the five consecutive Trading Days prior to and including
the date in question; provided, however, that (1) if the "ex" date
(as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment
to the conversion price pursuant to subparagraph (i), (ii), (iii),
(iv), or (v) above ("Other Event") occurs after the fifth Trading Day
prior to the day in question and prior to the "ex" date for the
issuance or distribution requiring such computation (the "Current
Event"), the Closing Price for each Trading Day prior to the "ex"
date for such Other Event shall be adjusted by multiplying such
Closing Price by the same fraction by which the conversion price is
so required to be adjusted as a result of such Other Event, (2) if
the "ex" date, for any Other Event occurs after the "ex" date for the
Current Event and on or prior to the date in question, the Closing
Price for each Trading Day on and after the "ex" date for such Other
Event shall be adjusted by multiplying such Closing Price by the
reciprocal of the fraction by which the conversion price is so
required to be adjusted as a result of such Other Event, (3) if the
"ex" date for any Other Event occurs on the "ex" date for the Current
Event, one of those events shall be deemed for purposes of clauses
(1) and (2) of this proviso to have an "ex" date occurring prior to
the "ex" date for the other event, and (4) if the "ex" date for the
Current Event is on or prior to the date in question, after taking
into account any adjustment required pursuant to clause (2) of this
proviso, the Closing Price for each Trading Day on or after such "ex"
date shall be adjusted by adding thereto the amount of any cash and
the fair market value on the date in question (as determined in good
faith by the Board of Directors in a manner consistent with any
determination of such value for purposes of paragraph (iv) or (v) of
this Section VI(c), whose determination shall be conclusive and
described in a resolution of the Board of Directors) of the portion
of the rights, warrants, evidences of indebtedness, shares of capital
stock or assets being distributed applicable to one share of Common
Stock. For purposes of this paragraph, the term "ex" date, (1) when
used with respect to any issuance or distribution, means the first
date on which the Common Stock trades regular way on the relevant
exchange or in the relevant market from which the Closing Price was
obtained without the right to receive such issuance or distribution
and (2) when used with respect to any subdivision or combination of
shares of Common Stock, means the first date on which the Common
Stock trades regular way on such exchange or in such market after the
time at which such subdivision or combination becomes effective.
(vii) No adjustment in the conversion price shall be required
unless such adjustment would require an increase or decrease of at
least 1 percent in the conversion price; provided, however, that any
adjustments which by reason of this subparagraph (vii) are not
required to be made shall be carried forward and taken into account
in any subsequent adjustment.
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(viii) Whenever the conversion price is adjusted as herein
provided:
(1) the Corporation shall compute the adjusted conversion
price and shall prepare a certificate signed by the Treasurer
of the Corporation setting forth the adjusted conversion price
and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be
filed with the transfer agent for the Convertible Preferred
Stock; and
(2) a notice stating that the conversion price has been
adjusted and setting forth the adjusted conversion price shall
forthwith be required, and as soon as practicable after it is
required, such notice shall be mailed by the Corporation to all
record holders of shares of Convertible Preferred Stock at
their last addresses as they shall appear upon the stock
transfer books of the Corporation.
(ix) The Corporation from time to time may reduce the
conversion price by any amount for any period of time if the period
is at least twenty days, the reduction is irrevocable during the
period and the Board of Directors of the Corporation shall have made
a determination that such reduction would be in the best interest of
the Corporation, which determination shall be conclusive. Whenever
the conversion price is reduced pursuant to the preceding sentence,
the Corporation shall mail to holders of record of the Convertible
Preferred Stock a notice of the reduction at least fifteen days prior
to the date the reduced conversion price takes effect, and such
notice shall state the reduced conversion price and the period it
will be in effect.
(d) No Fractional Shares. No fractional shares of Common Stock shall
be issued upon conversion of Convertible Preferred Stock. If more than one
certificate evidencing shares of Convertible Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number of
full shares issuable upon conversion thereof shall be computed on the basis
of the aggregate number of shares of Convertible Preferred Stock so
surrendered. Instead of any fractional share of Common Stock that would
otherwise be issuable to a holder upon conversion of any shares of
Convertible Preferred Stock, the Corporation shall pay a cash adjustment in
respect of such fractional share in an amount equal to the same fraction of
the market price per share of Common Stock (as determined by the Board of
Directors or in any manner prescribed by the Board of Directors, which, so
long as the Common Stock is listed on the New York Stock Exchange, shall be
the reported last sale price regular way on the New York Stock Exchange) at
the close of business on the day of conversion.
(e) Reclassification, Consolidation, Merger or Sale of Assets. In the
event that the Corporation shall be a party to any transaction (including
without limitation any recapitalization or reclassification of the Common
Stock (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), any consolidation of the Corporation
with, or merger of the Corporation into, any other person, any merger of
another person into the Corporation (other than a merger which does not
result in a reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Corporation), any sale or
transfer of all or substantially all of the assets of the Corporation or
any share exchange) pursuant to which the Common Stock is converted into
the right to receive other securities, cash or other property, then lawful
provisions shall be made as part of the terms of such transaction whereby
the holder of each share of Convertible Preferred Stock then outstanding
shall have the right thereafter to convert such share only into (i) in the
case of any such transaction other than a Common Stock Fundamental Change
and subject to funds being legally available for such purpose under
applicable law at the time of such conversion, the kind and amount of
securities, cash and other property receivable upon such transaction by a
holder of the number of shares of Common Stock of the Corporation into
which such share of Convertible Preferred Stock might have been converted
immediately prior to such transaction, after giving effect, in the case of
any Non-Stock Fundamental Change, to any adjustment in the conversion price
required by the provisions of Section VI(h), and (ii) in the case of a
Common Stock Fundamental Change, common stock of the kind received by
holders of Common Stock as a result of such Common Stock Fundamental Change
in an amount determined pursuant to the provisions of Section VI(h). The
Corporation or the person formed by such consolidation or resulting from
such merger or which acquires such assets or which acquires the
Corporation's shares, as the case may be, shall make provisions in its
certificate or articles of incorporation or other constituent document to
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establish such right. Such certificate or articles of incorporation or
other constituent document shall provide for adjustments which, for events
subsequent to the effective date of such certificate or articles of
incorporation or other constituent document, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Section VI.
The above provisions shall similarly apply to successive transactions of
the foregoing type.
(f) Reservation of Shares; Etc. The Corporation shall at all times
reserve and keep available, free from preemptive rights out of its
authorized and unissued stock, solely for the purpose of effecting the
conversion of the Convertible Preferred Stock, such number of shares of its
Common Stock as shall from time to time be sufficient to effect the
conversion of all shares of Convertible Preferred Stock from time to time
outstanding. The Corporation shall from time to time, in accordance with
the laws of the Commonwealth of Kentucky, in good faith and as
expeditiously as possible endeavor to cause the authorized number of shares
of Common Stock to be increased if at any time the number of shares of
authorized and unissued Common Stock shall not be sufficient to permit the
conversion of all the then-outstanding shares of Convertible Preferred
Stock.
If any shares of Common Stock required to be reserved for purposes of
conversion of the Convertible Preferred Stock hereunder require
registration with or approval of any governmental authority under any
Federal or State law before such shares may be issued upon conversion, the
Corporation will in good faith and as expeditiously as possible endeavor to
cause such shares to be duly registered or approved as the case may be. If
the Common Stock is listed on the New York Stock Exchange or any other
national securities exchange, the Corporation will, if permitted by the
rules of such exchange, list and keep listed on such exchange, upon
official notice of issuance, all shares of Common Stock issuable upon
conversion of the Convertible Preferred Stock.
(g) Prior Notice of Certain Events. In case:
(i) the Corporation shall (1) declare any dividend (or any
other distribution) on its Common Stock, other than (A) a dividend
payable in shares of Common Stock or (B) a dividend payable in cash
out of its retained earnings other than any special or nonrecurring
or other extraordinary dividend or (2) declare or authorize a
redemption or repurchase of in excess of 10 percent of the
then-outstanding shares of Common Stock; or
(ii) the Corporation shall authorize the granting to all
holders of Common Stock of rights or warrants to subscribe for or
purchase any shares of stock of any class or series or of any other
rights or warrants; or
(iii) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which
the Corporation is a party and for which approval of any shareholders
of the Corporation shall be required, or of the sale or transfer of
all or substantially all of the assets of the Corporation or of any
share exchange whereby the Common Stock is converted into other
securities, cash or other property; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for
the Convertible Preferred Stock, and shall cause to be mailed to the
holders of record of the Convertible Preferred Stock, at their last
addresses as they shall appear upon the stock transfer books of the
Corporation, at least fifteen days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, redemption, repurchase, rights or warrants or, if a record is
not to be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution, redemption, rights or
warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and
the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their shares of Common Stock for securities,
cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution,
liquidation or winding up (but no failure to mail such notice or any defect
therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
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(h) Adjustments in Case of Fundamental Changes. Notwithstanding any
other provision in this Section VI to the contrary, if any Fundamental
Change (as defined in Section VI(i) occurs, then the conversion price in
effect will be adjusted immediately after such Fundamental Change as
described below. In addition, in the event of a Common Stock Fundamental
Change (as defined in Section VI(i), each share of Convertible Preferred
Stock shall be convertible solely into common stock of the kind received by
holders of Common Stock as the result of such Common Stock Fundamental
Change.
For purposes of calculating any adjustment to be made pursuant to
this Section VI(h) in the event of a Fundamental Change, immediately after
such Fundamental Change:
(i) in the case of a Non-Stock Fundamental Change (as defined
in Section VI(i)), the conversion price of the Convertible Preferred
Stock shall thereupon become the lower of (A) the conversion price in
effect immediately prior to such Non-Stock Fundamental Change, but
after giving effect to any other prior adjustments effected pursuant
to this Section VI, and (B) the result obtained by multiplying the
greater of the Applicable Price (as defined in Section VI(i)) or the
then applicable Reference Market Price (as defined in Section VI(i))
by a fraction of which the numerator shall be $50 and the denominator
shall be (x) the then-current Redemption Price per share of
Convertible Preferred Stock or (y) for any Non-Stock Fundamental
Change that occurs before the Convertible Preferred Stock becomes
redeemable by the Corporation pursuant to Section V, the applicable
price per share set forth for the date of such Non-Stock Fundamental
Change in the following table:
Date of Non-Stock Fundamental Change
Price
After date of original issuance of Convertible
Preferred Stock and on or before March 14,1994................. $53.13
After March 14, 1994 and on or before March 14,1995.......... . $52.81
After March 14, 1995 and on or before March 14,1996. .......... $52.50
After March 14, 1996 and on or before March 24,1997............ $52.19
plus, in any case referred to in this clause (y), an amount equal to
all per share dividends on the Convertible Preferred Stock accrued
and unpaid thereon, whether or not declared, to but excluding the
date of such Non-Stock Fundamental Change; and
(ii) in the case of a Common Stock Fundamental Change, the
conversion price of the Convertible Preferred Stock in effect
immediately prior to such Common Stock Fundamental Change, but after
giving effect to any other prior adjustments effected pursuant to
this Section VI, shall thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator shall be the
Purchaser Stock Price (as defined in Section VI(i)) and the
denominator shall be the Applicable Price; provided, however, that in
the event of a Common Stock Fundamental Change in which (A) 100
percent by value of the consideration received by a holder of Common
Stock is common stock of the successor, acquiror or other third party
(and cash, if any, is paid with respect to any fractional interests
in such common stock resulting from such Common Stock Fundamental
Change) and (B) all of the Common Stock shall have been exchanged
for, converted into or acquired for common stock (and cash with
respect to fractional interests) of the successor, acquiror or other
third party, the conversion price of the Convertible Preferred Stock
in effect immediately prior to such Common Stock Fundamental Change
shall thereupon be adjusted by multiplying such conversion price by a
fraction of which the numerator shall be one (1) and the denominator
shall be the number of shares of common stock of the successor,
acquiror, or other third party received by a holder of one share of
Common Stock as a result of such Common Stock Fundamental Change.
(i) Definitions. The following definitions shall apply to terms used in
this Section VI:
(1) "Applicable Price" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Common Stock
receive only cash, the amount of cash received by the holder of one
share of Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the
average of the daily Closing Prices of the Common Stock for the ten
consecutive
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Trading Days prior to and including the record date for the
determination of the holders of Common Stock entitled to receive
cash, securities, property or other assets in connection with such
Non-Stock Fundamental Change or Common Stock Fundamental Change, or,
if there is no such record date, the date upon which the holders of
the Common Stock shall have the right to receive such cash,
securities, property or other assets, in each case, as adjusted in
good faith by the Board of Directors of the Corporation to
appropriately reflect any of the events referred to in subparagraphs
(i), (ii), (iii), (iv) and (v) of Section VI(c).
(2) "Closing Price" of any common stock on any day shall mean
the last reported sale price regular way on such day or, in case no
such sale takes place on such day, the average of the reported
closing bid and asked prices regular way of the common stock in each
case on the New York Stock Exchange, or, if the common stock is not
listed or admitted to trading on such Exchange, on the principal
national securities exchange or quotation system on which the common
stock is listed or admitted to trading or quoted, or, if not listed
or admitted to trading or quoted on any national securities exchange
or quotation system, the average of the closing bid and asked prices
of the common stock in the over-the-counter market on the day in
question as reported by the National Quotation Bureau Incorporated,
or a similarly generally accepted reporting service, or, if not so
available in such manner, as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors of
the Corporation for that purpose.
