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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
CHEVRON CORPORATION
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(Exact name of registrant as specified
in its charter)
Delaware 94-0890210
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(State of incorporation (I.R.S. Employer
or organization) Identification No.)
575 Market Street, San Francisco, California 94105
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Series A Participating Preferred Chicago Stock Exchange
Stock Purchase Rights New York Stock Exchange
Pacific Exchange
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. |X|
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. |_|
Securities Act of 1933 registration statement file number to which this form
relates: N/A
Securities to be registered pursuant to Section 12(g) of the Exchange Act:
None
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(Title of class)
Item 1. Description of Securities to be Registered.
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On November 23, 1998, the Board of Directors declared a dividend
distribution on each outstanding share of Common Stock of one Right to purchase
Chevron's Series A Participating Preferred Stock. The dividend will be paid to
stockholders of record at the close of business on December 3, 1998. No income
was recognized by stockholders for tax purposes on payment of the dividend. The
Rights are not now exercisable, and it is not known at this time whether they
ever will be exercisable. No action can be taken by holders of Rights at this
time. The Rights will expire on the earlier of (1) November 23, 2008, or (2)
redemption or exchange of the Rights as described below.
In general, until the Rights are exercisable or are redeemed or exchanged
or expire unexercised, each Right is associated with and cannot be separated
from the underlying share of Common Stock on which the right was declared as a
dividend. Accordingly, until the Rights are separate from the Common Stock, (1)
each holder of outstanding shares of Common Stock is also the holder of an equal
number of Rights, (2) any sale or other transfer of shares of Common Stock by a
holder thereof also will cause a transfer of the associated Rights, (3) no
income or loss will be recognized with respect to the sale of Rights incident to
a sale of Common Stock, and (4) no certificates will be issued to evidence
ownership of the Rights, but certificates for shares of Common Stock issued
after the Record Date will refer to the associated Rights. Until a Right is
exercised, it confers no rights as a stockholder, including, without limitation,
the right to vote or to receive dividends.
The Rights will separate from the Common Stock if there is a "Distribution
Date." A Distribution Date would occur upon the earliest to happen of (1) a
public announcement that someone has become an "Acquiring Person," meaning that
such person (including affiliated or associated persons or entities) has
acquired, or obtained the right to acquire, beneficial ownership of 10 percent
or more of the outstanding shares of Common Stock, other than as a result of
repurchases of stock by Chevron, or (2) 10 days (unless such date is extended by
the Board of Directors) having elapsed following the commencement of (or a
public announcement of an intention to make) a tender offer or exchange offer
that would result in someone becoming an Acquiring Person. If a Distribution
Date occurs, the Rights will become exercisable and separately tradable, and
Chevron will issue certificates for the Rights as soon as possible.
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock Chevron may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to 1,000 times the dividend declared on each share of Common Stock, but in no
event less than $25. In the event of liquidation, the holders of shares of
Preferred Stock will receive a preferred liquidation payment equal to the
greater of $1,000 or 1,000 times the payment made per each share of Common
Stock.
Each share of Preferred Stock will have 1,000 votes, voting together with
the shares of Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount and type of
consideration received per share of Common Stock. The rights of the Preferred
Stock as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary anti-dilution provisions.
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The amount of Preferred Stock that the holder of a Right is entitled to
receive upon exercise of a Right and the Purchase Price payable upon exercise of
a Right are both subject to adjustment. Initially, the Purchase Price is $320
per Right. If no one has yet become an Acquiring Person, payment of the Purchase
Price entitles the holder of a Right to receive only one one-thousandth of a
share of Preferred Stock. If someone has become an Acquiring Person, however,
payment of the Purchase Price entitles the holder to receive a number of one
one-thousandth shares having a value, based on the then current market value of
the Common Stock, equal to two times the Purchase Price. In addition, if someone
has become an Acquiring Person, and thereafter Chevron is involved in a merger
or other business combination transaction, a holder of a Right also will be able
to acquire, upon payment of the Purchase Price, Common Stock of Chevron or its
successor having a value, based on the market value of Chevron or its successor
at the time of the transaction, equal to twice the value of the Purchase Price.
Some limitations apply to the timing of exercise of the Rights, and any Rights
belonging to an Acquiring Person are null and void.
The Board of Directors may redeem the Rights in whole, but not in part, at
the Redemption Price of $0.01 per Right, at any time before there is an
Acquiring Person. After there is an Acquiring Person, the Rights may be redeemed
only in very limited circumstances. However, the Board of Directors may in some
cases also exchange all or part of the then outstanding and exercisable Rights
(except for Rights that have become void) for shares of Common Stock at a rate
of one share of Common Stock (or substitute consideration) per Right. Upon
redemption or exchange, the right to exercise the Rights will terminate and the
only right of the holders of Rights will be to receive the Redemption Price or
the exchange consideration, as applicable.
A full description of the Rights is set forth in the Rights Agreement
between Chevron and the Rights Agent, ChaseMellon Shareholder Services, L.L.C. A
copy of the Rights Agreement is filed as an exhibit to this Registration
Statement on Form 8-A. THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT
TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS
AGREEMENT, WHICH IS INCORPORATED HEREIN BY REFERENCE.
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Item 2. Exhibits.
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4.1 Rights Agreement dated as of November 23, 1998 between Chevron
Corporation and ChaseMellon Shareholder Services, L.L.C., which
includes as Exhibit B the form of Rights Certificate. Pursuant to the
Rights Agreement, Rights Certificates will not be mailed until the
earlier of (i) a public announcement that a person or a group of
affiliated or associated persons has acquired beneficial ownership of
securities representing 10% or more of the outstanding common stock or
(ii) ten days after a person or a group of affiliated or associated
persons has commenced or announced an intent to commence a tender offer
or exchange offer which, upon consummation thereof, would cause such
person or group to own beneficially securities representing 10% or more
of the outstanding common stock.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Dated: November 23, 1998 CHEVRON CORPORATION
By: /s/ LYDIA I. BEEBE
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Lydia I. Beebe
Secretary
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EXHIBIT INDEX
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EXHIBIT
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4.1 Rights Agreement dated as of November 23, 1998 between
Chevron Corporation and ChaseMellon Shareholder Services,
L.L.C., which includes as Exhibit B the form of Rights
Certificate. Pursuant to the Rights Agreement, Rights
Certificates will not be mailed until the earlier of (i) a
public announcement that a person or a group of affiliated
or associated persons has acquired beneficial ownership of
securities representing 10% or more of the outstanding
common stock or (ii) ten days after a person or a group of
affiliated or associated persons has commenced or announced
an intent to commence a tender offer or exchange offer
which, upon consummation thereof, would cause such person or
group to own beneficially securities representing 10% or
more of the outstanding common stock.
