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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): DECEMBER 8, 1995
LYONDELL PETROCHEMICAL COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 1-10145 95-4160558
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1221 MCKINNEY STREET, SUITE 1600
HOUSTON, TEXAS 77010
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 713/652-7200
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ITEM 5. OTHER EVENTS
On December 8, 1995, the Board of Directors of Lyondell Petrochemical
Company (the "Company") declared a dividend of one right ("Right") for each
outstanding share of the Company's Common Stock, par value $1.00 per share
("Common Stock"), to stockholders of record at the close of business on December
20, 1995. Each Right entitles the registered holder to purchase from the
Company one share of Common Stock at a purchase price of $80 per share of Common
Stock, subject to adjustment (the "Purchase Price"). The description and terms
of the Rights are set forth in a Rights Agreement dated as of December 8, 1995
as it may from time to time be supplemented or amended (the "Rights Agreement")
between the Company and The Bank of New York, as Rights Agent.
Initially, the Rights will be attached to all certificates
representing outstanding shares of Common Stock, and no separate certificates
for the Rights ("Rights Certificates") will be distributed. The Rights will
separate from the Common Stock and a "Distribution Date" will occur, with
certain exceptions, upon the earlier of (i) ten days following a public
announcement of the existence of an "Acquiring Person" (the date of the
announcement being the "Stock Acquisition Date"), or (ii) ten business days
following the commencement of a tender offer or exchange offer that would result
in a person's becoming an Acquiring Person. An "Acquiring Person" is any person
or group of affiliated or associated persons that has acquired or obtained the
right to acquire beneficial ownership of 15% or more of the outstanding shares
of Common Stock, except that Atlantic Richfield Company, a Delaware corporation
("ARCO"), will not be or become an "Acquiring Person" unless and until such time
as ARCO or any person affiliated or associated with ARCO acquires or becomes the
beneficial owner of (or ARCO becomes affiliated or associated with any person
who, collectively with ARCO, is the beneficial owner of) more than the lesser of
(i) 1,000,000 shares of Common Stock in addition to those ARCO beneficially
owned as of December 8, 1995 (or in addition to any lesser number of shares ARCO
beneficially owns from time to time thereafter) and (ii) one share less than 50%
of the shares of Common Stock outstanding at any time. In certain circumstances
prior to the time a person has become an Acquiring Person, the Distribution Date
may be deferred by the Board of Directors. Certain inadvertent acquisitions
will not result in a person becoming an Acquiring Person if the person promptly
divests itself of sufficient Common Stock. Until the Distribution Date, (a) the
Rights will be evidenced by the Common Stock certificates (together with this
Summary of Rights or bearing the notation referred to below) and will be
transferred with and only with such Common Stock certificates, (b) new Common
Stock certificates issued after December 20, 1995 will contain a notation
incorporating the Rights Agreement by reference and (c) the surrender for
transfer of any certificate for Common Stock (with or without a copy of this
Summary of Rights) will also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 8, 2005, unless earlier redeemed or
exchanged by the Company as described below.
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As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Common Stock as of the close
of business on the Distribution Date and, from and after the Distribution Date,
the separate Rights Certificates alone will represent the Rights. All shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
Shares of Common Stock issued after the Distribution Date in connection with
certain employee benefit plans or upon conversion of certain securities will be
issued with Rights. Except as otherwise determined by the Board of Directors,
no other shares of Common Stock issued after the Distribution Date will be
issued with Rights.
In the event (a "Flip-In Event") that a person becomes an Acquiring
Person (except pursuant to a tender or exchange offer for all outstanding shares
of Common Stock at a price and on terms that a majority of the independent
directors of the Company determines to be fair to and otherwise in the best
interests of the Company and its stockholders (a "Permitted Offer")), each
holder of a Right will thereafter have the right to receive, upon exercise of
such Right, a number of shares of Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a Current Market Price
(as defined in the Rights Agreement) equal to two times the exercise price of
the Right. Notwithstanding the foregoing, following the occurrence of any Flip-
In Event, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by or transferred to such Acquiring
Person (or by certain related parties) will be null and void in the
circumstances set forth in the Rights Agreement.
For example, at an exercise price of $80 per Right, each Right not
owned by such an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$160 worth of Common Stock (or other consideration, as noted above), based upon
its then Current Market Price, for $80. Assuming that the Common Stock had a
Current Market Price of $25 per share at such time, the holder of each valid
Right would be entitled to purchase 6.4 shares of Common Stock for $80.
In the event (a "Flip-Over Event") that, at any time from and after
the time an Acquiring Person becomes such, (i) the Company is acquired in a
merger or other business combination transaction (other than certain mergers
that follow a Permitted Offer), or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
owned by such Acquiring Person or certain related parties) shall thereafter have
the right to receive, upon exercise, a number of shares of common stock of the
acquiring company having a Current Market Price equal to two times the exercise
price of the Right. Flip-In Events and Flip-Over Events are collectively
referred to as "Triggering Events."
The Purchase Price payable, and the number of 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) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or securities convertible into Common
Stock at less than
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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
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock are required to be issued upon
exercise of the Rights, but in lieu thereof a cash payment may be made based on
the market price of the Common Stock on the last trading date prior to the date
of exercise.
At any time until the time a person becomes an Acquiring Person, the
Company may redeem the Rights in whole, but not in part, at a price of $.005 per
Right, payable, at the option of the Company, in cash, shares of Common Stock or
such other consideration as the Board of Directors may determine. Immediately
upon the effectiveness of the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.005 redemption price.
At any time after the occurrence of a Flip-In Event and prior to the
occurrence of a Flip-Over Event or a person becoming the beneficial owner of 50%
or more of the shares of Common Stock then outstanding, the Company may exchange
the Rights (other than Rights owned by an Acquiring Person or an affiliate or an
associate of an Acquiring Person, which will have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, and/or other equity
securities deemed to have the same value as one share of Common Stock, per
Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights should not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for the
common stock of the acquiring company as set forth above or are exchanged as
provided in the preceding paragraph.
Other than the redemption price, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company as long as the
Rights are redeemable. Thereafter, the provisions of the Rights Agreement (other
than the Redemption Price) may be amended by the Board of Directors in order to
cure any ambiguity, defect or inconsistency, to make changes that do not
materially adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to lengthen the
time period governing redemption or amendment shall be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to this Report on Form 8-K. This summary
description of the Rights does
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not purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
The Rights will have certain anti-takeover effects. The Rights will
cause substantial dilution to any person or group that attempts to acquire the
Company without the approval of the Company's Board of Directors. As a result,
the overall effect of the Rights may be to render more difficult or discourage
any attempt to acquire the Company even if such acquisition may be favorable to
the interests of the Company's stockholders. Because the Company's Board of
Directors can redeem the Rights or approve a Permitted Offer, the Rights should
not interfere with a merger or other business combination approved by the Board
of Directors of the Company.
The information set forth in the Company's press release dated
December 8, 1995, included herewith as Exhibit 2, is incorporated by reference
to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
1. Rights Agreement dated as of December 8, 1995 between Lyondell
Petrochemical Company and The Bank of New York, as Rights Agent, which includes
as Exhibit A the form of Rights Certificate and as Exhibit B the Summary of
Rights to Purchase Common Stock. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until after the Distribution Date (as defined in
the Rights Agreement).