(3) "Common Stock Fundamental Change" shall mean any
Fundamental Change in which more than 50 percent by value (as
determined in good faith by the Board of Directors of the
Corporation) of the consideration received by holders of Common Stock
consists of common stock that for each of the ten consecutive Trading
Days referred to with respect to such Fundamental Change in Section
VI(i)(1) above has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or
quoted on the National Association of Securities Dealers Automated
Quotation ("NASDAQ") National Market System; provided, however, that
a Fundamental Change shall not be a Common Stock Fundamental Change
unless either (i) the Corporation continues to exist after the
occurrence of such Fundamental Change and the outstanding shares of
Convertible Preferred Stock continue to exist as outstanding shares
of Convertible Preferred Stock, or (ii) not later than the occurrence
of such Fundamental Change, the outstanding shares of Convertible
Preferred Stock are converted into or exchanged for shares of
convertible preferred stock of a corporation succeeding to the
business of the Corporation, which convertible preferred stock has
powers, preferences and relative, participating, optional or other
rights, and qualifications, limitations and restrictions,
substantially similar to those of the Convertible Preferred Stock.
(4) "Fundamental Change" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all
or substantially all of the Common Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to
receive cash, securities, property or other assets (whether by means
of an exchange offer, liquidation, tender offer, consolidation,
merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of a plan involving more
than one such transaction or event, for purposes of adjustment of the
conversion price, such Fundamental Change shall be deemed to have
occurred when substantially all of the Common Stock of the
Corporation shall be exchanged for, converted into, or acquired for
or constitute solely the right to receive cash, securities, property
or other assets, but the adjustment shall be based upon the highest
weighted average of consideration per share which a holder of Common
Stock could have received in such transactions or events as a result
of which more than 50 percent of the Common Stock of the Corporation
shall have been exchanged for, converted into, or acquired for or
constitute solely the right to receive cash, securities, property or
other assets.
(5) "Non-Stock Fundamental Change" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
(6) "Purchaser Stock Price" shall mean, with respect to any
Common Stock Fundamental Change, the average of the daily Closing
Prices of the Common Stock received in such Common Stock Fundamental
Change for the ten consecutive Trading Days prior to and including
the record date for the determination of the holders of the Common
Stock entitled to receive such common stock, or, if there is no such
record date,
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the date upon which the holders of the Common Stock shall have the
right to receive such common stock, in each case, as adjusted in good
faith by the Board of Directors of the Corporation to appropriately
reflect any of the events referred to in subparagraphs (i), (ii),
(iii), (iv) and (v) of Section VI(c); provided, however, if no such
Closing Prices of the common stock for such Trading Days exist, then
the Purchaser Stock Price shall be set at a price determined in good
faith by the Board of Directors of the Corporation.
(7) "Reference Market Price" shall initially mean $17.25 (which
is an amount equal to 66 2/3 percent of the reported last sale price
for the Common Stock on the New York Stock Exchange on May 13, 1993),
and in the event of any adjustment to the conversion price other than
as a result of a Fundamental Change, the Reference Market Price shall
also be adjusted so that the ratio of the Reference Market Price to
the conversion price after giving effect to any such adjustment shall
always be the same as the ratio of $17.25 to the initial conversion
price per share set forth in the last sentence of Section VI(a).
(8) "Trading Day" shall mean a day on which securities traded
on the national securities exchange or quotation system or in the
over-the-counter market used to determine the Closing Price.
(j) Dividend or Interest Reinvestment Plans. Notwithstanding the
foregoing provisions, the issuance of any shares of Common Stock pursuant
to any plan providing for the reinvestment of dividends or interest payable
on securities of the Corporation and the investment of additional optional
amounts in shares of Common Stock under any such plan, and the issuance of
any shares of Common Stock or options or rights to purchase such shares
pursuant to any employee benefit plan or program of the Corporation or
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of the date the Convertible Preferred
Stock was first designated (except as expressly provided in Section
VI(c)(1) or VI(c)(ii) with respect to certain events under the Rights
Agreement), and any issuance of Rights (as hereinafter defined), shall not
be deemed to constitute an issuance of Common Stock or exercisable,
exchangeable or convertible securities by the Corporation to which any of
the adjustment provisions described above applies. There shall also be no
adjustment of the conversion price in case of the issuance of any stock (or
securities convertible into or exchangeable for stock) of the Corporation
except as specifically described in this Section VI. If any action would
require adjustment of the conversion price pursuant to more than one of the
provisions described above, only one adjustment shall be made and such
adjustment shall be the amount of adjustment which has the highest absolute
value to holders of Convertible Preferred Stock.
(k) Preferred Share Purchase Rights. So long as Preferred Share
Purchase Rights of the kind declared and distributed by the Corporation's
Board of Directors in May 1986, as the same have been and may hereafter be
amended ("Rights"), are attached to the outstanding shares of Common Stock
of the Corporation, each share of Common Stock issued upon conversion of
the shares of Convertible Preferred Stock prior to the earliest of any
Distribution Date (as defined in the Rights Agreement), the date of
redemption of the Rights or the date of expiration of the Rights shall be
issued with Rights in an amount equal to the amount of Rights then attached
to each such outstanding share of Common Stock.
(l) Certain Additional Rights. In case the Corporation shall, by
dividend or otherwise, declare or make a distribution on its Common Stock
referred to in Section VI(c)(iv) or VI(c)(v) (including, without
limitation, dividends or distributions referred to in the last sentence of
Section VI(c)(iv)), the holder of each share of Convertible Preferred
Stock, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of shareholders entitled to receive
such distribution and prior to the effectiveness of the conversion price
adjustment in respect of such distribution, shall also be entitled to
receive for each share of Common Stock into which such share of Convertible
Preferred Stock is converted, the portion of the shares of Common Stock,
rights, warrants, evidences of indebtedness, shares of capital stock, cash
and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Corporation (whose election
shall be evidenced by a resolution of the Board of Directors) with respect
to all holders so converting, the Corporation may, in lieu of distributing
to such holder any portion of such distribution not consisting of cash
securities of the Corporation, pay such holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and
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described in a resolution of the Board of Directors). If any conversion of
a share of Convertible Preferred Stock described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the holder of the share of Convertible
Preferred Stock so converted is entitled to receive in accordance with the
immediately preceding sentence, the Corporation may elect (such election to
be evidenced by a resolution of the Board of Directors) to distribute to
such holder a due bill for the shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets to which
such holder is so entitled, provided that such due bill (i) meets any
applicable requirements of the principal national securities exchange or
other market on which the Common Stock is then traded and (ii) requires
payment or delivery of such shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets no later
than the date of payment or delivery thereof to holders of shares of Common
Stock receiving such distribution.
VII. Voting Rights.
(a) General. The holders of shares of Convertible Preferred Stock
shall not have any voting rights except as set forth below or as otherwise
from time to time required by law. In connection with any right to vote,
each holder of a share of Convertible Preferred Stock shall have one vote
for each share held. Any shares of Convertible Preferred Stock owned,
directly or indirectly, by any entity of which the Corporation owns,
directly or indirectly, a majority of the shares entitled to vote for
directors, shall not have voting rights hereunder and shall not be counted
in determining the presence of a quorum.
(b) Default Voting Rights. Whenever dividends on the Convertible
Preferred Stock or any other class or series of Parity Dividend Stock shall
be in arrears in an aggregate amount equal to at least six quarterly
dividends (whether or not consecutive), (i) the number of members of the
Board of Directors of the Corporation shall be increased by two, effective
as of the time of election of such directors as hereinafter provided and
(ii) the holders of shares of Convertible Preferred Stock (voting
separately as a class with all other affected classes or series of Parity
Dividend Stock upon which like voting rights have been conferred and are
exercisable) shall have the exclusive right to vote for and elect such two
additional directors of the Corporation who shall continue to serve during
the period such dividends remain in arrears. The right of the holders of
shares of Convertible Preferred Stock to vote for such two additional
directors shall terminate when all accrued and unpaid dividends on the
Convertible Preferred Stock and all other affected classes or series of
Parity Dividend Stock have been declared and paid or set apart for payment.
The term of office of all directors so elected shall terminate immediately
upon the termination of the right of the holders of shares of Convertible
Preferred Stock and such Parity Dividend Stock to vote for such two
additional directors, and the number of directors of the Board of Directors
of the Corporation shall immediately thereafter be reduced by two.
The foregoing right of the holders of shares of Convertible Preferred
Stock with respect to the election of two directors may be exercised at any
annual meeting of shareholders or at any special meeting of shareholders
held for such purpose. If the right to elect directors shall have accrued
to the holders of shares of Convertible Preferred Stock more than ninety
days preceding the date established for the next annual meeting of
stockholders, the President of the Corporation shall, within twenty days
after the delivery to the Corporation at its principal office of a written
request for a special meeting signed by the holders of at least 10 percent
of all outstanding shares of Convertible Preferred Stock, call a special
meeting of the holders of Convertible Preferred Stock to be held within
sixty days after the delivery of such request for the purpose of electing
such additional directors.
The holders of shares of Convertible Preferred Stock and any Parity
Dividend Stock referred to above voting as a class shall have the right to
remove without cause at any time and replace any directors such holders
shall have elected pursuant to this Section VII.
VIII. Outstanding Shares. For purposes of this amendment, all shares
of Convertible Preferred Stock issued by the Corporation shall be deemed
outstanding, all shares of Convertible Preferred Stock issued by the
Corporation shall be deemed outstanding except (i) from the date fixed for
redemption pursuant to Section V, all shares of Convertible Preferred Stock
that have been so called for redemption under Section V, to the extent
13
<PAGE>
provided thereunder; (ii) from the date of surrender of certificates
evidencing shares of Convertible Preferred Stock, all shares of Convertible
Preferred Stock converted into Common Stock; and (iii) from the date of
registration of transfer, all shares of Convertible Preferred Stock owned,
directly or indirectly, by any entity of which the Corporation owns,
directly or indirectly, a majority of the shares entitled to vote for
directors.
IX. Partial Payments. Upon an optional redemption by the Corporation,
if at any time the Corporation does not pay amounts sufficient to redeem
all Convertible Preferred Stock, then such funds which are paid shall be
applied to redeem such shares of Convertible Preferred Stock as the
Corporation may designate by lot or in such other manner as the Board of
Directors may determine to be fair, or such redemption shall be effected
pro rata.
X. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or
otherwise adversely affecting the remaining provisions hereof. If a court
of competent jurisdiction should determine that a provision hereof would be
valid or enforceable if a period of time were extended or shortened or a
particular percentage were increased or decreased, then such court may make
such change as shall be necessary to render the provision in question
effective and valid under applicable law.
XI. Miscellaneous. (a) The Corporation shall pay any and all stock
transfer and documentary stamp taxes that may be payable in respect of any
issuance or delivery of shares of Convertible Preferred Stock or shares of
Common Stock or other securities issued on account of Convertible Preferred
Stock pursuant hereto or certificates or instruments evidencing such shares
or securities. The Corporation shall not, however, be required to pay any
such tax which may be payable in respect of any transfer involved in the
issuance or delivery of shares of Convertible Preferred Stock or Common
Stock or other securities in a name other than that in which the shares of
Convertible Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any
payment to any person with respect to any such shares or securities other
than a payment to the registered holder thereof, and shall not be required
to make any such issuance, delivery or payment unless and until the person
otherwise entitled to such issuance, delivery or payment has paid to the
Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid or is not
payable.
(b) In the event that a holder of shares of Convertible Preferred
Stock shall not by written notice designate the name in which shares of
Common Stock to be issued upon conversion of such shares should be
registered or to whom payment upon redemption of shares of Convertible
Preferred Stock should be made or the address to which the certificates or
instruments evidencing such shares or such payment, should be sent, the
Corporation shall be entitled to register such shares and make such
payment, in the name of the holder of such Convertible Preferred Stock as
shown on the records of the Corporation and to send the certificates or
instruments evidencing such shares or such payment, to the address of such
holder shown on the records of the Corporation.
THIRD: The Amendment was adopted on May 18, 1993.
FOURTH: The Amendment was duly adopted by the Board of Directors.
ASHLAND OIL, INC.
/Paul W. Chellgren/
-------------------------
Paul W. Chellgren
President
COMMONWEALTH OF KENTUCKY )
COUNTY OF GREENUP )
14
<PAGE>
The foregoing instrument was acknowledged before me this 17th day of
May, 1993, by Paul W. Chellgren, President of ASHLAND OIL, INC., a Kentucky
corporation, on behalf the corporation.
/Mary E. Mell/
---------------------------------
Mary E. Mell
Notary Public
[STAMP]
MARY E. MELL
My commission expires: July 3,
1994
Prepared by Thomas L. Feazell
1000 Ashland Drive
Russell, Kentucky 41114
/Thomas L. Feazell/
- ---------------------------------
Thomas L. Feazell
15
<PAGE>
[STAMP]
LODGED FOR RECORD ON
THE 18 DAY OF MAY
1993 AT 3:45 PM RECORDED
IN ART. OF INC. BOOK
NO. 12 PAGE 322
TAX $______ FEES $23.50
DONALD L. DAVIDSON, CLERK
GREENUP COUNTY
BY J. THOMPSON D.C.