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EXHIBIT 4.1
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CHEVRON CORPORATION
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
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RIGHTS AGREEMENT
Dated as of November 23, 1998
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TABLE OF CONTENTS
Page
1. Certain Definitions.....................................................1
2. Appointment of Rights Agent.............................................3
3. Issue of Rights Certificates............................................3
4. Form of Rights Certificates.............................................5
5. Countersignature and Registration.......................................5
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates................6
7. Exercise of Rights; Purchase Price; Expiration Date of Rights...........6
8. Cancellation and Destruction of Rights Certificates.....................8
9. Reservation and Availability of Preferred Stock.........................8
10. Preferred Stock Record Date.............................................9
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights..................................................................9
12. Certificate of Adjusted Purchase Price or Number of Shares............ 14
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.. 14
14. Additional Covenants.................................................. 16
15. Fractional Rights and Fractional Shares............................... 16
16. Rights of Action...................................................... 17
17. Agreement of Rights Holders........................................... 17
18. Rights Certificate Holder Not Deemed a Stockholder.................... 18
19. Concerning the Rights Agent........................................... 18
20. Merger or Consolidation or Change of Name of Rights Agent............. 18
21. Duties of Rights Agent................................................ 19
22. Change of Rights Agent................................................ 21
23. Issuance of New Rights Certificates................................... 21
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24. Redemption, Termination and Exchange.................................. 22
25. Notice of Certain Events.............................................. 24
26. Notices............................................................... 24
27. Supplements and Amendments............................................ 25
28. Determination and Actions by the Board of Directors, etc.............. 25
29. Successors............................................................ 26
30. Benefits of This Agreement............................................ 26
31. Severability.......................................................... 26
32. Governing Law......................................................... 26
33. Counterparts.......................................................... 26
34. Descriptive Headings.................................................. 27
EXHIBIT A - Form of Amended Certificate of Designation.....................A-1
EXHIBIT B - Form of Rights Certificate.....................................B-1
EXHIBIT C - Summary of Rights..............................................C-1
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RIGHTS AGREEMENT
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THIS AGREEMENT, dated as of November 23, 1998 between CHEVRON
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CORPORATION, a Delaware corporation (the "Company"), and CHASEMELLON SHAREHOLDER
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SERVICES, L.L.C., a New Jersey limited liability company (the "Rights Agent"),
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W I T N E S S E T H:
Whereas on November 23, 1998 the Board of Directors of the Company
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authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each share of Common Stock, $1.50 par value per share, of the
Company (the "Common Stock") outstanding as of the close of business on December
3, 1998 (the "Record Date"), and contemplates the issuance of one Right (subject
to adjustment as provided herein) for each share of Common Stock of the Company
issued between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined in Section 3(a) and
Section 7(a), respectively) (with Rights also to be issued in connection with
certain issuances of Common Stock after the Distribution Date, as provided more
fully herein), each Right representing the right to purchase when exercisable
one one-thousandth of a share of Series A Participating Preferred Stock, $1.00
par value per share, of the Company ("Preferred Stock") having the rights,
powers and preferences set forth in the Amended Certificate of Designation,
Preferences and Rights of Series A Participating Preferred Stock of the Company
attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights"):
N o w, T h e r e f o r e, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following terms
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have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person,
without the prior approval of the Company, shall have become the Beneficial
Owner (as such term is hereinafter defined) of securities representing 10% or
more of the shares of Common Stock then outstanding or who was such a Beneficial
Owner at any time on or after the date hereof, whether or not such Person
continues to be the Beneficial Owner of securities representing 10% or more of
the outstanding shares of Common Stock; provided, however, that in no event
shall a Person who or which, together with all Affiliates and Associates of such
Person, is the Beneficial Owner of less than 10% of the Company's outstanding
shares of Common Stock become an Acquiring Person solely as a result of a
reduction of the number of shares of outstanding Common Stock, including
repurchases of outstanding shares of Common Stock by the Company, which
reduction increases the percentage of outstanding shares of Common Stock
beneficially owned by such Person (provided that any subsequent increase in the
amount of Common Stock beneficially owned by such Person, together with all
Affiliates and Associates of such Person, without the prior approval of the
Board of Directors of the Company shall cause such Person to be an Acquiring
Person); and provided, further, that the Acquiring Person shall not mean (i) the
Company, (ii) any subsidiary of the Company (as such term is hereinafter
defined), (iii) any employee benefit plan of the Company or any of its
subsidiaries or (iv) any entity holding securities of the Company organized,
appointed or established by the Company or any of its subsidiaries for or
pursuant to the terms of any such plan.
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(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect
on the date of this Agreement.
(c) "Approval of" or "approved by" the Company shall mean the affirmative
vote of a majority of a quorum of the Board of Directors.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right or obligation to acquire (whether such
right or obligation is exercisable or effective immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing and other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," 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 payment
or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange Act and (2) is not
also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (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 and
other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or with which such Person or any of such Person's
Affiliates have otherwise formed a group, for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in
clause (B) of subparagraph (ii) of this paragraph (d)) or disposing of
any securities of the Company.
(e) "Board of Directors of the Company," "Board of Directors" or "Board"
shall mean the Board of Directors of the Company as constituted at the time in
question.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of California are authorized or
obligated by law or executive order to close.
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(g) "Close of Business" on any given date shall mean 5 P.M., San Francisco
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5 P.M., San Francisco time, on the next succeeding Business Day.
(h) "Common Stock" shall mean the Common Stock, $1.50 par value per share,
of the Company, except that "Common Stock" when used with reference to stock
issued by any Person other than the Company shall mean the capital stock with
the greatest Voting Power (as such term is hereinafter defined), or the equity
securities or other equity interest having power to control or direct the
management, of such Person or, if such Person is a subsidiary of another Person,
of the Person which ultimately controls such first-mentioned Person and which
has issued and outstanding such capital stock, equity securities or equity
interests.
(i) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust or other entity.
(j) "Preferred Stock" shall mean the Series A Participating Preferred
Stock, $1.00 par value per share, of the Company.
(k) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(l) A "subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the Voting Power of the voting equity securities or
voting interests is owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(m) "Voting Power" shall mean the voting power of all securities of the
Company then outstanding and generally entitled to vote for the election of
directors of the Company.
2. Appointment of Rights Agent. The Company hereby appoints the Rights
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Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agents and any Co-Rights Agents
shall be as the Company shall determine. 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.
3. Issue of Rights Certificates.
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(a) Until the earlier of (i) 10 days following the Stock Acquisition Date
or (ii) 10 days following (unless such date is extended by the Board of
Directors) the commencement of (or first public announcement of an intention to
commence) (which intention to commence remains in effect for five Business Days
after such announcement), a tender or exchange offer without the prior approval
of the Company which would result, in the absence of approval by the Company, in
any Person (other than the Company, any subsidiary of the Company, or any
employee benefit plan of the Company or any of its subsidiaries, or any entity
holding securities of the Company organized, appointed or established by the
Company or any of its subsidiaries for or pursuant to the terms of any such
plan) becoming an Acquiring Person (including any such date which is on or after
the date of this Agreement and prior to the issuance of the Rights) (the earlier
of such dates being herein referred to as the "Distribution Date"), (x) the
Rights shall 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 (which certificates for
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Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights (and the right to receive certificates
therefor) shall be transferable only in connection with the transfer of the
underlying shares of Common Stock. As soon as practicable after the Distribution
Date, the Rights Agent shall send by first-class, insured, postage prepaid mail,
to each record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a certificate for Rights, in substantially the form of Exhibit B hereto
(the "Rights Certificates"), evidencing one Right (subject to adjustment as
provided in Section 11 hereof) for each share of Common Stock so held. As of and
after the Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates.
As soon as practicable following the Record Date, the Company shall send a
copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit C (the "Summary of Rights"), by first-class, postage prepaid mail, to
each record holder of the 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 the Common Stock outstanding as of the Record Date,
until the Distribution Date (or earlier redemption, expiration or termination of
the Rights), the Rights shall be evidenced by such certificates for the 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 Distribution Date (or earlier redemption, expiration or termination of
the Rights), the surrender for transfer of any of the certificates for the
Common Stock outstanding on the Record Date, even without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
(b) Certificates issued for Common Stock (including, without limitation,
certificates issued upon transfer or exchange of Common Stock) after the Record
Date, but prior to the earlier of the Distribution Date or the Expiration Date
(as such term is hereinafter defined), shall be deemed also to be certificates
for Rights, and shall have impressed, printed, stamped, written or otherwise
affixed onto them the following legend:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Chevron
Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights
Agent, dated as of November 23, 1998, as it may be amended from time to
time (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 Chevron Corporation. Under certain circumstances,
as set forth in the Rights Agreement, such Rights may be redeemed, may
expire, or may be evidenced by separate Certificates and will no longer
be evidenced by this Certificate. Chevron Corporation will mail to the
holder of this Certificate a copy of the Rights Agreement without
charge within five days after receipt of a written request therefor.
Under certain circumstances, Rights issued to Acquiring Persons (as
defined in the Rights Agreement) or certain related Persons and any
subsequent holder of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
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4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to purchase
Preferred Stock and of assignment and certificates to be printed on the reverse
thereof) shall each be substantially in the form set forth in Exhibit B hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company and the Rights Agent
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 interdealer quotation system on which the Rights may from time
to time be listed or traded, or to conform to usage. Subject to the provisions
of Section 11 and Section 23 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of one one-thousandths of a
share of Preferred Stock as shall be set forth therein at the price per one
one-thousandth of a share set forth therein (the "Purchase Price"), but the
number of such shares and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) hereof that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Rights Certificate issued at any time upon the
transfer of any Rights to such an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and
any Rights Certificate issued pursuant to Section 6, Section 11 or Section 23
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain, to the extent the
Rights Agent has appropriate notice, the following legend:
The Rights represented by this Rights Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person. This Rights Certificate and the Rights represented
hereby may become void under the circumstances specified in Section
7(e) of the Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights Certificate.
5. Countersignature and Registration. The Rights Certificates shall be
---------------------------------
executed on behalf of the Company by its Chairman of the Board, any Vice
Chairman of the Board, 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 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 Certificates 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.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purpose at such location or locations as
the secretary of the Company shall agree upon from time to time with the Rights
Agent, all in compliance with the New York Stock Exchange, Inc.,
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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 date of each of the Rights Certificates.
