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EXHIBIT 99.9
CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS
OF
AUTOMATICALLY CONVERTIBLE EQUITY SECURITIES,
CONVERSION PREFERRED STOCK, SERIES C
OF
APACHE CORPORATION
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Apache Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), in accordance with
the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority vested in the Board of Directors in accordance
with the provisions of the Restated Certificate of Incorporation, as amended, of
the Corporation, which authorizes the issuance by the Corporation of up to five
million (5,000,000) shares of no par value preferred stock, which authority was
delegated by the Board of Directors to a committee of the Board of Directors
(the "Committee") pursuant to resolutions adopted on April 2, 1999 and April 26,
1999, the Committee by unanimous written consent dated May ___, 1999, adopted
the following resolution creating and providing for the issuance of a series of
preferred stock of the Corporation:
RESOLVED: That, pursuant to the authority delegated by the Board of
Directors of the Corporation, the Committee hereby creates a series of
preferred stock of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights, preferences and
limitations thereof (in addition to the provisions set forth in the
Restated Certificate of Incorporation of the Corporation, which are
applicable to all series of the Corporation's preferred stock) as
follows:
AUTOMATICALLY CONVERTIBLE EQUITY SECURITIES,
CONVERSION PREFERRED STOCK, SERIES C
1. Number of Shares and Designation. [ONE HUNDRED FIFTEEN] thousand
[(115,000)] shares of the five million (5,000,000) authorized shares of no par
value preferred stock of the Corporation are hereby constituted as a series of
preferred stock, no par value per share, designated as "Automatically
Convertible Equity Securities, Conversion Preferred Stock, Series C"
(hereinafter called the "Series C Preferred Stock"). The Board of Directors may
increase or decrease the number of shares of the series, but may not decrease
the number of shares below the number of shares then outstanding.
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2. Ranking. The Series C Preferred Stock shall rank prior and superior
to all of the common stock, $1.25 par value per share, of the Corporation (the
"Common Stock") now or hereafter outstanding, and prior and superior to the
Series A Junior Participating Preferred Stock of the Corporation (the "Series A
Preferred Stock") as to payment of dividends and distribution of assets upon
dissolution, liquidation or winding up of the Corporation. The Series C
Preferred Stock shall rank equal to the Corporation's 5.68% Cumulative Preferred
Stock, Series B (the "Series B Preferred Stock"), as to payment of dividends and
distribution of assets upon dissolution, liquidation or winding up of the
Corporation.
3. Dividends.
(i) General. Cumulative cash dividends shall be payable on each share
of Series C Preferred Stock when, as and if declared by the Board of Directors
of the Corporation or a duly authorized committee thereof, out of the assets of
the Corporation legally available therefor.
Dividends on the Series C Preferred Stock shall be payable quarterly,
when, as and if declared by the Board of Directors of the Corporation or a duly
authorized committee thereof on the last business day of January, April, July
and October of each year (each such date being referred to herein as a "Dividend
Payment Date") at the annual rate of $________ per share. The initial dividend
on the Series C Preferred Stock for the dividend period commencing on May ___,
1999, to but excluding July 30, 1999, will be $_________ per share, and shall be
payable on July 30, 1999. The amount of dividends payable on each share of
Series C Preferred Stock for each full quarterly period thereafter shall be
computed by dividing the annual dividend rate by four. The amount of dividends
payable for any other period that is shorter or longer than a full quarterly
dividend period will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
A dividend period with respect to a Dividend Payment Date is the period
commencing on the preceding Dividend Payment Date or, if none, the date of issue
and ending on the day immediately prior to the next Dividend Payment Date.
Dividends payable, if declared, on a Dividend Payment Date shall be payable to
holders of record as they appear on the stock books of the Corporation on the
record date, which shall be the fifteenth day of the calendar month in which the
applicable Dividend Payment Date falls (each, a "Dividend Record Date").
Dividends on the Series C Preferred Stock shall be cumulative if the
Corporation fails to declare one or more dividends on the Series C Preferred
Stock in any amount, whether or not the earnings or financial condition of the
Corporation were sufficient to pay such dividends in whole or in part.
Holders of shares of Series C Preferred Stock shall not be entitled to
any dividend, whether payable in cash, property or stock, in excess of full
dividends (including accrued dividends, if any) on shares of Series C Preferred
Stock. No interest or sum of money in lieu of interest shall be payable in
respect of any dividend or payment which may be in arrears.
Dividends in arrears on the Series C Preferred Stock payable, if
declared, but not declared for payment or paid on any Dividend Payment Date may
be declared by the Board of
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Directors of the Corporation or a duly authorized committee thereof and paid on
any date fixed by the Board of Directors of the Corporation or a duly authorized
committee thereof, whether or not a Dividend Payment Date, to the holders of
record of the shares of Series C Preferred Stock, as they appear on the stock
register of the Corporation on such record date, which shall be not less than
ten nor more than 30 days prior to the payment date therefor, as shall be fixed
by the Board of Directors of the Corporation or a duly authorized committee
thereof.
