EXHIBIT 4.(b)
AMENDMENT TO RIGHTS AGREEMENT
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THIS AMENDMENT TO RIGHTS AGREEMENT, dated as of September 22, 1996
(this "Amendment"), is made and entered into by Diamond Shamrock, Inc., a
Delaware corporation (the "Company").
RECITALS
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WHEREAS, the Board of Directors of the Company (the "Board") has
approved an Agreement and Plan of Merger, to be dated as of the date hereof (as
the same may be amended from time to time, the "Merger Agreement"), between the
Company and Ultramar Corporation, a Delaware corporation ("Ultramar"), providing
for the Merger of the Company with and into Ultramar with Ultramar as the
surviving corporation (the "Merger");
WHEREAS, the Board has approved a Stock Option Agreement, to be dated
as of the date hereof (as the same may be amended from time to time, the
"Company Option"), between the Company and Ultramar pursuant to which the
Company has granted Ultramar the option, on the terms and conditions stated
therein, to purchase shares of the Company's outstanding common stock, par value
$.01 per share;
WHEREAS, the Board has approved a Stock Option Agreement, to be dated
as of the date hereof (as the same may be amended from time to time, the
"Ultramar Option"), between Ultramar and the Company pursuant to which Ultramar
has granted the Company the option to purchase shares of Ultramar's common stock
on substantially the same terms as the Company Option;
WHEREAS, the Company is a party to a Rights Agreement, dated as of
March 6, 1990 (the "Rights Agreement");
WHEREAS, as a condition and inducement of Ultramar's willingness to
enter into the Merger Agreement and the Ultramar Option, Ultramar has requested
that the Company agree, and the Company has agreed, to execute and deliver this
Amendment in order to permit execution and delivery of the Merger Agreement and
the Company Option and the consummation of the transactions contemplated thereby
without causing the Rights (as defined in the Rights Agreement) to become
exercisable; and
WHEREAS, as a condition and inducement to Company's willingness to
enter into the Merger Agreement and the Company Option, the Company has
requested that Ultramar agree, and Ultramar has agreed, to enter into the
Amendment, to be dated as of the date of this Amendment, to a Rights Agreement,
dated as of June 25, 1992, as amended by First Amendment, dated as of
October 26, 1992, and Amendment, dated as of May 10, 1994, between Ultramar and
Registrar and Transfer Company (as successor to First City, Texas-Houston,
National Association), as Rights Agent (the "Ultramar Rights Agreement"), in
order to permit execution and delivery of the Merger Agreement and the Ultramar
Option and the consummation of the transactions contemplated thereby without
causing the rights issued under the Ultramar Rights Agreement to become
exercisable;
NOW, THEREFORE, in accordance with Section 26 of the Rights Agreement,
the Company hereby amends the Rights Agreement as follows:
1. Certain Definitions. (a) Capitalized terms used in the Rights
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Agreement, as amended by this Amendment, which are defined in this Amendment
shall have the meanings set forth in this Amendment, and such defined terms are
incorporated into the Rights Agreement, as amended by this Amendment.
(b) The definition of "Acquiring Person" in Section 1(a) of the
Rights Agreement is amended by adding the following clause after the word
"Person" and before the period at the end of such definition:
"provided, further, however, that (x) neither Ultramar nor any wholly
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owned subsidiary of Ultramar shall be deemed to be or to have become
an Acquiring Person (I) solely as a result of the execution and
delivery of the Merger Agreement and the Company Option or the
consummation of the transactions contemplated thereby, or (II) solely
as a result of Ultramar or any wholly owned subsidiary of Ultramar
being or becoming the Beneficial Owner of not more than two percent of
the Common Shares then outstanding (in addition to the Common Shares
that Ultramar has become the Beneficial Owner of as the result of its
execution and delivery of the Company Option), excluding, however, for
purposes of determining whether such two percent limitation has been
exceeded, Common Shares that Ultramar would be deemed the Beneficial
Owner of because any UC Benefit Plan (as that term is defined in the
Merger Agreement) is the Beneficial Owner of such Common Shares as of
the date of the Amendment, and (y) a Person shall not be deemed to be
or to have become an Acquiring Person (I) solely as a result of taking
an assignment or transfer of Ultramar's rights under the Company
Option, in accordance with the terms thereof, or the consummation of
the transactions contemplated thereby following any such assignment or
transfer, or (II) solely as a result of such Person being or becoming
the Beneficial Owner of not more than two percent of the Common Shares
then outstanding (in addition to the Common Shares that such Person
has become the Beneficial Owner of as a result of the assignment of
the Company Option in accordance
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with its terms), excluding, however, for purposes of determining whether
such two percent limitation has been exceeded, Common Shares that such
Person would be deemed the Beneficial Owner of because any employee benefit
plan of such Person is the Beneficial Owner of such Common Shares as of the
date of such assignment or transfer"
(c) The definition of "Adverse Person" in Section 1(b) of the Rights
Agreement is amended by adding the following after a word "outstanding" and
before the period at the end of the first sentence thereof:
"; and provided, further, however, that (x) neither Ultramar nor any
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wholly owned subsidiary of Ultramar shall be deemed to be or to have
become an Adverse Person (I) solely as a result of the execution and
delivery of the Merger Agreement and the Company Option or the
consummation of the transactions contemplated thereby, or (II) solely