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
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Mutilated, Destroyed, Lost or Stolen Rights Certificates. Subject to the
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provisions of Sections 4(b), 7(e), 7(f) and 15 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 Preferred Stock as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall 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 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.
Subject to the provisions of Sections 4(b), 7(e), 7(f) and 15 hereof, 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 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, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and if requested by the Company or the Rights
Agent, 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 shall 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.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) The registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon presentation of the Rights
Certificate, with the appropriate form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the office of the Rights
Agent designated for such purpose, together with payment of the Purchase Price
for each one one-thousandth of a share of Preferred Stock (or such other number
of shares or other securities) as to which the Rights are exercised, at or prior
to the earlier of (i) the Close of Business on November 23, 2008 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 24 hereof, or (iii) the time at which the Rights are exchanged as
provided in Section 24(c) hereof (such earliest time being herein referred to as
the "Expiration Date"). Notwithstanding any other provision of this Agreement,
any Person who prior to the Distribution Date becomes a record holder of shares
of Common Stock may exercise all of the rights of a registered holder of a
Rights Certificate with respect to the Rights associated with such shares of
Common Stock in accordance with and subject to the provisions of this Agreement,
including the provisions of Section 7(e) hereof, as of the date such Person
becomes a record holder of shares of Common Stock.
(b) The Purchase Price for each one one-thousandth share of Preferred Stock
issuable upon exercise of a Right shall initially be $320, but shall be subject
to adjustment from time to time as provided
-6-
in Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the appropriate form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares (or other securities or property)
to be purchased and an amount equal to any applicable transfer tax in cash, or
by certified check or bank draft payable to the order of the Company, the Rights
Agent shall, subject to Section 21(k), thereupon promptly (i)(A) requisition
from any transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent) certificates for the number of shares of
Preferred Stock to be purchased, and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company, in
its sole discretion, shall have elected to deposit the shares of Preferred Stock
issuable upon exercise of the Rights hereunder into a depositary, requisition
from the depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in which
case certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company shall direct the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be paid
in lieu of issuance of fractional shares in accordance with Section 15, (iii)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt promptly deliver such cash
to or upon the order of the registered holder of such Rights Certificate. In the
event that the Company is obligated to issue other securities of the Company,
and/or distribute other property pursuant to Section 11(a), the Company shall
make all arrangements necessary so that such other securities and/or property
are available for distribution by the Rights Agent, if and when appropriate. In
addition, in the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii), the Rights Agent shall return such Rights Certificate to the
registered holder thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Rights Certificate no longer include
the rights provided by Section 11(a)(ii) of the Rights Agreement and if less
than all the Rights represented by such Rights Certificate were so exercised,
the Rights Agent shall indicate on the Rights Certificate the number of Rights
represented thereby which continue to include the rights provided by Section
11(a)(ii).
(d) In case the registered holder of any Rights Certificate shall exercise
(except pursuant to Section 11(a)(ii)) 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 the
registered holder of such Rights Certificate or to his duly authorized assigns,
subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if there
occurs any of the events set forth in Section 11(a)(ii) or Section 13(a) then
any Rights that are or were on or after the Distribution Date beneficially owned
by an Acquiring Person or any Associate or Affiliate of an Acquiring Person
shall become null and void, without any further action, and any holder of such
Rights shall thereafter have no rights whatsoever with respect to such Right,
whether under any provision of this Agreement or otherwise. Without limiting the
foregoing sentence, Rights held by the following Persons shall be null and void
without any further action: (i) any direct or indirect transferee of any Rights
that are or were on or after the Distribution Date beneficially owned by an
Acquiring Person or any Associate or Affiliate of an Acquiring Person; (ii) any
direct or indirect transferee of any Rights that were on or before the
Distribution Date beneficially owned by an Acquiring Person or any Associate or
Affiliate of an Acquiring Person if the transferee received such Rights,
directly or indirectly, (A) from an Acquiring Person or any Associate or
Affiliate of an Acquiring Person (x) as a result of a distribution by such
Acquiring Person or any Associate or Affiliate of an Acquiring Person to holders
of its equity securities
-7-
or similar interests (including, without limitation, partnership interests) or
(y) pursuant to any continuing agreement, arrangement or understanding with
respect to the Rights or (B) in a transfer (or series of transfers) which the
Board of Directors of the Company determines is part of a plan, arrangement or
understanding which has the purpose or effect of avoiding the provisions of this
Section 7(e); and (iii) subsequent transferees of Persons referred to in the
foregoing clauses (i) and (ii) as well as this clause (iii). The Company shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
are complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of Rights or any Rights Certificate or to any other
Person as a result of the Company's failure to make any determination 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 the certificate contained in the appropriate
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise shall have been properly completed and
duly executed by the registered holder thereof and the Company and the Rights
Agent shall have been provided with such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company and the Rights Agent shall reasonably request.
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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the 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 canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Preferred Stock. The Company covenants
-----------------------------------------------
and agrees that it shall cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock, or any authorized and issued
shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights and, after the occurrence of an event specified in Section
11(a)(ii) or Section 13(a), shall so reserve and keep available a sufficient
number of shares of Common Stock (and/or other securities) which may be required
to permit the exercise in full of the Rights pursuant to this Agreement.
So long as the shares of Preferred Stock (and, after the occurrence of an
event specified in Section 11(a)(ii) or Section 13(a), any other securities)
issuable upon the exercise of the Rights may be listed on any national
securities exchange or national quotation system, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares (or other securities) reserved for such issuance to be listed on such
exchange or system upon official notice of issuance upon such exercise.
The Company covenants and agrees that it shall take all such action as may
be necessary to ensure that all shares of Preferred Stock and/or other
securities delivered upon exercise of the Rights shall, at the time of delivery
of the certificates for such shares or other securities (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares or securities.
-8-
The Company further covenants and agrees that it shall pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of
any certificates for shares of Preferred Stock and/or other securities upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or in respect of the issuance or
delivery of the shares of Preferred Stock and/or other securities in 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 Preferred Stock, and/or other securities 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.
The Company shall use its best efforts to (i) file, if required by law, as
soon as practicable following the Distribution Date, a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (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 Act
and the rules and regulations thereunder) until the Expiration Date (unless and
until the Company shall have received an opinion of counsel to the effect that
the maintenance of such registration statement in effect is no longer
necessary). The Company will also take such action as may be appropriate under
the blue sky laws of the various states.
10. Preferred Stock Record Date. Each Person in whose name any certificate
---------------------------
for shares of Preferred Stock (or other securities) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the shares of Preferred Stock (or other securities) represented thereby on,
and such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly presented and payment of the Purchase Price (and
any applicable transfer taxes) was made; provided, however, that if the date of
such presentation and payment is a date upon which the Preferred Stock (or other
securities) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Stock
(or other securities) 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.
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
--------------------------------------------------------------------
Rights. The Purchase Price, the number of shares covered by each Right and the
- ------
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) subdivide the outstanding Preferred Stock, (B) combine the
outstanding Preferred Stock into a smaller number of shares or (C) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and in Section 7(e), 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 capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock and other
-9-
securities which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24(c) of this Agreement, in the event that any
Person (other than the Company, any subsidiary of the Company, any employee
benefit plan of the Company or any of its subsidiaries or any entity holding
securities of the Company organized, appointed or established by the Company or
any of its subsidiaries for or pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, shall become an Acquiring Person,
then proper provision shall be made so that each holder of a Right, except as
provided in Section 7(e) hereof, shall, for a period of 90 days after the later
of the occurrence of any such event and the effective date of an appropriate
registration statement pursuant to Section 9, have a right to receive upon
exercise of each Right at the then current Purchase Price in accordance with the
terms of this Agreement, such number of one one-thousandths of a share of
Preferred Stock as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right is then exercisable and (y) dividing that
product by 50% of the current market price per one share of Common Stock
(determined pursuant to Section 11(b)) on the date of the occurrence of the
event set forth in this subparagraph (ii) (such number of shares being referred
to as the "number of Adjustment Shares"); provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii); and provided, further, that such 90-day period shall not be
deemed to run during any period in which the exercise of the Rights or the
fulfillment by the Company or the Rights Agent of its or their obligations under
this Agreement shall be enjoined or otherwise prohibited in full or in part by
any court or other governmental agency or body.
