AMENDMENT NO. 1 TO RIGHTS AGREEMENT
This AMENDMENT NO. 1, dated as of April 17, 1998, is between PENNZOIL
COMPANY, a Delaware corporation (the "Company"), and THE CHASE MANHATTAN BANK,
as successor Rights Agent (the "Bank").
WHEREAS, the Company and Chemical Bank, as Rights Agent, entered into a
Rights Agreement dated as of October 28, 1994 (the "Rights Agreement");
WHEREAS, pursuant to Section 19(a) of the Rights Agreement, the Bank as
successor to Chemical Bank is the successor Rights Agent under the Rights
Agreement;
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
desires to amend the Rights Agreement as set forth below;
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. AMENDMENT OF SECTION 1.
a. Section 1 of the Rights Agreement is amended by deleting the
first proviso contained in the definition of "Acquiring Person" and substituting
in lieu thereof the following:
"PROVIDED, however, that a Person shall not become an Acquiring Person if
such Person, together with its Affiliates and Associates, shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding (i) solely as a result of a reduction in the number of shares
of Common Stock outstanding due to the repurchase of Common Stock by the
Company, unless and until such time as such Person or any Affiliate or
Associate of such Person shall purchase or otherwise become the Beneficial
Owner of additional shares of Common Stock constituting 1% or more of the
then outstanding shares of Common Stock or any other Person (or Persons)
who is (or collectively are) the Beneficial Owner of shares of Common Stock
constituting 1% or more of the then outstanding shares of Common Stock
shall become an Affiliate or Associate of such Person, or (ii) pursuant to
a Qualifying Offer;"
b. Section 1 of the Rights Agreement is amended by adding thereto,
following the definition of "Purchase Price" and prior to the definition of
"Record Date", the following:
"`Qualifying Offer' shall mean an all-cash tender offer for all outstanding
shares of Common Stock which meets all of the following requirements:
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(i) the Person or group making the tender offer must, prior to
or upon commencing such offer, have provided the Company firm written
commitments from responsible financial institutions, which have been
accepted by such Person or group, to provide, subject only to customary
terms and conditions (which shall in no event include conditions requiring
access by such financial institutions to non-public information to be
provided by the Company, conditions based on the accuracy of any
information concerning the Company other than such as would be the subject
of representations and warranties in a public financing by the Company, or
conditions requiring the Company to make any representations, warranties or
covenants in connection with such financing) funds for such offer which,
when added to the amount of cash and cash equivalents which such Person or
group then has available and has irrevocably committed in writing to the
Company to utilize for purposes of the offer if consummated, and to set
apart and maintain available for such purposes until the offer is
consummated or withdrawn, will be sufficient to pay for all shares
outstanding on a fully diluted basis and all related expenses;
(ii) such Person or group must own, after consummating such
offer, at least two-thirds of the then outstanding shares of Common Stock;
(iii) the price per share offered in such offer must be at least
35% above the average Closing Price of the Common Stock for the 20
consecutive Trading Days ending on the fourth Trading Day preceding the
commencement of the offer, provided that if another tender offer for shares
of Common Stock (a "Competing Offer") is commenced during the pendency of a
Qualifying Offer (the "First Offer"), such Competing Offer shall constitute
a Qualifying Offer only if, in addition to satisfying the requirements of
clauses (i), (ii), (iv) and (v) hereof, the per share price offered in such
Competing Offer is at least 10% higher than the per share price offered in
the First Offer;
(iv) such offer must remain open for at least 60 Business Days
and must be extended for at least 20 Business Days after the last increase
in the price offered and after any bona fide higher alternative offer is
made and shall be subject only to customary terms and conditions, which
shall in no event include satisfaction of any conditions relating to the
business, financial condition, results of operations or prospects of the
Company other than such as are based on information publicly disclosed by
the Company; and
(v) prior to or upon commencing such offer, such Person or
group must irrevocably commit in writing to the Company and in the offer to
purchase relating to the offer:
(A) to consummate promptly upon completion of the offer
an all-cash transaction whereby all shares of Common Stock not tendered
into the offer will be acquired at the same price per share paid pursuant
to the offer, and
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otherwise not to purchase any shares of Common Stock following completion
of the offer,
(B) that such Person or group will not materially amend
such offer, except to increase the price offered, and
(C) that such Person or group will not make any offer
for any equity securities of the Company for six months after commencement
of the original offer if the original offer does not result in the tender
of the number of shares required to be purchased pursuant to clause (ii)
above, unless a Competing Offer which meets the conditions for a Qualifying
Offer (including the proviso in clause (iii) above) is commenced by another
Person or Persons not affiliated or associated with, acting in concert
with, or instigated or financed by, the Person or group making the original
offer or with whom the Person or group making the original offer has any
agreement, arrangement or understanding relating to the Company or any
assets or securities of it or any of its Subsidiaries."
2. AMENDMENT OF SECTION 13(d).
Section 13(d) of the Rights Agreement is amended by deleting the last
sentence thereof and substituting in lieu thereof the following:
"Upon consummation of any such transaction contemplated by this Section
13(d) or a transaction contemplated by clause (v)(A) of the definition of
`Qualifying Offer' contained in Section 1 hereof, all Rights hereunder
shall expire."
3. EFFECTIVENESS.
This Amendment No. 1 shall be deemed effective as of April 17, 1998 as if
executed by both parties hereto on such date. Except as amended hereby, the
Rights Agreement shall remain in full force and effect and shall be otherwise
unaffected hereby.
4. MISCELLANEOUS.
This Amendment No. 1 shall be deemed to be a contract made under the laws
of the State of Delaware and for all purposes shall be governed by and construed
in accordance with the laws of such state applicable to contracts to be made and
performed entirely within such state. This Amendment No.1 may be executed in
any number of counterparts, 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. If any term, provision, covenant or
restriction of this Amendment No. 1 is held by a court of competent jurisdiction
or other authority to be invalid, illegal, or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Amendment No. 1 shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed as of the date and year first above written.
PENNZOIL COMPANY
By: /s/ David P. Alderson, II
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Name: David P. Alderson, II
Title: Group Vice President-
Finance & Accounting
THE CHASE MANHATTAN BANK,
as Rights Agent
By: /s/ Joseph A. Lifrieri
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Name: Joseph A. Lifrieri
Title: SVP
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