as a result of Ultramar or any wholly owned subsidiary of Ultramar
being or becoming the Beneficial Owner of not more than two percent of
the Common Shares then outstanding (in addition to the Common Shares
that Ultramar has become the Beneficial Owner of as the result of its
execution and delivery of the Company Option), excluding, however, for
purposes of determining whether such two percent limitation has been
exceeded, Common Shares that Ultramar would be deemed the Beneficial
Owner of because any UC Benefit Plan (as that term is defined in the
Merger Agreement) is the Beneficial Owner of such Common Shares as of
the date of the Amendment, and (y) a Person shall not be deemed to be
or to have become an Adverse Person (I) solely as a result of taking
an assignment or transfer of Ultramar's rights under the Company
Option, in accordance with the terms thereof, or the consummation of
the transactions contemplated thereby following any such assignment or
transfer, or (II) solely as a result of such Person being or becoming
the Beneficial Owner of not more than two percent of the Common Shares
then outstanding (in addition to the Common Shares that such Person
has become the Beneficial Owner of as a result of the assignment or
transfer of the Company Option in accordance with its terms),
excluding, however, for purposes of determining whether such two
percent limitation has been exceeded, Common Shares that such Person
would be deemed the Beneficial Owner of because any employee benefit
plan of such Person is the Beneficial Owner of such Common Shares as
of the date of such assignment or transfer"
(d) The definition of "Expiration Date" in Section 1(k) of the Rights
Agreement is amended by deleting the word
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"and" prior to "(iii)" and by adding the following after the word "hereof" and
before the period at the end thereof:
", and (iv) immediately prior to the Effective Time (as that term is
defined in the Merger Agreement)"
2. Amendment of Flip-in Event. Section 11(a)(ii)(A) of the Rights
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Agreement is amended by adding the following after the semicolon and before the
word "or" at the end thereof:
"provided, further, however, that notwithstanding the foregoing, no
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Flip-in Event shall be deemed to have occurred (x) solely as the
result of the execution and delivery of the Merger Agreement and the
Company Option or the consummation of the transactions contemplated
thereby, (y) solely as a result of Ultramar or any of its wholly owned
subsidiaries being or becoming the Beneficial Owner of not more than
two percent of the Common Shares then outstanding (in addition to the
Common Shares that Ultramar has become the Beneficial Owner of as the
result of its execution and delivery of the Company Option),
excluding, however, for purposes of determining whether such two
percent limitation has been exceeded, Common Shares that Ultramar
would be deemed the Beneficial Owner of because any UC Benefit Plan
(as that term is defined in the Merger Agreement) is the Beneficial
Owner of as of the date of the Amendment, or (z) solely as a result of
(I) a Person taking an assignment or transfer of Ultramar's rights
under the Company Option, in accordance with the terms thereof, or the
consummation of the transactions contemplated thereby following any
such assignment or transfer, or (II) such Person being or becoming the
Beneficial Owner of not more than two percent of the Common Shares
then outstanding (in addition to the Common Shares that such Person
has become the Beneficial Owner of as a result of the assignment or
transfer of the Company Option in accordance with its terms),
excluding, however, for purposes of determining whether such two
percent limitation has been exceeded, Common Shares that such Person
would be deemed the Beneficial Owner of because any employee benefit
plan of such Person is the Beneficial Owner of such Common Shares as
of the date of such assignment or transfer;"
3. Amendment of Flip-over Event. Section 13(a)(i) of the Rights
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Agreement is amended by adding the phrase "(other than Ultramar pursuant to the
Merger Agreement)" after the word "Person" and before the word "and".
4. Effective Time. This Amendment shall be effective immediately prior
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to the execution and delivery of the Merger Agreement and the Company Option.
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5. Full Force. Except as expressly amended hereby, the Rights Agreement
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shall continue in full force and effect in accordance with the provisions
thereof on the date hereof.
6. Governing Law and Document. This Amendment shall be deemed to be a
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contract made under the internal substantive laws of the State of Delaware and
for all purposes shall be governed by and construed in accordance with the
internal substantive laws of such State applicable to contracts to be made and
performed entirely within such State. This Amendment is an amendment to the
Rights Agreement pursuant to Section 26 of the Rights Agreement.
IN WITNESS WHEREOF, the Company has caused this Amendment to be duly
executed as of the day and year first above written.
DIAMOND SHAMROCK, INC.
By:
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Name: Roger R. Hemminghaus
Title: Chairman and
Chief Executive Officer
Attest:
By:
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Name: Timothy J. Fretthold
Title: Senior Vice President and
General Counsel
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AGREED TO AND ACCEPTED.
KEYBANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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Date:
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Attest:
By:
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Name:
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Title:
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