2. Press release issued by the Company dated December 8, 1995.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LYONDELL PETROCHEMICAL COMPANY
Date: 12/12/95 By: /s/ RUSSELL S. YOUNG
_______________ ______________________________
Name: Russell S. Young
Title: Senior Vice President,
Chief Financial Officer and Treasurer
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Execution Copy
================================================================================
LYONDELL PETROCHEMICAL COMPANY
AND
THE BANK OF NEW YORK,
RIGHTS AGENT
________________
RIGHTS AGREEMENT
DATED AS OF DECEMBER 8, 1995
================================================================================
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TABLE OF CONTENTS
<TABLE>
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Page
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Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 8
Section 3. Issue of Rights Certificates 8
Section 4. Form of Rights Certificates 9
Section 5. Countersignature and Registration 10
Section 6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates 10
Section 7. Exercise of Rights; Purchase Price 11
Section 8. Cancellation and Destruction of Rights Certificates 13
Section 9. Reservation and Availability of Common Stock 13
Section 10. Common Stock Record Date 14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights 15
Section 12. Certificate of Adjusted Purchase Price or Number of Shares 21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 22
Section 14. Fractional Rights and Fractional Shares 25
Section 15. Rights of Action 25
Section 16. Agreement of Rights Holders 25
Section 17. Rights Certificate Holder Not Deemed a Stockholder 26
Section 18. Concerning the Rights Agent 26
Section 19. Merger or Consolidation or Change of Name of Rights Agent 27
</TABLE>
(i)
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<TABLE>
<S> <C> <C>
Section 20. Duties of Rights Agent 27
Section 21. Change of Rights Agent 30
Section 22. Issuance of New Rights Certificates 31
Section 23. Redemption and Termination 31
Section 24. Exchange 32
Section 25. Notice of Certain Events 33
Section 26. Notices 33
Section 27. Supplements and Amendments 34
Section 28. Successors 35
Section 29. Determinations and Actions by the Board of Directors, etc. 35
Section 30. Benefits of this Agreement 35
Section 31. Severability 35
Section 32. Governing Law 35
Section 33. Counterparts 36
Section 34. Descriptive Headings 36
</TABLE>
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights to Purchase Common Stock
(ii)
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RIGHTS AGREEMENT
This Rights Agreement, dated as of December 8, 1995 (the "Agreement"),
between Lyondell Petrochemical Company, a Delaware corporation (the "Company"),
and The Bank of New York, a New York banking corporation (the "Rights Agent"),
W I T N E S S E T H:
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WHEREAS, on December 8, 1995 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend of one
Right for each share of common stock, par value $1.00 per share, of the Company
(the "Common Stock") outstanding at the close of business on December 20, 1995
(the "Record Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of Section 11(p)
hereof) for each share of Common Stock of the Company issued (whether originally
issued or delivered from the Company's treasury) between the Record Date and the
earlier of the Distribution Date (as hereinafter defined) and the Expiration
Date (as hereinafter defined), and, in certain circumstances provided for in
Section 22 hereof, after the Distribution Date, each Right initially
representing the right to purchase one share of Common Stock upon the terms and
subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding, but shall not include
any Exempt Person; provided, however, that a Person shall not be or become an
Acquiring Person if such Person, together with its Affiliates and Associates,
shall become the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding solely as a result of a reduction in the number of shares of
Common Stock outstanding due to the repurchase of Common Stock by the Company,
unless and until such time as such Person or any Affiliate or Associate of such
Person shall purchase or otherwise become the Beneficial Owner of additional
shares of Common Stock, constituting 1% or more of the then outstanding shares
of Common Stock, or any other Person (or Persons) who is (or collectively are)
the Beneficial Owner(s) of shares of Common Stock, constituting 1% or more of
the then outstanding shares of Common Stock, shall become an Affiliate or
Associate of such Person, unless, in either such case, such Person, together
with its Affiliates and Associates, is not then the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding; and provided, further,
that, notwithstanding anything in this definition of "Acquiring Person" to the
contrary (A) so long as ARCO, together with its Affiliates and Associates,
remains the Beneficial Owner of 15% or more of the outstanding shares of Common
Stock, ARCO shall not be or become an Acquiring Person unless and until such
time
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as ARCO or any Affiliate or Associate of ARCO shall purchase or otherwise become
the Beneficial Owner of, or any other Person (or Persons) shall become an
Affiliate or Associate of ARCO, which Person (or Persons) is (or are),
collectively with ARCO, the Beneficial Owner(s) of, more than the lesser of (1)
1,000,000 shares of Common Stock in addition to the number of shares of Common
Stock beneficially owned by ARCO at the date hereof (or, if ARCO or any
Affiliate or Associate of ARCO shall sell or otherwise dispose of shares of
Common Stock at any time or from time to time after the date hereof, 1,000,000
shares of Common Stock in addition to the fewest number of shares of Common
Stock beneficially owned by ARCO at any time and from time to time after the
date hereof) and (2) one share less than 50% of the shares of Common Stock at
any time then outstanding; provided, however, that ARCO shall not be or become
an Acquiring Person if ARCO, together with its Affiliates and Associates, shall
become the Beneficial Owner of more than one share less than 50% of the shares
of Common Stock at any time then outstanding solely as a result of a reduction
in the number of shares of Common Stock outstanding due to the repurchase of
Common Stock of the Company, unless and until such time as ARCO or any Affiliate
or Associate of ARCO shall purchase or otherwise become the Beneficial Owner of
any additional shares of Common Stock or any other Person (or Persons) who is
(or are) the Beneficial Owner(s) of any shares of Common Stock shall become an
Affiliate or Associate of ARCO, and (B) if, as of the date hereof, any Person
(other than ARCO), together with any of his or its Affiliates or Associates, is
the Beneficial Owner of a number of shares of Common Stock that would otherwise
cause such Person to be an Acquiring Person, such Person shall not be or become
an Acquiring Person, unless and until such time as such Person or any Affiliate
or Associate of such Person shall purchase or otherwise become the Beneficial
Owner(s) of additional shares of Common Stock, constituting 1% or more of the
then outstanding shares of Common Stock, or any other Person (or Persons) who is
(or are) the Beneficial Owner(s) of shares of Common Stock, constituting 1% or
more of the then outstanding shares of Common Stock, shall become an Affiliate
or Associate of such Person, unless, upon becoming the Beneficial Owner of such
additional shares of Common Stock, such Person, together with its Affiliates and
Associates, is not then the Beneficial Owner of 15% or more of the shares of
Common Stock outstanding; and provided, further, that if the Board of Directors
determines in good faith that any Person (including ARCO) that would otherwise
be an "Acquiring Person" has become such inadvertently (including, without
limitation, because (i) such Person was unaware that it beneficially owned a
percentage of Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (ii) such Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual knowledge of the consequences of
such Beneficial Ownership under this Agreement) and without any intention of
changing or influencing control of the Company, and if any such Person as
promptly as practicable divested or divests itself of Beneficial Ownership of a
sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Agreement.
At any time that the Rights are redeemable, the Board of Directors may,
with respect to any specified Person or Persons, determine to increase to a
specified percentage or amount greater than that set forth herein or decrease to
a specified percentage or amount lower than that set forth herein (but not lower
than the percentage or amount of Common Stock then beneficially owned by
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such Person), the level of Beneficial Ownership of Common Stock at which such
Person or Persons becomes an Acquiring Person.
"Adjustment Shares" shall have the meaning set forth in Section 11(a)(ii)
hereof.
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement; provided, however, that no Person shall be deemed an
"Affiliate" of ARCO solely by virtue of being an officer or director of ARCO
unless and until such officer or director, as the case may be, and ARCO (or an
Affiliate or Associate of ARCO) (i) have any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of the definition of "Beneficial Owner") or
disposing of any voting securities of the Company or (ii) are members of any
group (as that term is used in Rule 13d-5(b) of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement).
"ARCO" shall mean Atlantic Richfield Company, a Delaware corporation.
"Associate" shall mean, with reference to any Person, (i) any corporation,
firm, partnership, association, unincorporated organization or other entity
(other than the Company or a Subsidiary of the Company) of which such Person is
an officer or general partner (or officer or general partner of a general
partner) or is, directly or indirectly, the Beneficial Owner of 10% or more of
any class of equity securities, (ii) any trust or other estate in which such
Person has a substantial beneficial interest or as to which such Person has
investment discretion or voting power over any shares of Common Stock held in
such trust or estate and (iii) any relative or spouse of such Person, or any
relative of such spouse, who has the same home as such Person.