(ii) Payment Restrictions. The Corporation may not declare or pay any
dividend or make any distribution of assets (other than dividends paid or other
distributions made in stock of the Corporation ranking junior to the Series C
Preferred Stock as to the payment of dividends and the distribution of assets
upon liquidation, dissolution or winding up) on, or redeem, purchase or
otherwise acquire (except upon conversion or exchange for stock of the
Corporation ranking junior to the Series C Preferred Stock as to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up), shares of Common Stock, of Series A Preferred Stock or of any other
stock of the Corporation ranking junior to the Series C Preferred Stock as to
the payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, unless all accrued and unpaid dividends on the Series
C Preferred Stock for all prior dividend periods have been or contemporaneously
are declared and paid and the full quarterly dividend on the Series C Preferred
Stock for the current dividend period has been or contemporaneously is declared
and set apart for payment.
Whenever all accrued dividends on the Series C Preferred Stock are not
paid in full, the Corporation may not declare or pay dividends or make any
distribution of assets (other than dividends paid or other distributions made in
stock of the Corporation ranking junior to the Series C Preferred Stock as to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up) on any other stock of the Corporation ranking on a
parity with the Series C Preferred Stock as to the payment of dividends,
including the Series B Preferred Stock, unless (a) all accrued and unpaid
dividends on the Series C Preferred Stock for all prior dividend periods are
contemporaneously declared and paid or (b) all dividends declared and paid or
set apart for payment or other distributions made on the Series C Preferred
Stock and any other stock of the Corporation ranking on a parity with the Series
C Preferred Stock as to the payment of dividends, including the Series B
Preferred Stock, are declared and paid or set apart for payment or made pro rata
so that the amount of dividends declared and paid or set apart for payment or
other distributions made per share on the Series C Preferred Stock and such
other stock of the Corporation will bear the same ratio that accrued and unpaid
dividends per share on the Series C Preferred Stock and such other stock of the
Corporation bear to each other.
Whenever all accrued dividends on the Series C Preferred Stock are not
paid in full, the Corporation may not redeem, purchase or otherwise acquire
(except upon conversion or exchange for stock of the Corporation ranking junior
to the Series C Preferred Stock as to the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up) other stock
of the Corporation ranking on a parity with the Series C Preferred Stock as to
the payment of dividends or the distribution of assets upon liquidation,
dissolution or winding up, including the Series B Preferred Stock, unless (a)
all outstanding shares of the Series C Preferred Stock are contemporaneously
redeemed or (b) a pro rata redemption is made of shares of Series C Preferred
Stock and such other stock of the Corporation, with the amount allocable to each
series of such stock determined on the basis of the aggregate liquidation
preference of the outstanding shares of each series and the shares of each
series being redeemed only on a pro rata basis.
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4. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of shares
of Series C Preferred Stock shall be entitled to receive out of the assets of
the Corporation available for distribution to stockholders, before any
distribution of assets is made on the Common Stock of the Corporation or any
other class or series of stock of the Corporation ranking junior to the Series C
Preferred Stock, upon liquidation, a liquidating distribution in the amount of
$______ per share, plus an amount equal to the sum of all accrued and unpaid
dividends (whether or not earned or declared) for the then-current dividend
period and all dividend periods prior thereto.
Neither the sale of all or substantially all of the property or
business of the Corporation, nor the merger, conversion or consolidation of the
Corporation into or with any other corporation, nor the merger, conversion or
consolidation of any other corporation into or with the Corporation shall
constitute a liquidation, dissolution or winding up, voluntary or involuntary,
for the purposes of the foregoing paragraph. After the payment to the holders of
the shares of Series C Preferred Stock of the full preferential amounts provided
for above, the holders of the shares of Series C Preferred Stock as such shall
have no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution
to the holders of the shares of Series C Preferred Stock upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled as provided above, no such distribution shall be made on account of any
other stock of the Corporation ranking on a parity with the Series C Preferred
Stock as to the distribution of assets upon such liquidation, dissolution or
winding up, including the Series B Preferred Stock, unless a pro rata
distribution is made on the Series C Preferred Stock and such other stock of the
Corporation, with the amount allocable to each series of such stock determined
on the basis of the aggregate liquidation preference of the outstanding shares
of each series and distributions to the shares of each series being made on a
pro rata basis.
5. Voting Rights.
(i) The holders of shares of Series C Preferred Stock shall have no
voting rights, except as set forth below or as expressly required by applicable
law. In exercising any such vote, each outstanding share of Series C Preferred
Stock shall be entitled to one vote.