NO. ___________
[STAMP]
LODGED FOR RECORD
ON THE 18 DAY OF MAY
1993 AT 2:55 PM RECORDED
IN ART. OF INC. BOOK
NO. 30 PAGE 59
[STAMP]
RECEIVED & FILED
$40.00
JAN 27 8:34AM '95
BOB BABBAGE
SECRETARY OF STATE
COMM. OF KENTUCKY
BY: ACH
ARTICLES OF AMENDMENT
TO
SECOND RESTATED ARTICLES OF INCORPORATION
OF ASHLAND OIL, INC.
AMENDMENT NO. 4
Pursuant to the provisions of Section 271B.10-060 of the Kentucky
Business Corporation Act, the undersigned corporation adopts the following
articles of amendment to its Second Restated Articles of Incorporation:
First: The name of the corporation is Ashland Oil, Inc.
Second: At a meeting of the Board of Directors held on November 3,
1994, the Board of Directors proposed that the Second Restated Articles of
Incorporation be amended by substituting a new Article I for the existing
Article I, and directed that the proposed amendment be submitted to the
shareholders with the affirmative recommendation of the Board of Directors
at a meeting of the corporation's shareholders to be held on January 26,
1995 (the "Meeting"), which Meeting was duly called upon notice of the
specific purpose.
The text of the new Article I is as follows:
ARTICLE I
The name of the corporation is Ashland Inc. (hereinafter called the
"Company" or the "Corporation").
Third: There were 60,754,474 shares of Ashland Oil, Inc. Common
Stock, each of which was entitled to cast one vote, outstanding at November
28, 1994, the record date for the Meeting, which represent all of the
shares entitled to vote on such amendment.
Fourth: There were 52,983,021 shares of Ashland Oil, Inc. Common
Stock indisputably represented at the Meeting.
Fifth: The total number of undisputed votes cast for such
amendment was 51,239,239 and the total number of votes cast against such
amendment was 1,370,949. The number of votes cast for the amendment was
sufficient for approval.
Sixth: The amendment will become effective at 4:00 p.m. on January
27, 1995.
ASHLAND OIL, INC.
/Paul W. Chellgren/
By: _____________________________
Paul W. Chellgren
President
[STAMP] BOOK 31 PAGE 320
<PAGE>
Commonwealth of Kentucky
County of Greenup
The foregoing instrument was acknowledged before me this 27th day of
January, 1995, by Paul W. Chellgren, President of Ashland Oil, Inc., a
Kentucky corporation, on behalf of the corporation.
/Teresa F. Gabbard/
---------------------------
Notary Public
[STAMP] TERESA F. GABBARD
My commission expires October 9, 1997
Prepared by Thomas L. Feazell
1000 Ashland Drive
Russell, Kentucky 41169
/Thomas L. Feazell/
- -----------------------------
[STAMP]
DOCUMENT NO: 440448
RECORDED ON: JANUARY 27, 1995 12:58:53PM
TOTAL FEES: $9.00
COUNTY CLERK: MAXINE SELBEE
COUNTY: BOYD COUNTY
DEPUTY CLERK: GAIL BOGGS
BOOK 31 PAGE 321
[STAMP]
LODGED FOR RECORD ON
THE 27 DAY OF JAN., 1995
AT 1:45PM RECORDED IN ART.
OF INC. BOOK NO. 13 PAGE
147 TAX $_________ FEES
$9.00
DONALD L. DAVIDSON, CLERK
GREENUP COUNTY
BY: JOAN BURNETT D.C.
<PAGE>
ARTICLES OF AMENDMENT
TO
SECOND RESTATED ARTICLES OF INCORPORATION
OF
ASHLAND INC.
AMENDMENT NO. 5
Pursuant to the provisions of Section 271B.10-060 of the Kentucky Business
Corporation Act, the undersigned corporation adopts the following articles
of amendment to set forth the preferences, limitations and relative rights
of a series of shares of its Cumulative Preferred Stock, without par value,
under Article IV of its Second Restated Articles of Incorporation.
FIRST: The name of the Corporation is Ashland Inc.
SECOND: The text of the amendment determining the terms of the series
of shares of the Cumulative Preferred Stock is as follows:
I. DESIGNATION AND NUMBER OF SHARES. This series of the Cumulative
Preferred Stock shall be designated as "Series A Participating Cumulative
Preferred Stock" (the "Series A Preferred Stock"). The number of shares
initially issuable as the Series A Preferred Stock shall be 500,000;
provided, however, that, if more than a total of 500,000 shares of Series A
Preferred Stock shall be issuable upon the exercise of Rights (the
"Rights") issued pursuant to the Rights Agreement dated as of May 16, 1996,
between the Corporation and Harris Trust and Savings Bank, as Rights Agent
(the "Rights Agreement"), the Board of Directors of the Corporation,
pursuant to Section 271B.10-060 of the Kentucky Business Corporation Act,
shall direct by resolution or resolutions that Articles of Amendment of the
Articles of Incorporation of the Corporation be properly executed and filed
with the Secretary of State of Kentucky providing for the total number of
shares issuable as Series A Preferred Stock to be increased (to the extent
that the Articles of Incorporation then permit) to the largest number of
whole shares (rounded up to the nearest whole number) issuable upon
exercise of such Rights.
II. DIVIDENDS OR DISTRIBUTIONS. (a) Subject to the prior and superior
rights of the holders of shares of any other series of Preferred Stock or
other class of capital stock of the Corporation ranking prior and superior
to the shares of Series A Preferred Stock with respect to dividends, the
holders of shares of the Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of the
assets of the Corporation legally available therefor, (i) quarterly
dividends payable in cash on the last day of each fiscal quarter in each
year, or such other dates as the Board of Directors of the Corporation
shall approve (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or a fraction of a share of Series
A Preferred Stock, in the amount of $.01 per whole share (rounded to the
nearest cent), less the amount of all cash dividends declared on the Series
A Preferred Stock pursuant to the following clause (ii) since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock (the total of
which shall not, in any event, be less than zero) and (ii) dividends
payable in cash on the payment date for each cash dividend declared on the
Common Stock in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect times
the cash dividends then to be paid on each share of Common Stock. In
addition, if the Corporation shall pay any dividend or make any
distribution on the Common Stock payable in assets, securities or other
forms of non-cash consideration (other than dividends or distributions
solely in shares of Common Stock), then, in each such case, the Corporation
shall simultaneously pay or make on each outstanding whole share of Series
A Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be
1,000; PROVIDED, HOWEVER, that, if at any time after May 16, 1996, the
Corporation shall (x) declare or pay any dividend on the Common Stock
payable in shares of Common Stock or make any distribution on the Common
Stock in shares of Common Stock, (y) subdivide (by a stock split or
otherwise) the outstanding shares of Common Stock into a larger number of
shares of Common Stock or (z) combine (by a
<PAGE>
reverse stock split or otherwise) the outstanding shares of Common Stock
into a smaller number of shares of Common Stock, then, in each such event,
the Formula Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that are outstanding immediately prior
to such event (and rounding the result to the nearest whole number); and
PROVIDED FURTHER, that, if at any time after May 16, 1996, the Corporation
shall issue any shares of its capital stock in a merger, share exchange,
reclassification, or change of the outstanding shares of Common Stock,
then, in each such event, the Formula Number shall be appropriately
adjusted to reflect such merger, share exchange, reclassification or change
so that each share of Preferred Stock continues to be the economic
equivalent of a Formula Number of shares of Common Stock prior to such
merger, share exchange, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common
Stock); PROVIDED, HOWEVER, that, in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock) 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 $.01 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
dividend or distribution declared thereon, which record date shall be the
same as the record date for any corresponding dividend or distribution on
the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series A Preferred Stock; PROVIDED, HOWEVER, that dividends on such shares
that are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and on or prior to the next succeeding Quarterly
Dividend Payment Date shall begin to accrue and be cumulative from and
after such Quarterly Dividend Payment Date. Notwithstanding the foregoing,
dividends on shares of Series A Preferred Stock that are originally issued
prior to the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend on the
first Quarterly Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal quarter next preceding the date
of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding and entitled to receive
such dividends.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock,
unless, in each case, the dividend required by this Section 2 to be
declared on the Series A Preferred Stock shall have been declared and paid.
(e) The holders of the shares of Series A Preferred Stock shall not be
entitled to receive any dividends or other distributions, except as
provided herein.
III. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share
of Series A Preferred Stock held of record on each matter on which holders
of the Common Stock or shareholders generally are entitled to vote,
multiplied by the maximum number of votes per share which any holder of the
Common Stock or shareholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred
<PAGE>
Stock and the holders of shares of Common Stock shall vote together as
one voting group for the election of directors of the Corporation and on
all other matters submitted to a vote of shareholders of the Corporation.
(c) If, at the time of any annual meeting of shareholders for the
election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series A Preferred
Stock are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series A
Preferred Stock, voting separately as a voting group to the exclusion of
the holders of Common Stock, shall be entitled at said meeting of
shareholders (and at each subsequent annual meeting of shareholders),
unless all dividends in arrears have been paid or declared and set apart
for payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Preferred Stock being entitled to
cast a number of votes per share of Series A Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends that
permitted the election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the next preceding sentence may
be removed at any time, either with or without cause, only by the
affirmative vote of the holders of the shares of Series A Preferred Stock
at the time entitled to cast such number of votes as are required by law
for the election of any such director at a special meeting of such holders
called for that purpose, and any vacancy thereby created may be filled only
by the vote of such holders. If and when such default shall cease to exist,
the holders of the Series A Preferred Stock shall be divested of the
foregoing special voting rights, subject to revesting in the event of each
and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special
voting rights shall forthwith terminate to the extent permitted by law, and
the number of directors constituting the Board of Directors shall be
reduced by two. The voting rights granted by this Section 3(c) shall be in
addition to any other voting rights granted to the holders of the Series A
Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders 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 Common Stock as set forth herein) for authorizing
or taking any corporate action.
IV. CERTAIN RESTRICTIONS. (a) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock; PROVIDED that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates
<PAGE>
and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (a) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
V. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock, unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to the accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, plus an amount equal to the greater of (i) $.01 per
whole share or (ii) an aggregate amount per share equal to the Formula
Number then in effect times the aggregate amount to be distributed per
share to holders of Common Stock or (b) to the holders of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
VI. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, share exchange, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash or any other property, then,
in any such case, the then outstanding shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount per
share equal to the Formula Number then in effect times the aggregate amount
of stock, securities, cash or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is
exchanged or changed. In the event both this Section 6 and Section 2 appear
to apply to a transaction, this Section 6 will control.
VII. NO REDEMPTION; NO SINKING FUND. (a) The shares of Series A
Preferred Stock shall not be subject to redemption by the Corporation or at
the option of any holder of Series A Preferred Stock; provided, however,
that the Corporation may purchase or otherwise acquire outstanding shares
of Series A Preferred Stock in the open market or by offer to any holder or
holders of shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
VIII. Ranking. The Series A Preferred Stock shall rank junior to all
other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations and restrictions
thereof.
IX. FRACTIONAL SHARES. The Series A Preferred Stock shall be issuable
upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one-thousandth (1/1,000)
of a share or any integral multiple of such fraction which shall entitle
the holder, in proportion to such holder's fractional shares, to receive
dividends, exercise voting rights, participate in distributions and have
the benefit of all other rights of holders of Series A Preferred Stock. In
lieu of fractional shares, the Corporation, prior to the first issuance of
a share or a fraction of a share of Series A Preferred Stock, may elect (a)
to make a cash payment as provided in the Rights Agreement for fractions of
a share other than one-thousandth (1/1,000) of a share or any integral
multiple thereof or (b) to issue depository receipts evidencing such
authorized fraction of a share of Series A Preferred Stock pursuant to an
appropriate agreement between the Corporation and a depository selected by
the Corporation; PROVIDED that such agreement shall provide that the
holders of such depository receipts shall have all the rights, privileges
and preferences to which they are entitled as holders of the Series A
Preferred Stock.
<PAGE>
X. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancelation become authorized but unissued shares
of Preferred Stock, without par value, of the Corporation, undesignated as
to series, and may thereafter be reissued as part of a new series of such
Preferred Stock as permitted by law.
XI. AMENDMENT. None of the powers, preferences and relative,
participating, optional and other special rights of the Series A Preferred
Stock as provided herein or in the Articles of Incorporation shall be
amended in any manner that would alter or change the powers, preferences,
rights or privileges of the holders of Series A Preferred Stock so as to
affect such holders adversely without the affirmative vote of the holders
of at least 66-2/3% of the outstanding shares of Series A Preferred Stock,
voting as a separate voting group; PROVIDED, HOWEVER, that no such
amendment approved by the holders of at least 66-2/3% of the outstanding
shares of Series A Preferred Stock shall be deemed to apply to the powers,
preferences, rights or privileges of any holder of shares of Series A
Preferred Stock originally issued upon exercise of a Right after the time
of such approval without the approval of such holder.
THIRD: This amendment was duly adopted by the Board of Directors of
the Corporation without shareholder action on May 16, 1996. Shareholder
action was not required.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment as of this 16th day of May, 1996.
ASHLAND INC.
by /s/ Paul W. Chellgren
----------------------------------
Paul W. Chellgren
President
<PAGE>
COMMONWEALTH OF KENTUCKY)
COUNTY OF GREENUP )
The foregoing instrument was acknowledged before me this 16th day of
May, 1996, by , of ASHLAND INC., a Kentucky corporation, on behalf of the
corporation.
