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As filed with the Securities and Exchange Commission on September 15, 1997.
UNITED STATES
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
UNION TEXAS PETROLEUM HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 76-0040040
(State of Incorporation or Organization) (I.R.S. Employer Identification No.)
1330 Post Oak Boulevard
Houston, Texas 77056
(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the registration and class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A. (c), check the following box. [X]
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A. (d), check the following box. [ ]
Securities Act registration statement file number to which this form relates:
(if applicable)
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of each class Name of each exchange on
to be so registered which each class is to be registered
COMMON STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
PACIFIC EXCHANGE, INC.
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
On September 12, 1997, the Board of Directors of Union Texas Petroleum
Holdings, Inc. (the "Company"), authorized the issuance of one right (a
"Right") with respect to each outstanding share of voting common stock, par
value of $0.05 ("Common Stock"), of the Company as of the close of business on
September 23, 1997. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") dated September 12, 1997, between the
Company and First Chicago Trust Company of New York (the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
certificates of outstanding shares of Common Stock and no separate Right
Certificate will be distributed. The Rights will become exercisable and
separate from the shares of Common Stock upon the earlier of (i) ten days after
the date of a public announcement that a person or group of affiliated or
associated persons has acquired beneficial ownership of 15% or more of the
outstanding Common Stock of the Company (such person or group being hereinafter
referred to as an "Acquiring Person") (the "Stock Acquisition Date"); or (ii)
ten business days (or such later date as the Board may determine) following the
commencement or announcement of an intention to make a tender offer or exchange
offer the consummation of which would result in a person or group becoming the
beneficial owner of 15% or more of the outstanding Common Stock (the earlier of
such dates being called the "Distribution Date").
Until the Distribution Date (or earlier redemption or expiration of the
Rights) (i) the Rights will be evidenced by the certificates for the Common
Stock, (ii) the Rights will be transferred with and only with the Common Stock,
(iii) new Common Stock certificates issued after September 23, 1997, upon
transfer or new issuance of the Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for Common Stock outstanding as of September 23,
1997, even without such notation or a copy of the Summary of Rights being
attached thereto, will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date. When they
become exercisable, each Right initially entitles the registered holder to
purchase from the Company one-half of one share of Common Stock of the Company
at a price of $90.00 per full share of Common Stock (the
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"Purchase Price"), subject to adjustment. The Rights will expire on September
30, 2007 (the "Final Expiration Date"), unless the Final Expiration Date is
extended or the Rights are earlier redeemed or exchanged by the Company as
described below.
If a Person were to become an Acquiring Person, each Right then
outstanding (other than Rights beneficially owned by the Acquiring Person which
would become null and void) would become a right to buy for the Purchase Price
that number of shares of Common Stock that at the time of such acquisition
would have a market value of two times the Purchase Price. If, however, the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an Acquiring Person, has become such inadvertently, and such
Person divests a sufficient number of shares of Common Stock by such deadline
as the Board of Directors shall set, then such Person shall not be deemed to be
an Acquiring Person for any purposes of this Agreement.
If the Company is acquired in a merger or other business combination
transaction or more than 50% of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price, that number of shares of common stock of the acquiring
company which at the time of such transaction would have a market value of two
times the Purchase Price.
Each of the following persons will not be deemed to be an Acquiring Person
even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock of the Company: (i)
the Company, any subsidiary of the Company, or any employee benefit plan of the
Company or of any subsidiary of the Company; (ii) any person who would
otherwise become an Acquiring Person solely by virtue of a reduction in the
number of outstanding shares of Common Stock unless and until such person shall
become the beneficial owner of any additional shares of Common Stock; and (iii)
certain persons specified in the Rights Agreement who as of September 12, 1997
are the beneficial owners of 15% or more of the Common Stock (and transferees
thereof under certain circumstances). The Rights are not exercisable until the
Distribution Date. The Rights will expire at the close of business on September
30, 2007, unless earlier redeemed by the Company.
REGISTRATION AND LISTING OF COMMON SHARES. The offer and sale of the
Common Stock or other securities issuable upon exercise of the Rights will be
registered with the Securities and Exchange Commission but such registration
will not be effective until the Rights become exercisable. As described above,
however, the Rights will not be transferable separately from the Common Stock
until the Distribution Date.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of Common Stock or other
securities or property issuable upon exercise of the Rights, and the Purchase
Price payable, are subject to customary adjustments from time to time to
prevent dilution.
The number of outstanding Rights and the number of Common Stock or other
securities issuable upon exercise of each Right are also subject to adjustment
in the event of a stock split of
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the Common Stock or a stock dividend on the Common Stock payable in Common
Stock or subdivisions, consolidations or combinations of the Common Stock
occurring, in any such case, prior to the Distribution Date.
EXCHANGE OPTION. At any time after a Person or becomes an Acquiring Person
and before the acquisition by a Person or group of 50% or more of the
outstanding Common Stock of the Company, the Board of Directors may, at its
option, issue Common Stock of the Company in mandatory redemption of, or in
exchange for, all or part of the then outstanding exercisable Rights (other
than Rights owned by such Acquiring Person or group which would become null and
void) at an exchange ratio of one share of Common Stock per Right, subject to
adjustment.
REDEMPTION OF RIGHTS. At any time prior to the Stock Acquisition Date, the
Board of Directors of the Company may redeem all, but not less than all, of the
then outstanding Rights at a price of $0.001 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the Company
without the consent of the holders of the Rights, except that after the Stock
Acquisition Date no such amendment may materially and adversely affect the
interests of holders of the Rights.
The form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A thereto the
form of Right Certificate, is attached as Exhibit 1 to this Form 8-A and is
incorporated herein by reference. The foregoing description of the Rights does
not purport to be complete and is qualified in its entirety by reference to the
form of the Rights Agreement and the exhibits thereto. Capitalized terms in
this description are defined in the Rights Agreement.
ITEM 2. EXHIBITS.
Exhibit No. Description of Exhibit
1 Rights Agreement dated as of September 12, 1997 between the Company
and First Chicago Trust Company of New York, as Rights Agent, which
includes as EXHIBIT A the Form of Right Certificate and as EXHIBIT B
the Summary of Rights to Purchase Common Stock.
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SIGNATURES
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.
UNION TEXAS PETROLEUM HOLDINGS, INC.
Date: September 15, 1997 By: /s/ ALAN R. CRAIN, JR.
-------------------------------------------
Name: Alan R. Crain, Jr.
Title: Vice President and General Counsel
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
1 Rights Agreement dated as of September 12, 1997 between the
Company and First Chicago Trust Company of New York, as
Rights Agent, which includes as EXHIBIT A the Form of Right
Certificate and as EXHIBIT B the Summary of Rights to
Purchase Common Stock.
</TABLE>
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UNION TEXAS PETROLEUM HOLDINGS, INC.