(iii) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Preferred Stock to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) and the Rights
become so exercisable, notwithstanding any other provision of this Agreement, to
the extent necessary and permitted by applicable law and any agreements in
effect on the date hereof to which it is a party, each Right shall thereafter
represent the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, a number of
shares, or units of shares, of (x) Common Stock (up to the maximum number of
shares of Common Stock which may permissibly be issued using the allocation
procedure specified in the second sentence of Section 11(g)) and (y) preferred
stock (or other equity securities) of the Company, including, but not limited
to, Preferred Stock, equal in the aggregate to the number of Adjustment Shares
where the Board of Directors of the Company shall have deemed such shares or
units, other than the shares of Common Stock, to have at least the same economic
value and voting rights as the Common Stock (a "common stock equivalent") (one
one-thousandth of a share of Preferred Stock shall be deemed to be a common
stock equivalent); provided, however, if there are unavailable sufficient shares
(or fractions of shares) of Common Stock and/or common stock equivalents, then
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock or common stock equivalents for issuance upon
exercise of the Rights, including the calling of a meeting of stockholders; and
provided, further, that the Company shall issue no common stock equivalent upon
exercise of the Rights (except for Preferred Stock) until the Company has first
issued all authorized and unreserved shares of Common Stock; and provided,
further, that if the Company is unable to cause sufficient shares of Common
Stock and/or common stock equivalents to be available for issuance upon exercise
in full of the Rights, then each Right shall thereafter represent the right to
receive the Adjusted Number of Common Shares upon exercise at the Adjusted
-10-
Purchase Price (as such terms are hereinafter defined). As used herein, the term
"Adjusted Number of Common Shares" shall be equal to that number of shares (or
fractions of shares) of Common Stock (and/or shares or units of common stock
equivalents) equal to the product of (x) the number of Adjustment Shares and (y)
a fraction, the numerator of which is the number of shares of Common Stock
(and/or shares or units of common stock equivalents) available for issuance upon
exercise of the Rights and the denominator of which is the aggregate number of
Adjustment Shares otherwise issuable upon exercise in full of all Rights
(assuming there were sufficient shares of Common Stock available) (such fraction
being referred to as the "Proration Factor"). The Adjusted Purchase Price shall
mean the product of the Purchase Price and the Proration Factor. The Board of
Directors may, but shall not be required to, establish procedures to allocate
the right to receive Common Stock and common stock equivalents upon exercise of
the Rights among holders of Rights.
(b)(i) For the purpose of any computation hereunder, other than in Section
11(a)(iii), the "current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to but not including such date; provided, however,
that in the event that the current per share market price of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such Common
Stock or (B) any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of 30 Trading Days (as hereinafter defined)
after but not including the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification, then,
and in each such case, the "current market price" shall be properly adjusted to
take into account ex-dividend trading. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq Bulletin Board or such other
system then in use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value of such shares on
such date as determined reasonably and with good faith by the Board of Directors
of the Company shall be used and shall be binding on the Rights Agent. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per share
determined reasonably and with good faith to the holders of Rights 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.
(ii) For the purpose of any computation hereunder, the "current market
price" per share (or one one-thousandth of a share) of Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock in Section
11(b) (other than the last sentence thereof). If the current market price per
share (or one one-thousandth of a share) of Preferred Stock cannot be determined
in the manner
-11-
provided above or if the Preferred Stock is not publicly held or listed or
traded in a manner described in Section 11(b)(i), the "current market price" per
share of Preferred Stock shall be conclusively deemed to be an amount equal to
1,000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of the Common Stock and the "current market price" per one
one-thousandth of a share of Preferred Stock shall be equal to the current
market price per share of the Common Stock (as appropriately adjusted). If
neither the Common Stock nor the Preferred Stock is publicly held or so listed
or traded, "current market price" per share 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.
(c) 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 which by reason of this Section 11(c) 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 thousandth of a share of Common Stock or other share or
the nearest one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(c), 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.
(d) If as a result of any provision of Section 11(a), the holder of any
Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Stock, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in Section
11(a), and the provisions of Sections 7, 9, 10, 13 and 15 hereof with respect to
the Preferred Stock shall apply on like terms to any such other shares.
(e) 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 Preferred
Stock purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(f) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Preferred Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(g) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the shares of Preferred
Stock, Common Stock or other securities issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Preferred Stock, Common Stock or other
securities at such adjusted Purchase Price. If upon any exercise of the Rights,
a holder is to receive a combination of Preferred Stock, Common Stock and/or
common stock equivalents, a portion of the consideration paid upon such
exercise, equal to at least the then par value of a share of Preferred Stock
and/or Common Stock of the Company, shall be allocated as the payment for each
share of Preferred Stock or Common Stock of the Company so received, as the case
may be.
-12-
(h) 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 (with prompt notice thereof to the Rights
Agent) until the occurrence of such event the issuing to the holder of any Right
exercised after such record date the shares of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the occurrence of the
event requiring such adjustment.
(i) Anything to the contrary in this Section 11 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 it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of its
Preferred Stock shall not be taxable to such stockholders.
(j) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the date of this Agreement and
prior to the Distribution Date, (i) declare a dividend on the outstanding shares
of Common Stock payable in Common Stock, (ii) subdivide the outstanding Common
Stock, (iii) combine the outstanding Common Stock into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
the outstanding Common Stock, then in any such case, (1) each Common Share (or
shares of capital stock issued in such reclassification of the Common Shares)
outstanding immediately following such time shall have associated with it the
number of Rights as were associated with one Common Share immediately prior to
the occurrence of the event described in clauses (i)-(iv) above; (2) the
Purchase Price in effect at the time of the record date for such dividend or the
effective date of such subdivision, combination or reclassification shall be
determined by multiplying the Purchase Price in effect immediately prior to such
time by a fraction, the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the event described in clauses (i)-(iv)
above, and the denominator of which shall be the total number of Common Shares
outstanding immediately after such event; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one one-thousandths of a
share of Preferred Stock (or shares of such other capital stock) issuable upon
the exercise of each Right outstanding after such event shall equal the number
of one one-thousandths of a Preferred Share (or shares of such other capital
stock) as were issuable with respect to one Right immediately prior to such
event. Each Common Share that shall become outstanding after an adjustment has
been made pursuant to this Section 11(j) shall have associated with it the
number of Rights, exercisable at the Purchase Price and for the number of one
one-thousandths of a Preferred Share (or shares of such other capital stock) as
one Common Share has associated with it immediately following the adjustment
made pursuant to this Section 11(j). If an event occurs which would require an
adjustment under both this Section 11(j) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(j) shall be in addition to, and shall
be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(k) The exercise of Rights under Section 11(a)(ii) shall only result in the
loss of rights under Section 11(a)(ii) to the extent so exercised and shall not
otherwise affect the rights represented by the Rights under this Rights
Agreement, including the rights represented by Section 13.
-13-
12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an
----------------------------------------------------------
adjustment is made as provided in Section 11 or 13 hereof, the Company shall (a)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts and computations accounting for such adjustment, (b)
promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Rights Certificate 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 and shall not be deemed
to have knowledge of any adjustment unless and until it shall have received such
certificate. Notwithstanding the foregoing provisions of this Section 12, the
failure of the Company to make such certification or give such notice shall not
affect the validity of or the force or effect of the requirement for such
adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
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(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person, (y) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger (other than in the case of either transaction
described in (x) or (y), a merger or consolidation which would result in all of
the Voting Power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all
of the Voting Power represented by the securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation and
the holders of such securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell, mortgage or otherwise transfer
(or one or more of its subsidiaries shall sell, mortgage or otherwise transfer),
in one or more 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, then, and in each such case, proper provision shall
be made so that (i) following the Distribution Date, each holder of a Right,
except as provided in Section 7(e) hereof, shall have the right to receive, upon
the exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of shares of freely tradable Common Stock
of the Principal Party (as hereinafter defined), free and clear of liens, rights
of call or first refusal, encumbrances or other adverse claims, as shall be
equal to the result obtained by (x) multiplying the then current Purchase Price
by the number of one one-thousandths of a share of Preferred Stock for which a
Right is then exercisable (without taking into account any adjustment previously
made pursuant to Section 11(a)(ii) hereof) and (y) dividing that product by 50%
of the current market price per share of the Common Stock of such Principal
Party (determined pursuant to Section 11(b) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock in accordance with Section 9
hereof) in connection with such consummation 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.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (x) or (y) of the
first sentence of this Section 13, 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, and if no
-14-
securities are so issued, the Person that is the other party to the merger
or consolidation (including, if applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect subsidiary or Affiliate of another Person, "Principal Party"
shall refer to such other Person; (2) in case such Person is a subsidiary,
directly or indirectly, or Affiliate of more than one Person, the Common Stocks
of two or more 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) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth in (1)
and (2) above shall apply to each of the chains of ownership having an interest
in such joint venture as if such party were a "Subsidiary" of both or all of
such joint ventures 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 such consolidation, merger, sale
or transfer unless the Principal Party 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 Principal Party and
each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer 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 any consolidation, merger, sale or transfer of
assets mentioned in paragraph (a) of this Section 13, the Principal Party at its
own expense shall:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, will use its best efforts to cause such
registration statement to become effective as soon as practicable after
such filing and will use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date;
(ii) use its best efforts to (x) 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 and (y) cause
the Rights and the securities purchasable upon exercise of the Rights to be
listed on any national securities exchange or national quotation system
upon which its Common Stock is listed, traded or quoted; and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party and each of its Affiliates which comply in all
material 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. The rights under this Section 13
shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) and shall survive any exercise thereunder.