Mary E. Mell
----------------------------------
Notary Public
Prepared by Thomas L. Feazell
1000 Ashland Drive
Russell, Kentucky 41114
/s/ Thomas L. Feazell
- -------------------------
Thomas L. Feazell
RIGHTS AGREEMENT dated as of May 16,
1996, between ASHLAND INC., a Kentucky
corporation (the "Company"), and HARRIS TRUST
AND SAVINGS BANK, an Illinois banking
corporation, as Rights Agent (the "Rights
Agent").
The Board of Directors of the Company has authorized and declared
a dividend of one Right (as hereinafter defined) for each share of Common
Stock, par value $1.00 per share, of the Company (the "Common Stock")
outstanding at the Close of Business (as hereinafter defined) on May 16,
1996 (the "Record Date"), and has authorized the issuance of one Right (as
such number may hereafter be adjusted pursuant to the provisions of this
Rights Agreement) with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date (as such
terms are hereinafter defined); PROVIDED, HOWEVER, that Rights may be
issued with respect to shares of Common Stock that shall become outstanding
after the Distribution Date and prior to the earlier of the Redemption Date
or the Expiration Date in accordance with the provisions of Section 23.
Each Right shall initially represent the right to purchase one-thousandth
(1/1,000) of a share of Series A Participating Cumulative Preferred Stock,
without par value, of the Company (the "Preferred Shares"), having the
powers, rights and preferences set forth in the Articles of Amendment
attached as Exhibit A.
Accordingly, 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 Rights
Agreement, the following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding but
shall not include (a) the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any of its Subsidiaries, or any
Person holding Common Shares for or pursuant to the terms of any such
employee benefit plan or
<PAGE>
(b) any such Person who has become and is such a Beneficial Owner solely
because (i) of a change in the aggregate number of Common Shares
outstanding since the last date on which such Person acquired Beneficial
Ownership of any Common Shares or (ii) it acquired such Beneficial
Ownership in the good faith belief that such acquisition would not (A)
cause such Beneficial Ownership to exceed 15% of the Common Shares then
outstanding and such Person relied in good faith in computing the
percentage of its Beneficial Ownership on publicly filed reports or
documents of the Company which are inaccurate or out-of-date or (B)
otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a) to occur. Notwithstanding clause (b)(ii) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause
(b)(ii) does not reduce its percentage of Beneficial Ownership of Common
Shares to 15% or less by the Close of Business on the fifth Business Day
after notice from the Company (the date of notice being the first day) that
such Person's Beneficial Ownership of Common Shares so exceeds 15%, such
Person shall, at the end of such five Business Day period, become an
Acquiring Person (and such clause (b)(ii) shall no longer apply to such
Person). For purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively determined by the Board
of Directors of the Company.
"AFFILIATE" and "ASSOCIATE", when used with reference to any
Person, shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Rights Agreement.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be
deemed to "BENEFICIALLY OWN", and shall be deemed to have "BENEFICIAL
OWNERSHIP" of, any securities:
(a) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of
Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Rights Agreement;
(b) which such Person or any of such Person's 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 (written
or oral), or upon the exercise of conversion rights, exchange
rights
<PAGE>
(other than the Company's rights under Section 11(b)(1)),
rights (other than the Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed
the Beneficial Owner of, or to beneficially own, or to have
Beneficial Ownership of, securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange thereunder, or
(ii) the right to vote pursuant to any agreement, arrangement or
understanding (written or oral); PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially
own, or to have Beneficial Ownership of, any security if (A) the
agreement, arrangement or understanding (written or oral) to vote
such security arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and (B)
the beneficial ownership of such security is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) 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 (written or oral) for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy or consent
as described in clause (b)(ii) of this definition) or disposing of
any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition shall
cause a Person ordinarily engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own", or to
have "Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the
Company.
"ARTICLES OF AMENDMENT" shall mean the Articles of Amendment of
the Second Restated Articles of Incorporation of the Company designating
and establishing the Series A Participating Cumulative Preferred Stock and
setting forth the preferences, limitations and relative rights of such
<PAGE>
series of Preferred Stock of the Company, a copy of which is attached as
Exhibit A.
"BOOK VALUE", when used with reference to Common Shares issued by
any Person, shall mean the amount of equity of such Person applicable to
each Common Share, determined (a) in accordance with generally accepted
accounting principles in effect on the date as of which such Book Value is
to be determined, (b) using all the consolidated assets and all the
consolidated liabilities of such Person on the date as of which such Book
Value is to be determined, except that no value shall be included in such
assets for goodwill arising from consummation of a business combination,
and (c) after giving effect to (i) the exercise of all rights, options and
warrants to purchase such Common Shares (other than the Rights), and the
conversion of all securities convertible into such Common Shares, at an
exercise or conversion price, per Common Share, which is less than such
Book Value before giving effect to such exercise or conversion (whether or
not exercisability or convertibility is conditioned upon occurrence of a
future event), (ii) all dividends and other distributions on the capital
stock of such Person declared prior to the date as of which such Book Value
is to be determined and to be paid or made after such date, and (iii) any
other agreement, arrangement or understanding (written or oral), or
transaction or other action prior to the date as of which such Book Value
is to be determined which would have the effect of thereafter reducing such
Book Value.
"BUSINESS COMBINATION" shall have the meaning set forth in
Section 11(c)(i).
"BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in the
Borough of Manhattan, the City of New York, are authorized or obligated by
law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., New
York City time, on such date; PROVIDED, HOWEVER, that, if such date is not
a Business Day, "Close of Business" shall mean 5:00 p.m., New York City
time, on the next succeeding Business Day.
"COMMON SHARES", when used with reference to the Company prior to
a Business Combination, shall mean the shares of Common Stock of the
Company or any other shares of
<PAGE>
capital stock of the Company into which the Common Stock shall be
reclassified or changed. "Common Shares", when used with reference to any
Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of
any class or series, or units of equity interests in such Person (if such
Person is not a corporation) of any class or series, the terms of which do
not limit (as a maximum amount and not merely in proportional terms) the
amount of dividends or income payable or distributable on such class or
series or the amount of assets distributable on such class or series upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person and do not provide that such class or series is subject to
redemption at the option of such Person, or any shares of capital stock or
units of equity interests into which the foregoing shall be reclassified or
changed; PROVIDED, HOWEVER, that, if at any time there shall be more than
one such class or series of capital stock or equity interests of such
Person, "Common Shares" of such Person shall include all such classes and
series substantially in the proportion of the total number of shares or
other units of each such class or series outstanding at such time.
"COMMON STOCK" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"COMPANY" shall have the meaning set forth in the heading of this
Rights Agreement; PROVIDED, HOWEVER, that if there is a Business
Combination, "Company" shall have the meaning set forth in Section
11(c)(iii).
The term "CONTROL" with respect to any Person shall mean the
power to direct the management and policies of such Person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant
to or in connection with an agreement, arrangement or understanding
(written or oral) with one or more other Persons by or through stock
ownership, agency or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
"DISTRIBUTION DATE" shall have the meaning set forth in Section
3(b).
<PAGE>
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
in effect on the date in question, unless otherwise specifically provided.
"EXCHANGE CONSIDERATION" shall have the meaning set forth in
Section 11(b)(i).
"EXPIRATION DATE" shall have the meaning set forth in Section
7(a).
"MAJOR PART", when used with reference to the assets of the
Company and its Subsidiaries as of any date, shall mean assets (a) having a
fair market value aggregating 50% or more of the total fair market value of
all the assets of the Company and its Subsidiaries (taken as a whole) as of
the date in question, (b) accounting for 50% or more of the total value
(net of depreciation and amortization) of all the assets of the Company and
its Subsidiaries (taken as a whole) as would be shown on a consolidated or
combined balance sheet of the Company and its Subsidiaries as of the date
in question, prepared in accordance with generally accepted accounting
principles then in effect, or (c) accounting for 50% or more of the total
amount of earnings before interest, taxes, depreciation and amortization or
of the revenues of the Company and its Subsidiaries (taken as a whole) as
would be shown on, or derived from, a consolidated or combined statement of
income or operations of the Company and its Subsidiaries for the period of
12 months ending on the last day of the Company's monthly accounting period
next preceding the date in question, prepared in accordance with generally
accepted accounting principles then in effect.
"MARKET VALUE", when used with reference to Common Shares on any
date, shall be deemed to be the average of the daily closing prices, per
share, of such Common Shares for the period which is the shorter of (a) 30
consecutive Trading Days immediately prior to the date in question or (b)
the number of consecutive Trading Days beginning on the Trading Day
immediately after the date of the first public announcement of the event
requiring a determination of the Market Value and ending on the Trading Day
immediately prior to the record date of such event; PROVIDED, HOWEVER,
that, in the event that the Market Value of such Common Shares is to be
determined in whole or in part during a period following the announcement
by the issuer of such Common Shares of any action of the type described in
Section 12(a) that would require an adjustment thereunder, then, and in
<PAGE>
each such case, the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on the market
price of such Common Shares. The closing price for each Trading Day shall
be the closing price quoted on the principal United States securities
exchange registered under the Exchange Act (or any recognized foreign stock
exchange) on which such securities are listed, or, if such securities are
not listed on any such exchange, the average of the closing bid and asked
quotations with respect to a share of such securities on any National
Association of Securities Dealers, Inc. quotations system, or if no such
quotations are available, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in such
securities selected by the Board of Directors of the Company. If on any
such Trading Day no market maker is making a market in such securities, the
closing price of such securities on such Trading Day shall be deemed to be
the fair value of such securities as determined in good faith by the Board
of Directors of the Company (whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent, the holders of Rights and all other Persons); PROVIDED, HOWEVER,
that for the purpose of determining the closing price of the Preferred
Shares for any Trading Day on which there is no such market maker for the
Preferred Shares the closing price on such Trading Day shall be deemed to
be the Formula Number (as defined in the Articles of Amendment) times the
closing price of the Common Shares of the Company on such Trading Day.
"PERSON" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
"PREFERRED SHARES" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this
Rights Agreement to Preferred Shares shall be deemed to include any
authorized fraction of a Preferred Share, unless the context otherwise
requires.
"PRINCIPAL PARTY" shall mean the Surviving Person in a Business
Combination; PROVIDED, HOWEVER, that, if such Surviving Person is a direct
or indirect Subsidiary of any other Person, "Principal Party" shall mean
the Person which is the ultimate parent of such Surviving Person and which
is
<PAGE>
not itself a Subsidiary of another Person. In the event ultimate control
of such Surviving Person is shared by two or more Persons, "Principal
Party" shall mean that Person that is immediately controlled by such two or
more Persons.
"PURCHASE PRICE" with respect to each Right shall mean $140, as
such amount may from time to time be adjusted as provided herein. All
references herein to the Purchase Price shall mean the Purchase Price as in
effect at the time in question.
"RECORD DATE" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"REDEMPTION DATE" shall have the meaning set forth in Section
24(a).
"REDEMPTION PRICE" with respect to each Right shall mean $.01, as
such amount may from time to time be adjusted in accordance with Section
12. All references herein to the Redemption Price shall mean the Redemption
Price as in effect at the time in question.
"REGISTERED COMMON SHARES" shall mean Common Shares which are, as
of the date of consummation of a Business Combination, and have
continuously been for the 12 months immediately preceding such date,
registered under Section 12 of the Exchange Act.
"RIGHT CERTIFICATE" shall mean a certificate evidencing a Right
or Rights in substantially the form attached as Exhibit B.
"RIGHTS" shall mean the rights to purchase Preferred Shares (or
other securities) as provided in this Rights Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as in
effect on the date in question, unless otherwise specifically provided.
"SUBSIDIARY" shall mean a Person, at least a majority of the
total outstanding voting power (being the power under ordinary
circumstances (and not merely upon the happening of a contingency) to vote
in the election of directors of such Person (if such Person is a
corporation) or to participate in the management and control of such Person
(if such Person is not a corporation)) of which is
<PAGE>
owned, directly or indirectly, by another Person or by one or more other
Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.
"SURVIVING PERSON" shall mean (a) the Person which is the
continuing or surviving Person in a consolidation or merger or share
exchange specified in Section 11(c)(i)(A) or 11(c)(i)(B) or (b) the Person
to which the Major Part of the assets of the Company and its Subsidiaries
is sold, leased, exchanged or otherwise transferred or disposed of in one
or more transactions specified in Section 11(c)(i)(C); PROVIDED, HOWEVER,
that, if the Major Part of the assets of the Company and its Subsidiaries
is sold, leased, exchanged or otherwise transferred or disposed of in one
or more transactions specified in Section 11(c)(i)(C) to more than one
Person, the "Surviving Person" in such case shall mean the Person that
acquired assets of the Company and/or its Subsidiaries with the greatest
fair market value in such transaction or transactions.
"TRADING DAY" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the
case may be) on which any securities or Rights, as the case may be, are
listed or admitted to trading is open for the transaction of business or,
if the securities or Rights in question are not listed or admitted to
trading on any national securities exchange (or recognized foreign stock
exchange, as the case may be), a Business Day.
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 one or more
co-Rights Agents as it may deem necessary or desirable upon notice to the
Rights Agent (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights Agents).
In the event the Company appoints one or more co-Rights Agents, the
respective duties of the Rights Agent and any co-Rights Agents shall be set
forth in an amendment to this Rights Agreement.