AND
FIRST CHICAGO TRUST COMPANY OF NEW YORK,
RIGHTS AGENT
----------------------
RIGHTS AGREEMENT
DATED AS OF SEPTEMBER 12, 1997
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Table of Contents
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C> <C>
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . 5
3. Issuance of Right Certificates . . . . . . . . . . . . . . . . . . 5
4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . 7
5. Countersignature and Registration . . . . . . . . . . . . . . . . . 8
6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . 8
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 9
8. Cancellation and Destruction of Right Certificates . . . . . . . 10
9. Reservation and Availability of Capital Stock . . . . . . . . . . 11
10. Common Stock Record Date . . . . . . . . . . . . . . . . . . . . 12
11. Adjustments to Number and Kind of
Shares, Number of Rights or Purchase Price . . . . . . . . . . . 12
12. Certification of Adjustments . . . . . . . . . . . . . . . . . . 19
13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power . . . . . . . . . . . . . . . . . . . 19
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . 22
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . 23
16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . 23
</TABLE>
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<TABLE>
<S> <C> <C>
17. Right Certificate Holder Not Deemed
a Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . 24
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . 24
19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 25
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . 25
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . 27
22. Issuance of New Right Certificates . . . . . . . . . . . . . . . 28
23. Redemption and Termination . . . . . . . . . . . . . . . . . . . 28
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
25. Notice of Proposed Actions . . . . . . . . . . . . . . . . . . . 29
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . 31
28. Determinations and Actions by the Board . . . . . . . . . . . . . 31
29. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . 32
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 32
32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 32
33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . 32
34. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
Exhibit A -- Form of Right Certificate
Exhibit B -- Summary of Rights To Purchase Common Stock
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RIGHTS AGREEMENT
This Agreement (this "Agreement"), dated as of September 12, 1997,
between Union Texas Petroleum Holdings, Inc., a Delaware corporation (the
"Company"), and First Chicago Trust Company of New York, a New York corporation
(the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (i) authorized the
issuance and declared a dividend distribution of one right (a "Right") for each
share of the common stock, par value $.05 per share, of the Company outstanding
as of the Close of Business (as defined herein) on September 23, 1997 (the
"Record Date"), each Right initially representing the right to purchase one-
half of one share of Common Stock of the Company upon the terms and subject to
the conditions hereafter set forth, and (ii) further authorized the issuance of
one Right with respect to each share of Common Stock of the Company that shall
become outstanding between the Record Date, and the earlier of the Distribution
Date, the Expiration Date or the Final Expiration Date (each such term as
defined herein).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the outstanding Common Stock of the Company;
provided, however, that (i) the term "Acquiring Person" shall not include an
Exempt Person or a Permitted Holder; and (ii) a Person shall not be deemed to
have become an Acquiring Person for any purpose of this Agreement if the Board
of Directors in its good faith judgment determines that a Person has
inadvertently become the Beneficial Owner of 15% or more of the outstanding
Common Stock of the Company (or in the case of a Permitted Holder, has
inadvertently acquired additional shares of Common Stock of the Company so that
it is no longer a Permitted Holder) and within ten days after the date upon
which the Company shall first become aware of the occurrence of such an event,
the Board of Directors in its sole discretion provides such Person with a
fifteen day period to divest a sufficient number of shares so that such Person
no longer is the Beneficial Owner of 15% or more of the outstanding Common
Stock of the Company (or in the case of a Permitted Holder, to divest all
shares of Common Stock of the Company which prevent such Person from being a
Permitted Holder), and such Person has so divested such shares of Common Stock
of the Company at the end of any such fifteen day period and has not acquired
any additional shares of Common Stock of the Company prior to the end of such
fifteen day period.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii).
<PAGE> 5
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended ("Exchange Act"), as in effect on the date of this
Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "Beneficially Own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether or not
in writing), or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own," 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 pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act, until such tendered securities
are accepted for purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable proxy or
revocable consent given to such Person in response to a public proxy or public
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting
(except as described in the proviso to clause (B) of subparagraph (ii) of this
paragraph (e)) or disposing of any securities of the Company; provided,
however, that nothing in this paragraph (e) shall cause a Person engaged in
business as an underwriter of securities to be the Beneficial Owner of, or to
Beneficially Own, any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of forty
days after the date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., Houston, Texas time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Houston, Texas time, on the next
succeeding Business Day.
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(g) "Common Stock," when used with reference to the Company,
shall mean the common stock, $.05 par value per share, of the Company, and
"common stock," when used with reference to any Person other than the Company,
shall mean the capital stock or other equity interests with the greatest per
share or per unit voting power of such other Person or, if such other Person is
a Subsidiary of or is controlled by another Person, the Person or Persons which
ultimately controls such first-mentioned Person.
(h) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii).
(i) "Current Market Price" shall have the meaning set forth in
Section 11(d).
(j) "Current Value" shall have the meaning set forth in
Section 11(a)(iii).
(k) "Distribution Date" shall have the meaning set forth in
Section 3(a).
(l) "Equivalent Common Stock" shall have the meaning set forth
in Section 11(b).
(m) "Exchange Act" shall have the meaning set forth in Section
1(c).
(n) "Exempt Person" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such plan.
(o) "Expiration Date" shall have the meaning set forth in
Section 7(a).
(p) "Final Expiration Date" shall have the meaning set forth
in Section 7(a).
(q) "KKR Parties" shall mean Kohlberg Kravis Roberts & Co.,
KKR Associates, L.P., KKR Partners II, L.P. and Petroleum Associates, L.P. and
their respective Affiliates and Associates.
(r) "KKR Shares" shall mean shares of Common Stock (or any
securities issued or issuable with respect to such Common Stock by way of
conversion, exchange, stock dividend or stock split or in connection with a
combination of shares, recapitalization, merger, consolidation or other
reorganization or otherwise) which were Beneficially Owned on the date of this
Agreement by KKR Associates, L.P., KKR Partners II, L.P. or Petroleum
Associates, L.P. and reflected as so Beneficially Owned in the Schedules 13G
filed by such Persons with the SEC on February 14, 1997 (the "KKR Shares"),
provided that such shares or securities shall cease to be KKR Shares at such
time as such shares or securities are sold in a public offering or in a
brokers' transaction pursuant to Rule 144 under the Securities Act.
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(s) "NYSE" shall have the meaning set forth in Section 9(b).
(t) "Permitted Holder" shall mean:
(i) any Person who would otherwise become an Acquiring
Person solely by virtue of a reduction in the number of outstanding shares of
Common Stock; provided, however, that such Person shall not be a Permitted
Holder if, subsequent to such reduction, such Person shall become the
Beneficial Owner of any additional shares of Common Stock;
(ii) any KKR Party; provided, however, that such Person
shall not be a Permitted Holder from and after such time as the KKR Parties
collectively do not Beneficially Own 15% or more of the outstanding Common
Stock of the Company; and
(iii) any Person or Persons who acquires KKR Shares;
provided, however, that such Person shall not be a Permitted Holder (A) if at
the time of such acquisition, such Person Beneficially Owns shares of Common
Stock (other than KKR Shares) representing 15% or more of the outstanding
Common Stock of the Company, (B) if, subsequent to the acquisition of KKR
Shares, such Person acquires in one or more transactions (whether related or
unrelated) Beneficial Ownership of additional shares of Common Stock (other
than KKR Shares) which, when added to any shares of Common Stock Beneficially
Owned (other than KKR Shares) at the time of such acquisition, would represent
15% or more of the outstanding Common Stock of the Company, or (C) from and
after such time as such Person does not Beneficially Own 15% or more of the
outstanding Common Stock of the Company.