A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to
"beneficially own," any securities:
(i) that such Person or any of such Person's Affiliates or Associates,
directly or indirectly, is the "beneficial owner" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement) or otherwise has the right to vote or
dispose of, including pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," any security under
this subparagraph (i) as a result of an agreement, arrangement or understanding
to vote such security if such agreement, arrangement or understanding: (A)
arises solely from a revocable proxy or consent given in response to a public
(i.e., not including a solicitation exempted by Rule 14a-2(b)(2) of the General
Rules and Regulations under the Exchange Act, as in effect on the date of this
Agreement) proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and Regulations under the
Exchange Act and (B) is not then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report);
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(ii) that such Person or any of such Person's Affiliates or Associates,
directly or indirectly, has the right or obligation to acquire (whether such
right or obligation is exercisable or effective immediately or only after the
passage of time or the occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which Rights were
acquired by such Person or any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) or (p) hereof in connection with
an adjustment made with respect to any Original Rights, or (D) shares of Common
Stock that may be delivered upon exchange of the 9% Exchangeable Notes due
September 15, 1997 of ARCO unless and until such time as such shares of Common
Stock are delivered or deliverable by ARCO in exchange for such 9% Exchangeable
Notes due September 15, 1997; or
(iii) that are beneficially owned, directly or indirectly, by (A) any
other Person (or any Affiliate or Associate thereof) with which such Person or
any of such Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or consent as described in the
proviso to subparagraph (i) of this definition) or disposing of any voting
securities of the Company or (B) any group (as that term is used in Rule 13d-
5(b) of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Agreement) of which such Person is a member;
provided, however, that nothing in this definition shall cause a Person engaged
in business as an underwriter of securities to be the "Beneficial Owner" of, or
to "beneficially own," any securities 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. For purposes of
this Agreement, "voting" a security shall include voting, granting a proxy,
acting by written consent in lieu of a meeting, making a request or demand to
call a stockholder meeting or otherwise giving an authorization (within the
meaning of Section 14(a) of the Exchange Act, as in effect on the date of this
Agreement) in respect of such security.
"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.
"close of business" on any given date shall mean 5:00 p.m., New York City
time, on such date; provided, however, that if such date is not a Business Day,
it shall mean 5:00 p.m., New York City time, on the next succeeding Business
Day.
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"Closing Price" of a security for any day shall mean the last sales price,
regular way, on such day or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, on such day, in either
case as reported in the principal transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange, or, if
such security is not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which such security
is listed or admitted to trading, or, if such security is not listed or admitted
to trading on any national securities exchange but sales price information is
reported for such security, as reported by NASDAQ or such other self-regulatory
organization or registered securities information processor (as such terms are
used under the Exchange Act) that then reports information concerning such
security, or, if sales price information is not so reported, the average of the
high bid and low asked prices in the over-the-counter market on such day, as
reported by NASDAQ or such other entity, or, if on such day such security is not
quoted by any such entity, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such security
selected by the Board of Directors of the Company. If on such day no market
maker is making a market in such security, the fair value of such security on
such day as determined in good faith by the Board of Directors of the Company
shall be used.
"Common Stock" shall mean the common stock, par value $1.00 per share, of
the Company, except that "Common Stock" when used with reference to equity
interests issued by any Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the management, of such
Person.
"Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Company" shall mean the Person named as the "Company" in the preamble of
this Agreement until a successor Person shall have become such or until a
Principal Party shall assume, and thereafter be liable for, all obligations and
duties of the Company hereunder, pursuant to the applicable provisions of this
Agreement, and thereafter "Company" shall mean such successor Person or
Principal Party.
"Current Market Price" shall have the meaning set forth in Section 11(d)
hereof.
"Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
"Distribution Date" shall mean the earlier of (i) the close of business on
the tenth day (or, if such Stock Acquisition Date results from the consummation
of a Permitted Offer, such later date as may be determined prior to such time as
any Person becomes an Acquiring Person by the Company's Board of Directors)
after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date) or (ii) the close of business on the tenth Business Day (or such
later date as may be determined prior to such time as any Person becomes an
Acquiring Person by the Company's Board of Directors) after
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the date that a tender offer or exchange offer by any Person (other than any
Exempt Person) is first published or sent or given within the meaning of Rule
14d-2(a) of the General Rules and Regulations under the Exchange Act, as then in
effect, if upon consummation thereof, such Person would be an Acquiring Person,
other than a tender or exchange offer that is determined before the Distribution
Date occurs to be a Permitted Offer. The Board of Directors of the Company may,
to the extent set forth in the preceding sentence, defer the date set forth in
clause (i) or (ii) of the preceding sentence to a specified later date or to an
unspecified later date to be determined by a subsequent action or event (but in
no event to a date later than the close of business on the tenth day after the
occurrence of a Triggering Event).
"Equivalent Common Stock" shall have the meaning set forth in Section 11(b)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Ratio" shall have the meaning set forth in Section 24 hereof.
"Exempt Person" shall mean the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, and
any Person organized, appointed or established by the Company for or pursuant to
the terms of any such plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the Company or any Subsidiary
of the Company.
"Expiration Date" shall mean the earliest of (i) the Final Expiration Date,
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof,
(iii) the time at which the Rights expire pursuant to Section 13(d) hereof and
(iv) the time at which all Rights then outstanding and exercisable are exchanged
pursuant to Section 24 hereof.
"Final Expiration Date" shall mean the close of business on December 8,
2005.
"Flip-In Event" shall mean an event described in Section 11(a)(ii) hereof.
"Flip-In Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Flip-Over Event" shall mean any event described in clause (x), (y) or (z)
of Section 13(a) hereof, but excluding any transaction described in Section
13(d) hereof that causes the Rights to expire.
"NASDAQ" shall mean the National Association of Securities Dealers, Inc.
Automated Quotations System.
"Original Rights" shall have the meaning set forth in the definition of
"Beneficial Owner."
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"Permitted Offer" shall mean a tender offer or an exchange offer for all
outstanding shares of Common Stock at a price and on terms determined, prior to
the time the person making the offer or any Affiliate or Associate thereof
becomes an Acquiring Person, by at least a majority of the members of the Board
of Directors who are not officers or employees of the Company and who are not
(and are not representatives, nominees or Affiliates or Associates of) either an
Acquiring Person or the person making the offer, after receiving advice from one
or more investment banking firms, to be (a) at a price and on terms that are
fair to stockholders (taking into account all factors that such members of the
Board deem relevant including, without limitation, prices that could reasonably
be achieved if the Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best interests of the Company
and its stockholders.
"Person" shall mean any individual or any firm, corporation, limited
liability company, partnership, association, trust, unincorporated organization
or other entity and shall include any successor of any such entity by merger,
consolidation, transfer of all or substantially all assets or otherwise.
"Principal Party" shall have the meaning set forth in Section 13(b) hereof.
"Purchase Price" shall have the meaning set forth in Section 7(b) hereof.
"Record Date" shall have the meaning set forth in the recitals clause at
the beginning of this Agreement.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Rights" shall have the meaning set forth in the recitals clause at the
beginning of this Agreement.
"Rights Agent" shall mean the Person named as the "Rights Agent" in the
preamble of this Agreement until a successor Rights Agent shall have become such
pursuant to the applicable provisions hereof, and thereafter "Rights Agent"
shall mean such successor Rights Agent. If at any time there is more than one
Person appointed by the Company as Rights Agent pursuant to the applicable
provisions of this Agreement, "Rights Agent" shall mean and include each such
Person.
"Rights Certificates" shall mean the certificates evidencing the Rights.
"Rights Dividend Declaration Date" shall have the meaning set forth in the
recitals clause at the beginning of this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
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"Stock Acquisition Date" shall mean the first date of public announcement
(which, for purposes of this definition and Section 23, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
"Subsidiary" shall mean, with reference to any Person, any corporation or
other Person of which an amount of voting securities sufficient to elect at
least a majority of the directors or other persons performing similar functions
is beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Summary of Rights" shall mean the Summary of Rights to Purchase Common
Stock sent pursuant to Section 3(b) hereof.