(ii) If the equivalent of six quarterly dividends payable, whether
consecutively or not, on the Series C Preferred Stock or any other class or
series of preferred stock ranking on a parity with the Series C Preferred Stock
as to the payment of dividends, including the Series B Preferred Stock, has not
been paid, the number of directors of the Corporation shall be increased by two
(without duplication of any increase made pursuant to the terms of any other
series of preferred stock of the Corporation), and the holders of the Series C
Preferred Stock, voting as a single class with the holders of shares of any
other class of the preferred stock of the Corporation ranking on a parity with
the Series C Preferred Stock either as to dividends or distribution of assets
and upon which like voting rights have been conferred and are exercisable, shall
have the exclusive right to vote for and to elect such two directors at any
meeting of stockholders of the Corporation at which directors are to be elected
held during the period such dividends remain in arrears. Each class or series of
preferred stock entitled to vote for the additional directors shall
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have a number of votes proportionate to the aggregate liquidation preference of
its outstanding shares. Such voting right shall continue until full cumulative
dividends for all past dividend periods on all such preferred stock of the
Corporation, including any shares of the Series B Preferred Stock and the Series
C Preferred Stock, have been paid or declared and set apart for payment. Any
such elected directors shall serve until the Corporation's next annual meeting
of stockholders (notwithstanding that prior to the end of such term the right to
elect directors shall cease to exist) or until their respective successors shall
be elected and qualify.
(iii) Whenever such right shall vest, it may be exercised initially
either at a special meeting of holders of Series C Preferred Stock or at any
annual stockholders' meeting, but thereafter it shall be exercised only at
annual stockholders' meetings. Any director who shall have been elected by the
holders of Series C Preferred Stock as a class pursuant to this Section 5 may be
removed at any time, either for or without cause by, and only by, the
affirmative votes of the holders of record of a majority of the outstanding
shares of Series C Preferred Stock given at a special meeting of such
stockholders called for such purpose, and any vacancy created by such removal
may also be filled at such meeting. Any vacancy caused by the death or
resignation of a director who shall have been elected by the holders of Series C
Preferred Stock as a class pursuant to this Section 5 may be filled only by the
holders of all outstanding Series C Preferred Stock at a meeting called for such
purpose.
Any meeting of the holders of all outstanding Series C Preferred Stock
entitled to vote as a class for the election or removal of directors shall be
held at the place at which the last annual meeting of stockholders was held. At
such meeting, the presence in person or by proxy of the holders of a majority of
the outstanding shares of all outstanding Series C Preferred Stock shall be
required to constitute a quorum; in the absence of a quorum, a majority of the
holders present in person or by proxy shall have the power to adjourn the
meeting from time to time without notice, other than announcement at the
meeting, until a quorum shall be present.
(iv) So long as any Series C Preferred Stock is outstanding, the
affirmative vote or consent of the holders of at least 80% of the outstanding
shares of the Series C Preferred Stock will be required for any amendment of the
Restated Certificate of Incorporation of the Corporation (or any certificate
supplemental thereto) which will adversely affect the powers, preferences,
privileges or rights of the Series C Preferred Stock. The affirmative vote or
consent of the holders of at least 80% of the outstanding shares of the Series C
Preferred Stock and any other series of the preferred stock of the Corporation
ranking on a parity with the Series C Preferred Stock either as to dividends or
upon liquidation, voting as a single class without regard to series, will be
required to issue, authorize or increase the authorized amount of, or issue or
authorize any obligation or security convertible into or evidencing a right to
purchase, any additional class or series of stock ranking prior to the Series C
Preferred Stock as to dividends or upon dissolution, or to reclassify any
authorized stock of the Corporation into such prior shares; but such vote will
not be required for the Corporation to issue, authorize or increase the
authorized amount of, or issue or authorize any obligation or security
convertible into or evidencing a right to purchase, any stock ranking on a
parity with or junior to the Series C Preferred Stock.
The affirmative vote or consent of the holders of a majority of all the
outstanding shares of Series C Preferred Stock, voting or consenting separately
as a class, shall be required to approve any merger, conversion, consolidation
or compulsory share exchange to which the
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Corporation is a party, unless (a) the terms of such merger, conversion,
consolidation or compulsory share exchange do not provide for a change in the
terms of the Series C Preferred Stock and (b) the Series C Preferred Stock is on
a parity with or prior to (in respect of the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up) any other
class or series of capital stock authorized by the surviving corporation, other
than any class or series of stock of the Corporation ranking senior as to the
Series C Preferred Stock either as to the payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up of the
Corporation and previously authorized with the consent of holders of Series C
Preferred Stock as described herein (or other than any capital stock into which
such prior stock is converted as a result of such merger, consolidation or
compulsory share exchange).