SECTION 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES. (a) One Right
shall be associated with each Common Share outstanding on the Record Date,
each additional
<PAGE>
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date or the Expiration
Date and each additional Common Share with which Rights are issued after
the Distribution Date but prior to the earlier of the Redemption Date or
the Expiration Date as provided in Section 23; PROVIDED, HOWEVER, that, if
the number of outstanding Rights are combined into a smaller number of
outstanding Rights pursuant to Section 12(a), the appropriate fractional
Right determined pursuant to such Section shall thereafter be associated
with each such Common Share.
(b) Until the earlier of (i) such time as the Company learns that
a Person has become an Acquiring Person or (ii) the Close of Business on
such date, if any, as may be designated by the Board of Directors of the
Company following the commencement of, or first public disclosure of an
intent to commence, a tender or exchange offer by any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any of its Subsidiaries, or any Person holding Common
Shares for or pursuant to the terms of any such employee benefit plan) for
outstanding Common Shares, if upon consummation of such tender or exchange
offer such Person could be the Beneficial Owner of more than 15% of the
outstanding Common Shares (the Close of Business on the earlier of such
dates being the "Distribution Date"), (x) the Rights will be evidenced by
the certificates or other evidences of ownership of Common Shares
registered in the names of the holders thereof and not by separate Right
Certificates and (y) the Rights, including the right to receive Right
Certificates, will be transferable only in connection with the transfer of
Common Shares. As soon as practicable after the Distribution Date, the
Rights Agent will send, by first-class, postage-prepaid mail, to each
record holder of Common Shares as of the Distribution Date, at the address
of such holder shown on the records of the Company, a Right Certificate
evidencing one whole Right for each Common Share (or for the number of
Common Shares with which one whole Right is then associated if the number
of Rights per Common Share held by such record holder has been adjusted in
accordance with the proviso in Section 3(a)). If the number of Rights
associated with each Common Share has been adjusted in accordance with the
proviso in Section 3(a), at the time of distribution of the Right
Certificates the Company may make any necessary and appropriate rounding
adjustments so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Right in
<PAGE>
accordance with Section 15(a). As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(c) Until the earliest of the Distribution Date, the Redemption
Date or the Expiration Date, the Rights associated with Common Shares shall
be evidenced by the evidence of ownership of such Common Shares alone, the
registered holders of the Common Shares shall also be the registered
holders of the associated Rights, and the transfer of any Common Shares
shall also constitute the transfer of the Rights associated with such
Common Shares.
(d) Certificates issued for Common Shares after the Record Date
(including, without limitation, upon transfer or exchange of outstanding
Common Shares), but prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, shall have printed on, written on
or otherwise affixed to or attached to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
dated as of May 16, 1996, as it may be amended from time to
time (the "Rights Agreement"), between Ashland Inc. (the
"Company") and Harris Trust and Savings Bank, as Rights
Agent (the "Rights Agent"), the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company.
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. The Rights Agent will mail to the holder of
this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Rights
beneficially owned by Acquiring Persons or their Affiliates
or Associates (as such terms are defined in the Rights
Agreement) and by any subsequent holder of such Rights are
null and void and nontransferable.
Notwithstanding this paragraph (d), neither the omission of a
legend nor the existence of a legend which refers to a rights agreement
other than the Rights Agreement shall affect the enforceability of any part
of this Rights Agreement or the rights of any holder of Rights.
<PAGE>
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the form of election to purchase and form of assignment to be printed
on the reverse side thereof) shall be in substantially the form set forth
as Exhibit B 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 applicable law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time to time
be listed, or to conform to usage. Subject to the provisions of Sections 7,
11 and 23, the Right Certificates, whenever issued, shall be dated as of
the Distribution Date, and on their face shall entitle the holders thereof
to purchase such number of Preferred Shares as shall be set forth therein
for the Purchase Price set forth therein, subject to adjustment from time
to time as herein provided.
SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION. (a) The
Right Certificates shall be executed on behalf of the Company by the
Chairman of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, the Treasurer or a
Vice President (whether preceded by any additional title) of the Company,
either manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned
by the Rights Agent and shall not be valid or obligatory for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such an officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates may nevertheless be
countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such an 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 execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at
the date of execution of this Rights Agreement any such person was not such
an officer of the Company.
<PAGE>
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office in Chicago, Illinois, 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 by each of the Right
Certificates, the certificate number of each of the Right Certificates and
the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES;
UNCERTIFICATED RIGHTS. (a) Subject to the provisions of Sections 7(e) and
15, at any time after the Distribution Date, and at or prior to the Close
of Business on the earlier of the Redemption Date or the Expiration Date,
any Right Certificate or Right Certificates may be transferred, split-up,
combined or exchanged for another Right Certificate or Right Certificates
representing, in the aggregate, the same number of Rights as the Right
Certificate or Right Certificates surrendered then represented. Any
registered holder desiring to transfer, 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 transferred, split- up, combined or exchanged at the
principal office of the Rights Agent; PROVIDED, HOWEVER, that neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any Right Certificate
surrendered for transfer until the registered holder shall have completed
and signed the certification contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections
7(e) and 15, 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 or the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Right
<PAGE>
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancelation of the Right Certificate if mutilated, the Company will make a
new Right Certificate of like tenor and deliver such new Right Certificate
to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
(c) Notwithstanding any other provision hereof, the Company and
the Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced by
Right Certificates.
SECTION 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS. (a)
Subject to Section 7(e) and except as otherwise provided herein (including
Section 11), each Right shall entitle the registered holder thereof, upon
exercise thereof as provided herein, to purchase for the Purchase Price, at
any time after the Distribution Date and at or prior to the earlier of (i)
the Close of Business on the 10th anniversary of the date of this Rights
Agreement (the Close of Business on such date being the "Expiration Date")
or (ii) the Redemption Date, one-thousandth (1/1,000) of a Preferred Share,
subject to adjustment from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole
or in part at any time after the Distribution Date, upon surrender of the
Right Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the principal office of
the Rights Agent in Chicago, Illinois, together with payment of the
Purchase Price for each one-thousandth (1/1,000) of a Preferred Share as to
which the Rights are exercised, at or prior to the earlier of (i) the
Expiration Date or (ii) the Redemption Date.
(c) 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 for the Preferred Shares to be purchased
together with an amount equal to any applicable transfer tax, in lawful
money of the United States of America, in
<PAGE>
cash or by certified check or money order payable to the order of the
Company, the Rights Agent shall thereupon (i) either (A) promptly
requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests
or (B) if the Company shall have elected to deposit the Preferred Shares
with a depositary agent under a depositary arrangement, promptly
requisition from the depositary agent depositary receipts representing the
number of thousandths (1/1,000s) of a Preferred Share to be purchased (in
which case certificates for the Preferred Shares to be 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 all
such requests, (ii) when appropriate, promptly requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 15, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and
(iv) when appropriate, after receipt promptly deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be countersigned by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person shall
be null and void and nontransferable, and any holder of any such Right
(including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
(f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificates
<PAGE>
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.
(g) The Company may temporarily suspend, for a period of time not
to exceed 90 calendar days after the Distribution Date, the exercisability
of the Rights in order to prepare and file a registration statement under
the Securities Act, on an appropriate form, with respect to the Preferred
Shares purchasable upon exercise of the Rights and permit such registration
statement to become effective; PROVIDED, HOWEVER, that no such suspension
shall remain effective after, and the Rights shall without any further
action by the Company or any other Person become exercisable immediately
upon, the effectiveness of such registration statement. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a further public announcement at such time as the suspension is no longer
in effect. Notwithstanding any provision herein to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
under the blue sky or securities laws of such jurisdiction shall not have
been obtained or the exercise of the Rights shall not be permitted under
applicable law.
SECTION 8. CANCELATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right
Certificate representing Rights that have become null and void and
nontransferable pursuant to Section 7(e) surrendered or presented for any
purpose shall, if surrendered or presented to the Company or to any of its
agents, be delivered to the Rights Agent for cancelation or in canceled
form, or, if surrendered or presented to the Rights Agent, shall be
canceled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by this Rights Agreement. The Company shall
deliver to the Rights Agent for cancelation and retirement, and the Rights
Agent shall so cancel and retire, any Right Certificate purchased or
acquired by the Company. The Rights Agent shall deliver all
<PAGE>
canceled Right Certificates to the Company so that the Company is able to
maintain such certificates for such period of time as may be required by
law, or shall, at the written request of the Company, destroy such canceled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. (a)
The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares, free from
preemptive rights or any right of first refusal, a number of Preferred
Shares sufficient to permit the exercise pursuant to Section 7 or exchange
pursuant to Section 11 in full of all outstanding Rights.
(b) In the event that there shall not be sufficient authorized
but unissued Preferred Shares to permit the exercise or exchange of Rights
in accordance with Section 11, the Company covenants and agrees that it
will take all such action as may be necessary to authorize additional
Preferred Shares for issuance upon the exercise or exchange of Rights
pursuant to Section 11; PROVIDED, HOWEVER, that if the Company is unable to
cause the authorization of additional Preferred Shares, then the Company
shall, or in lieu of seeking any such authorization, the Company may, to
the extent necessary and permitted by applicable law and any agreements or
instruments in effect prior to the Distribution Date to which it is a
party, (i) upon surrender of a Right, pay cash equal to the Purchase Price
in lieu of issuing Preferred Shares and requiring payment therefor, (ii)
upon due exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, issue equity
securities having a value equal to the value of the Preferred Shares which
otherwise would have been issuable pursuant to Section 11, which value
shall be determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company or (iii) upon due
exercise of a Right and payment of the Purchase Price for each Preferred
Share as to which such Right is exercised, distribute a combination of
Preferred Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred Shares which otherwise
would have been issuable pursuant to Section 11, which value shall be
determined by a nationally recognized investment banking firm selected by
the Board of Directors of the Company. To the extent that any legal or
contractual
<PAGE>
restrictions (pursuant to agreements or instruments in effect prior to the
Distribution Date to which it is party) prevent the Company from paying the
full amount payable in accordance with the foregoing sentence, the Company
shall pay to holders of the Rights as to which such payments are being made
all amounts which are not then restricted on a pro rata basis as such
payments become permissible under such legal or contractual restrictions
until such payments have been paid in full.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered
upon exercise or exchange of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any national securities exchange,
the Company covenants and agrees to use its best efforts to cause, from and
after such time as the Rights become exercisable or exchangeable, all
Preferred Shares reserved for such issuance to be listed on such securities
exchange upon official notice of issuance upon such exercise or exchange.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all Federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of
Right Certificates or of any Preferred Shares or Common Shares or other
securities upon the exercise or exchange of the 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 in respect of the issuance or delivery of certificates or other
evidences of ownership of the Preferred Shares or Common Shares or other
securities, as the case may be, in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered
for exercise or exchange or to issue or deliver any certificates or other
evidences of ownership of Preferred Shares or Common Shares or other
securities, as the case may be, upon the exercise or exchange of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has
been
<PAGE>
established to the Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose
name any certificate or other evidence of ownership of Preferred Shares or
Common Shares or other securities is issued upon the exercise or exchange
of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares or Common Shares or other securities, as the
case may be, represented thereby on, and such certificate or other evidence
of ownership shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of any Purchase
Price (and any applicable transfer taxes) was made; PROVIDED, HOWEVER,
that, if the date of such surrender and payment is a date upon which the
transfer books of the Company for the Preferred Shares or Common Shares or
other securities, as the case may be, are closed, such Person shall be
deemed to have become the record holder of such Preferred Shares or Common
Shares or other securities, as the case may be, on, and such certificate or
other evidence of ownership shall be dated as of, the next succeeding
Business Day on which the transfer books of the Company for the Preferred
Shares or Common Shares or other securities, as the case may be, are open.
SECTION 11. ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING
PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS. (a) Upon a
Person becoming an Acquiring Person, proper provision shall be made so that
each holder of a Right, except as provided in Section 7(e), shall
thereafter have a right to receive, upon exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, such number of
thousandths (1/1,000s) of a Preferred Share as shall equal the result
obtained by multiplying the Purchase Price by a fraction, the numerator of
which is the number of thousandths (1/1,000s) of a Preferred Share for
which a Right is then exercisable and the denominator of which is 50% of
the Market Value of the Common Shares on the date on which a Person becomes
an Acquiring Person. As soon as practicable after a Person becomes an
Acquiring Person (provided the Company shall not have elected to make the
exchange permitted by Section 11(b)(i) for all outstanding Rights), the
Company covenants and agrees to use its best efforts to:
(i) prepare and file a registration statement under the
Securities Act, on an appropriate form, with
<PAGE>
respect to the Preferred Shares purchasable upon exercise of the
Rights;
(ii) cause such registration statement to become effective
as soon as practicable after such filing;
(iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the Expiration Date; and
(iv) qualify or register the Preferred Shares purchasable
upon exercise of the Rights under the blue sky or securities laws
of such jurisdictions as may be necessary or appropriate.
(b)(i) The Board of Directors of the Company may, at its option,
at any time after a Person becomes an Acquiring Person, mandatorily
exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that shall have become null and void and
nontransferable pursuant to the provisions of Section 7(e)) for
consideration per Right consisting of either (x) one-half of the securities
that would be issuable at such time upon the exercise of one Right in
accordance with Section 11(a) or, if applicable, Section 9(b)(ii) or (iii)
or, (y) if applicable, the cash consideration specified in Section 9(b)(i)
(the consideration issuable per Right pursuant to this Section 11(b)(i)
being the "Exchange Consideration"). The Board of Directors of the Company
may, at its option, issue, in substitution for Preferred Shares, Common
Shares in an amount per Preferred Share equal to the Formula Number (as
defined in the Articles of Amendment) if there are sufficient authorized
but unissued Common Shares. If the Board of Directors of the Company elects
to exchange all or part of the Rights for the Exchange Consideration
pursuant to this Section 11(b)(i) prior to the physical distribution of the
Rights Certificates, the Corporation may distribute the Exchange
Consideration in lieu of distributing Right Certificates, in which case for
purposes of this Rights Agreement holders of Rights shall be deemed to have
simultaneously received and surrendered for exchange Right Certificates on
the date of such distribution.