(u) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(v) "Principal Party" shall have the meaning set forth in
Section 13(b).
(w) "Purchase Price" shall have the meaning set forth in
Section 4(a).
(x) "Redemption Price" shall have the meaning set forth in
Section 23(a).
(y) "Right Certificate" shall have the meaning set forth in
Section 3(a).
(z) "Section 11(a)(ii) Event" shall have the meaning set forth
in Section 11(a)(ii).
(aa) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii).
(bb) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a).
(cc) "Securities Act" shall mean the Securities Act of 1933, as
amended.
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(dd) "Stock Acquisition Date" shall mean the first date of a
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act or a report filed on Schedule 13G under the Exchange Act) by the Company or
an Acquiring Person that an Acquiring Person has become such; provided,
however, that if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a), then no Stock Acquisition Date shall be deemed
to have occurred.
(ee) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii).
(ff) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are beneficially owned, directly or
indirectly, by such Person.
(gg) "Summary of Rights" shall have the meaning set forth in
Section 3(b).
(hh) "Trading Day" shall have the meaning set forth in Section
11(d).
(ii) "Triggering Event" shall mean any Section 11(a)(ii) Event
or Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
of this Agreement, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. If the Company appoints one or more co-Rights Agents,
the respective duties of the Rights Agent and any co-Rights Agents shall be as
the Company shall determine.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the
tenth day after the Stock Acquisition Date or (ii) the Close of Business on the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an Exempt
Person) of, or the first public announcement of the intent of any Person (other
than an Exempt Person) to commence, a tender or exchange offer upon the
successful consummation of which such Person, together with its Affiliates and
Associates, would be the Beneficial Owner of 15% or more of the outstanding
Common Stock (irrespective of whether any shares are actually purchased
pursuant to such offer) (the earlier of such dates described in clauses (i) and
(ii) being referred to herein as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of Section 3(c)) by the certificates
for the Common Stock registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be certificates
for Rights) and not by separate certificates, and (y) each Right (and the right
to receive separate Right Certificates) will be
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<PAGE> 9
transferable only in connection with the transfer of a share (subject to
adjustment as hereinafter provided) of Common Stock. As soon as practicable
after the Distribution Date, the Company will prepare and execute, and the
Rights Agent will send, by first class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the Close of Business on the
Distribution Date, as shown by the records of the Company, at the address of
such holder shown on such records, a Right certificate in substantially the
form of Exhibit A hereto ("Right Certificate") evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On September 23, 1997 or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Common Stock, substantially in the form attached hereto as Exhibit B ("Summary
of Rights"), by first-class, postage prepaid mail, to each record holder of
Common Stock as of the close of business on the Record Date, at the address of
such holder shown on the records of the Company.
(c) With respect to certificates for Common Stock outstanding
as of the Record Date, until the Distribution Date (or, if earlier, the
Expiration Date or the Final Expiration Date), the Rights will be evidenced by
certificates for Common Stock registered in the names of the holders thereof
together with a copy of the Summary of Rights attached thereto. Until the
Distribution Date (or, if earlier, the Expiration Date or Final Expiration
Date), the surrender for transfer of any certificate for Common Stock
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the surrender for transfer of the
Rights associated with the Common Stock represented thereby.
(d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock)
after the Record Date, but prior to the earliest of the Distribution Date, the
Expiration Date or the Final Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Union
Texas Petroleum Holdings, Inc. and First Chicago Trust Company of
New York, as Rights Agent, dated as of September 12, 1997 (the
"Rights Agreement"), the terms of which are incorporated herein
by reference and a copy of which is on file at the principal
executive office of Union Texas Petroleum Holdings, Inc. 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. Union Texas Petroleum
Holdings, Inc. will mail to the holder of this certificate a copy
of the Rights Agreement without charge after receipt by it of a
written request therefor. Under certain circumstances as
provided in the Rights Agreement, Rights issued to or
beneficially owned by Acquiring Persons or their Associates or
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<PAGE> 10
Affiliates (as defined in the Rights Agreement) or any subsequent
holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earlier of the Expiration Date or the Distribution Date, be evidenced by
such certificates alone, and the surrender for transfer of any such certificate
shall also constitute the surrender for transfer of the Rights associated with
the Common Stock represented thereby. If the Company purchases or acquires any
Common Stock after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated
with shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit A
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange or
trading system on which the Rights may from time to time be listed or traded,
or to conform to usage. Subject to the provisions of Sections 11 and 22, the
Right Certificates whenever distributed shall be dated the Record Date and on
their face shall entitle the holders thereof to purchase such number of shares
of Common Stock as shall be set forth therein at the price per full share of
Common Stock set forth therein (the "Purchase Price"), but the amount and type
of securities purchasable upon the exercise of each Right and the Purchase
Price per full share of Common Stock shall be subject to adjustment as provided
therein and in this Agreement.
(b) Notwithstanding any other provision of this Agreement, any
Right Certificate that represents Rights that are or were at any time on or
after the Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall have
impressed on, printed on, written on or otherwise affixed to it (if the Company
or the Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a nominee of
any of the foregoing) the following legend:
The beneficial owner of the Rights represented by this Right
Certificate is an Acquiring Person or an Affiliate or Associate
(as defined in the Rights Agreement) of an Acquiring Person or a
subsequent holder of such Right Certificate beneficially owned by
such Persons. Accordingly, under certain circumstances as
provided in the Rights Agreement, this Right Certificate and the
Rights represented hereby may become null and void.
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<PAGE> 11
Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman, Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. If any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered with the same force and effect as though the
person who signed such Right Certificates had not ceased to be such officer of
the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, the
date of each of the Right Certificates, and the certificate numbers for each of
the Right Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14, at any time after
the Close of Business on the Distribution Date and at or prior to the Close of
Business on the earlier of the Expiration Date or the Final Expiration Date,
any Right Certificate or Right Certificates may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock as the Right Certificate or Right Certificates surrendered then entitled
such holder to purchase. Any registered holder desiring to transfer any Right
Certificate shall surrender the Right Certificate at the principal office of
the Rights Agent with the form of assignment on the reverse side thereof duly
endorsed (or enclose with such Right Certificate a written instrument of
transfer in a form satisfactory to the Company and the Rights Agent), duly
executed by the registered holder thereof or his attorney duly authorized in
writing, and with such signature duly guaranteed. Any registered holder
desiring to split up, combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be split up, combined or exchanged at the
principal office of the Rights Agent. Thereupon the Rights Agent shall
countersign
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<PAGE> 12
(by manual signature) and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e), 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 (with such
signature duly guaranteed), to the Rights Agent at the principal office of the
Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to each Right exercised, subject to
adjustment as hereinafter provided, at or prior to the earlier of (i) the Close
of Business on September 30, 2007 ("Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 (such date being herein
referred to as the "Expiration Date"), or (iii) the time at which such Rights
are exchanged as provided in Section 24.