"Trading Day" with respect to a security shall mean a day on which the
principal national securities exchange on which such security is listed or
admitted to trading is open for the transaction of business, or, if such
security is not listed or admitted to trading on any national securities
exchange but is quoted by NASDAQ, a day on which NASDAQ reports trades, or, if
such security is not so quoted, a Business Day.
"Triggering Event" shall mean any Flip-In Event or any Flip-Over Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and to take certain actions in
respect of the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such Co-
Rights Agents as it may deem necessary or desirable upon ten days' prior written
notice to the Rights Agent. The Rights Agent shall have no duty to supervise,
and in no event shall be liable for the acts or omissions of, any such Co-Rights
Agent.
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date, (x) the Rights will be evidenced (subject
to the provisions of paragraph (b) of this Section 3) by the certificates for
Common Stock registered in the names of the holders of the Common Stock and not
by separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock (including
a transfer to the Company). The Company shall give the Rights Agent prompt
written notice of the Distribution Date. As soon as practicable after the
Distribution Date and receipt of written notice of the Distribution Date from
the Company, the Rights Agent will, at the Company's expense, send by first-
class, insured, postage prepaid mail, to each record holder of the Common Stock
(other than a Person whose Rights shall have become null and void pursuant to
Section 7(e) hereof) as of the close of business on the Distribution Date, at
the address of such holder shown on
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the records of the Company, one or more Rights Certificates, in substantially
the form attached hereto as Exhibit A, evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit B, by first-class, postage prepaid mail, to each record holder of Common
Stock as of the close of business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date or
the earlier surrender for transfer thereof or the Expiration Date, the Rights
associated with the shares of Common Stock represented by such certificates
shall be evidenced by such certificates for Common Stock together with the
Summary of Rights, and the registered holders of the Common Stock shall also be
the registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any of the
certificates for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
(c) Rights shall be issued in respect of all shares of Common Stock that
are issued (whether originally issued or delivered from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date or, in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates issued representing such shares of
Common Stock that shall so become outstanding or shall be transferred or
exchanged after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date shall also be deemed to be certificates for Rights,
and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Lyondell
Petrochemical Company (the "Company") and The Bank of New York (the "Rights
Agent") dated as of December 8, 1995 as it may from time to time be
supplemented or amended (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed, may be
exchanged, may expire or may be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt of a written
request therefor. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO
IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS
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AGREEMENT), AND CERTAIN TRANSFEREES THEREOF, WILL BECOME NULL AND VOID AND
WILL NO LONGER BE TRANSFERABLE.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Stock represented by such certificates shall be evidenced by
such certificates alone, and registered holders of Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates. The Rights Certificates
(and the forms of election to purchase and of assignment to be printed on the
reverse thereof), when, as and if issued, shall be substantially in the form set
forth in Exhibit 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 applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange or quotation system on which the Rights may from time to time
be listed or quoted, or to conform to usage. The Rights Certificates shall be
in a machine printable format and in a form reasonably satisfactory to the
Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever issued, shall be dated as of the Record Date,
shall show the date of countersignature 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 set forth therein, but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof, which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be countersigned by an authorized signatory of the
Rights Agent, either manually or by facsimile signature, and shall not be valid
for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
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(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the certificate number and the date of each of the Rights
Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 7(e), Section 13(d), Section
14 and Section 24 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock (or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitled such holder (or former holder in the case
of a transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged at the office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof or of the
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 7(e), Section 13(d),
Section 14 and Section 24 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment by the holder of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will, subject to Section 7(e), Section 13(d), Section 14
and Section 24, execute and deliver a new Rights Certificate of like tenor to
the Rights Agent for countersignature and delivery to the registered owner in
lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
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Section 7. Exercise of Rights; Purchase Price.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly completed and executed, to the
Rights Agent at the office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of shares of Common Stock (or other securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $80 and shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below (such exercise price per share of
Common Stock (or, as set forth in this Agreement, for any other securities)
being referred to herein as the "Purchase Price").
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the reverse
side thereof duly executed, accompanied by payment, with respect to the Rights
so exercised, of the Purchase Price per share of Common Stock (or other shares,
other securities, cash or other assets, as the case may be) to be purchased as
set forth below and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) requisition
from any transfer agent of the shares of Common Stock (or make available, if the
Rights Agent is the transfer agent for the Common Stock) certificates for the
total number of shares of Common Stock to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu of
fractional shares of Common Stock in accordance with Section 14 hereof, (iii)
after receipt of such certificates for shares of Common Stock, cause the same to
be delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder and (iv) after receipt thereof, deliver such cash, if any, to or upon the
order of the registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) may be made in cash or by certified check, cashiers or official bank
check or bank draft payable to the order of the Company or the Rights Agent. In
the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to Section 11(a) or
Section 13(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of,
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the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the provisions of Section
14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Triggering Event, any Rights beneficially
owned by or transferred to (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person other than any such Person that became such pursuant to a
Permitted Offer and, after such Triggering Event, the Board of Directors in good
faith determined was not involved in and did not cause or facilitate, directly
or indirectly, such Triggering Event, (ii) a direct or indirect transferee of
such Rights from such Acquiring Person (or any such Associate or Affiliate) who
becomes a transferee after such Triggering Event or (iii) a direct or indirect
transferee of such Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with such Triggering Event and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from such Acquiring Person (or such Affiliate or Associate) to
holders of equity interests in such Acquiring Person (or such Affiliate or
Associate) or to any Person with whom such Acquiring Person (or such Affiliate
or Associate) has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board of Directors
of the Company determines is part of a plan, arrangement or understanding that
has as a primary purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action, no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise, and such Rights shall not be
transferable. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) are complied with, but shall have no liability
to any holder of Rights Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company.
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Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Common Stock
(and, following the occurrence of a Triggering Event, any other securities) or
out of its authorized and issued shares held in its treasury, the number of
shares of Common Stock (and, following the occurrence of a Triggering Event, any
other securities) that, as provided in this Agreement, including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Common Stock (and, following the
occurrence of a Triggering Event, any other securities) issuable and deliverable
upon the exercise of the Rights may be listed on any national securities
exchange or quoted on any trading system, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable (but only to
the extent it is reasonably likely that the Rights will be exercised), all
shares reserved for such issuance to be listed on such exchange, or quoted on
such system, upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) prepare and file, as
soon as practicable following the occurrence of a Flip-In Event or, if
applicable, as soon as practicable following the earliest date after the
occurrence of a Flip-In Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined pursuant to this
Agreement (including in accordance with Section 11(a)(iii) hereof), a
registration statement on an appropriate form under the Securities Act with
respect to the Common Stock or other securities purchasable upon exercise of the
Rights, (ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed 90 days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to become
effective. In addition, if the Company shall determine that the Securities Act
requires an effective registration statement under the Securities Act following
the Distribution Date, the Company may temporarily suspend the exercisability of
the Rights until such time as such a registration statement has been declared
effective. Upon any such suspension, the Company shall issue a public
announcement, and shall give simultaneous written notice to the Rights Agent,
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement, with simultaneous written notice to the Rights
Agent, at such time as the suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise thereof shall not be
permitted under applicable law or any required registration statement shall not
have been declared effective. In the absence of notice to the contrary
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from the Company, the Rights Agent may assume that the Rights may be exercised
and shall have no liability for acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Common Stock (and, following
the occurrence of a Triggering Event, any other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges that may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for 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 that may be payable in respect of any transfer
or delivery of Rights Certificates to a Person other than, or the issuance or
delivery of shares of Common Stock (or other securities, as the case may be) in
respect of a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates for shares of Common Stock (or other securities, as the case
may be) in a name other than that of the registered holder upon the exercise of
any Rights until such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
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 shares of Common Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Common Stock (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 (or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate, as such, shall not be entitled to any rights of
a stockholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares of
Common Stock or other securities, as the case may be, subject to purchase upon
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
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(a)(i) In the event the Company shall at any time after the Rights
Dividend Declaration Date (A) declare or pay a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (B) subdivide the
outstanding shares of Common Stock, (C) combine the outstanding shares of Common
Stock into a smaller number of shares 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 this Section 11(a) and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of Common Stock or other securities, 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 other securities, 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 (or
other securities, as the case may be) transfer books of the Company were open,
he would have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Sections 23 and 24 of this Agreement, in the event any
Person shall, at any time after the Rights Dividend Declaration Date, become an
Acquiring Person, unless the event causing such Person to become an Acquiring
Person is (1) a Flip-Over Event or (2) an acquisition of shares of Common Stock
pursuant to a Permitted Offer (provided that this clause (2) shall cease to
apply if such Acquiring Person thereafter becomes the Beneficial Owner of any
additional shares of Common Stock other than pursuant to such Permitted Offer or
a transaction set forth in Section 13(d) hereof), then (x) the Purchase Price
shall be adjusted to be the Purchase Price immediately prior to the occurrence
of such Flip-In Event multiplied by the number of shares of Common Stock for
which a Right was exercisable immediately prior to such occurrence and (y) each
holder of a Right (except as provided below in Section 11(a)(iii) and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise thereof
at a price equal to such adjusted Purchase Price in accordance with the terms of
this Agreement, such number of shares of Common Stock of the Company as shall
equal the result obtained by dividing such adjusted Purchase Price by 50% of the
Current Market Price per share of Common Stock on the date of such occurrence
(such number of shares, the "Adjustment Shares"); provided that such adjusted
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 occurrence.