(ii) Any action of the Board of Directors of the Company ordering
the exchange of any Rights pursuant to Section 11(b)(i) shall be
irrevocable and, immediately upon the taking of such action and without any
further action and
<PAGE>
without any notice, the right to exercise any such Right pursuant to
Section 11(a) shall terminate and the only right thereafter of a holder of
such Right shall be to receive the Exchange Consideration in exchange for
each such Right held by such holder or, if the Exchange Consideration shall
not have been paid or issued, to exercise any such Right pursuant to
Section 11(c)(i). 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 holders of such
Rights at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Rights for the Exchange Consideration 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 shall have become
null and void and nontransferable pursuant to the provisions of Section
7(e)) held by each holder of Rights.
(c)(i) In the event that, following a Distribution Date, directly
or indirectly, any transactions specified in the following clause (A), (B)
or (C) of this Section 11(c) (each such transaction being a "Business
Combination") shall be consummated:
(A) the Company shall consolidate with, merge with and
into, or enter into a share exchange with any Acquiring Person or
any Affiliate or Associate of an Acquiring Person;
(B) any Acquiring Person or any Affiliate or Associate of
an Acquiring Person shall merge with and into or enter into a
share exchange with the Company and, in connection with such
merger or share exchange, all or part of the Common Shares shall
be changed into or exchanged for capital stock or other securities
of the Company or of any Acquiring Person or Affiliate or
Associate of an Acquiring Person or cash or any other property; or
<PAGE>
(C) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall
sell, lease, exchange or otherwise transfer or dispose of), in one
or more transactions, the Major Part of the assets of the Company
and its Subsidiaries (taken as a whole) to any Acquiring Person
or any Affiliate or Associate of an Acquiring Person;
then, in each such case, proper provision shall be made so that each holder
of a Right, except as provided in Section 7(e), shall thereafter have the
right to receive, upon the exercise thereof for the Purchase Price in
accordance with the terms of this Rights Agreement, the securities
specified below (or, at such holder's option, the securities specified in
Section 11(a)):
(x) if the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights
Agreement, such number of Registered Common Shares of such
Principal Party, free and clear of all liens, encumbrances or
other adverse claims, as shall have an aggregate Market Value
equal to the result obtained by multiplying the Purchase Price by
two; or
(y) if the Principal Party involved in such Business Combination
does not have Registered Common Shares outstanding, each Right
shall thereafter represent the right to receive, upon the exercise
thereof for the Purchase Price in accordance with the terms of
this Rights Agreement, at the election of the holder of such Right
at the time of the exercise thereof, any of:
(1) such number of Common Shares of the Surviving Person
in such Business Combination as shall have an aggregate Book Value
immediately after giving effect to such Business Combination equal
to the result obtained by multiplying the Purchase Price by two;
(2) such number of Common Shares of the Principal Party
in such Business Combination (if the Principal Party is not also
the Surviving Person in such Business Combination) as shall have
an aggregate Book Value immediately after giving effect to such
Business Combination equal to the result obtained by multiplying
the Purchase Price by two; or
<PAGE>
(3) if the Principal Party in such Business Combination
is an Affiliate of one or more Persons which has Registered Common
Shares outstanding, such number of Registered Common Shares of
whichever of such Affiliates of the Principal Party has Registered
Common Shares with the greatest aggregate Market Value on the date
of consummation of such Business Combination as shall have an
aggregate Market Value on the date of such Business Combination
equal to the result obtained by multiplying the Purchase Price by
two.
(ii) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as
set forth in this Section 11(c), shall have sufficient authorized Common
Shares that have not been issued or reserved for issuance (and which shall,
when issued upon exercise thereof in accordance with this Rights Agreement,
be validly issued, fully paid and nonassessable and free of preemptive
rights, rights of first refusal or any other restrictions or limitations on
the transfer or ownership thereof) to permit the exercise in full of the
Rights in accordance with this Section 11(c) and unless prior thereto:
(A) a registration statement under the Securities Act on
an appropriate form, with respect to the Rights and the Common
Shares of such issuer purchasable upon exercise of the Rights,
shall be effective under the Securities Act; and
(B) the Company and each such issuer shall have:
(1) executed and delivered to the Rights Agent a
supplemental agreement providing for the assumption by
such issuer of the obligations set forth in this Section
11(c) (including the obligation of such issuer to issue
Common Shares upon the exercise of Rights in accordance
with the terms set forth in Sections 11(c)(i) and
11(c)(iii)) and further providing that such issuer, at
its own expense, will use its best efforts to:
(x) cause a registration statement
under the Securities Act on an appropriate form,
with respect to the Rights and the Common Shares
of such issuer purchasable upon exercise of the
Rights, to remain effective
<PAGE>
(with a prospectus at all times meeting the
requirements of the Securities Act) until the
Expiration Date;
(y) qualify or register the Rights and
the Common Shares of such issuer purchasable
upon exercise of the Rights under the blue sky
or securities laws of such jurisdictions as may
be necessary or appropriate; and
(z) list the Rights and the Common
Shares of such issuer purchasable upon exercise
of the Rights on each national securities
exchange on which the Common Shares were listed
prior to the consummation of the Business
Combination or, if the Common Shares were not
listed on a national securities exchange prior
to the consummation of the Business Combination,
on a national securities exchange;
(2) furnished to the Rights Agent a written
opinion of independent counsel stating that such
supplemental agreement is a valid, binding and
enforceable agreement of such issuer; and
(3) filed with the Rights Agent a certificate of
a nationally recognized firm of independent accountants
setting forth the number of Common Shares of such issuer
which may be purchased upon the exercise of each Right
after the consummation of such Business Combination.
(iii) After consummation of any Business Combination and subject
to the provisions of Section 11(c)(ii), (A) each issuer of Common Shares
for which Rights may be exercised as set forth in this Section 11(c) shall
be liable for, and shall assume, by virtue of such Business Combination,
all the obligations and duties of the Company pursuant to this Rights
Agreement, (B) the term "Company" shall thereafter be deemed to refer to
such issuer, (C) each such issuer shall take such steps in connection with
such consummation as may be necessary to assure that the provisions hereof
(including the provisions of Sections 11(a) and 11(c)) shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights and (D) the
number of Common Shares of each such
<PAGE>
issuer thereafter receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions of Sections 11 and 12 and the provisions
of Section 7, 9 and 10 with respect to the Preferred Shares shall apply, as
nearly as reasonably may be, on like terms to any such Common Shares.
SECTION 12. CERTAIN ADJUSTMENTS. (a) To preserve the actual or
potential economic value of the Rights, if at any time after the date of
this Rights Agreement there shall be any change in the Common Shares or the
Preferred Shares, whether by reason of share dividends, share splits,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to
holders of Common Shares or Preferred Shares, as the case may be (other
than distribution of the Rights or regular quarterly cash dividends) or
otherwise, then, in each such event the Board of Directors of the Company
shall make such appropriate adjustments in the number of Preferred Shares
(or the number and kind of other securities) issuable upon exercise of each
Right, the Purchase Price and Redemption Price in effect at such time and
the number of Rights outstanding at such time (including the number of
Rights or fractional Rights associated with each Common Share) such that
following such adjustment such event shall not have had the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such event.
(b) If, as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled
to receive any securities other than Preferred Shares, thereafter the
number of such securities so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions of Sections 11 and 12 and the
provisions of Sections 7, 9 and 10 with respect to the Preferred Shares
shall apply, as nearly as reasonably may be, on like terms to any such
other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall
<PAGE>
evidence the right to purchase, for the Purchase Price, the adjusted number
and kind of securities purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(d) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other
securities issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the terms which
were expressed in the initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment 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 issuing to the holder of any Right exercised after such
record date the Preferred Shares and/or other securities, if any, issuable
upon such exercise over and above the Preferred Shares and/or other
securities, if any, issuable before giving effect 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 securities upon the occurrence of the event requiring such
adjustment.
SECTION 13. CERTIFICATE OF ADJUSTMENT. Whenever an adjustment is
made as provided in Section 11 or 12, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly file with the
Rights Agent and with each transfer agent for the Preferred Shares a copy
of such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate (or, prior to the Distribution Date, of the Common
Shares) in accordance with Section 25. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
SECTION 14. ADDITIONAL COVENANTS. (a) Notwithstanding any other
provision of this Rights Agreement, no adjustment to the number of
Preferred Shares (or fractions of a share) or other securities for which a
Right is exercisable or the number of Rights outstanding or associated with
each Common Share or any similar or other adjustment shall be made or be
effective if such adjustment would have the effect of reducing or limiting
the benefits the holders
<PAGE>
of the Rights would have had absent such adjustment, including, without
limitation, the benefits under Sections 11 and 12, unless the terms of this
Rights Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it will not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce
or otherwise limit the benefits the holders of the Rights would have had
absent such action, including, without limitation, the benefits under
Sections 11 and 12. Any action taken by the Company during any period after
any Person becomes an Acquiring Person but prior to the Distribution Date
shall be null and void unless such action could be taken under this Section
14(b) from and after the Distribution Date. The Company shall not
consummate any Business Combination if any issuer of Common Shares for
which Rights may be exercised after such Business Combination in accordance
with Section 11(c) shall have taken any action that reduces or otherwise
limits the benefits the holders of the Rights would have had absent such
action, including, without limitation, the benefits under Sections 11 and
12.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company may, but shall not be required to, issue fractions of Rights or
distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, the Company may pay to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 15(a),
the current market value of a whole Right shall be the closing price of the
Rights (as determined pursuant to the second and third sentences of the
definition of Market Value contained in Section 1) for the Trading Day
immediately prior to the date on which such fractional Rights would have
been otherwise issuable.
(b) The Company may, but shall not be required to, issue
fractions of Preferred Shares upon exercise or exchange of the Rights or
distribute certificates which evidence fractional Preferred Shares. In lieu
of fractional Preferred Shares, the Company may elect to (i) utilize a
depository arrangement as provided by the terms of the
<PAGE>
Preferred Shares or (ii) in the case of a fraction of a Preferred Share
(other than one-thousandth (1/1,000) of a Preferred Share or any integral
multiple thereof), pay to the registered holders of Right Certificates at
the time such Rights are exercised or exchanged as herein provided an
amount in cash equal to the same fraction of the current market value of
one Preferred Share, if any are outstanding and publicly traded (or the
Formula Number times the current market value of one Common Share if the
Preferred Shares are not outstanding and publicly traded). For purposes of
this Section 15(b), the current market value of a Preferred Share (or
Common Share) shall be the closing price of a Preferred Share (or Common
Share) (as determined pursuant to the second and third sentences of the
definition of Market Value contained in Section 1) for the Trading Day
immediately prior to the date of such exercise or exchange. If, as a result
of an adjustment made pursuant to Section 12(a), the holder of any Right
thereafter exercised shall become entitled to receive any securities other
than Preferred Shares, the provisions of this Section 15(b) shall apply, as
nearly as reasonably may be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue
fractions of Common Shares upon exchange of Rights pursuant to Section
11(b), or to distribute certificates or other evidences of ownership which
evidence fractional Common Shares. In lieu of such fractional Common
Shares, the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
current Market Value of one Common Share as of the date on which a Person
became an Acquiring Person.
(d) The holders of Rights by the acceptance of the Right
Certificates (or, prior to the Distribution Date, of the Common Shares)
expressly waives the right to receive any fractional Rights or any
fractional shares upon exercise of a Right except as provided in this
Section 15.
SECTION 16. RIGHTS OF ACTION. (a) All rights of action in respect
of this Rights Agreement are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent
<PAGE>
or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares) may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Rights 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 Rights Agreement
and shall be entitled to specific performance of the obligations of any
Person under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred in such
action.
SECTION 17. TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT
CERTIFICATES. (a) Prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares and
the Rights associated with the Common Shares shall be automatically
transferred upon the transfer of the Common Shares.
(b) After the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e), only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights Agent,
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 a Right Certificate (or, prior to the Distribution
Date, the associated certificate or other evidence of ownership of Common
Shares) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Right Certificates or the associated certificate or other evidence of
ownership of Common Shares made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
<PAGE>
SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or be deemed, for any purpose, the holder of the
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise or exchange of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any
of the rights of a shareholder of the Company, including, without
limitation, any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders, or to receive dividends or other
distributions or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised or
exchanged in accordance with the provisions hereof.
SECTION 19. CONCERNING THE RIGHTS AGENT. (a) The Company agrees
to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder from time to time and 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.
(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 or certificate or other evidence of ownership of
the Common Shares or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF 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 stock transfer or corporate
<PAGE>
trust 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 22.
In case, at the time such 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 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 Rights Agreement.