6. Conversion.
(i) Mandatory Conversion. Unless earlier converted at the option of the
holder in accordance with the provisions of Section 6(ii), on May ___, 2002 (the
"Mandatory Conversion Date"), each outstanding share of the Series C Preferred
Stock shall convert automatically (the "Automatic Conversion") into (a) shares
of authorized Common Stock at the Exchange Rate (as hereinafter defined) in
effect on the Mandatory Conversion Date and (b) the right to receive an amount
in cash equal to all accrued and unpaid dividends on such share of Series C
Preferred Stock to the Mandatory Conversion Date, whether or not earned or
declared, out of funds legally available therefor. The Exchange Rate is equal to
(a) if the Current Market Price is greater than or equal to $______ per share
(the "Threshold Price"), ____ shares of Common Stock (the "Upper Exchange
Rate"), (b) if the Current Market Price is less than the Threshold Price but
greater than the Initial Price, the number of shares of Common Stock having a
value (determined at the Current Market Price) equal to 50 times the Initial
Price (the "Middle Exchange Rate"), and (c) if the current Market Price is less
than or equal to the Initial Price, 50 shares of Common Stock (the "Lower
Exchange Rate") per share of Series C Preferred Stock, and is subject to
adjustment as set forth in Section 6(iii) and Section 6(iv) below. Dividends on
the shares of Series C Preferred Stock shall cease to accrue and such shares of
Series C Preferred Stock shall cease to be outstanding on the Mandatory
Conversion Date. The Corporation shall make such arrangements as it deems
appropriate for the issuance of certificates representing shares of Common
Stock, and for the payment of cash in respect of such accrued and unpaid
dividends on the Series C Preferred Stock, if any, or cash in lieu of fractional
shares of Common Stock, if any, in exchange for and contingent upon surrender of
certificates representing the shares of Series C Preferred Stock, and the
Corporation may defer the payment of dividends on such shares of Common Stock
and the voting thereof until, and make such payment and voting contingent upon,
the surrender of such certificates representing the shares of Series C Preferred
Stock, provided that the Corporation shall give the holders of the shares of
Series C Preferred Stock such notice of any such actions as the Corporation
deems appropriate and upon such surrender such holders shall be entitled to
receive such dividends declared and paid on such shares of Common Stock
subsequent to the Mandatory Conversion Date. Amounts payable in cash in respect
of the shares of Series C Preferred Stock or in respect of such shares of Common
Stock shall not bear interest.
(ii) Optional Conversion. Shares of Series C Preferred Stock are
convertible, in whole or in part, at the option of the holders thereof
("Optional Conversion"), at any time prior to the Mandatory Conversion Date,
into shares of Common Stock at a rate of __________ shares
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of Common Stock for each share of Series C Preferred Stock (the "Optional
Conversion Rate"), subject to adjustment as set forth in Section 6(iii) and
Section 6(iv) below.
Optional conversion of shares of Series C Preferred Stock may be
effected by delivering certificates evidencing such shares, together with
written notice of conversion and a proper assignment of such certificates to the
Corporation or in blank (and, if applicable, payment of an amount equal to the
dividend payable on such shares), to the office of the Transfer Agent for the
Series C Preferred Stock or to any other office or agency maintained by the
Corporation for that purpose and otherwise in accordance with Optional
Conversion procedures established by the Corporation. Each Optional Conversion
shall be deemed to have been effected immediately prior to the close of business
on the date on which the foregoing requirements shall have been satisfied. The
Optional Conversion shall be at the Optional Conversion Rate in effect at such
time and on such date.
Holders of shares of Series C Preferred Stock at the close of business
on a Dividend Record Date shall be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date notwithstanding the
Optional Conversion of such shares following such Dividend Record Rate and prior
to such Dividend Payment Date. However, shares of Series C Preferred Stock
surrendered for Optional Conversion after the close of business on a Dividend
Record Date and before the opening of business on the next succeeding Dividend
Payment Date must be accompanied by payment in cash of an amount equal to the
dividend payable on such shares on such Dividend Payment Date. Except as
provided above, upon any Optional Conversion of shares of Series C Preferred
Stock, the Corporation shall make no payment or allowance for unpaid preferred
dividends, whether or not in arrears, on such shares of Series C Preferred Stock
as to which Optional Conversion has been effected or for dividends or
distributions on the shares of Common Stock issued upon such Optional
Conversion.
(iii) Adjustments to the Exchange Rate and the Optional Conversion
Rate. The Exchange Rate and the Optional Conversion Rate shall each be subject
to adjustment from time to time as provided below in this Section 6(iii).
(a) If the Corporation shall pay or make a dividend or other
distribution with respect to its Common Stock in shares of Common Stock
(including by way of reclassification of any shares of its Common
Stock), the Exchange Rate and the Optional Conversion Rate in effect at
the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
other distribution shall each be increased by multiplying such Exchange
Rate and Optional Conversion Rate by a fraction of which the numerator
shall be the sum of the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the
total number of shares of Common Stock constituting such dividend or
other distribution, and of which the denominator shall be the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination, such increase to become effective
immediately after the opening of business on the day following the date
fixed for such determination.
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(b) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock,
the Exchange Rate and the Optional Conversion Rate in effect at the
opening of business on the day following the day upon which such
subdivision or split becomes effective shall each be proportionately
increased, and, conversely, in case outstanding shares of Common Stock
shall be combined into a smaller number of shares of Common Stock, the
Exchange Rate and the Optional Conversion Rate in effect at the opening
of business on the day following the day upon which such combination
becomes effective shall each be proportionately reduced, such increases
or reductions, as the case may be, to become effective immediately
after the opening of business on the day following the day upon which
such subdivision, split or combination becomes effective.