-15-
14. Additional Covenants.
--------------------
(a) The Company covenants and agrees that after the Stock Acquisition Date,
it shall not (i) consolidate with, (ii) merge with or into, or (iii) sell or
transfer to, in one or more 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, any other Person if at the time of or after such
consolidation, merger or sale there are any charter or by-law provisions or any
rights, warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights. The Company shall not consummate any such consolidation, merger
or sale unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 24 hereof, take any action the
purpose or effect of which is to diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
15. 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(j), or to distribute
Rights Certificates which evidence 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 current market value of a whole
Right. For the purposes of this Section 15(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by The Nasdaq Stock Market or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined reasonably and
with good faith to the holders of Rights by the Board of Directors of the
Company shall be used and shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). Fractions of shares of Preferred Stock in integral
multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the shares of Preferred Stock represented by
such
-16-
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-thousandth of a share of Preferred Stock, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 15(b), the current market value of
one one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(b)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the transactions or events specified
in Section 11 or Section 13 giving rise to the right to receive common stock
equivalents (other than Preferred Stock) or other securities upon the exercise
of a Right, the Company shall not be required to issue fractions of shares or
units of such common stock equivalents or other securities upon exercise of the
Rights or to distribute certificates which evidence fractional shares of such
common stock equivalents or other securities. In lieu of fractional shares or
units of such common stock equivalents or other securities, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of a share or unit of such common stock equivalent or other
securities. For purposes of this Section 15(c), the current market value shall
be determined in the manner set forth in Section 11(b) hereof for the Trading
Day immediately prior to the date of such exercise and, if such common stock
equivalent is not traded, each such common stock equivalent shall have the value
of one one-thousandth of a share of Preferred Stock.
(d) Except as otherwise expressly provided herein, the holder of a Right by
the acceptance of the Rights expressly waives such holder's right to receive any
fractional Rights or any fractional shares (other than, in the case of Preferred
Stock, fractions which are integral multiples of one one-thousandth of a share
of Preferred Stock) upon exercise of a Right.
16. Rights of Action. All rights of action in respect of this Agreement,
----------------
except those rights of action vested in the Rights Agent pursuant to Section 21,
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
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 such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
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.
Holders of Rights shall be entitled to recover from the Company the reasonable
costs and expenses, including attorneys' fees, incurred by them in any action to
enforce the provisions of this Agreement.
17. 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 be transferable only in
connection with the transfer of Common Stock;
-17-
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in whose
name a Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary.
18. 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 shares of Preferred Stock, Common Stock
or any other securities of the Company which may at any time be issuable on 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 thereof.
19. Concerning the Rights Agent. The Company agrees to pay to the
---------------------------
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
preparation, execution, delivery and amendment 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, damages, including consequential and special damages, judgment, fine,
penalty, claim, settlement, cost or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for any action
taken, suffered 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 arising therefrom, directly or
indirectly.
The Rights Agent shall be authorized and protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its acceptance and 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 by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
20. Merger or Consolidation or Change of Name of Rights Agent. Any Person
---------------------------------------------------------
into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any Person succeeding to the stockholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 22 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
-18-
delivered, any such successor Rights Agent may adopt the countersignature of the
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.
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.
21. Duties of Rights Agent. The Rights Agent undertakes the duties and
----------------------
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof shall be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, any Vice Chairman of the Board, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be
full authorization and protection to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct; provided, however, that the Rights Agent shall
not be liable in excess of the greater of its insurance proceeds plus deductible
or ten million dollars.
(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 (except as to the fact that it has countersigned the Rights
Certificates) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability for nor 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 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
-19-
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of a certificate pursuant to Section 12 describing
any such adjustment); nor shall it be responsible for any determination by the
Board of Directors of the Company of the current market value of the Rights or
Preferred Stock or Common Stock pursuant to the provisions of Section 15 hereof;
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Preferred Stock
or other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock or other securities
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the Chairman of the
Board, any Vice Chairman of the Board, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and is authorized to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith in accordance with
instructions of any such officer. 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 with respect to its duties or obligations under this Rights Agreement and
the date on and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date specified
therein (which date shall not be less than three Business Days after the date
any such officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, affiliate, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other Person.
(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 or to the holders of the
Rights resulting from any such act, omission, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
-20-
(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 of transfer without first consulting with the Company.
22. Change of Rights Agent. The Rights Agent or any successor Rights Agent
----------------------
may resign and be discharged from its duties under this Agreement upon 30 days'
notice in writing mailed to the Company and to each transfer agent of the Common
Stock and Preferred Stock by registered or certified mail, and to holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then 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 Person organized and doing
business under the laws of the United States or of the State of California or of
the State of New York (or of any other state of the United States so long as
such corporation is authorized to do business in the State of California or the
State of New York), in good standing, having an office in the State of
California or the State of New York, which is authorized under such laws to
exercise corporate trust or stockholder services 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 Person 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 Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 22, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
23. Issuance of New Rights Certificates. Notwithstanding any of the
-----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price per share 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 redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or otherwise under any employee plan or arrangement,
which plan or arrangement is existing as of the Distribution Date, or upon the
exercise, conversion or exchange of any other 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
-21-
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificates 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 Certificates would be issued, and (ii) no such Rights Certificates shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
24. Redemption, Termination and Exchange.
------------------------------------
(a)(i) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the Distribution Date or (y) 5 P.M., San
Francisco time, on the Final Expiration Date, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price").
(ii) In addition, following the occurrence of the Distribution Date but
prior to any Stock Acquisition Date, the Board of Directors of the Company may
redeem all but not less than all of the then outstanding Rights at the
Redemption Price either (x) in connection with any transaction not involving any
Person or group of Affiliated or Associated Persons that caused the Distribution
Date to occur or any other Person in which such Person or any constituent of
such group has an interest or on whose behalf such Person is acting directly or
indirectly, or (y) in connection with a tender or exchange offer for any and all
outstanding shares of Common Stock at a price and on terms determined, prior to
the date of the first acceptance of payment for any of such shares, by at least
a majority of the members of the Board of Directors to be both adequate and
otherwise in the best interests of the Company and its stockholders.
(iii) In addition, following the occurrence of a Stock Acquisition Date but
prior to any event described in Section 13(a), the Board of Directors of the
Company may redeem all but not less than all of the then outstanding Rights at
the Redemption Price either (x) in connection with any event specified in
Section 13(a) in which all holders of Common Stock are treated alike and not
involving (other than as a holder of Common Stock being treated like all other
such holders) an Acquiring Person or an Affiliate or Associate of an Acquiring
Person or any other Person in which such Acquiring Person, Affiliate or such
Associate has any interest, or any other Person acting directly or indirectly on
behalf of or in association with any such Acquiring Person, Affiliate or
Associate, or (y) in connection with a tender offer for all outstanding shares
of Common Stock at a price and on terms determined by the Board of Directors to
be both adequate and in the best interest of the Company if and for as long as
the Acquiring Person is not then the Beneficial Owner of securities representing
10% or more of the outstanding shares of the Voting Power, and at the time of
redemption there are no other Persons who are Acquiring Persons and following
the occurrence of an event set forth in, and the expiration of any period during
which the holder of Rights may exercise the rights under, Section 11(a)(ii).