(iii) In the event that the number of shares of Common Stock that
are authorized by the Company's Restated Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii)
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of this Section 11(a), the Company shall, to the extent permitted by applicable
law and regulation, (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (computed using the Current Market
Price used to determine the number of Adjustment Shares) (the "Current Value")
over (2) the Purchase Price, as adjusted pursuant to subparagraph (ii) of this
Section 11(a) (such excess is herein referred to as the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute for the Adjustment
Shares, upon the exercise of the Rights and payment of such adjusted Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock that the Board of Directors of the
Company has determined to have the same value as shares of Common Stock and has
determined is available for issuance in such circumstances taking into account,
among other things, the relevant provisions in the Company's Restated
Certificate of Incorporation relating to such preferred stock (such shares or
units of shares of preferred stock are herein referred to as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
however, if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within 30 days following the date of the occurrence
of a Flip-In Event (the "Flip-In Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise in full of
the Rights, the 30-day period set forth above may be extended to the extent
necessary, but not more than 90 days after the Flip-In Trigger Date, in order
that the Company may seek stockholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company or the Board of Directors determines
that some action need be taken pursuant to the first and/or second sentences of
this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement, and shall give
simultaneous written notice to the Rights Agent, stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement,
with simultaneous written notice to the Rights Agent, at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Market Price per share of the
Common Stock on the Flip-In Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such
date.
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(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of shares of
Common Stock entitling them to subscribe for or purchase (for a period expiring
within 45 calendar days after such record date) shares of Common Stock (or
shares having substantially the same rights, privileges and preferences as the
shares of Common Stock ("Equivalent Common Stock")) or securities convertible
into Common Stock or Equivalent Common Stock at a price per share of Common
Stock or per share of 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 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 that the aggregate offering price of the total number of shares of
Common Stock and/or Equivalent Common Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of 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 in the event that
such rights or warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in 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) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price per share of
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 and shall be binding on
the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of 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 in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
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(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock of a Person on any date shall be deemed to be
the average of the daily Closing Prices per share of such Common Stock for the
30 consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily Closing Prices per share of such Common Stock for the 10
consecutive Trading Days immediately following such date; provided, however,
that in the event that the Current Market Price per share of Common Stock is
determined during a period following the announcement of (A) a dividend or
distribution on such Common Stock other than a regular quarterly cash dividend
or the dividend of the Rights or (B) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall not have occurred prior to the commencement of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, then, and
in each such case, the Current Market Price shall be properly adjusted to take
into account ex-dividend trading. If the Common Stock is not publicly held or
not so listed or traded, "Current Market Price" per share shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments that by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive in respect of such Right any shares of capital stock other
than Common Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of Common Stock
contained in Sections 11(a), (b), (c), (e), (f), (g), (h), (i), (j), (k) and (m)
hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect
to the 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.
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(h) Unless the Company shall have exercised its election as provided
in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c) hereof, 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 one ten-thousandth) obtained
by (i) multiplying (x) the number of shares of Common Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any adjustment of
the Purchase Price as a result of the calculations made in accordance with
Sections 11(b) and/or (c) hereof, 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, with
simultaneous written notice to the Rights Agent, of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This record date may be
the date on which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least 10 days later than
the date of the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares of Common Stock
that were expressed in the initial Rights Certificates issued hereunder.
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(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, or the stated capital of
the number of shares of Common Stock or other securities issuable upon exercise
of a Right, the Company shall take any corporate action that may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of shares of Common Stock or
other securities at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of shares of Common Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the number of
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 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 their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that the following shall not be
taxable to holders of Common Stock: (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 that 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.
(n) The Company covenants and agrees that it shall not, at any time
that there is an Acquiring Person, (i) consolidate with any other Person, (ii)
merge with or into any other Person, or (iii) sell, lease or transfer (or permit
one or more Subsidiaries to sell, lease or transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the Company and/or any of
its wholly owned Subsidiaries in one or more transactions each of which complies
(and all of which together comply) with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger, sale, lease or transfer
there are any rights, warrants or other instruments or securities of the Company
or any other Person outstanding or agreements, arrangements or understandings in
effect that would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale, lease or transfer, the
stockholders or other equity owners of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) hereof shall
have received a distribution of Rights previously owned by such Person or any of
its Affiliates or Associates, or (z) the identity, form or
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nature of organization of the Principal Party (including without limitation the
selection of the Person that will be the Principal Party as a result of the
Company's entering into one or more consolidations, mergers, sales, leases,
transfers or transactions with more than one party) would preclude or limit the
exercise of Rights or otherwise diminish substantially or eliminate the benefits
intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, Section 24 or Section 27
hereof, take (or permit any Subsidiary to take) any action if the purpose of
such action is to, or if at the time such action is taken it is reasonably
foreseeable that such action will, diminish substantially or eliminate the
benefits intended to be afforded by the Rights.