(b) The Purchase Price and the number of shares of Common
Stock or other securities or consideration to be acquired upon exercise of a
Right shall be subject to adjustment from time to time as provided in Sections
11 and 13. The Purchase Price shall be payable in lawful money of the United
States of America, in accordance with Section 7(c).
(c) Except as provided in Section 7(d), upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment of the
Purchase Price or so much thereof as is necessary for the shares or other
securities or assets to be purchased and an amount equal to any applicable
transfer tax, by cash, certified check or official bank check payable to the
order of the Company or the Rights Agent, the Rights Agent, subject to Section
20(j), shall thereupon promptly (i) (A) requisition from any transfer agent of
the Common Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of shares of Common Stock so
elected to be purchased and the Company will comply and hereby authorizes and
directs such transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Common
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of shares of
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<PAGE> 13
Common Stock as are to be purchased (in which case certificates for the shares
of Common Stock represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company will direct the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14, (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)
after receipt promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate; provided, however, that in the case of a
purchase of securities, other than Common Stock, pursuant to Section 13, the
Rights Agent shall promptly take the appropriate actions corresponding to the
foregoing clauses (i) through (iv). If the Company is obligated to issue other
securities of the Company, pay cash and/or distribute other property pursuant
to Section 11(a), the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for distribution by
the Rights Agent, if and when appropriate. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon any exercise
of Rights, a number of Rights be exercised so that only whole shares of Common
Stock would be issued.
(d) If the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section 14.
(e) Notwithstanding anything in this 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 Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the
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<PAGE> 14
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Right Certificates to the Company, or shall, at the
written request of the Company, destroy or cause to be destroyed such canceled
Right Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) Subject to the Company's rights under Section 11(a)(iii)
to otherwise fulfill its obligations hereunder, the Company covenants and
agrees that it will cause to be reserved and kept available, out of and to the
extent of its authorized and unissued shares of Common Stock not reserved for
another purpose (and, following the occurrence of a Triggering Event, other
securities) or shares of Common Stock not reserved for another purpose (and,
following the occurrence of a Triggering Event, other securities) held in its
treasury, the number of shares of Common Stock (and, following the occurrence
of a Triggering Event, other securities) that, as provided in this Agreement,
including Section 11(a)(iii), will be sufficient to permit the exercise in full
of all outstanding Rights; provided, however, that the Company shall not be
required to reserve and keep available shares of Common Stock or other
securities sufficient to permit the exercise in full of all outstanding Rights
pursuant to the adjustments set forth in Section 11(a)(ii), Section 11(a)(iii)
or Section 13 unless, and only to the extent that, the Rights become
exercisable pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from
and after such time as the Rights become exercisable, the Rights and all shares
of Common Stock (and following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be listed
by the New York Stock Exchange ("NYSE") or any other national securities
exchange upon notice of issuance upon such exercise and (ii) if then necessary
to permit the offer and issuance of such shares of Common Stock (and, following
the occurrence of a Triggering Event, other securities), register and qualify
such shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) under the Securities Act and any applicable state
securities or "blue sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the Expiration Date or the Final
Expiration Date of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety days, the exercisability of the Rights in
order to prepare and file a registration statement under the Securities Act and
permit it to become effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Securities Act (if
required) shall have been declared effective.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all shares of Common Stock (and
following the occurrence of a Triggering Event, other securities) delivered
upon exercise of Rights shall, at the time of delivery
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<PAGE> 15
of the certificates for such shares (subject to payment of the Purchase Price
in respect thereof), be duly and validly authorized and issued and fully paid
and nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of Common Stock (or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates for Common Stock (or other securities, as
the case may be) upon exercise of Rights in a name other than that of, the
registered holder of the Right Certificate, and the Company shall not be
required to issue or deliver a Right Certificate or certificate for Common
Stock (or other securities, as the case may be) to a person other than such
registered holder until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for shares of Common Stock (or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the Common Stock (or other securities, as
the case may be) represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock (and/or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Common Stock
(and/or other securities) transfer books of the Company are open.
Section 11. Adjustments to Number and Kind of Shares, Number of Rights
or Purchase Price. The number and kind of shares subject to purchase upon the
exercise of each Right, the number of Rights outstanding and the Purchase Price
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the date of
this Agreement (A) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (B) subdivide or split the outstanding shares of Common
Stock into a greater number of shares, (C) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares or effect a
reverse split of the outstanding shares of Common Stock or (D) issue any shares
of its capital stock in a reclassification of the Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in Section 7(e) or this Section 11(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of Common Stock or capital
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<PAGE> 16
stock, as the case may be, issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Common Stock or capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Common Stock transfer books of the Company were
open, the holder thereof would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration
to be paid upon the exercise of one such Right be less than the per share par
value of the Common Stock. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person shall become an Acquiring Person (a
"Section 11(a)(ii) Event"), then each holder of a Right (except as provided
below and in Section 7(e)) shall thereafter have a right to receive for each
Right, upon exercise thereof in accordance with the terms of this Agreement and
payment of the Purchase Price, in lieu of a number of shares of Common Stock
for which a Right was theretofore exercisable, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price per full share of Common Stock by the then number
of shares of Common Stock for which two Rights were exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing
that product (such product, following such first occurrence, shall be referred
to as the "Purchase Price" for all purposes of this Agreement) by 50% of the
Current Market Price per share of Common Stock on the date of such first
occurrence (such number of shares is herein called the "Adjustment Shares");
provided that the Purchase Price and the number of Adjustment Shares shall be
further adjusted as provided in this Agreement to reflect any events occurring
after the date of such first occurrence. Notwithstanding the foregoing, upon
the occurrence of a Section 11(a)(ii) Event, any Rights that are or were at any
time, on or after the earlier of the Stock Acquisition Date or the Distribution
Date, Beneficially Owned by the Acquiring Person or any Associate or Affiliate
of the Acquiring Person shall become null and void and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement.