(b) In the case of a redemption permitted under Section 24(a)(i),
immediately upon the action of the Board of Directors of the Company ordering
the redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. In the case of a redemption
permitted under Section 24(a)(ii) or (iii), evidence of which shall have been
filed with the Rights Agent, the right to exercise the Rights will terminate and
represent only the right to receive the Redemption Price only after 10 Business
Days following the giving of notice of such redemption to the holders of such
Rights if no event set forth in Section 11(a)(ii) shall have occurred, and, if
such event shall have occurred, upon the later of 10 Business Days following the
giving of such notice or the expiration of any period during which the rights
under Section 11(a)(ii) may be exercised. Within 10 days after the action of the
Board of Directors ordering any such redemption of
-22-
the Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to the
Rights Agent and to all such holders at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
In the case of a redemption permitted under this Section 24(a), the Company
may, at its option, discharge all of its obligations with respect to the Rights
by (i) issuing a press release announcing the manner of redemption of the Rights
and (ii) mailing payment of the Redemption Price to the registered holders of
the Rights at their last addresses as they appear on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Stock, and upon such action, all outstanding Rights
Certificates shall be null and void without any further action by the Company.
(c)(i) Subject to the limitations of applicable law, the Board of Directors
of the Company may, at its option, at any time after any Person becomes an
Acquiring Person, redeem 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) by exchanging for such Rights shares of
Common Stock or common stock equivalent at an exchange ratio of one share of
Common Stock or common stock equivalent per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than the Company, any subsidiary of the Company, any employee benefit plan of
the company or any such subsidiary, or any entity holding Common Stock for or
pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(ii) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(c)(i) 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 or common stock equivalent equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 7(e) hereof) held by each holder of Rights.
(iii) In any exchange pursuant to this Section 24(c), the Company, at its
option, may substitute shares of Preferred Stock or shares having the same or
more favorable rights, privileges and preferences as the Preferred Stock
("equivalent preferred stock") for Common Stock exchangeable for Rights, at the
initial rate of one one-thousandth of a share of Preferred Stock (or equivalent
preferred stock) for each share of Common Stock, as appropriately adjusted to
reflect adjustments in the voting rights of the shares of Preferred Stock
pursuant to the terms thereof, so that the fraction of a Preferred Share
delivered in lieu of each share of Common Stock shall have the same voting
rights as one share of Common Stock.
-23-
(iv) In the event that there shall not be sufficient shares of Common Stock
or Preferred Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24(c), the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock or Preferred Stock for issuance upon exchange
of the Rights.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Rights Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this Section 24(d), the current
market value of a whole share of Common Stock shall be the current market price
of a share of Common Stock (as determined pursuant to Section 11(b) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24(d).
25. Notice of Certain Events. In case the Company shall propose (a) to pay
------------------------
any dividend payable in stock of any class to the holders of Preferred Stock or
to make any other distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained earnings of the
Company) or (b) to offer to the holders of Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock or shares
of stock of any class or any other securities, rights or options, or (c) to
effect any reclassification of its Preferred Stock (other than a reclassi-
fication involving only the subdivision of outstanding shares of Preferred
Stock), or (d) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its subsidiaries (taken as
a whole) to, any other Person, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Right and the Rights Agent, 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, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (a) or (b) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock whichever shall be the
earlier.
In case any of the events set forth in Section 11(a)(ii) or 13(a) of this
Agreement shall occur, then, in any such case, the Company or the Principal
Party, as the case may be, shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a notice
of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) or 13(a)
hereof, as the case may be.
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.
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:
-24-
Chevron Corporation
575 Market Street
San Francisco, CA 94105-2856
Attention: Secretary
Subject to the provisions of Section 22, 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:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Ridgefield Park, NJ 07660
Attention: Relationship Manager
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 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.
27. Supplements and Amendments. The Company and the Rights Agent may from
--------------------------
time to time supplement or amend this Agreement without approval of any holders
of Rights or Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) prior to the Distribution
Date, to change or supplement the provisions hereunder which the Company may
deem necessary or desirable or (iv) on or following the Distribution Date, to
change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates. 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 unless the
Rights Agent shall have determined in good faith that such supplement or
amendment would adversely affect its interests under this Agreement. Prior to
the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
28. Determination and Actions by the Board of Directors, etc. For all
--------------------------------------------------------
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock or any
other securities of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date of this
Agreement. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties, and
(y) not subject the Board to any liability to the holders of the Rights
Certificates.
-25-
29. 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.
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, 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, the Common Stock).
31. Severability. If any term, provision, covenant or restriction of this
------------
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
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 to be made and to
be performed entirely within such state.
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.
-26-
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 and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: CHEVRON CORPORATION
/s/ LYDIA I. BEEBE By /s/ KENNETH T. DERR
- ----------------------------------- -------------------------------------
Lydia I. Beebe, Kenneth T. Derr
Corporate Secretary Chairman of the Board
Attest: CHASEMELLON SHAREHOLDER SERVICES,
L.L.C., as Rights Agent
/s/ PATRICIA D. DEDRICK By /s/ DUANE P. KNUTSON
- ----------------------------------- -------------------------------------
Title: Assistant Vice President Title: Assistant Vice President
---------------------------- ---------------------------------
EXHIBIT A
---------
FORM OF AMENDED CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF
---------------------------------------------------------------------
SERIES A PARTICIPATING PREFERRED STOCK
--------------------------------------
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Kenneth T. Derr, Chairman of the Board of Directors and Chief Executive
Officer, and Lydia I. Beebe, Secretary, of Chevron Corporation, a corporation
organized and existing under the laws of the State of Delaware, DO HEREBY
CERTIFY:
1. That no shares of the Series A Participating Preferred Stock of the
Corporation have been issued.
2. That, pursuant to the authority conferred on the Board of Directors by
the Restated Certificate of Incorporation of the Corporation, the Board of
Directors on November 23, 1998 adopted the following resolutions amending the
Certificate of Designations, Preferences and Rights filed with the Secretary of
State of the State of Delaware on November 23, 1988 that set forth the terms of
a series of preferred stock designated as Series A Participating Preferred
Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation by Article IV of the Restated Certificate of Incorporation,
the Certificate of Designation, Preferences and Rights filed with the Secretary
of State of the State of Delaware on November 23, 1988 that sets forth the terms
of a series of preferred stock designated as "Series A Participating Preferred
Stock" of the Corporation be, and it hereby is, amended, and that the
designation and amount thereof and the relative powers, rights, preferences and
limitations of the shares of such series are as follows:
(a) Designation and Amount. The shares of the series of Preferred
----------------------
Stock shall be designated as "Series A Participating Preferred Stock,"
$1.00 par value per share, and the number of shares constituting such
series shall be five million. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series A Participating
Preferred Stock to a number less than that of the shares then outstanding
plus the number of shares issuable upon exercise of outstanding rights,
options or warrants or upon conversion of outstanding securities issued by
the Corporation.
(b) Dividends and Distributions.
---------------------------
(i) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the shares of Series A Participating Preferred Stock with respect
to dividends or distributions (except as provided in paragraph (f)
below), the holders of shares of Series A Participating Preferred
Stock, in preference to the holders of shares of Common Stock, par
value $1.50 per share (the "Common Stock"), of the Corporation and any
other junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for
the purpose, in an amount per share (rounded to the nearest cent)
equal to the greater of (x) $25 or (y) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and
A-1
1,000 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions (except as provided in
paragraph (f) below) other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, since
the first issuance of any share or fraction of a share of Series A
Participating Preferred Stock. In the event the Corporation shall at
any time after the first issuance of any share or fraction of a share
of Series A Participating Preferred Stock (A) declare any dividend on
Common Stock payable in shares of Common Stock, (B) subdivide the
outstanding Common Stock, or (C) combine the outstanding Common Stock
into a smaller number of shares, by reclassification or otherwise,
then in each such case the amount to which holders of shares of Series
A Participating Preferred Stock were entitled immediately prior to
such event under the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(ii) Other than with respect to a dividend on the Common Stock
payable in shares of Common Stock, the Corporation shall declare a
dividend or distribution on the Series A Participating Preferred Stock
as provided in subparagraph (i) above at the same time as it declares
a dividend or distribution on the Common Stock. The date or dates set
for the payment of such dividend or distribution on the Series A
Participating Preferred Stock and the record date or dates for the
determination of entitlement to such dividend or distribution shall be
the same date or dates as are set for the dividend or distribution on
the Common Stock. On any such payment date, no dividend or
distribution shall be paid on the Common Stock until the appropriate
payment has been made on the Series A Participating Preferred Stock.
(iii) Other than as set forth in this Section 2(b), no dividend
or other distribution shall be paid on the Series A Participating
Preferred Stock.