(c) If the Corporation shall, after the date hereof, issue
rights or warrants, in each case other than the Rights, to all holders
of its Common Stock entitling them (for a period not exceeding 45 days
from the date of such issuance) to subscribe for or purchase shares of
Common Stock at a price per share less than the Fair Market Value of
the Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants, then in each
case the Exchange Rate and the Optional Conversion Rate shall each be
adjusted by multiplying the Exchange Rate and the Optional Conversion
Rate in effect on such record date by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date
of issuance of such rights or warrants, immediately prior to such
issuance, plus the number of additional shares of Common Stock offered
for subscription or purchase pursuant to such rights or warrants, and
of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants,
immediately prior to such issuance, plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares
of Common Stock so offered for subscription or purchase pursuant to
such rights or warrants would purchase at such Fair Market Value
(determined by multiplying such total number of shares by the exercise
price of such rights or warrants and dividing the product so obtained
by such Fair Market Value). Shares of Common Stock owned by the
Corporation or by another company of which a majority of the shares
entitled to vote in the election of directors are held, directly or
indirectly, by the Corporation shall not be deemed to be outstanding
for purposes of such computation. Such adjustment shall become
effective at the opening of business on the business day next following
the record date for the determination of stockholders entitled to
receive such rights or warrants. To the extent that shares of Common
Stock are not delivered after the expiration of such rights or
warrants, the Exchange Rate and the Optional Conversion Rate shall each
be readjusted to the Exchange Rate and the Optional Conversion Rate
which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made upon the basis of the
issuance of rights or warrants in respect of only the number of shares
of Common Stock actually delivered.
(d) If the Corporation shall pay a dividend or make a
distribution to all holders of its Common Stock consisting of evidences
of its indebtedness, securities, cash or other assets (including shares
of capital stock of the Corporation other than Common Stock but
excluding any cash dividends or distributions and any dividends or
other
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distributions referred to in clauses (a) and (b) above), or shall issue
to all holders of its Common Stock rights or warrants to subscribe for
or purchase any of its securities (other than those referred to in
clause (c) above), then in each such case the Exchange Rate and the
Optional Conversion Rate shall each be adjusted by multiplying the
Exchange Rate and the Optional Conversion Rate in effect on the record
date for such dividend or distribution or for the determination of
stockholders entitled to receive such rights or warrants, as the case
may be, by a fraction of which the numerator shall be the Fair Market
Value per share of the Common Stock on such record date), and of which
the denominator shall be such Fair Market Price per share of Common
Stock less the Fair Market Value (as determined by the Board of
Directors, whose determination shall be conclusive) as of such record
date of the portion of the evidences of indebtedness or assets so
distributed, or of such subscription rights or warrants, applicable to
one share of Common Stock. Such adjustment shall become effective on
the opening of business on the business day next following the record
date for such dividend or distribution or for the determination of
stockholders entitled to receive such rights or warrants, as the case
may be.
(e) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any cash
that is distributed in a transaction to which Section 6(iv) applies or
as part of a distribution referred to in Section 6(iii)(d)) in an
aggregate amount that, combined together with (1) the aggregate amount
of any other distributions to all holders of its Common Stock made
exclusively in cash within the 12 months preceding the date of payment
of such distribution and in respect of which no adjustment pursuant to
this Section 6(iii)(e) or Section 6(iii)(f) has been made and (2) the
aggregate of any cash plus the fair market value (as determined by the
Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) of any non-cash
consideration payable in respect of any tender or exchange offer by the
Corporation or any of its subsidiaries for all or any portion of the
Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment
pursuant to this Section 6(iii)(e) or Section 6(iii)(f) has been made,
exceeds 12.5% of the product of the Current Market Price per share of
the Common Stock on the date for the determination of holders of shares
of Common Stock entitled to receive such distribution times the number
of shares of Common Stock outstanding on such date, then, and in each
such case, immediately after the close of business on such date for
determination, each of the Exchange Rate and the Optional Conversion
Rate shall be increased so that the Exchange Rate and the Optional
Conversion Rate shall equal the rate determined by dividing the
Exchange Rate and the Optional Conversion Rate, respectively, in effect
immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution
by a fraction (1) the numerator of which shall be equal to the Current
Market Price per share of the Common Stock on the date fixed for such
determination less an amount equal to the quotient of (x) the excess of
such combined amount over such 12.5% and (y) the number of shares of
Common Stock outstanding on such date for determination and (2) the
denominator of which shall be equal to the Current Market Price per
share of the Common Stock on such date for determination.