(iii) If the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) and the Rights shall become so exercisable, to the extent
permitted by applicable law and any agreements in effect on the date hereof to
which the Company is a party, the Company shall: (A) determine the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value")
and (B) with respect to each Right (subject to Section 7(e)), upon the exercise
of such Right and payment of the applicable Purchase Price, make adequate
provision to substitute for the Adjustment Shares (1) cash, (2) a reduction in
the Purchase Price, (3) equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock of the Company
which, by virtue of having dividend, voting and liquidation rights
substantially comparable to those of the Common Stock, are deemed in good faith
by the Board of Directors of the Company to have substantially the same value
as shares of Common Stock (such shares or units
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<PAGE> 17
of shares of preferred stock are herein called "Common Stock Equivalents")),
(4) debt securities of the Company, (5) other assets, or (6) any combination of
the foregoing, having an aggregate value which, when added to the value of the
shares of Common Stock actually issued upon exercise of such Right, shall have
an aggregate value equal to the Current Value (less the amount of any reduction
in the Purchase Price), where such aggregate value has been determined in good
faith by the Board of Directors of the Company based upon the advice of a
nationally recognized independent investment banking firm selected in good
faith by the Board of Directors of the Company; provided, however, that if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty days following the first occurrence of a Section
11(a)(ii) Event (the "Section 11(a)(ii) Trigger Date"), then the Company shall
be obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the excess of the Current Value over the Purchase
Price. If the Board of Directors of the Company shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty day
period set forth above may be extended to the extent necessary, but not more
than one hundred and twenty days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the authorization of
such additional shares (such thirty day period, as it may be extended, is
herein called the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or third
sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) and the last sentence of Section 11(a)(ii), that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first sentence and
to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the Current Market
Price per share of the Common Stock on the Section 11(a)(ii) Trigger Date and
the per share or per unit value of any "Common Stock Equivalent" shall be
deemed to equal the Current Market Price per share of the Common Stock on such
date. The Board of Directors may, but shall not be required to, establish
procedures to allocate the right to receive Common Stock upon the exercise of
the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) If the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Common
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five calendar days after such record date) Common Stock, shares having
the same rights, privileges and preferences as the Common Stock ("Equivalent
Common Stock") or securities convertible into Common Stock or Equivalent Common
Stock at a price per share of Common Stock or Equivalent Common Stock (or
having a conversion price per share, if a security convertible into Common
Stock or Equivalent Common Stock) less than the Current Market Price per share
of Common Stock on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect
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<PAGE> 18
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding on such record date,
plus the number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock and/or Equivalent Common Stock
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Common Stock outstanding on such
record date, plus the number of additional shares of Common Stock and/or
Equivalent Common Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery of consideration part
or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and the holders of
the Rights. Shares of Common Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and if such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) If the Company shall fix a record date for a distribution
to all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Common Stock, but including
any dividend payable in stock other than Common Stock) or subscription rights
or warrants (excluding those referred to in Section 11(b)), the Purchase Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Current Market Price per share of Common
Stock on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Common Stock and the
denominator of which shall be such Current Market Price per share of Common
Stock. Such adjustments shall be made successively whenever such a record date
is fixed; and if such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price"
per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of the Common Stock for the thirty consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for purpose of computations made pursuant to Section 11(a)(iii), the
"Current Market Price" per share of the Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of the Common
Stock for the ten consecutive Trading Days immediately following such date;
provided, however, that if the Current Market Price per share of the Common
Stock is
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<PAGE> 19
determined during a period following the announcement by the issuer of such
Common Stock of (i) any dividend or distribution on the Common Stock (other
than a regular quarterly cash dividend and other than the Rights), or (ii) any
subdivision, combination or reclassification of the Common Stock, and prior to
the expiration of the requisite thirty Trading Day or ten Trading Day period,
as set forth above, the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification occurs,
then, and in each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on
the NYSE or, if the shares of Common Stock are not listed or admitted to
trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted sale price or, if
not so quoted, the average of the high bid and low asked prices in the over-
the-counter market, as reported by the National Association of Securities
Dealers, Inc., Automated Quotations System or such other system then in use,
or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board of Directors of the Company shall
be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange or national market system, on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or national market system, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, "Current Market Price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest ten-thousandth of a share, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable
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<PAGE> 20
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Common Stock
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
shares of Common Stock (calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior
to this adjustment, by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price or any adjustment to the number of shares of
Common Stock for which a Right may be exercised, to adjust the number of
Rights, in lieu of any adjustment in the number of shares of Common Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
shares of Common Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten days later than the date
of the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the
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<PAGE> 21
adjusted Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue
to express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the shares of
Common Stock issuable upon exercise of the Rights, the Company shall take any
corporate action, including using its best efforts to obtain any required
stockholder approvals, which may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) of Common
Stock and other capital stock or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Common Stock, (ii) issuance wholly for cash
of any shares of Common Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Common Stock or securities which by their
terms are convertible into or exchangeable for shares of Common Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants referred to in
this Section 11, hereafter made by the Company to holders of its Common Stock
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the earlier of the Stock Acquisition Date or the Distribution Date,
(i) consolidate with any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)), (ii) merge with or into
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets, cash flow or earning power aggregating more than 50% of
the assets, cash flow or earning power of the Company and its
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<PAGE> 22
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of
which complies with Section 11(o)), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the earlier
of the Stock Acquisition Date or the Distribution Date, it will not, except as
permitted by Section 23 or Section 27, take (or permit any Subsidiary to take)
any action if at the time such action is taken it is reasonably foreseeable
that such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is
made as provided in Sections 11 and 13, the Company shall (a) promptly prepare
a certificate setting forth such adjustment and a brief statement of the facts
giving rise to such adjustment, (b) promptly file with the Rights Agent and
with each transfer agent for the Common Stock a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 26. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any
certificate prepared by the Company pursuant to Sections 11 and 13 and on any
adjustment therein contained. Any adjustment to be made pursuant to Sections
11 and 13 of this Agreement shall be effective as of the date of the event
giving rise to such adjustment.
Section 13. Consolidation. Merger or Sale or Transfer of Assets or
Earning Power.
(a) If at any time on or after the earlier of the Stock
Acquisition Date or the Distribution Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person or
Persons (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)) and the Company shall not be the surviving or continuing
corporation of such consolidation or merger, (y) any Person or Persons (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o)), shall consolidate with, or merge with and into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or of the Company or cash or any
other property, or (z) the Company or one or more of its Subsidiaries shall
sell or otherwise transfer to any other Person or any Affiliate or Associate of
such Person (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o)), in one or more
transactions, or the
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<PAGE> 23
Company or one or more of its Subsidiaries shall sell or otherwise transfer to
any Person (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o)) in one or a series
of related transactions, assets, cash flow, or earning power aggregating more
than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole), then, on the first occurrence of any such
event, proper provision shall be made so that (i) each holder of record of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof and payment of the Purchase Price in
accordance with the terms of this Agreement, such number of shares of validly
issued, fully paid and nonassessable and freely tradeable common stock of the
Principal Party (as defined herein) not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the
number of shares of Common Stock for which two Rights were exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the number of shares of Common
Stock for which two Rights were exercisable immediately prior to such first
occurrence of a Section 11(a)(ii) Event) and (2) dividing that product (such
product, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for all purposes of this Agreement) by 50%
of the Current Market Price (determined as provided in Section 11(d) with
respect to the Common Stock) per share of the common stock of such Principal
Party on the date of consummation of such Section 13 Event (or the fair market
value on such date of other securities or property of the Principal Party, as
provided for herein); provided that the Purchase Price and the number of shares
of common stock of such Principal Party issuable upon exercise of each Right
shall be further adjusted as provided in this Agreement to reflect any events
occurring after the date of the first occurrence of a Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" for all purposes of this
Agreement shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 shall only apply to
such Principal Party following the first occurrence of a Section 13 Event; and
(iv) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its common stock in
accordance with Section 9) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of common stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction
in respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase
Price, such cash, shares, rights, warrants and other property which such holder
would have been entitled to receive had he, at the time of such transaction,
owned the shares of common stock of the Principal Party purchasable upon the
exercise of a Right, and such Principal Party shall take such steps (including,
but not limited to, reservation of shares of stock) as may be necessary to
permit the subsequent exercise of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other property.