(c) Voting Rights. The holders of shares of Series A Participating
-------------
Preferred Stock shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Participating Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters submitted to
a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after the first issuance of any share or
fraction of a share of Series A Participating Preferred Stock (A)
declare any dividend on Common Stock payable in shares of Common
Stock, (B) subdivide the outstanding Common Stock into a greater
number of shares, or (C) combine the outstanding Common Stock into a
smaller number of shares, by reclassification or otherwise, then in
each such case the number of votes per share to which holders of
shares of Series A Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after
A-2
such event and the denominator of which is the number of shares of
Common Stock outstanding immediately prior to such event.
(ii) Except as otherwise provided herein or by law, the holders
of shares of Series A Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(iii)(A) If at any time dividends on any Series A
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series A Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred
Stock (including holders of the Series A Participating Preferred
Stock) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of
series, shall have the right to elect two (2) Directors.
(B) During any default period, such voting right of the
holders of Series A Participating Preferred Stock may be
exercised initially at a special meeting called pursuant to
subparagraph (C) of this Section 7(c)(iii) or at any annual
meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
Directors shall be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting
at which the holders of Preferred Stock shall exercise such
voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to
fill such vacancies, if any, in the Board of Directors as may
then exist up to two (2) Directors, or if such right is exercised
at an annual meeting, to elect two (2) Directors. If the number
which may be so elected at any special meeting does not amount to
the required number, the holders of the Preferred Stock shall
have the right to make such increase in the number of Directors
as shall be necessary to permit the election by them of the
required number. After the holders of the Preferred Stock shall
have exercised their right to elect Directors in any default
period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or pursuant to
the rights of any equity securities ranking senior to or pari
passu with the Series A Participating Preferred Stock.
A-3
(C) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred
Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Preferred Stock,
which meeting shall thereupon be called by the Chairman of the
Board, a Vice Chairman of the Board or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at
which holders of Preferred Stock are entitled to vote pursuant to
this subparagraph (c)(iii)(C) shall be given to each holder of
record of Preferred Stock by mailing a copy of such notice to him
at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier
than 10 days and not later than 60 days after such order or
request or in default of the calling of such meeting within 60
days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the
aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding. Notwithstanding the
provisions of this subparagraph (c)(iii)(C), no such special
meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting
of the stockholders.
(D) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation, if applicable, shall
continue to be entitled to elect the whole number of Directors
until the holders of Preferred Stock shall have exercised their
right to elect two (2) Directors voting as a class, after the
exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the
expiration of the default period, and (y) any vacancy in the
Board of Directors may (except as provided in subparagraph
(c)(iii)(B) of this Section 7) be filled by vote of a majority of
the remaining Directors theretofore elected by the holders of the
class of stock which elected the Director whose office shall have
become vacant. References in this paragraph (iii) to Directors
elected by the holders of a particular class of stock shall
include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(E) Immediately upon the expiration of a default period (x)
the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by
the holders of Preferred Stock as a class shall terminate, and
(z) the number of Directors shall be such number as may be
provided for in, or pursuant to, the Restated Certificate of
Incorporation or By-Laws irrespective of any increase made
pursuant to the provisions of subparagraph (c)(iii)(B) of this
Section 7 (such number being subject, however, to change
thereafter in any manner provided by law or in the
A-4
Restated Certificate of Incorporation or By-Laws). Any vacancies
in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority
of the remaining Directors, even though less than a quorum.
(iv) Following the establishment of a Fairness Committee of
the Board of Directors, pursuant to the provisions of Article VII
of the Restated Certificate of Incorporation of the Corporation
as in effect on the date hereof, no action requiring the approval
of the holders of Common Stock pursuant to such provisions may be
effected without the approval of the holders of a majority of the
voting power of the aggregate outstanding shares of the Series A
Participating Preferred Stock and the Common Stock.
(v) Except as set forth herein, holders of Series A
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent
they are entitled to vote on matters submitted to the
stockholders of the Corporation as set forth herein) for taking
any corporate action.
(d) Certain Restrictions.
--------------------
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred
Stock as provided in Subsection (b) are in arrears, thereafter
and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(A) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Participating Preferred Stock;
(B) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Participating Preferred Stock
except dividends paid ratably on the Series A Participating
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(C) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Participating Preferred Stock
provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Participating
Preferred Stock; or
(D) purchase or otherwise acquire for consideration any
shares of Series A Participating Preferred Stock or any
shares of stock ranking on a parity with the Series A
Participating Preferred Stock except in accordance
A-5
with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective
series or classes.
(ii) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under subparagraph (i) of this
Subsection (d), purchase or otherwise acquire such shares at
such time and in such manner.
(e) Reacquired Shares. Any shares of Series A Participating Preferred Stock
-----------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
(f) Liquidation, Dissolution or Winding Up.
--------------------------------------
(i) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A
Participating Preferred Stock shall have received per share,
the greater of $1,000 or 1,000 times the payment made per
share of Common Stock, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of the full
amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series
A Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an
amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (A) the Series A Liquidation
Preference by (B) 1,000 (as appropriately adjusted as set
forth in subparagraph (iii) below to reflect such events as
stock splits, stock dividends and recapitalization with
respect to the Common Stock) (such number in clause (B), the
"Adjustment Number"). Following the payment of the full amount
of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A
Participating Preferred Stock and Common Stock, respectively,
holders of Series A Participating Preferred Stock and holders
of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to
such Preferred Stock and Common Stock, on a per share basis,
respectively.
(ii) In the event there are not sufficient assets
available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all
other series of Preferred Stock, if any, which rank on a
parity with the Series A Participating Preferred Stock then
such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their
respective liquidation
A-6
preferences. In the event there are not sufficient assets
available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(iii) In the event the Corporation shall at any time
after the first issuance of any share or fraction of a share
of Series A Participating Preferred Stock (A) declare any
dividend on Common Stock payable in shares of Common Stock,
(B) subdivide the outstanding Common Stock, or (C) combine the
outstanding Common Stock into a smaller number of shares, by
reclassification or otherwise, then in each such case the
Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(g) Consolidation, Merger, etc. In case the Corporation shall enter into
---------------------------
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the shares of Series A
Participating Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time after the first issuance of any
share or fraction of a share of Series A Participating Preferred Stock (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that are outstanding immediately prior to
such event.
(h) Redemption. The shares of Series A Participating Preferred Stock shall
----------
not be redeemable.
(i) Ranking. The Series A Participating Preferred Stock shall rank junior
-------
to all other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such series
shall provide otherwise.
(j) Amendment. The Restated Certificate of Incorporation and the By-Laws of
---------
the Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series A
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding shares of
Series A Participating Preferred Stock voting separately as a class.
(k) Fractional Shares. Series A Participating Preferred Stock may be issued
-----------------
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series A Participating Preferred Stock.
A-7
And be it further
RESOLVED, that any Officer of the Corporation be, and each of them hereby
is, authorized to execute an Amended Certificate of Designation with respect to
the Series A Participating Preferred Stock pursuant to section 151 of the
General Corporation Law of the State of Delaware and to take all appropriate
action to cause such Certificate to become effective, including, but not limited
to, the filing of such Certificate with the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned have executed and subscribed this
Certificate on this 23rd day of November, 1998.
----------------------------------
Kenneth T. Derr
Chairman of the Board and
Chief Executive Officer
ATTEST:
- -----------------------------
Lydia I. Beebe
Secretary
A-8
EXHIBIT B
---------
[Form of Rights Certificate]
Certificate No. R- Rights
------------------------- --------------------------
NOT EXERCISABLE AFTER NOVEMBER 23, 2008 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE WERE
ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON. THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME VOID UNDER THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Rights Certificate
CHEVRON CORPORATION
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 November 23, 1998 (the "Rights Agreement") between Chevron Corporation, a
Delaware corporation (the "Company"), and ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5 P.M. (San Francisco time) on
November 23, 2008, at the office of the Rights Agent designated for such
purpose, one one-thousandth of a fully paid, nonassessable share of Series A
Participating Preferred Stock (the "Preferred Stock") of the Company, at a
purchase price of $320 per one one-thousandth of a share (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the appropriate
Form of Election to Purchase and Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of the close of business on
the record date relating to the initial distribution of the Rights, based on the
Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
shares of Preferred Stock or other securities which 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.
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 portion of the legend in brackets shall be inserted only if applicable.