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(f) In case a tender or exchange offer made by the Corporation
or any subsidiary of the Corporation for all or any portion of the
Common Stock shall expire and such tender or exchange offer (as amended
upon the expiration thereof) shall require the payment to stockholders
of an aggregate consideration having a fair market value (as determined
by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) that combined
together with (1) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors), as
of the expiration of the applicable tender or exchange offer, of any
non-cash consideration payable in respect of any other tender or
exchange offer, by the Corporation or any subsidiary of the Corporation
for all or any portion of the Common Stock expiring within the 12
months preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to Section 6(iii)(e) or this
Section 6(iii)(f) has been made and (2) the aggregate amount of any
distributions to all holders of the Corporation's Common Stock made
exclusively in cash within the 12 months preceding the expiration of
such tender or exchange offer and in respect of which no adjustment
pursuant to Section 6(iii)(e) or this Section 6(iii)(f) has been made,
exceeds 12.5% of the product of the Current Market Price per share of
the Common Stock as of the last time (the "Expiration Time") tenders
could have been made pursuant to such tender or exchange offer (as it
may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time, then, and in
each such case, immediately prior to the opening of business on the day
after the date of the Expiration Time, the Exchange Rate and the
Optional Conversion Rate shall be adjusted so that the Exchange Rate
and the Optional Conversion Rate shall equal the rate determined by
dividing the Exchange Rate and the Optional Conversion Rate,
respectively, immediately prior to the close of business on the date of
the Expiration Time by a fraction (1) the numerator of which shall be
equal to (x) the product of (i) the Current Market Price per share of
the Common Stock on the date of the Expiration Time and (ii) the number
of shares of Common Stock outstanding (including any tendered shares)
on the Expiration Time less (y) the amount of cash plus the fair market
value (determined as aforesaid) of the aggregate non-cash consideration
payable to stockholders pursuant to such tender or exchange offer, and
(2) the denominator of which shall be equal to the product of (x) the
Current Market Price per share of the Common Stock as of the Expiration
Time and (y) the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time less the
number of all shares accepted for payment pursuant to such tender or
exchange offer.
(g) Any shares of Common Stock issuable in payment of a
dividend or other distribution shall be deemed to have been issued
immediately prior to the close of business on the record date for such
dividend or other distribution for purposes of calculating the number
of outstanding shares of Common Stock under Section 6(iii)(b) above.
(h) Anything in this Section 6 notwithstanding, the
Corporation shall be entitled to make such upward adjustments in the
Exchange Rate and the Optional Conversion Rate, in addition to those
required by this Section 6, as the Corporation in its sole discretion
shall determine to be advisable.
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(i) In any case in which this Section 6(iii) shall require
that an adjustment as a result of any event become effective at the
opening of business on the business day next following a record date
and the date fixed for conversion pursuant to Section 6(i) occurs after
such record date, but before the occurrence of such event, the
Corporation may in its sole discretion elect to defer the following
until after the occurrence of such event: (1) issuing to the holder of
any shares of Series C Preferred Stock surrendered for conversion the
additional shares of Common Stock issuable upon such conversion over
the shares of Common Stock issuable before giving effect to such
adjustment; and (2) paying to such holder any amount in cash in lieu of
a fractional share of Common Stock pursuant to Section 6(vii).
(j) For purposes hereof, an "adjustment in the Exchange Rate"
means, and shall be implemented by, an adjustment of the nature and
amount specified, effected in the manner specified, in each of the
Upper Exchange Rate, the Middle Exchange Rate and the Lower Exchange
Rate. If an adjustment is made to the Exchange Rate pursuant to this
Section 6(iii), an adjustment shall also be made to the Current Market
Price solely to determine which of clauses (a), (b) or (c) of the
definition of Exchange Rate in Section 6(i) will apply on the Mandatory
Conversion Date. Such adjustment shall be made by multiplying the
Current Market Price by a fraction of which the numerator shall be the
Exchange Rate immediately after such adjustment pursuant to Section
6(iii) and the denominator shall be the Exchange Rate immediately
before such adjustment. All adjustments to the Exchange Rate and the
Optional Conversion Rate shall be calculated to the nearest 1/10,000th
of a share of Common Stock. No adjustment in the Exchange Rate or in
the Optional Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent in the
Lower Exchange Rate; provided, however, any adjustments which by reason
of this subparagraph are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
adjustments to the Exchange Rate and the Optional Conversion Rate shall
be made successively.
(k) Before taking any action that would cause an adjustment
increasing the Exchange Rate or the Optional Conversion Rate such that
the conversion price (for purposes of this Section 6(iii), an amount
equal to the liquidation value per share of Series C Preferred Stock
divided by the Optional Conversion Rate, respectively, as in effect
from time to time) would be below the then par value of the Common
Stock, the Corporation will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of Common
Stock at the Optional Conversion Rate as so adjusted.
(iv) Adjustment for Certain Consolidations or Mergers. In case of any
consolidation or merger to which the Corporation is a party (other than a merger
or consolidation in which the Corporation is the continuing corporation and in
which the Common Stock outstanding immediately prior to the merger or
consolidation remains unchanged), or in case of any sale or transfer to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety, or in case of any statutory exchange of securities with another
corporation (other than in connection with a merger or acquisition), proper
provision shall be made so that each share of the Series C Preferred Stock
shall, after consummation of such transaction, be subject to
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(a) conversion at the option of the holder into the kind and amount of
securities, cash or other property receivable upon consummation of such
transaction by a holder of the number of shares of Common Stock into which such
share of the Series C Preferred Stock might have been converted immediately
prior to consummation of such transaction, and (b) conversion on the Mandatory
Conversion Date into the kind and amount of securities, cash or other property
receivable upon consummation of such transaction by a holder of the number of
shares of Common Stock into which such share of the Series C Preferred Stock
would have been converted if the conversion on the Mandatory Conversion Date had
occurred immediately prior to the date of consummation of such transaction,
assuming in each case that such holder of Common Stock failed to exercise rights
of election, if any, as to the kind or amount of securities, cash or other
property receivable upon consummation of such transaction (provided that if the
kind or amount of securities, cash or other property receivable upon
consummation of such transaction is not the same for each nonelecting share,
then the kind and amount of securities, cash or other property receivable upon
consummation of such transaction for each nonelecting share shall be deemed to
be the kind and amount so receivable per share by a plurality of the nonelecting
shares). The kind and amount of securities into which the shares of the Series C
Preferred Stock shall be convertible after consummation of such transaction
shall be subject to adjustment as described in Section 6(iii) following the date
of consummation of such transaction. The Corporation may not become a party to
any such transaction unless the terms thereof are consistent with the foregoing.