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<PAGE> 24
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a): (A) the Person that is the
issuer of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, or, if there is more than one such
issuer, the issuer the common stock of which has the greatest market value or
(B) if no securities are so issued, (x) the Person that is the other party to
the merger or consolidation and that survives said merger or consolidation, or,
if there is more than one such Person, the Person the common stock of which has
the greatest market value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or consolidation, the
Person that does survive the merger or consolidation (including the Company if
it survives); and
(ii) in the case of any transaction described in clause
(z) of the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of such
Persons as is the issuer of common stock having the greatest market value of
shares outstanding; provided, however, that in any such case described in the
foregoing (b)(i) or (b)(ii), if the common stock of such Person is not at such
time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of which is and has
been so registered, the term "Principal Party" shall refer to such other
Person, or if such Person is a Subsidiary, directly or indirectly, of more than
one Person, the common stock of all of which are and have been so registered,
the term "Principal Party" shall refer to whichever of such Persons is the
issuer of the common stock having the greatest market value of shares
outstanding.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) unless the Principal
Party shall have a sufficient number of authorized shares of its Common Stock
which have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior thereto
the Company and the Principal Party involved therein shall have executed and
delivered to the Rights Agent an agreement confirming that the requirements of
Sections 13(a) and (b) shall promptly be performed in accordance with their
terms and that such consolidation, merger, sale or transfer of assets shall not
result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Sections 13(a) and
(b) hereof and further providing that, as soon as practicable after executing
such agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to
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<PAGE> 25
remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the date of expiration of the Rights, and similarly
comply with applicable state securities laws;
(ii) use its best efforts, if the common stock of the
Principal Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the common stock of
the Principal Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchasable upon exercise of the Rights to
be listed by a national securities exchange or admitted for trading on The
Nasdaq National Market;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 (or
any successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of common stock of the Principal
Party subject to purchase upon exercise of outstanding Rights. If any of the
transactions described in Section 13(a) shall occur at any time after the
occurrence of a transaction described in Section 11(a)(ii), the Rights which
have not theretofore been exercised shall thereafter be exercisable in the
manner described in Section 13(a). The provisions of this Section 13 shall
similarly apply to all successive mergers, consolidations, sales, transfers or
other Section 13 Events.
(d) Furthermore, if the Principal Party which is to be a party
to a transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, bylaws or other instrument governing its corporate affairs,
which provision would have the effect of (i) causing such Principal Party to
issue, in connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, shares of common stock of such
Principal Party at less than the then current market price per share
(determined pursuant to Section 11(b)) or securities exercisable for, or
convertible into, common stock of such Principal Party at less than such then
current market price (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special payment, tax or similar provisions in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13; then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing that the provision in question of such Principal Party shall have
been canceled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be
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<PAGE> 26
paid to the holders of record of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the then current market value of a whole Right. For the
purposes of this Section 14(a), the then current market value of a whole Right
shall be determined in the same manner as the Current Market Price of a share
of Common Stock shall be determined pursuant to Section 11(d).
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or exchange of the Rights
for Common Stock pursuant to Section 24 of this Agreement or to distribute
certificates which evidence fractional shares. In lieu of issuing fractions of
shares of Common Stock, the Company may pay to the holders of record of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the then current market value of a share
of Common Stock. For purposes of this Section 14(b), the then current market
value of a share of Common Stock shall be the Current Market Price thereof as
determined pursuant to Section 11(d).
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective holders of record of the Right Certificates
(and, prior to the Distribution Date, the holders of record of the Common
Stock); and any holder of record of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or any other Person to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and, accordingly, that
they will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Right Certificate and will be transferable only in connection
with the transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will
be transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
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<PAGE> 27
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent or the
transfer agent of the Common Stock) for all purposes whatsoever, and neither
the Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder of a Right or a Right Certificate, as such, shall be entitled to vote,
receive dividends in respect of or be deemed for any purpose to be the holder
of Common Stock or any other securities of the Company which may at any time be
issuable upon the exercise of the Rights, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as set forth in Section 25), or to receive dividends or
subscription rights in respect of any such stock or securities, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence, bad faith
or willful misconduct on the part of the Rights Agent for anything done or
omitted to be done by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this
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<PAGE> 28
Agreement in reliance upon any Right Certificate, certificate for Common Stock
or other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, guaranteed, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. If at the time such successor Rights Agent shall
succeed to the agency created by this 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 if 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 Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver such Right Certificates so
countersigned; and if 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 Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company or its own in-house counsel), and the opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence
- 25 -
<PAGE> 29
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, Chief Executive Officer, President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution of this Agreement 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 Agreement or in any
Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment required under the provisions
hereof or responsible for the manner, method or amount of any such change or
adjustment or the ascertaining of the existence of facts that would require any
such change in the exercisability of the Rights or any change or adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or other securities
to be issued pursuant to this Agreement or any Right Certificate or as to
whether any shares of Common Stock or other securities will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any one of the Chairman, the Chief Executive Officer, the President, any
Vice President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions.
- 26 -
<PAGE> 30
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
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.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 and/or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise of transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' notice in writing mailed to the Company and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent (with or without cause) upon thirty
days' notice in writing mailed to the Rights Agent or any successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within a
period of thirty days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
incumbent Rights Agent or the holder of record of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be a corporation organized and doing business under the
laws of the United States or any State thereof, in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as
- 27 -
<PAGE> 31
if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or
change in the Expiration Date, the Purchase Price per full share and the number
or kind of class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Stock Acquisition Date or (ii) the
Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price, as defined in Section 11(d), of the Common Stock at the
time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors of the Company.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price
for each Right so held. The Company shall promptly give public notice of any
such redemption; provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption. Within ten
days after such action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent of the Common Stock. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the Company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
- 28 -
<PAGE> 32
specifically set forth in this Section 23 or in Section 24, and other than in
connection with the purchase of Common Stock prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 11(a)(ii))
for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of this Agreement (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of shares of Common Stock representing 50% or more of the shares of the Common
Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of such Rights at the last addresses
of the holders as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the shares of Common Stock for
Rights will be effected and, in the event of any partial exchange, the number
and kind of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights being exchanged (other than
Rights which have become void pursuant to the provisions of Section 11(a)(ii))
held by each holder of such Rights.