(p) In the event that at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date, the Company shall (i)
declare or pay a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
(iii) combine the outstanding shares of Common Stock into a smaller number of
shares or (iv) otherwise reclassify the outstanding shares of Common Stock, then
in any such case the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter, shall be proportionately
adjusted so that the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction, the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Common Stock, a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Rights Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock) in accordance
with Section 26 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) Subject to Section 13(d), in the event that, from and after the
time an Acquiring Person has become such, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person, and
the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger, and, in connection with such
consolidation or merger, all or part of the
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outstanding shares of Common Stock shall be changed into or exchanged for stock
or other securities of the Company or any other Person or cash or any other
property, or (z) the Company shall sell, lease or otherwise transfer (or one or
more of its Subsidiaries shall sell, lease or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any wholly owned Subsidiary of the Company or any combination thereof in one
or more transactions each of which complies (and all of which together comply)
with Section 11(o) hereof), then, and in each such case, proper provision shall
be made so that: (i) the Purchase Price shall be adjusted to be the Purchase
Price immediately prior to the first occurrence of a Triggering Event multiplied
by the number of shares of Common Stock for which a Right was exercisable
immediately prior to such first occurrence; (ii) on and after the Distribution
Date, each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at such adjusted
Purchase Price in accordance with the terms of this Agreement, in lieu of shares
of Common Stock of the Company, such number of validly authorized and issued,
fully paid, nonassessable and freely tradeable shares of Common Stock of the
Principal Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by dividing such adjusted Purchase Price by 50% of the
Current Market Price per share of the Common Stock of such Principal Party on
the date of consummation of such Flip-Over Event; provided that such adjusted
Purchase Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
this Agreement to reflect any events occurring after the date of such first
occurrence of a Triggering Event; (iii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Flip-Over Event, all the
obligations and duties of the Company pursuant to this Agreement; (iv) the term
"Company" shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply only
to such Principal Party following the first occurrence of a Flip-Over Event; (v)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and (vi) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the occurrence of any Flip-Over Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a), (A) the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, or, if there is more than one such issuer, the
issuer the Common Stock of which has the greatest aggregate market value, or (B)
if no securities are so issued, (x) the Person that survives such consolidation
or is the other party to the merger and survives such merger, or, if there is
more than one such Person, the Person the Common Stock of which has the greatest
aggregate market value or (y) if the Person that is the other party to the
merger does not survive the merger, the Person that does survive the merger
(including the Company if it survives); and
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(ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such transaction
or transactions, or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning power so
transferred, or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, the Person the Common Stock of which has the
greatest aggregate market value;
provided, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act, and if (1) such Person
is a direct or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such other
Person; (2) such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of all of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest aggregate market value; and (3) such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a "Subsidiary" of both
or all of such joint venturers and the Principal Parties in each such chain
shall bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any Flip-Over Event unless each
Principal Party (or Person that may become a Principal Party as a result of such
Flip-Over Event) shall have a sufficient number of authorized shares of its
Common Stock that have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and each such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of such Flip-Over Event, the
Principal Party at its own expense will
(i) prepare and file a registration statement under the Securities Act with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the "blue sky" laws of
such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts, if the Common Stock of the Principal Party
is or shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange and,
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if the Common Stock of the Principal Party shall not be listed on a national
securities exchange, to cause the Rights and the securities purchasable upon
exercise of the Rights to be reported by NASDAQ or such other transaction
reporting system then in use; and
(iv) deliver to holders of the Rights historical financial statements for
the Principal Party and each of its Affiliates that comply in all respects with
the requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Flip-Over Event
shall occur at any time after the occurrence of a Flip-In Event, the Rights that
have not theretofore been exercised shall thereafter become exercisable in the
manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a Permitted
Offer (or a wholly owned subsidiary of any such Person or Persons), (ii) the
price per share of Common Stock offered in such transaction is not less than the
price per share of Common Stock paid to all holders of Common Stock whose shares
were purchased pursuant to such Permitted Offer, and (iii) the form of
consideration being offered to the remaining holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid
pursuant to such Permitted Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
(e) In no event shall the Rights Agent have any liability in respect
of any such Principal Party transactions, including, without limitation, the
propriety thereof. The Rights Agent may rely and be fully protected in relying
upon a certificate of the Company stating that the provisions of this Section 13
have been fulfilled. Notwithstanding anything in this Agreement to the
contrary, the prior written consent of the Rights Agent must be obtained in
connection with any supplemental agreement which alters the rights or duties of
the Rights Agent.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p) hereof, or
to distribute Rights Certificates or scrip evidencing fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
Closing Price of one Right for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates or scrip
evidencing fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the
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registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the Closing
Price of one share of Common Stock for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares of
Common Stock upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent pursuant
to Section 18 hereof, are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the registered holders
of the Common Stock) and, where applicable, the Company; and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
After a Triggering Event, holders of Rights shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred by them in
any action to enforce the provisions of this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be evidenced
by Rights Certificates and will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the form of
assignment set forth on the reverse side thereof and the certificate contained
therein duly completed and fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than
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the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock or any other securities of the Company that may at any time be
issuable upon the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent such compensation
for all services rendered by it hereunder as shall be agreed to in writing
between the Company and the Rights Agent and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and disbursements and
other reasonable disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability. The provisions of this Section 18(a) shall
survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document believed
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by it, after proper inquiry or examination, to be genuine and to be signed and
executed by the proper Person or Persons and, where necessary, guaranteed,
verified or acknowledged.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations expressly imposed by this Agreement (and no implied
duties or obligations shall be read into this Agreement against the Rights
Agent) upon the following terms and conditions, by all of which the Company and
the holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection
(who may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "Current Market Price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter
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(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, the Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct. In no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 13 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt by the Rights Agent of actual knowledge of any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or other securities to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common Stock or other
securities will, when so issued, be validly authorized and issued, fully paid
and nonassessable, nor shall the Rights Agent be responsible for the legality of
the terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Treasurer, the
Secretary or any Assistant Secretary 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
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such officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed
to be taken or omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in such
application on or after the date specified in such application (which date shall
not be less than three Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
omission, default, neglect or misconduct; provided, however, that reasonable
care was exercised in the selection thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
(l) In addition to the foregoing, the Rights Agent shall be protected
and shall incur no liability for, or in respect of, any action taken or omitted
by it in connection with its administration of this Agreement, if such acts or
omissions are in reliance upon (i) the certification concerning beneficial
ownership appended to the form of assignment and the form of election to
exercise attached hereto, unless the Rights Agent shall have actual knowledge
that, as executed, such certification is untrue, or (ii) the non-execution of
such certification including, without limitation,
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any refusal to honor any otherwise permissible assignment or election by reason
of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written notice
of any event or ownership that would prohibit the exercise or transfer of the
Rights Certificates.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock, by registered or certified mail. The
Company may remove the Rights Agent or any successor Rights Agent (with or
without cause) upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock, by registered or certified mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the Rights Agent or the registered holder of
any Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the State
of New York (or of any other state of the United States so long as such
corporation is authorized to conduct a stock transfer or corporate trust
business in the State of New York), in good standing, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered
holders, if any, of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of
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Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date,
the Company (a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement granted or awarded on or prior to the Distribution Date, or upon the
exercise, conversion or exchange of securities issued by the Company on or prior
to the Distribution Date, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the time a Person becomes an Acquiring Person, cause the Company
to redeem all but not less than all the then outstanding Rights at a redemption
price of $.005 per Right, as such amount may be appropriately adjusted, if
necessary, to reflect any stock split, stock dividend or similar transaction
occurring after the Rights Dividend Declaration Date (such redemption price
being hereinafter referred to as the "Redemption Price"). The Company may, at
its option, pay the Redemption Price in cash, shares of Common Stock (based on
the Current Market Price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the redemption of the Rights (the
effectiveness of which action may be conditioned on the occurrence of one or
more events or on the existence of one or more facts or may be effective at some
future time), evidence of which shall be filed with the Rights Agent and without
any further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held. Promptly after the
effectiveness of the action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the registered holders of the then outstanding Rights by mailing such notice
to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the Company for the Common Stock. Any notice that is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
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Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any
time and from time to time after the occurrence of a Flip-In Event, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock or Common Stock Equivalents or any combination
thereof, at an exchange ratio of one share of Common Stock, or such number of
Common Stock Equivalents or units representing fractions thereof as would be
deemed to have the same value as one share of Common Stock, per Right,
appropriately adjusted, if necessary, to reflect any stock split, stock dividend
or similar transaction occurring after the Rights Dividend Declaration Date
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors may not effect such
exchange at any time after (i) any Person, together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding (other than (A) an Exempt Person or (B)
ARCO, if it has not become an Acquiring Person) or (ii) the occurrence of a
Flip-Over Event.
(b) Immediately upon the effectiveness of the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to and in
accordance with subsection (a) of this Section 24 (the effectiveness of which
action may be conditioned on the occurrence of one or more events or on the
existence of one or more facts or may be effective at some future time) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock and/or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice, with
simultaneous written notice to the Rights Agent, of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the registered holders of such Rights at their
last addresses as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
will state the method by which the exchange of the shares of Common Stock and/or
Common Stock Equivalents for Rights will be effected and, in the event of any
partial exchange, the number of Rights that will be exchanged. Any partial
exchange shall be effected as nearly pro rata as possible based on the number of
Rights (other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock that are
authorized by the Company's Restated Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights is not sufficient to permit an exchange of Rights as contemplated in
accordance with this Section 24, the Company may, at its option, take all such
action as may be necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights.