(v) Notice of Adjustments. Whenever the Exchange Rate and Optional
Conversion Rate are adjusted as provided in Section 6(iii), the Corporation
shall:
(a) Forthwith compute the adjusted Exchange Rate and Optional
Conversion Rate and prepare a certificate signed by the Chief Financial
Officer, any Vice President, the Treasurer and the Controller of the
Corporation setting forth the adjusted Exchange Rate and Optional
Conversion Rate, the method of calculation thereof in reasonable detail
and the facts requiring such adjustment and upon which such adjustment
is based, which certificate shall be prima facie evidence of the
correctness of the adjustment, and file such certificate forthwith with
the Transfer Agent;
(b) Make a prompt public announcement stating that the
Exchange Rate and Optional Conversion Rate have been adjusted and
setting forth the adjusted Exchange Rate and Optional Conversion Rate;
and
(c) Promptly mail a notice stating that the Exchange Rate and
Optional Conversion Rate have been adjusted, the facts requiring such
adjustment and upon which such adjustment is based and setting forth
the adjusted Exchange Rate and Optional Conversion Rate, to the holders
of record of the outstanding shares of the Series C Preferred Stock at
or prior to the time the Corporation mails an interim statement to its
stockholders covering the fiscal quarter period during which the facts
requiring such adjustment occurred but in any event within 45 days of
the end of such fiscal quarter period.
(vi) Notices of Proposed Actions. In case, at any time while any of the
shares of Series C Preferred Stock are outstanding,
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(a) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock (other than in cash out of profits or
surplus and other than the Rights), or
(b) the Corporation shall authorize the issuance to all
holders of the Common Stock of rights or warrants (other than the
Rights) to subscribe for or purchase shares of the Common Stock or of
any other subscription rights or warrants, or
(c) of any reclassification of the Common Stock (other than a
subdivision or combination thereof) or of any consolidation or merger
to which the Corporation is a party and for which approval of any
stockholders of the Corporation is required (except for a merger of the
Corporation into one of its subsidiaries solely for the purpose of
changing the corporate domicile of the Corporation to another state of
the United States and in connection with which there is no substantive
change in the rights or privileges of any securities of the Corporation
other than changes resulting from differences in the corporate statutes
of the then existing and the new state of domicile), or of the sale or
transfer of all or substantially all of the assets of the Corporation,
then the Corporation shall cause to be filed at each office or agency maintained
for the purpose of conversion of the shares of Series C Preferred Stock, and
shall cause to be mailed to the holders of shares of Series C Preferred Stock at
their last addresses as they shall appear on the stock register, as promptly as
possible, but at least 10 days before the date hereinafter specified (or the
earlier of the dates hereinafter specified, in the event that more than one date
is specified), a notice stating (1) the date on which a record is to be taken
for the purpose of such dividend, distribution, rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock of
record to be entitled to such dividend, distribution, rights or warrants are to
be determined, or (2) the date on which any such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property (including cash), if any, deliverable
upon such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. The failure to give or receive the notice required by
this Section 6(vi) or any defect therein shall not affect the legality or
validity of any such dividend, distribution, right or warrant or other action.
(vii) No Fractional Shares. No fractional shares of Common Stock shall
be issued upon the conversion of any shares of the Series C Preferred Stock. In
lieu of any fraction of a share of Common Stock which would otherwise be
issuable in respect of the aggregate number of shares of the Series C Preferred
Stock surrendered by the same holder upon Automatic Conversion or Optional
Conversion, such holder shall have the right to receive an amount in cash
(computed to the nearest cent) equal to the same fraction of (a) in the case of
Automatic Conversion, the Current Market Price or (b) in the case of an Optional
Conversion by a holder, the Closing Price of the Common Stock determined as of
the second Trading Day immediately preceding the effective date of conversion.
If more than one share of Series C Preferred Stock shall be surrendered for
conversion at one time by or for the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of shares of the Series C Preferred Stock so surrendered.
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(viii) Treasury Shares. For the purposes of this Section 6, the number
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common Stock. The
Corporation will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
(ix) Other Action. If the Corporation shall take any action affecting
the Common Stock, other than action described in this Section 6, that in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of the shares of Series C Preferred Stock, the
Exchange Rate and/or the Optional Conversion Rate for the Series C Preferred
Stock may be adjusted, to the extent permitted by law, in such manner, if any,
and at such time, as the Board of Directors may determine to be equitable in the
circumstances.