B-1
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office 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 Preferred Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised (other than pursuant
to Section 11(a)(ii) of the Rights Agreement) 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. If this Rights
Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this Rights
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right. Subject to the provisions of the Rights Agreement, the
Company, at its option, may elect to mail payment of the redemption price to the
registered holder of the Right at the time of redemption, in which event this
Rights Certificate may become void without any further action by the Company.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
B-2
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Attest: CHEVRON CORPORATION
By
- --------------------------------- ----------------------------------
Title: Title:
--------------------------- ----------------------------
Countersigned:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
- ---------------------------------
- ---------------------------------
B-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED, hereby sells, assigns and transfers unto
-------------
- ------------------------------------------------------------------------------
(please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint Attorney, to
----------
transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ___________, __.
----------------------------------------
Signature
Signature Guaranteed:
B-4
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 any such Acquiring Person
(as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _______________, __.
---------------------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment must correspond to the name as
written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
B-5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To Chevron Corporation:
The undersigned hereby irrevocably elects to exercise Rights
-------------
represented by this Rights Certificate to purchase the shares of Preferred
Stock (or such other securities of the Company) issuable upon the exercise of
the Rights and requests that certificates for such shares be issued in the
name of:
- -------------------------------------------------------------------------------
(Please insert social security or other identifying number)
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
The Rights Certificate indicating the balance, if any, of such Rights which
may still be exercised pursuant to Section 11(a)(ii) of the Rights Agreement
shall be returned to the undersigned unless such Person requests that the Rights
Certificate be registered in the name of and delivered to:
- -------------------------------------------------------------------------------
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Dated: _______________, __.
----------------------------------------
Signature
Signature Guaranteed:
B-6
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 any such Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement); and
(3) 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.
Dated: _____________, __.
-------------------------------------
Signature
NOTICE
------
The signature to the foregoing Election to Purchase must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
B-7
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To Chevron Corporation:
The undersigned hereby irrevocably elects to exercise Rights
-------------
represented by this Rights Certificate to purchase the shares of Preferred
Stock (or such other securities of the Company or any other Person) issuable
upon the exercise of the Rights and requests that certificates for such shares
be issued in the name of:
- -------------------------------------------------------------------------------
(Please insert social security or other identifying number)
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised pursuant to Section 11(a)(ii) of the Rights
Agreement shall be returned to the undersigned unless such Person requests that
the Rights Certificate be registered in the name of and delivered to:
- -------------------------------------------------------------------------------
Please insert social security or other identifying number
(complete only if Rights Certificate is to be registered in a name other than
the undersigned)
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Dated: _______________, __.
-------------------------------------
Signature
Signature Guaranteed:
B-8
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 any such Acquiring Person
(as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________, __.
-----------------------------------
Signature
NOTICE
------
The signature to the foregoing Election to Purchase must correspond to the
name as written upon the fact of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
B-9
EXHIBIT C
---------
SUMMARY OF RIGHTS
-----------------
As a precaution to ensure that it continues to be able to take appropriate
action to protect the interests of Chevron Corporation and its stockholders,
Chevron's Board of Directors has adopted a new Stockholder Rights Plan to
replace the plan that expired on November 22, 1998. The new plan is very similar
to the old plan in purpose and effect. It would help the Board to maximize
stockholder value in the event of a change of control of Chevron, and otherwise
to resist actions that the Board considers likely to injure Chevron or its
stockholders. In adopting the new plan, the Board also announced its intention
to review the plan not less often than every third year to ensure that the plan
remains consistent with stockholder interests. Such review would be carried out
in the first instance by the Board Nominating and Governance Committee, which is
composed exclusively of nonemployee directors.
Integral to the plan is a Rights dividend payable on shares of Chevron's Common
Stock. On November 23, 1998, the Board of Directors declared a dividend
distribution on each outstanding share of Common Stock of one Right to purchase
Chevron's Series A Participating Preferred Stock. The dividend was paid to
stockholders of record at the close of business on December 3, 1998. No income
was recognized by stockholders for tax purposes on payment of the dividend. The
Rights are not now exercisable, and it is not known at this time whether they
ever will be exercisable. No action can be taken by holders of Rights at this
time. The Rights will expire on the earlier of (1) November 23, 2008, or (2)
redemption or exchange of the Rights as described below.
In general, until the Rights are exercisable or are redeemed or exchanged or
expire unexercised, each Right is associated with and cannot be separated from
the underlying share of Common Stock on which the right was declared as a
dividend. Accordingly, until the Rights are separate from the Common Stock, (1)
each holder of outstanding shares of Common Stock is also the holder of an equal
number of Rights, (2) any sale or other transfer of shares of Common Stock by a
holder thereof also will cause a transfer of the associated Rights, (3) no
income or loss will be recognized with respect to the sale of Rights incident to
a sale of Common Stock, and (4) no certificates will be issued to evidence
ownership of the Rights, but certificates for shares of Common Stock issued
after the Record Date will refer to the associated Rights. Until a Right is
exercised, it confers no rights as a stockholder, including, without limitation,
the right to vote or to receive dividends.
The Rights will separate from the Common Stock if there is a "Distribution
Date." A Distribution Date would occur upon the earliest to happen of (1) a
public announcement that someone has become an "Acquiring Person," meaning that
such person (including affiliated or associated persons or entities) has
acquired, or obtained the right to acquire, beneficial ownership of 10 percent
or more of the outstanding shares of Common Stock, other than as a result of
repurchases of stock by Chevron, or (2) 10 days (unless such date is extended by
the Board of Directors) having elapsed following the commencement of (or a
public announcement of an intention to make) a tender offer or exchange offer
that would result in someone becoming an Acquiring Person. If a Distribution
Date occurs, the Rights will become exer- cisable and separately tradable, and
Chevron will issue certificates for the Rights as soon as possible.
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock Chevron may
issue (unless otherwise provided in the terms of such stock). Each share of
Preferred Stock will have a preferential quarterly dividend in an amount equal
to 1,000 times the dividend declared on each share of Common Stock, but in no
event less than $25. In the event
C-1
of liquidation, the holders of shares of Preferred Stock will receive a
preferred liquidation payment equal to the greater of $1,000 or 1,000 times the
payment made per each share of Common Stock.
Each share of Preferred Stock will have 1,000 votes, voting together with the
shares of Common Stock. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 1,000 times the amount and type of
consideration received per share of Common Stock. The rights of the Preferred
Stock as to dividends, liquidation and voting, and in the event of mergers and
consolidations, are protected by customary anti-dilution provisions.
The amount of Preferred Stock that the holder of a Right is entitled to receive
upon exercise of a Right and the Purchase Price payable upon exercise of a Right
are both subject to adjustment. Initially, the Purchase Price is $320 per Right.
If no one has yet become an Acquiring Person, payment of the Purchase Price
entitles the holder of a Right to receive only one one-thousandth of a share of
Preferred Stock. If someone has become an Acquiring Person, however, payment of
the Purchase Price entitles the holder to receive a number of one one-thousandth
shares having a value, based on the then current market value of the Common
Stock, equal to two times the Purchase Price. In addition, if someone has become
an Acquiring Person, and thereafter Chevron is involved in a merger or other
business combination transaction, a holder of a Right also will be able to
acquire, upon payment of the Purchase Price, Common Stock of Chevron or its
successor having a value, based on the market value of Chevron or its successor
at the time of the transaction, equal to twice the value of the Purchase Price.
Some limitations apply to the timing of exercise of the Rights, and any Rights
belonging to an Acquiring Person are null and void.
The Board of Directors may redeem the Rights in whole, but not in part, at the
Redemption Price of $0.01 per Right, at any time before there is an Acquiring
Person. After there is an Acquiring Person, the Rights may be redeemed only in
very limited circumstances. However, the Board of Directors may in some cases
also exchange all or part of the then outstanding and exercisable Rights (except
for Rights that have become void) for shares of Common Stock at a rate of one
share of Common Stock (or substitute consideration) per Right. Upon redemption
or exchange, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price or the exchange
consideration, as applicable.
A full description of the Rights is set forth in the Rights Agreement between
Chevron and the Rights Agent, ChaseMellon Shareholder Services, L.L.C. A copy of
the Rights Agreement has been filed with the Securities and Exchange Commission
as an Exhibit to a Registration Statement on Form 8-A. A copy of the Rights
Agreement is available at www.chevron.com or free by writing the Corporate
Secretary, Chevron Corporation, 575 Market Street, 38th Floor, San Francisco, CA
94105. Chevron and the Rights Agent retain broad authority to amend the Rights
Agreement; however, following any Distribution Date any amendment may not
adversely affect the interests of holders of Rights. This summary description of
the Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement.
C-2