SECTION 21. 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 (or, prior to the Distribution Date, of the Common
Shares), by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel satisfactory
to it (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, suffered or omitted 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
<PAGE>
necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person) be proved or established
by the Company prior to taking, refraining from taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman
of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, a Vice President (whether
preceded by any additional title), the Treasurer or the 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 wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Rights Agreement or
in the Right Certificates (except as to 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 Certificate (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 have any responsibility with
respect to any of exercise of Rights by an Acquiring Person in whose hands
the Rights are null and void and nontransferable unless the Company shall
have given actual notice to the Rights Agent of the identity of any such
Acquiring Person; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or 12 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
<PAGE>
any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right Certificate or
as to whether any Preferred Shares or Common Shares will, when so issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, a Vice
President (whether preceded by any additional title), the Secretary or the
Treasurer of the Company, and to apply to such officers for advice and
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 shareholder, director, officer,
employee or affiliate 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 legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct provided reasonable care was
exercised in the selection and continued employment thereof.
<PAGE>
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including
reasonable fees and expenses of legal counsel) which the Rights Agent may
incur resulting from its actions as Rights Agent pursuant to this Rights
Agreement; PROVIDED, HOWEVER, that the Rights Agent shall not be
indemnified or held harmless with respect to any such loss, liability,
damage or expense incurred by the Rights Agent as a result of, or arising
out of, its own negligence, bad faith or wilful misconduct. The Rights
Agent shall notify the Company, by letter or by facsimile confirmed by
letter, of the assertion of any action, proceeding, suit or claim against
the Rights Agent, promptly after the Rights Agent shall have notice of any
such assertion of an action, proceeding, suit or claim or have been served
with the summons or other first legal process giving information as to the
nature and basis of the action, proceeding, suit or claim. The Company
shall not be liable with respect to any such action, proceeding, suit or
claim to the extent that any failure of the Rights Agent so to notify
promptly the Company prejudices the rights of the Company with respect to
such action, proceeding, suit or claim. The Company shall at its own
expense assume the defense of any such action, proceeding, suit or claim.
In the event that the Company assumes such defense, the Company shall not
thereafter be liable for the fees and expenses of any additional counsel
retained by the Rights Agent, so long as the Company shall retain counsel
satisfactory to the Rights Agent, in the exercise of its reasonable
judgment, to defend such action, proceeding, suit or claim. In the event
the Company fails so to defend, the Rights Agent agrees not to settle any
litigation in connection with any action, proceeding, suit or claim with
respect to which it may seek indemnification from the Company without the
prior written consent of the Company.
(k) The Rights Agent shall be under no obligation to institute
any action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of
Right Certificates shall furnish the Rights Agent with security and
indemnity to its satisfaction for any costs and expenses which may be
incurred.
(l) The Rights Agent shall not be liable for failure to perform
any duties except as specifically set forth herein and no implied covenants
or obligations shall be read into this Agreement against the Rights Agent,
whose
<PAGE>
duties and obligations are ministerial and shall be determined solely by
the express provisions hereof.
SECTION 22. 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 Shares and the Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates
(or, prior to the Distribution Date, of the Common Shares) by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Shares and the Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates (or, prior to the Distribution Date, of
the Common Shares) by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (or, prior to the Distribution Date, of the Common
Shares) who shall, with such notice, submit his Right Certificate (or,
prior to the Distribution Date, the certificate or other evidence of
ownership of his Common Shares) for inspection by the Company, then the
registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Shares) 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 corporation organized and doing business under the laws of the United
States or of any state of the United States, in good standing, having a
principal office in the United States, which is authorized under such laws
to exercise stock transfer or corporate trust 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; PROVIDED that the principal transfer agent for the
Common Shares shall in any event be qualified to be the Rights Agent. 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 predeces-
<PAGE>
sor 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 Shares and the Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right
Certificates (or, prior to the Distribution Date, of the Common Shares).
Failure to give any notice provided for in this Section 22, however, or any
defect therein shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
SECTION 23. ISSUANCE OF ADDITIONAL RIGHTS AND 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 made in accordance with
the provisions of this Rights Agreement. In addition, in connection with
the issuance or sale of Common Shares following the Distribution Date and
prior to the earlier of the Redemption Date and the Expiration Date, the
Company (a) shall, with respect to Common Shares so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
or upon the exercise, conversion or exchange of securities, notes or
debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue
Rights and distribute Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; PROVIDED,
HOWEVER, that (x) no such Rights shall be issued if, and to the extent
that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights would be issued, and (y) no such
Rights shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
SECTION 24. REDEMPTION AND TERMINATION. (a) The Board of
Directors of the Company may, at its option, at any time prior to the
earlier of (i) such time as a Person becomes an Acquiring Person and (ii)
the Expiration Date,
<PAGE>
order the redemption of all, but not fewer than all, the then outstanding
Rights at the Redemption Price (the date of such redemption being the
"Redemption Date"), and the Company, at its option, may pay the Redemption
Price either in cash or Common Shares or other securities of the Company
deemed by the Board of Directors of the Company, in the exercise of its
sole discretion, to be at least equivalent in value to the Redemption
Price.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, 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. Within 10 Business Days after the action
of the Board of Directors of the Company ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders of
the then outstanding Rights by mailing such notice 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 Shares. Each such notice of redemption will
state the method by which payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of Rights
receives such notice. In any case, failure to give such notice by mail, or
any defect in the notice, to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of Rights.
SECTION 25. NOTICES. Subject to the provisions of Section 22,
notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of a Right Certificate (or, prior to the
Distribution Date, of the Common Shares) to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent)
as follows:
Ashland Inc.
P.O. Box 391
Ashland, KY 41114
Attention of General Counsel
Subject to the provisions of Section 22, any notice or demand authorized by
this Rights Agreement to be given or
<PAGE>
made by the Company or by the holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Harris Trust and Savings Bank
311 West Monroe
P.O. Box 755
Chicago, IL 60606
Attention: Tod C. Shafer
Notices or demands authorized by this Rights Agreement to be given or made
by the Company or the Rights Agent to any holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares) shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. At any time prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company may, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of this Rights Agreement (including,
without limitation, the date on which the Distribution Date shall occur or
the time during which the Rights may be redeemed pursuant to Section 24)
and the Company may amend any provision of the Articles of Amendment
without the approval of any holder of the Rights. From and after the
Distribution Date and subject to applicable law, the Company may, and the
Rights Agent shall if the Company so directs, amend this Rights Agreement
without the approval of any holders of Right Certificates (a) to cure any
ambiguity or to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provision of this Rights
Agreement or (b) to make any other provisions in regard to matters or
questions arising hereunder 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). Any supplement or amendment adopted
during any period after any Person has become an Acquiring Person but prior
to the Distribution Date shall be null and void unless such
<PAGE>
supplement or amendment could have been adopted under the prior
sentence from and after the Distribution Date. Any supplement or amendment
to this Rights Agreement duly approved by the Company that does not amend
Sections 19, 20, 21 or 22 in a manner adverse to the Rights Agent shall
become effective immediately upon execution by the Company, whether or not
also executed by the Rights Agent. In addition, notwithstanding anything to
the contrary contained in this Rights Agreement, no supplement or amendment
to this Rights Agreement shall be made which (x) reduces the Redemption
Price (except as required by Section 12(a)), or (y) provides for an earlier
Expiration Date or (z) charges the rights or duties of the Rights Agent
without the consent of the Rights Agent.
SECTION 27. SUCCESSORS. All 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. BENEFITS OF RIGHTS AGREEMENT; DETERMINATIONS AND
ACTIONS BY THE BOARD OF DIRECTORS, ETC. (a) Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, of the Common Shares) 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 registered holders of the Right
Certificates (and, prior to the Distribution Date, of the Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the exclusive
power and authority to administer this Rights Agreement and to exercise all
rights and powers specifically granted to the Board of Directors of the
Company or to the Company, or as may be necessary or advisable in the
administration of this Rights Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Rights Agreement
and (ii) make all determinations deemed necessary or advisable for the
administration of this Rights Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Rights
Agreement and whether there is an Acquiring Person).
<PAGE>
(c) Nothing contained in this Rights Agreement shall be deemed to
be in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any tender offer, or to recommend
that holders of Common Shares reject any tender offer, or to take any other
action (including, without limitation, the commencement, prosecution,
defense or settlement of any litigation and the submission of additional or
alternative offers or other proposals) with respect to any tender offer
that the Board of Directors believes is necessary or appropriate in the
exercise of such fiduciary duty.
SECTION 29. 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, void 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 30. GOVERNING LAW. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the law of the Commonwealth of Kentucky and for all purposes shall be
governed by and construed in accordance with the law of such State
applicable to contracts to be made and performed entirely within such
State.
SECTION 31. COUNTERPARTS; EFFECTIVENESS. 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.
This Rights Agreement shall be effective as of the Close of Business on the
date hereof.
SECTION 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only
and shall not control or
<PAGE>
affect the meaning or construction of any of the provisions of this Rights
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
ASHLAND INC.,
by /s/ Paul W. Chellgren
------------------------------
Name: Paul W. Chellgren
Title: President, Chief Operating Officer
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent,
by /s/ Tod C. Shafer
------------------------------
Name: Tod C. Shafer
Title: Vice President
<PAGE>
EXHIBIT A
ARTICLES OF AMENDMENT
TO
SECOND RESTATED ARTICLES OF INCORPORATION
OF
ASHLAND INC.
AMENDMENT NO. 5
Pursuant to the provisions of Section 271B.10-060 of the Kentucky Business
Corporation Act, the undersigned corporation adopts the following articles
of amendment to set forth the preferences, limitations and relative rights
of a series of shares of its Cumulative Preferred Stock, without par value,
under Article IV of its Second Restated Articles of Incorporation.
FIRST: The name of the Corporation is Ashland Inc.
SECOND: The text of the amendment determining the terms of the series
of shares of the Cumulative Preferred Stock is as follows:
I. DESIGNATION AND NUMBER OF SHARES. This series of the Cumulative
Preferred Stock shall be designated as "Series A Participating Cumulative
Preferred Stock" (the "Series A Preferred Stock"). The number of shares
initially issuable as the Series A Preferred Stock shall be 500,000;
provided, however, that, if more than a total of 500,000 shares of Series A
Preferred Stock shall be issuable upon the exercise of Rights (the
"Rights") issued pursuant to the Rights Agreement dated as of May 16, 1996,
between the Corporation and Harris Trust and Savings Bank, as Rights Agent
(the "Rights Agreement"), the Board of Directors of the Corporation,
pursuant to Section 271B.10-060 of the Kentucky Business Corporation Act,
shall direct by resolution or resolutions that Articles of Amendment of the
Articles of Incorporation of the Corporation be properly executed and filed
with the Secretary of State of Kentucky providing for the total number of
shares issuable as Series A Preferred Stock to be increased (to the extent
that the Articles of Incorporation then permit) to the largest number of
whole shares (rounded up to the nearest whole number) issuable upon
exercise of such Rights.
II. DIVIDENDS OR DISTRIBUTIONS. (a) Subject to the prior and superior
rights of the holders of shares of any other series of Preferred Stock or
other class of capital stock of the Corporation ranking prior and superior
to the shares of Series A Preferred Stock with respect to dividends, the
holders of shares of the Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of the
assets of the Corporation legally available therefor, (i) quarterly
dividends payable in cash on the last day of each fiscal quarter in each
year, or such other dates as the Board of Directors of the Corporation
shall approve (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or a fraction of a share of Series
A Preferred Stock, in the amount of $.01 per whole share (rounded to the
nearest cent), less the amount of all cash dividends declared on the Series
A Preferred Stock pursuant to the following clause (ii) since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock (the total of
which shall not, in any event, be less than zero) and (ii) dividends
payable in cash on the payment date for each cash dividend declared on the
Common Stock in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect times
the cash dividends then to be paid on each share of Common Stock. In
addition, if the Corporation shall pay any dividend or make any
distribution on the Common Stock payable in assets, securities or other
forms of non-cash consideration (other than dividends or distributions
solely in shares of Common Stock), then, in each such case, the Corporation
shall simultaneously pay or make on each outstanding whole share of Series
A Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be
1,000; PROVIDED, HOWEVER, that, if at any time after May 16, 1996, the
Corporation shall (x) declare or pay any dividend on the Common Stock
payable in shares of Common Stock or make any distribution on the Common
Stock in shares of Common Stock, (y) subdivide (by a stock split or
otherwise) the outstanding shares of Common Stock into a larger number of
shares of Common Stock or (z) combine (by a
<PAGE>
reverse stock split or otherwise) the outstanding shares of Common Stock
into a smaller number of shares of Common Stock, then, in each such event,
the Formula Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a fraction,
the numerator of which is the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that are outstanding immediately prior
to such event (and rounding the result to the nearest whole number); and
PROVIDED FURTHER, that, if at any time after May 16, 1996, the Corporation
shall issue any shares of its capital stock in a merger, share exchange,
reclassification, or change of the outstanding shares of Common Stock,
then, in each such event, the Formula Number shall be appropriately
adjusted to reflect such merger, share exchange, reclassification or change
so that each share of Preferred Stock continues to be the economic
equivalent of a Formula Number of shares of Common Stock prior to such
merger, share exchange, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common
Stock); PROVIDED, HOWEVER, that, in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock) 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 $.01 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
dividend or distribution declared thereon, which record date shall be the
same as the record date for any corresponding dividend or distribution on
the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series A Preferred Stock; PROVIDED, HOWEVER, that dividends on such shares
that are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and on or prior to the next succeeding Quarterly
Dividend Payment Date shall begin to accrue and be cumulative from and
after such Quarterly Dividend Payment Date. Notwithstanding the foregoing,
dividends on shares of Series A Preferred Stock that are originally issued
prior to the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend on the
first Quarterly Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal quarter next preceding the date
of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding and entitled to receive
such dividends.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock,
unless, in each case, the dividend required by this Section 2 to be
declared on the Series A Preferred Stock shall have been declared and paid.