(x) Conversion. The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock for the purpose of effecting
conversion of the Series C Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of Series C
Preferred Stock not theretofore converted. For purposes of this Section 6(x),
the number of shares of Common Stock that shall be deliverable upon the
conversion of all outstanding shares of Series C Preferred Stock shall be
computed as if at the time of computation all such outstanding shares were held
by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the Series C Preferred Stock shall be validly issued, fully paid
and non-assessable.
The Corporation shall endeavor to list the shares of Common Stock
required to be delivered upon conversion of the Series C Preferred Stock, prior
to such delivery, upon each national securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series C Preferred Stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(xi) Taxes. The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
Series C Preferred Stock pursuant thereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the
Series C Preferred Stock to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid to
the Corporation the amount of any such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
7. Redemption. The Series C Preferred Stock is not redeemable.
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8. Outstanding Shares. For purposes of this Certificate of
Designations, all shares of Series C Preferred Stock shall be deemed
outstanding, except from the date of registration of transfer, all shares of
Series C Preferred Stock held of record by the Corporation or any subsidiary of
the Corporation.
9. Preemptive Rights. The Series C Preferred Stock is not entitled to
any preemptive or subscription rights in respect of any securities of the
Corporation.
10. Severability of Provisions. Whenever possible, each provision
hereof shall be interpreted in a manner as to be effective and valid under
applicable law, but if any provision hereof is held to be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating or otherwise
adversely affecting the remaining provisions hereof. If a court of competent
jurisdiction should determine that a provision hereof would be valid or
enforceable if a period of time were extended or shortened or a particular
percentage were increased or decreased, then such court may make such change as
shall be necessary to render the provision in question effective and valid under
applicable law.
11. Fractional Shares. Series C 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 C Preferred Stock.
12. Reversion to Corporation. Subject to applicable escheat laws, any
monies set aside by the Corporation in respect of any payment with respect to
shares of the Series C Preferred Stock, or dividends thereon, and unclaimed at
the end of two years from the date upon which such payment is due and payable
shall revert to the general funds of the Corporation, after which reversion the
holders of such shares shall look only to the general funds of the Company for
the payment thereof. Any interest accrued on funds so deposited shall be paid to
the Corporation from time to time.
13. Definitions. For purposes of the Series C Preferred Stock, the
following terms shall have the meanings indicated:
"business day" means any day other than a Saturday or Sunday
or any other day on which banks in The City of New York are authorized
or required by law or executive order to close.
"Closing Price" of a share of Common Stock on any date of
determination means the closing sale price (or, if no closing sale
price is reported, the last reported sale price) of such share on the
New York Stock Exchange (the "NYSE") on such date or, if the Common
Stock is not listed for trading on the NYSE on any such date, as
reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed, or if it is
not so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if it is not so
reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation Bureau or
similar organization, or, if such bid price is not available, the
market value of a
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share of Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for this
purpose by the Corporation.
"Current Market Price" per share of the Common Stock means the
average Closing Price per share of the Common Stock of the Company on
the 20 Trading Days immediately prior to, but not including, the
Mandatory Conversion Date or, for purposes of Section 6(iii)(f), the
Expiration Time.
"Fair Market Value" on any day means the average of the daily
Closing Prices of a share of Common Stock of the Company on the five
(5) consecutive Trading Days selected by the Corporation commencing not
more than 20 Trading Days before, and ending not later than, the
earlier of the day in question or the day before the "ex" date with
respect to the issuance or distribution requiring such computation. The
term "ex date," when used with respect to any issuance or distribution,
means the first day on which the Common Stock trades regular way,
without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that
day's Closing Price.
"Initial Price" means $_______ per share of Common Stock.
"Rights" means the rights of the Corporation which are
issuable under the Corporation's Rights Agreement, dated January 31,
1996, and as amended from time to time, or rights to purchase any
capital stock of the Corporation under any successor stockholder rights
plan or agreement adopted in replacement of the Corporation's Rights
Agreement.
"Trading Day" means a day on which the Common Stock (a) is not
suspended from trading on any national or regional securities exchange
or association or over-the-counter market at the close of business and
(b) has traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the primary
market for the trading of such security.
"Transfer Agent" means Norwest Bank Minnesota, National
Association and any of its successors and assigns, or such other agent
or agents of the Corporation as may be designated by the Board of
Directors as the transfer agent for the Series C Preferred Stock.
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This Certificate shall be effective as of May ___, 1999.
IN WITNESS WHEREOF, said Apache Corporation has caused this Certificate to be
signed by Raymond Plank, its Chairman and Chief Executive Officer, and attested
by Cheri L. Peper, its Corporate Secretary, this _____ day of May, 1999.
ATTEST: APACHE CORPORATION
- ------------------------------- -------------------------------------------
Name: Cheri L. Peper Name: Raymond Plank
Title: Corporate Secretary Title: Chairman and Chief Executive Officer
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