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EXHIBIT 4.1
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT, dated as of November 22, 1997, to the Rights Agreement between
Sonat Inc., a Delaware corporation (the "Company"), and Chemical Mellon
Stockholder Services, L.L.C., as Rights Agent (the "Rights Agent"), dated as of
January 8, 1996 (the "Rights Agreement").
Pursuant to Section 27 of the Rights Agreement, the Company and the Rights
Agent may from time to time supplement or amend the Rights Agreement in
accordance with the provisions of said Section 27 subject to the terms and
conditions thereof. All acts and things necessary to make this Amendment a valid
agreement, enforceable according to its terms have been done and performed, and
the execution and delivery of this Amendment by the Company and the Rights Agent
have been in all respects duly authorized by the Company and the Rights Agent.
In consideration of the foregoing and the mutual agreements set forth
herein, the parties hereto agree as follows:
1. Effective as of the consummation of the Merger (as defined in the
Agreement and Plan of Merger, dated as of the date hereof, by and among the
Company and Zilkha Energy Company, a Delaware corporation), Section 1(a) of the
Rights Agreement is hereby amended by inserting the following at the end of such
section:
Notwithstanding anything in this Agreement to the contrary, no Zilkha
Entity (as defined below) shall be deemed to be an "Acquiring Person"
solely as a result of the acquisition of the Common Shares pursuant to
the Agreement and Plan of Merger, dated as of November 22, 1997, by and
among the Company and Zilkha Energy Company, a Delaware corporation (the
"Merger Agreement"), as long as (a) all Zilkha Entities, all affiliates
and associates of any Zilkha Entity and all persons acting in concert
with any of the foregoing (collectively, the "Zilkha Group") do not
beneficially own in the aggregate a number of Common Shares representing
in excess of the lesser of (i) the percentage of the Common Shares
issued in the aggregate to the Zilkha Entities pursuant to the Merger
Agreement, or (ii) any percentage of the Common Shares beneficially
owned by the members of the Zilkha Entities in the aggregate at any time
after the consummation of the transactions contemplated by the Merger
Agreement (the lesser of clause (i) or (ii), the "Permitted
Percentage"), and (b) no member of the Zilkha Group has or acquires
beneficial ownership of any Common Shares other than the Common Shares
issued pursuant to the Merger Agreement.
In addition, no Zilkha Entity shall be come an "Acquiring Person" solely
as the result of an acquisition of Common Shares by the Company which,
by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by the Zilkha Entities
in the aggregate to the then applicable Permitted Percentage or more of
the Common Shares of the Company then outstanding; provided, however,
that if any member of the Zilkha Group shall thereafter become the
Beneficial Owner of any additional Common Shares of the Company, then
the members of the Zilkha Group shall be deemed to be an "Acquiring
Person."
Further, no Zilkha Entity shall be deemed to beneficially own any Common
Shares that are acquired directly (other than in connection with the
transactions contemplated by the Merger Agreement) from, and in a
transaction involving, the Company, unless such Common Shares are
acquired as a result of a stock split, stock dividend or other dividend
or distribution made generally to all holders of Common Shares.
If the Board of Directors of the Company determines in good faith that a
Zilkha Entity who would otherwise be an "Acquiring Person" has become
such inadvertently, and such Zilkha Entity immediately divests a
sufficient number of Common Shares so that such Zilkha Entity would no
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longer be an "Acquiring Person," then such Zilkha Entity shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement.
The term "Zilkha Entity" shall mean each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇▇▇ (collectively, the "Initial Holders"), each member of the
immediate family of any of the Initial Holders, and any trust holding
Common Shares solely for the benefit of the Initial Holders or the
members of their immediate families.
2. Effective as of the date hereof, Section 1(a) of the Rights Agreement is
hereby amended by inserting the following at the end of such section:
Notwithstanding anything in this Agreement to the contrary, no Person
shall become or be deemed to be an "Acquiring Person" solely as a result
of the execution and delivery of the Agreement and Plan of Merger, dated
as of November 22, 1997, by and between the Company and Zilkha Energy
Company, a Delaware corporation (the "Merger Agreement").
3. This Amendment to the Rights Agreement shall be governed by and
construed in accordance with 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.
4. This Amendment to the Rights Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument. Terms not defined herein shall,
unless the context otherwise requires, have the meanings assigned to such terms
in the Rights Agreement, as previously amended. Nothing in this Amendment, and
no beneficial ownership by any member of the Zilkha Group, shall prevent any
future or additional amendment to the Rights Agreement, and each Initial Holder
on behalf of itself and each Zilkha Entity hereby expressly affirms the
foregoing.
5. In all respects not inconsistent with the terms and provisions of this
Amendment to the Rights Agreement, the Rights Agreement is hereby ratified,
adopted, approved and confirmed. In executing and delivering this Amendment, the
Rights Agent shall be entitled to all the privileges and immunities afforded to
the Rights Agent under the terms and conditions of the Rights Agreement.
6. If any term, provision, covenant or restriction of this Amendment to the
Rights 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 Amendment to the Rights Agreement, and of the
Rights Agreement, 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 to be
duly executed and attested, all as of the date and year first above written.
Attest: SONAT INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: V.P. - Finance Title: Executive Vice President
CHEMICAL MELLON SHAREHOLDER
Attest: SERVICES, L.L.C., as Rights Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Vice President Title: Assistant Vice President
AGREED:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ TRUST
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Trustee
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (1996) ANNUITY
TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Trustee
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