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(d) The Company shall not be required to issue fractions of shares of
Common Stock upon exchange of the Rights or to distribute certificates or scrip
evidencing fractional shares of Common Stock. In lieu of such fractional shares
of Common Stock, the Company may pay to the registered holders of Rights with
regard to which such fractional shares of Common Stock would otherwise be
issuable an amount in cash equal to the same fraction of the value of a whole
share of Common Stock. For purposes of this Section 24, the value of a whole
share of Common Stock shall be the Closing Price per share of Common Stock for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24, and the value of any Common Stock Equivalent shall be deemed to have
the same value as the Common Stock on such date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Common Stock or to make any other distribution to the holders of
Common Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Common
Stock rights or warrants to subscribe for or to purchase any additional shares
of Common Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a wholly owned Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or to effect any sale,
lease or other transfer of all or substantially all the Company's assets to any
other Person or Persons (other than a wholly owned Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of record of a Rights Certificate and to
the Rights Agent, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale, lease,
transfer, liquidation, dissolution or winding up is to take place and the date
of participation therein by the holders of the shares of 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 20 days prior to the record
date for determining holders of the shares of Common Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of 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) In case any Flip-In Event or Flip-Over Event shall occur, then the
Company shall as soon as practicable thereafter give to the Rights Agent and
each holder of a Rights Certificate (or if occurring prior to the Distribution
Date, the holders of Common Stock), in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall specify the event and
the consequences of the event to holders of Rights under Section 11(a)(ii) or
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Section 13(a) hereof, and (ii) all references in the preceding paragraph to
Common Stock shall, to the extent appropriate, also be deemed thereafter to
refer to other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Lyondell Petrochemical Company
1221 McKinney Street, Suite 1600
Houston, Texas 77010
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The Bank of New York
101 Barclay Street, Floor 12W
New York, New York 10286
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Except as provided in the
last sentence of this Section 27, at any time when the Rights are then
redeemable, the Company may in its sole and absolute discretion and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of any holders of Rights or
the holders of Common Stock. At any time when the Rights are not redeemable,
except as provided in the last sentence of this Section 27, the Company may and
the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein that may
be defective or inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable; and any such amendment shall not materially adversely affect the
interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, that this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed or when
this Agreement may be supplemented or amended pursuant to this
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first sentence of this Section 27, or (B) any other time period unless such
lengthening of such other time period is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of
Rights (other than any Acquiring Person and its Affiliates and Associates).
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment; provided, however, that the Rights Agent may, but shall not be
obligated to, enter into any such supplement or amendment that affects the
Rights Agent's own rights, duties or immunities under this Agreement.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made that decreases the Redemption Price.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company (or, as set forth herein,
certain specified members thereof) shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors of the Company in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties, and (y) not subject the
Board of Directors to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or
-36-
<PAGE>
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.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State; provided, however, that the
rights and obligations of the Rights Agent shall be governed by and construed in
accordance with the laws of the State of New York.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
LYONDELL PETROCHEMICAL COMPANY
By ________________________________
Name:
Title:
THE BANK OF NEW YORK, as Rights Agent
By _________________________________
Name:
Title:
-37-
<PAGE>
Exhibit A
---------
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER DECEMBER 8, 2005 OR EARLIER IF REDEEMED OR EXCHANGED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.005 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
RIGHTS CERTIFICATE
LYONDELL PETROCHEMICAL COMPANY
This certifies that _____________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement, dated as of December 8, 1995 as it may from time to time
be supplemented or amended (the "Rights Agreement"), between Lyondell
Petrochemical Company, a Delaware corporation (the "Company"), and The Bank of
New York, a New York banking corporation (the "Rights Agent"), to purchase from
the Company at any time prior to 5:00 p.m. (New York City time) on December 8,
2005 at the office or offices of the Rights Agent designated for such purpose,
or its successors as Rights Agent, one fully paid, nonassessable share of Common
Stock, par value $1.00 per share ("Common Stock"), of the Company, at a purchase
price of $80 per share of Common Stock (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate set forth on the reverse hereof duly executed. The
Purchase Price may be paid in cash or by certified check, cashiers or official
bank check or bank draft payable to the order of the Company or the Rights
Agent. The number of Rights evidenced by this Rights Certificate (and the
number of shares of Common Stock which may be purchased upon exercise thereof)
set forth above, and the Purchase Price per share of Common Stock set forth
above, are the number and Purchase Price as of December 8, 1995, based on the
Common Stock as constituted at such date.
A-1
<PAGE>
From and after the first occurrence of a Triggering Event (as such
term is defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by or transferred to (i) an Acquiring Person
(other than an Acquiring Person who became such pursuant to a Permitted Offer)
or an Associate or Affiliate of such an Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a person who, concurrently with or
after such transfer, became such an Acquiring Person or an Affiliate or
Associate of such an Acquiring Person, such Rights shall become null and void in
the circumstances set forth in the Rights Agreement, and no holder hereof shall
have any rights whatsoever with respect to such Rights from and after the
occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Common Stock or other securities or assets that may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available free of charge upon written request to the
Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $.005 per Right, payable, at the election of the
Company, in cash or shares of Common Stock or such other consideration as the
Board of Directors may determine, at any time prior to the time a person becomes
an Acquiring Person or (ii) may be exchanged in whole or in part for shares of
Common Stock and/or other equity securities of the Company deemed to have the
same value as shares of Common Stock, at any time prior to the occurrence of a
Flip-Over Event or a person becoming the beneficial owner of 50% or more of the
shares of Common Stock outstanding.
A-2
<PAGE>
No fractional shares of Common Stock are required to be issued upon
the exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Common Stock or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ______________, 199__
ATTEST: LYONDELL PETROCHEMICAL COMPANY
________________________ By ________________________________
Secretary Title:
Countersigned:
THE BANK OF NEW YORK, as Rights Agent
By ________________________________
Authorized Signatory
Date of countersignature:
A-3
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer any Rights evidenced by the Rights Certificate.)
FOR VALUE RECEIVED ________________________________________ hereby sells,
assigns and transfers unto ___
(Please print name and address of transferee)
_________ Rights evidenced by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
__________________ Attorney, to transfer the said Rights on the books of the
within-named Company, with full power of substitution.
Dated: _________________, 199__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
A-4
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or who is a direct or indirect
transferee of an Acquiring Person or of an Affiliate or Associate of an
Acquiring Person.
Dated: _____________, 199__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: LYONDELL PETROCHEMICAL COMPANY
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares (or other securities) be
issued in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: ____________, 199__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
A-6
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or who is a direct or indirect transferee of an
Acquiring Person or of an Affiliate or Associate of an Acquiring Person.
Dated: _____________, 199__
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a national securities
exchange, a member of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or another eligible guarantor institution (as defined pursuant to Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended).
NOTICE
The signatures to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
A-7
<PAGE>
Exhibit B
---------
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS, WAS OR BECOMES AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT), AND CERTAIN TRANSFEREES THEREOF, WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On December 8, 1995, the Board of Directors of Lyondell Petrochemical
Company (the "Company") declared a dividend of one right ("Right") for each
outstanding share of the Company's Common Stock, par value $1.00 per share
("Common Stock"), to stockholders of record at the close of business on December
20, 1995. Each Right entitles the registered holder to purchase from the
Company one share of Common Stock at a purchase price of $80 per share of Common
Stock, subject to adjustment (the "Purchase Price"). The description and terms
of the Rights are set forth in a Rights Agreement dated as of December 8, 1995
as it may from time to time be supplemented or amended (the "Rights Agreement")
between the Company and The Bank of New York, as Rights Agent.
