EXHIBIT 10.7
AMENDMENT NO. 1
TO RIGHTS AGREEMENT
OF
MCMORAN OIL & GAS CO.
This Amendment No. 1 (the "Amendment") to the Rights Agreement between
McMoRan Oil & Gas Co. (the "Company") and Mellon Securities Trust Company, as
Rights Agent (the "Rights Agent"), dated May 19, 1994 by and between the Company
and the Rights Agent (the "Rights Agreement") is dated and effective as of July
14, 1997.
W I T N E S S E T H
WHEREAS, Section 29 of the Rights Agreement grants the Board of Directors
of the Company the exclusive power and authority to amend the Rights Agreement;
WHEREAS, the Company intends to undertake a rights offering (the "Rights
Offering") in which it will distribute to holders of record of its common stock,
par value $.01 per share ("Common Stock"), transferable subscription rights to
subscribe for and purchase additional shares of Common Stock for a price to be
determined (the "Subscription Price");
WHEREAS, the Company intends to enter into each of a master agreement (the
"Master Agreement") and a standby purchase agreement (the "Standby Purchase
Agreement") with Freeport-McMoRan Resource Partners, Limited Partnership
("FRP");
WHEREAS, pursuant to the Master Agreement, the Company and FRP will,
subject to certain conditions, enter into the Standby Purchase Agreement
pursuant to which FRP will be obligated to purchase all remaining shares of
Common Stock not purchased in the Rights Offering (the "Standby Commitment") and
if FRP does not acquire at least 30% of the outstanding Common Stock pursuant to
the Standby Commitment, it will have the option to purchase at the Subscription
Price up to a 30% ownership interest in the Company after giving effect to the
completion of the Rights Offering, and the purchase of shares pursuant to the
Standby Commitment and the option;
WHEREAS, pursuant to the Master Agreement, the Company and FRP will enter
into a Stockholder Agreement in connection with the consummation of the
transactions contemplated by the Standby Purchase Agreement that will govern
FRP's ownership and acquisition of Common Stock; and
WHEREAS, the Company's Board of Directors desires to amend the Rights
Agreement to permit FRP and the Company to enter into and consummate the
transactions contemplated by the Master Agreement and the Standby Purchase
Agreement without triggering the rights under the Rights Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements contained
herein, the parties agree as follows:
1. The definition of "Acquiring Person" in Section 1 of the Rights
Agreement is hereby amended and restated to read in its entirety as follows:
"Acquiring Person" means any Person who, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, but shall not include the Company, any
of its Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries or any Person organized, appointed or established by the Company or
any of its Subsidiaries for or pursuant to the terms of any such plan; provided,
however, that for the purpose of determining shares of Common Stock beneficially
owned by Xxxxxxxxxxx Group, Inc., all shares of Common Stock beneficially owned
by Xxxxxxxxxxx Group, Inc. on the Distribution Date shall be excluded; and
provided further, however, that, neither Freeport-McMoRan Resource Partners,
Limited Partnership ("FRP") nor any of FRP's Affiliates or Associates shall be
deemed to be an Acquiring Person.
Notwithstanding the foregoing, no Person shall become an Acquiring Person if (i)
such Person has become the Beneficial Owner of 15% or more of the shares of
Common Stock, (ii) the acquisition by such Person of the shares that equal or
exceed 15% of the shares of Common Stock was made without apparent knowledge of
the potential implications of such acquisition under this Agreement and (iii)
either (A) within 10 days after the Company has notified such Person that the
Company has become aware of such potential implications, such Person ceases to
be the Beneficial Owner of 15% or more of the shares of Common Stock or (B)
prior to receiving such notice such Person ceases to be the Beneficial Owner of
15% or more of the shares of Common Stock.
2. Footnote 2 to the term "Distribution Date" within the description of
"Transfer" in Exhibit C to the Rights Agreement (the "Summary of Terms") is
hereby amended to read in its entirety as follows:
Distribution Date means the earlier of:
(1) the 10th day after public announcement that any person has become an
Acquiring Person (as defined in the note below) and
(2) the 10th business day after the date of the commencement of a tender or
exchange offer by any person which would, if consummated, result in such person
becoming an Acquiring Person, in each case, subject to extension by a majority
of the Directors not affiliated with the Acquiring Person.
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3. The definition of the term "Flip-In" defined in the Summary of Terms
is hereby amended to read in its entirety as follows:
If any person becomes an Acquiring Person,/+/ then each Right (other than Rights
beneficially owned by the Acquiring Person and certain affiliated persons) will
entitle the holder to purchase, for the Purchase Price, a number of shares of
the Company's Common Stock having a market value of twice the Purchase Price.
/+/Acquiring Person means any Person who, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, but shall not include the Company, any
of its Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries or any Person organized, appointed or established by the Company or
any of its Subsidiaries for or pursuant to the terms of any such plan; provided,
however, that for the purpose of determining shares of Common Stock beneficially
owned by Xxxxxxxxxxx Group, Inc., all shares of Common Stock beneficially owned
by Xxxxxxxxxxx Group, Inc. on the Distribution Date shall be excluded; and
provided further, however, that, neither Freeport-McMoRan Resource Partners,
Limited Partnership ("FRP") nor any of FRP's Affiliates or Associates shall be
deemed to be an Acquiring Person.
Notwithstanding the foregoing, no Person shall become an Acquiring Person if (i)
such Person has become the Beneficial Owner of 15% or more of the shares of
Common Stock, (ii) the acquisition by such Person of the shares that equal or
exceed 15% of the shares of Common Stock was made without apparent knowledge of
the potential implications of such acquisition under this Agreement and (iii)
either (A) within 10 days after the Company has notified such Person that the
Company has become aware of such potential implications, such Person ceases to
be the Beneficial Owner of 15% or more of the shares of Common Stock or (B)
prior to receiving such notice such Person ceases to be the Beneficial Owner of
15% or more of the shares of Common Stock.
4. All capitalized terms used herein but not otherwise defined herein
shall have the meanings ascribed to them in the Rights Agreement.
5. Except as specifically amended by this Amendment, the Rights Agreement
shall remain in full force and effect.
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6. Any reference to "this Agreement" or "the Rights Agreement" shall be
deemed to be a reference to the Rights Agreement as amended hereby.
7. This Amendment, all rights hereunder and provisions hereof, shall be
governed by, and construed in accordance with, the laws of the State of Delaware
without giving effect to principles of conflict of laws.
8. This Amendment may be executed by the parties in one or more
counterparts, all of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment
effective as of the day and year first above written.
McMoRan OIL & GAS CO.
Attest:
By: /s/ Xxxxxxx X. Xxxxxxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxxxxx
______________________________ _______________________________
Xxxxxxx X. Xxxxxxxxxx, Xx. Xxxxxxx X. Xxxxxxxx
Secretary Co-Chairman of the Board and
Chief Executive Officer
MELLON SECURITIES TRUST COMPANY
Attest:
By: /s/ Xxxxxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxx
______________________________ _______________________________
Name: Xxxxxxxx X. Xxxxxxx Name: Xxxxx Xxxxx
Title: Vice President Title: Assistant Vice President
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