(c) If there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
Section 25. Notice of Proposed Actions.
(a) If the Company, after the earlier of the Stock Acquisition
Date or the Distribution Date, shall propose to (i) effect any of the
transactions referred to in Section 11(a)(i) or to pay any dividend to the
holders of record of its Common Stock payable in stock of any class or to make
any other distribution to the holders of record of its Common Stock (other than
a regular quarterly cash dividend), or (ii) offer to the holders of record of
its Common Stock options,
- 29 -
<PAGE> 33
warrants, or other rights to subscribe for or to purchase shares of Common
Stock (including any security convertible into or exchangeable for Common
Stock) or shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights, (iii) effect
any reclassification of its Common Stock or any recapitalization or
reorganization of the Company, (iv) effect any consolidation or merger with or
into, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v)
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of record of a Right
Certificate, in accordance with Section 26, notice of such proposed action,
which shall specify the record date for the purposes of such transaction
referred to in Section 11(a)(i), or such dividend or distribution, or the date
on which such reclassification, recapitalization, reorganization,
consolidation, merger, sale or transfer of assets, liquidation, dissolution, or
winding up is to take place and the record date for determining participation
therein by the holders of record of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 10 days prior to the record date for
determining holders of record of the Common Stock for purposes of such action,
and in the case of any such other action, at least 10 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of record of Common Stock, whichever shall be the earlier. The failure
to give notice required by this Section 25 or any defect therein shall not
affect the legality or validity of the action taken by the Company or the vote
upon any such action.
(b) If any of the transactions referred to in Section
11(a)(ii) or Section 13 of this Agreement are proposed, then, in any such case,
the Company shall give to each holder of Rights, in accordance with Section 26,
notice of the proposal of such transaction at least 10 days prior to
consummating such transaction, which notice shall specify the proposed event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
or Section 13, as the case may be, and, upon consummating such transaction,
shall similarly give notice thereof to each holder of Rights.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on 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:
Union Texas Petroleum Holdings, Inc.
1330 Post Oak Blvd.
Houston, Texas 77056
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of record of
any Right Certificate or Right to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
Attention: Tenders; Exchange Commission
First Chicago Trust Company of New York
525 Washington Boulevard, Suite 4660
Jersey City, New Jersey 07310
- 30 -
<PAGE> 34
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right Certificate or
Right shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent.
Section 27. Supplements and Amendments. Prior to the Stock Acquisition
Date, the Company may in its sole and absolute discretion and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement (including an amendment that provides that the Rights shall become
exercisable, in lieu of a share or shares of Common Stock, for Common Stock
Equivalents) without the approval of any holders of the Rights or the Common
Stock. From and after the Stock Acquisition Date, the Company may and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order to (i) cure
any ambiguity, (ii) correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, or (iii)
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable; provided, that no such supplement or amendment
shall adversely affect the interests of the holders of Rights (other than any
interest of an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment.
Section 28. Determinations and Actions by the Board. For all purposes
of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in effect on the date
of this Agreement. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as
may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board to any liability to
the holders of the Rights.
- 31 -
<PAGE> 35
Section 29. Successors. All of the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of record of
the Right Certificates (and, prior to the Distribution Date, the Common Stock).
Section 31. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.
Section 34. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, illegal, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
- 32 -
<PAGE> 36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
Attest: UNION TEXAS PETROLEUM HOLDINGS, INC.
By: /s/ AMY J. WATKINS By: /s/ ALAN R. CRAIN, JR.
---------------------- ------------------------------------------
Name: Amy J. Watkins Name: Alan R. Crain, Jr.
Title: Counsel and Title: Vice President and
Secretary General Counsel
Attest: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ GEORGE DALTON By: /s/ JAMES R. KUZMICH
---------------------- ------------------------------------------
Name: George Dalton Name: James R. Kuzmich
Title: Assistant Vice Title: Assistant Vice
President President
- 33 -
<PAGE> 37
EXHIBIT A
[Form of Right Certificate]
Certificate No. R-__ _______ Rights
NOT EXERCISABLE AFTER SEPTEMBER 30, 2007 OR UNDER CERTAIN
CIRCUMSTANCES EARLIER. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. IF THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING PERSON OR
AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON OR A TRANSFEREE
OF THE RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID.
Right Certificate
Union Texas Petroleum Holdings, 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 September 12, 1997 (the "Rights Agreement")
between Union Texas Petroleum Holdings, Inc., a Delaware corporation
("Company"), and First Chicago Trust Company of New York, a New York
corporation ("Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 P.M., Houston, Texas time, on September 30, 2007, at the
principal office of the Rights Agent, or its successors as Rights Agent, one-
half of one fully paid and nonassessable share of voting common stock, par
value $0.05 per share ("Common Stock"), of the Company at a purchase price of
$90.00 per full share of Common Stock as the same may from time to time be
adjusted in accordance with the Rights Agreement (such purchase price per full
share of Common Stock is referred to herein as the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares of Common Stock which may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of September 23, 1997 (the "Record Date")
based on the shares of Common Stock of the Company as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
shares of Common Stock which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events and, upon the happening of certain events,
securities other than
<PAGE> 38
shares of Common Stock, or other property, may be acquired upon exercise of the
Rights evidenced by this Right Certificate, as provided by the Rights
Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company
and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal 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 of record to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall 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.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.001 per Right or (ii) may be exchanged in whole or in
part for shares of Common Stock. No fractional shares of Common Stock shall be
issued upon the exercise of any Right or Rights evidenced hereby, and in lieu
thereof, as provided in the Rights Agreement, fractions of shares of Common
Stock shall receive an amount in cash equal to the same fraction of the then
current market value of a share of Common Stock.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of Common Stock or of any
other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement) or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
A-2
<PAGE> 39
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal, dated as of ______________ 19__.
ATTEST: UNION TEXAS PETROLEUM HOLDINGS, INC.
By:
- -------------------------------- ----------------------------------
Secretary Name:
Title:
Countersigned:
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By
------------------------------
Authorized signature
A-3
<PAGE> 40
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________ hereby sells, assigns and
transfers unto _________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution. Dated:
___________ , 19__
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
___________________________________
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement); and (2)
after due inquiry and to the best knowledge of the undersigned, it [ ] did
[ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated: ____________, 19__
__________________________________
Signature
<PAGE> 41
NOTICE
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
- 2 -
<PAGE> 42
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to
Exercise the Right Certificate.)
To: Union Texas Petroleum Holdings, Inc.