Initially, the Rights will be attached to all certificates
representing outstanding shares of Common Stock, and no separate certificates
for the Rights ("Rights Certificates") will be distributed. The Rights will
separate from the Common Stock and a "Distribution Date" will occur, with
certain exceptions, upon the earlier of (i) ten days following a public
announcement of the existence of an "Acquiring Person" (the date of the
announcement being the "Stock Acquisition Date"), or (ii) ten business days
following the commencement of a tender offer or exchange offer that would result
in a person's becoming an Acquiring Person. An "Acquiring Person" is any person
or group of affiliated or associated persons that has acquired or obtained the
right to acquire beneficial ownership of 15% or more of the outstanding shares
of Common Stock, except that Atlantic Richfield Company, a Delaware corporation
("ARCO"), will not be or become an "Acquiring Person" unless and until such time
as ARCO or any person affiliated or associated with ARCO acquires or becomes the
beneficial owner of (or ARCO becomes affiliated or associated with any person
who, collectively with ARCO, is the beneficial owner of) more than the lesser of
(i) 1,000,000 shares of Common Stock in addition to those ARCO beneficially
owned as of December 8, 1995 (or in addition to any lesser number of shares
ARCO beneficially owns from time to time thereafter) and (ii) one share less
than 50% of the shares of Common Stock outstanding at any time. In certain
circumstances prior to the time a person has become an Acquiring Person, the
Distribution Date may be deferred by the Board of Directors. Certain
inadvertent acquisitions will not result in a person's becoming an Acquiring
Person if the person promptly divests itself of sufficient Common Stock. Until
the Distribution Date, (a) the Rights will be evidenced by the Common Stock
certificates (together with this Summary of Rights or bearing the notation
referred to below) and will be transferred with and only with such Common Stock
certificates, (b) new Common Stock certificates issued after December 20, 1995
will contain a notation incorporating the Rights Agreement by reference and (c)
the surrender for transfer of any certificate for Common Stock (with or without
a copy of this Summary of Rights) will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
B-1
<PAGE>
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 8, 2005, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of Common Stock as of the close
of business on the Distribution Date and, from and after the Distribution Date,
the separate Rights Certificates alone will represent the Rights. All shares of
Common Stock issued prior to the Distribution Date will be issued with Rights.
Shares of Common Stock issued after the Distribution Date in connection with
certain employee benefit plans or upon conversion of certain securities will be
issued with Rights. Except as otherwise determined by the Board of Directors,
no other shares of Common Stock issued after the Distribution Date will be
issued with Rights.
In the event (a "Flip-In Event") that a person becomes an Acquiring
Person (except pursuant to a tender or exchange offer for all outstanding shares
of Common Stock at a price and on terms that a majority of the independent
directors of the Company determines to be fair to and otherwise in the best
interests of the Company and its stockholders (a "Permitted Offer")), each
holder of a Right will thereafter have the right to receive, upon exercise of
such Right, a number of shares of Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a Current Market Price
(as defined in the Rights Agreement) equal to two times the exercise price of
the Right. Notwithstanding the foregoing, following the occurrence of any Flip-
In Event, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by or transferred to such Acquiring
Person (or by certain related parties) will be null and void in the
circumstances set forth in the Rights Agreement.
For example, at an exercise price of $80 per Right, each Right not
owned by such an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$160 worth of Common Stock (or other consideration, as noted above), based upon
its then Current Market Price, for $80. Assuming that the Common Stock had a
Current Market Price of $25 per share at such time, the holder of each valid
Right would be entitled to purchase 6.4 shares of Common Stock for $80.
In the event (a "Flip-Over Event") that, at any time from and after
the time an Acquiring Person becomes such, (i) the Company is acquired in a
merger or other business combination transaction (other than certain mergers
that follow a Permitted Offer), or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
owned by such Acquiring Person or certain related parties) shall thereafter have
the right to receive, upon exercise, a number of shares of common stock of the
acquiring company having a Current Market Price equal to two times the exercise
price of the Right. Flip-In Events and Flip-Over Events are collectively
referred to as "Triggering Events."
The Purchase Price payable, and the number of 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) if holders of the Common Stock are granted certain rights or
warrants to subscribe for Common Stock or securities convertible into Common
Stock at less than the current market price of the Common Stock, or (iii) upon
the distribution to holders of the
B-2
<PAGE>
Common Stock of evidences of indebtedness or assets (excluding regular quarterly
cash dividends) or of subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock are required to be issued upon
exercise of the Rights, but in lieu thereof a cash payment may be made based on
the market price of the Common Stock on the last trading date prior to the date
of exercise.
At any time until the time a person becomes an Acquiring Person, the
Company may redeem the Rights in whole, but not in part, at a price of $.005 per
Right, payable, at the option of the Company, in cash, shares of Common Stock or
such other consideration as the Board of Directors may determine. Immediately
upon the effectiveness of the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.005 redemption price.
At any time after the occurrence of a Flip-In Event and prior to the
occurrence of a Flip-Over Event or a person becoming the beneficial owner of 50%
or more of the shares of Common Stock then outstanding, the Company may exchange
the Rights (other than Rights owned by an Acquiring Person or an affiliate or an
associate of an Acquiring Person, which will have become void), in whole or in
part, at an exchange ratio of one share of Common Stock, and/or other equity
securities deemed to have the same value as one share of Common Stock, per
Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights should not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for the
common stock of the acquiring company as set forth above or are exchanged as
provided in the preceding paragraph.
Other than the redemption price, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Company as long as the
Rights are redeemable. Thereafter, the provisions of the Rights Agreement (other
than the Redemption Price) may be amended by the Board of Directors in order to
cure any ambiguity, defect or inconsistency, to make changes that do not
materially adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time period
under the Rights Agreement; provided, however, that no amendment to lengthen the
time period governing redemption or amendment shall be made at such time as the
Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an exhibit to a Current Report on Form 8-K. A copy of
the Rights Agreement is available free of charge upon written request to the
Company. This summary description of the
B-3
<PAGE>
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference.
B-4
<PAGE>
[LYONDELL LOGO APPEARS HERE]
<TABLE>
<S> <C>
NEWS
- ----------------------------------------------------------------------------------------------
One Houston Center, 1221 McKinney Ave., P.O. Box 3646, Houston, Texas 77253-3646(713) 652-7200
</TABLE>
FOR RELEASE FRIDAY, DEC. 8
LYONDELL PETROCHEMICAL COMPANY
ADOPTS STOCKHOLDER RIGHTS PLAN
HOUSTON, December 8, 1995 -- Lyondell Petrochemical Company (NYSE:LYO) today
announced that its Board of Directors has adopted a stockholder rights plan.
Typical of such plans undertaken by other corporations, the plan is intended
to ensure fair treatment of stockholders in the event of any proposed change of
control of the company. The plan would guard against coercive and abusive
takeover tactics by enabling the Board to negotiate fair treatment for the
stockholders.
The plan will be implemented by the distribution of common stock purchase
rights as a dividend at the rate of one right for each share of common stock
held as of the close of business on December 20, 1995 or issued thereafter until
the rights become exercisable.
Stockholders are not required to take any action at this time. The rights
become exercisable only under certain situations. These include situations in
which a person or group acquires beneficial ownership of 15% or more of the
company's outstanding common stock or commences a tender or exchange offer that
would result in a person or group having beneficial ownership of 15% or more of
the company's outstanding common stock. An exception is provided for Atlantic
Richfield Company (ARCO), which currently owns approximately 49.9% of the
company's common stock. Additional accumulation of shares by ARCO could make the
rights exercisable. The rights expire on December 20, 2005 and may be redeemed
by the Board of Directors at any time prior to the time the stock ownership
thresholds referred to above are exceeded.
If the rights become exercisable, stockholders will be notified by Lyondell
of the steps they should take to exercise their common stock purchase rights.
###
For information, contact:
Media - Jackie Wilson (713) 652-4596
Investors - Dave Balderston (713) 652-4590