(e) The holders of the shares of Series A Preferred Stock shall not be
entitled to receive any dividends or other distributions, except as
provided herein.
III. VOTING RIGHTS. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share
of Series A Preferred Stock held of record on each matter on which holders
of the Common Stock or shareholders generally are entitled to vote,
multiplied by the maximum number of votes per share which any holder of the
Common Stock or shareholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred
<PAGE>
Stock and the holders of shares of Common Stock shall vote together as
one voting group for the election of directors of the Corporation and on
all other matters submitted to a vote of shareholders of the Corporation.
(c) If, at the time of any annual meeting of shareholders for the
election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series A Preferred
Stock are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series A
Preferred Stock, voting separately as a voting group to the exclusion of
the holders of Common Stock, shall be entitled at said meeting of
shareholders (and at each subsequent annual meeting of shareholders),
unless all dividends in arrears have been paid or declared and set apart
for payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Preferred Stock being entitled to
cast a number of votes per share of Series A Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends that
permitted the election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the next preceding sentence may
be removed at any time, either with or without cause, only by the
affirmative vote of the holders of the shares of Series A Preferred Stock
at the time entitled to cast such number of votes as are required by law
for the election of any such director at a special meeting of such holders
called for that purpose, and any vacancy thereby created may be filled only
by the vote of such holders. If and when such default shall cease to exist,
the holders of the Series A Preferred Stock shall be divested of the
foregoing special voting rights, subject to revesting in the event of each
and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special
voting rights shall forthwith terminate to the extent permitted by law, and
the number of directors constituting the Board of Directors shall be
reduced by two. The voting rights granted by this Section 3(c) shall be in
addition to any other voting rights granted to the holders of the Series A
Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders 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 Common Stock as set forth herein) for authorizing
or taking any corporate action.
IV. CERTAIN RESTRICTIONS. (a) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock; PROVIDED that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates
<PAGE>
and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result
in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (a) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
V. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock, unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to the accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, plus an amount equal to the greater of (i) $.01 per
whole share or (ii) an aggregate amount per share equal to the Formula
Number then in effect times the aggregate amount to be distributed per
share to holders of Common Stock or (b) to the holders of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
VI. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, share exchange, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash or any other property, then,
in any such case, the then outstanding shares of Series A Preferred Stock
shall at the same time be similarly exchanged or changed into an amount per
share equal to the Formula Number then in effect times the aggregate amount
of stock, securities, cash or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is
exchanged or changed. In the event both this Section 6 and Section 2 appear
to apply to a transaction, this Section 6 will control.
VII. NO REDEMPTION; NO SINKING FUND. (a) The shares of Series A
Preferred Stock shall not be subject to redemption by the Corporation or at
the option of any holder of Series A Preferred Stock; provided, however,
that the Corporation may purchase or otherwise acquire outstanding shares
of Series A Preferred Stock in the open market or by offer to any holder or
holders of shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
VIII. Ranking. The Series A Preferred Stock shall rank junior to all
other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations and restrictions
thereof.
IX. FRACTIONAL SHARES. The Series A Preferred Stock shall be issuable
upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one-thousandth (1/1,000)
of a share or any integral multiple of such fraction which shall entitle
the holder, in proportion to such holder's fractional shares, to receive
dividends, exercise voting rights, participate in distributions and have
the benefit of all other rights of holders of Series A Preferred Stock. In
lieu of fractional shares, the Corporation, prior to the first issuance of
a share or a fraction of a share of Series A Preferred Stock, may elect (a)
to make a cash payment as provided in the Rights Agreement for fractions of
a share other than one-thousandth (1/1,000) of a share or any integral
multiple thereof or (b) to issue depository receipts evidencing such
authorized fraction of a share of Series A Preferred Stock pursuant to an
appropriate agreement between the Corporation and a depository selected by
the Corporation; PROVIDED that such agreement shall provide that the
holders of such depository receipts shall have all the rights, privileges
and preferences to which they are entitled as holders of the Series A
Preferred Stock.
<PAGE>
X. REACQUIRED SHARES. Any shares of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancelation become authorized but unissued shares
of Preferred Stock, without par value, of the Corporation, undesignated as
to series, and may thereafter be reissued as part of a new series of such
Preferred Stock as permitted by law.
XI. AMENDMENT. None of the powers, preferences and relative,
participating, optional and other special rights of the Series A Preferred
Stock as provided herein or in the Articles of Incorporation shall be
amended in any manner that would alter or change the powers, preferences,
rights or privileges of the holders of Series A Preferred Stock so as to
affect such holders adversely without the affirmative vote of the holders
of at least 66-2/3% of the outstanding shares of Series A Preferred Stock,
voting as a separate voting group; PROVIDED, HOWEVER, that no such
amendment approved by the holders of at least 66-2/3% of the outstanding
shares of Series A Preferred Stock shall be deemed to apply to the powers,
preferences, rights or privileges of any holder of shares of Series A
Preferred Stock originally issued upon exercise of a Right after the time
of such approval without the approval of such holder.
THIRD: This amendment was duly adopted by the Board of Directors of
the Corporation without shareholder action on May 16, 1996. Shareholder
action was not required.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment as of this 16th day of May, 1996.
ASHLAND INC.
by
----------------------------------
<PAGE>
COMMONWEALTH OF KENTUCKY)
COUNTY OF GREENUP )
The foregoing instrument was acknowledged before me this 16th day of
May, 1996, by , of ASHLAND INC., a Kentucky corporation, on behalf of the
corporation.
----------------------------------
Notary Public
Prepared by Thomas L. Feazell
1000 Ashland Drive
Russell, Kentucky 41114
- -------------------------
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. [R]-
___________ Rights
NOT EXERCISABLE AFTER MAY 16, 2006, OR EARLIER, IF
REDEEMED OR MANDATORILY EXCHANGED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
ARE NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
ASHLAND INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of May 16, 1996 (the
"Rights Agreement"), between Ashland Inc., a Kentucky corporation (the
"Company"), and Harris Trust and Savings Bank, an Illinois banking
corporation, as Rights Agent (the "Rights Agent"), unless the Rights
evidenced hereby shall have been previously redeemed or mandatorily
exchanged by the Company, to purchase from the Company at any time after
the Distribution Date (as defined in the Rights Agreement) and prior to
5:00 p.m., New York City time, on the 10th anniversary of the date of the
Rights Agreement (the "Expiration Date"), at the principal office of the
Rights Agent, or its successors as Rights Agent, in Chicago, Illinois,
one-thousandth (1/1,000) of a fully paid, nonassessable share of Series A
Participating Cumulative Preferred Stock, without par value, of the Company
(the "Preferred Shares"), at a purchase price per one-thousandth (1/1,000)
of a share equal to $140 (the "Purchase Price"), payable in cash, upon
presentation and surrender of this
<PAGE>
2
Right Certificate with the Form of Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Right Certificate,
as set forth above, are the Purchase Price and the number and kind of
shares which may be so purchased as of May 16, 1996. As provided in the
Rights Agreement, the Purchase Price and the number and kind of shares
which may be purchased upon the exercise of each Right evidenced by this
Right Certificate are subject to modification and adjustment upon the
happening of certain events.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement),
such Rights shall be null and void and nontransferable and the holder of
any such Right (including any purported transferee or subsequent holder)
shall not have any right to exercise or transfer any such Right.
This Right Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof, and
reference to the Rights Agreement is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available from the
Company upon written request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number and kind of shares as the Rights
evidenced by the Right Certificate or Right Certificates surrendered shall
have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
<PAGE>
3
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its
option at a redemption price (in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors to be at least
equivalent in value) of $.01 per Right (which amount shall be subject to
adjustment as provided in the Rights Agreement) at any time prior to the
earlier of (a) such time as a Person becomes an Acquiring Person and (b)
the Expiration Date.
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby.
In lieu of issuing fractional shares, the Company may elect to make a cash
payment as provided in the Rights Agreement for fractions of a share other
than one-thousandth (1/1,000) of a share or any integral multiple thereof
or to issue certificates or to utilize a depositary arrangement as provided
in the terms of the Rights Agreement and the Preferred Shares.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares 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 shareholder of the Company, including, without
limitation, any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or other distributions or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in accordance with the
provisions of the Rights Agreement.
<PAGE>
4
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of:
ASHLAND INC.,
by
-----------------------------------------
Name:
Title:
Attest:
- -------------------------
Name:
Title:
Countersigned:
HARRIS TRUST AND SAVINGS BANK,
as Rights Agent,
by
---------------------
Authorized Officer
<PAGE>
5
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the Preferred
Shares (or other shares) issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
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 balance remaining of
such Rights shall be registered in the name of and delivered to:
<PAGE>
6
Please insert social security
or other identifying number
- ----------------------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------------------
Dated:____________,____
---------------------------------
Signature
Signature Guaranteed:
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Right
Certificate.)
FOR VALUE RECEIVED ________________________________ hereby sells,
assigns and transfers unto
- ---------------------------------------------------------------------------
(Please print name and address of transferee)
- ---------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint ______________
Attorney, to transfer the within Right Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated: ____________, ____
------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that (a) the Rights evidenced by this
Right Certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
<PAGE>
7
Associate thereof (as such terms are defined in the Rights Agreement), (b)
this Rights Certificate is not being sold, assigned or transferred to or on
behalf of any such Acquiring Person, Affiliate or Associate, and (c) after
inquiry and to the best knowledge of the undersigned, the undersigned did
not acquire the Rights evidenced by this Right Certificate from any Person
who is or was an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement).
------------------------------
Signature
NOTICE
------
The signature on the foregoing Form of Election to Purchase or Form of
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.
[Wyatt, Tarrant & Combs Letterhead]
May 16, 1996
Board of Directors
Ashland Inc.
P.O. Box 391
Ashland, KY 41114
Re: Rights Agreement dated as of May 16, 1996 between
Ashland Inc. and Harris Trust and Savings Bank, as
RIGHTS AGENT
Ladies and Gentlemen:
We have acted as special Kentucky counsel to Ashland Inc., a Kentucky
corporation (the "Company"), in connection with the preparation and
adoption of the Rights Agreement dated as of May 16, 1996 between the
Company and Harris Trust and Savings Bank, as Rights Agent (the "Rights
Agreement"), and the issuance of rights (the "Rights") to purchase shares
of the Series A Participating Cumulative Preferred Stock, without par
value, of the Company (the "Preferred Shares") as contemplated in the
Rights Agreement. We are providing this opinion to you at the request of
the Company.
For purposes of this opinion, we have reviewed the Kentucky Business
Corporation Act (the "Act") and the case law of Kentucky, and we have
examined such documents and matters as we have deemed necessary and
appropriate. The documents we examined include, but are not limited to, the
Articles of Incorporation and
<PAGE>
Board of Directors
Ashland Inc.
May 16, 1996
Page 2.
Bylaws of the Company, the materials distributed to each member of the
Board of Directors concerning the Rights Agreement, and an executed copy of
the Rights Agreement.
For purposes of this opinion, we have assumed that each member of the
Board of Directors, in connection with the adoption of the Rights
Agreement, acted in good faith; made inquiry into the action to be taken
with the care that an ordinarily prudent person in a like position would
exercise under similar circumstances; and acted in a manner he or she
believed to be in the best interests of the Company.
Based upon the foregoing, and subject to the qualifications and
limitations set forth below in this letter, we are of the opinion that:
1. The Board of Directors was legally authorized to issue the Rights
upon the terms and conditions contained in the Rights Agreement, and the
Rights have been validly issued by the Company.
2. The Preferred Shares to be issued upon the exercise of the Rights
are duly authorized and, assuming (a) the Preferred Shares so issuable will
continue to be duly authorized on the dates of exercise of the Rights, (b)
the provisions of any applicable state or federal securities laws have been
complied with, and (c) no change occurs in the applicable law, when the
Rights are exercised in accordance with the terms of the Rights Agreement,
the Preferred Shares so issuable will be validly issued, fully paid and
nonassessable.
3. In adopting the Rights Agreement, the Board of Directors met the
standard of care for directors of a Kentucky corporation set forth in the
Act.
This opinion is limited to the law of the State of Kentucky, and we do
not express any opinion concerning any other law. This opinion relates
solely to the questions of law addressed above and does not address other
questions of law which may be presented by these facts. This opinion is
furnished for the benefit of the Board of Directors and the Company in
connection with the adoption of the Rights Agreement and the issuance of
the Rights, and may not be relied upon by any other person or in any other
context without our prior written consent. We expressly disclaim any
responsibility for advising you of any change occurring hereafter in
circumstances concerning the subject matter of this
<PAGE>
Board of Directors
Ashland Inc.
May 16, 1996
Page 3.
opinion, including any changes in the applicable law occurring after the
date of this opinion.
We consent to the use of this opinion as an exhibit to the
Registration Statement on Form 8-A being filed by the Company with the
Securities and Exchange Commission relating to the registration of the
Rights under the Securities and Exchange Act of 1934.
Very truly yours,
WYATT, TARRANT & COMBS
/s/ Wyatt, Tarrant & Combs