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Right Certificate to purchase
the shares of Common Stock issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name:
Please insert social security
or other identifying number
____________________________________________
(Please print name and address)
____________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
____________________________________________
(Please print name and address)
____________________________________________
Dated: ______________, 19
____________________________________________________
Signature
(Signature must conform in all respects to name of
holder as specified on the face of this Right
Certificate)
<PAGE> 43
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
___________________________________
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Right Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or any transferee of such
Persons.
Dated: ______________, 19___
__________________________________
Signature
- 2 -
<PAGE> 44
EXHIBIT B
UNION TEXAS PETROLEUM HOLDINGS, INC.
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On September 12, 1997, the Board of Directors of Union Texas Petroleum
Holding, Inc. (the "Company") adopted a Rights Agreement (the "Rights
Agreement") and authorized and declared a dividend of one Common Stock Purchase
Right (a "Right") for each outstanding share of Common Stock, par value $0.05
per share ("Common Stock"), of the Company. The dividend is payable on
September 23, 1997 to the stockholders of record on that date (the "Record
Date"), and with respect to Common Stock issued thereafter until the
Distribution Date (as hereinafter defined) or the expiration or earlier
redemption or exchange of the Rights. Except as set forth below, each Right
entitles the registered holder to purchase from the Company at any time after
the Distribution Date one-half of one share of Common Stock at a price of
$90.00 per full share of Common Stock, subject to adjustment (the "Purchase
Price"). The description and terms of the Rights are set forth in the Rights
Agreement.
Initially the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate Right Certificates
will be distributed. The Rights will become exercisable and separate from the
shares of Common Stock upon the earlier to occur of (i) 10 days after the date
of a public announcement that a person or group of affiliated or associated
persons has acquired beneficial ownership of 15% or more of the outstanding
shares of Common Stock (such person or group being hereinafter referred to as
an "Acquiring Person") (the "Stock Acquisition Date"); or (ii) 10 business days
(or such later date as the Board may determine) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in a person or group becoming the
beneficial owner of 15% or more of the outstanding shares of Common Stock (the
earlier of such dates being called the "Distribution Date").
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with, and only with, the shares of Common Stock.
Until the Distribution Date (or earlier redemption or expiration), new Common
Stock certificates issued after the Record Date upon transfer or new issuance
of shares of Common Stock will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Right being attached thereto, will also
constitute the transfer of the Rights associated with the shares of Common
Stock represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the
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shares of Common Stock as of the close of business on the Distribution Date,
and such separate Right Certificates alone will evidence the Rights.
Each of the following persons will not be deemed to be an Acquiring
Person even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock of the Company: (i)
the Company, any subsidiary of the Company, or any employee benefit plan of the
Company or of any subsidiary of the Company; (ii) any person who would
otherwise become an Acquiring Person solely by virtue of a reduction in the
number of outstanding shares of Common Stock unless and until such person shall
become the beneficial owner of any additional shares of Common Stock; and (iii)
certain persons specified in the Rights Agreement who as of September 12, 1997
are the beneficial owners of 15% or more of the Common Stock (and transferees
thereof under certain circumstances). The Rights are not exercisable until the
Distribution Date. The Rights will expire at the close of business on
September 30, 2007, unless earlier redeemed by the Company as described below.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive, upon payment of the
Purchase Price, shares of Common Stock (or in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the Purchase Price. Notwithstanding the foregoing, all rights that are, or
were, beneficially owned by an Acquiring Person or any affiliate or associate
thereof will be null and void and not exercisable.
If, at any time on or after the earlier of the Stock Acquisition Date or
the Distribution Date, (i) the Company is acquired in a merger or other
business combination transaction in which the holders of all of the outstanding
shares of Common Stock immediately prior to the consummation of the transaction
are not the holders of all of the surviving corporation's voting power, or (ii)
more than 50% of the Company's assets, cash flow or earning power is sold or
transferred, then each holder of a Right (except Rights which have previously
been voided as set forth above) shall thereafter have the right (the "Flip-Over
Right") to receive, upon exercise and payment of the Purchase Price, common
shares of the acquiring company having a value equal to two times the Purchase
Price. If a transaction would otherwise result in a holder's having a Flip-In
as well as a Flip-Over Right, then only the Flip-Over Right will be
exercisable; if a transaction results in a holder's having a Flip-Over Right
subsequent to a transaction resulting in a holder's having a Flip-In Right, a
holder will have Flip-Over Rights only to the extent such holder's Flip-In
Rights have not been exercised.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
dividends payable in Common Stock) or of
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subscription rights or warrants (other than those referred to above). However,
no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1%.
To the extent that insufficient shares of Common Stock are available for
the exercise in full of the Rights, holders of Rights will receive upon
exercise shares of Common Stock to the extent available and then cash, property
or other securities of the Company, in proportions determined by the Company,
so that the aggregate value received is equal to twice the Purchase Price.
No fractional shares of Common Stock will be issued upon exercise of the
Rights and, in lieu thereof, a payment in cash will be made to the holder of
such Rights equal to the same fraction of the current market value of a share
of Common Stock.
In general, the Company may redeem the Rights at a price of $.001 per
Right (subject to adjustment), at any time before the Stock Acquisition Date.
Immediately upon the action of the Board of Directors ordering redemption of
the Rights, the Rights will terminate and the only right of the holders of
Rights will be to receive the redemption price.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by any person of 50% or more of the outstanding shares of
Common Stock, the Board of Directors of the Company may exchange the then
outstanding and exercisable Rights (other than Rights owned by an Acquiring
Person, which will have become null and void), in whole or in part, for shares
of Common Stock, each Right being exchangeable for one share of Common Stock,
subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
stockholders under presently existing federal income tax law, and will not
change the way in which stockholders can presently trade the Company's shares
of Common Stock. If the Rights should become exercisable, stockholders,
depending on then existing circumstances, may recognize taxable income.
Prior to the Stock Acquisition Date, the Rights Agreement generally may
be amended by the Board of Directors of the Company. On or after the Stock
Acquisition Date, the Company may amend the Rights Agreement only to (i) cure
any ambiguity, (ii) correct or supplement any provision which may be defective
or inconsistent with the other provisions of the Rights Agreement, or (iii)
change or supplement the Rights Agreement in any other manner which the Company
may deem necessary or desirable, provided that no amendment shall adversely
affect the interests of the holders of Rights (other than any interest of an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being
acquired. Accordingly, the existence of the Rights may deter
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certain acquirors from making takeover proposals or tender offers. However,
the rights plan helps ensure that the Company's stockholders receive fair and
equal treatment in the event of any proposed takeover of the Company. The
adoption of the plan is not in response to any specific threat, but is a
precaution taken to protect the rights of the Company's stockholders.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission (Commission File No. 1-9019). A copy of the Rights Agreement is
available free of charge from either First Chicago Trust Company of New York or
the Company, 1330 Post Oak Boulevard, Houston, Texas 77056, Attention:
Secretary. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated in this summary description by reference.
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