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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 25, 1997
NATIONAL-OILWELL, INC.
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(Exact Name of Registrant Specified in Charter)
Delaware 1-12317 76-0475815
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(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
5555 San Felipe
Houston, Texas 77056
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 960-5100
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(Former Name or Former Address, if Changed Since Last Report)
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Item 5. OTHER EVENTS.
The following description of capital stock updates the description of
common stock, par value $.01 per share (the "Common Stock"), of
National-Oilwell, Inc. ("National Oilwell") contained in its Registration
Statement on Form 8-A filed on October 15, 1996 to register such securities
under the Securities Exchange Act of 1934. Such description reflects
National-Oilwell's Amended and Restated Certificate of Incorporation (the
"Amended and Restated Certificate") filed upon the consummation of the
combination with Dreco Energy Services Ltd.("Dreco") on September 25, 1997. The
following description is qualified in its entirety by reference to the full text
of the Amended and Restated Certificate, which is filed as Exhibit 4.1 hereto
and is incorporated herein by reference.
As so amended, the Amended and Restated Certificate increases the
authorized shares of Common Stock from 40,000,000 to 75,000,000 and authorizes
one share of Special Voting Stock (the "Voting Share"). The single Voting Share
is held by Montreal Trust Company of Canada, as trustee under the Voting and
Exchange Trust Agreement, dated as of September 25, 1997, between
National-Oilwell and Dreco. Except as otherwise required by law, the Voting
Share possesses a number of votes equal to the number of outstanding
Exchangeable Shares of Dreco (the "Exchangeable Shares") from time to time not
owned by National-Oilwell or any entity controlled by National-Oilwell for the
election of directors and upon all matters submitted to a vote of stockholders
of National-Oilwell. The holders of Common Stock and the holder of the Voting
Share will vote together as a single class on all matters. Upon most
National-Oilwell liquidation events, all outstanding Exchangeable Shares will
automatically be exchanged for shares of National-Oilwell Common Stock, and the
holder of the Voting Share will not be entitled to receive any assets of
National-Oilwell available for distribution to its stockholders. The holder of
the Voting Share will not be entitled to receive dividends. At such time as the
Voting Share has no votes attached to it because there are no Exchangeable
Shares outstanding not owned by National-Oilwell or an entity controlled by
National-Oilwell, the Voting Share will be cancelled.
The description of the Exchangeable Shares is incorporated herein by
reference to Annex E ("Plan of Arrangement and Exchangeable Share Provisions")
to National-Oilwell's Registration Statement on Form S-4 (No. 333-32191),
in the form such registration statement became effective, and is filed as
exhibit 99.1 hereto.
In addition to the above, on October 10, 1997, National-Oilwell
declared a two-for-one stock split in the form of a stock dividend payable on
November 18, 1997 to holders of Common Stock of record as of November 10, 1997.
Simultaneously, in order to effect an equivalent share dividend, Dreco approved
a stock dividend of one Exchangeable Share for each outstanding Exchangeable
Share payable on November 18, 1997 to holders of record of Dreco Exchangeable
Shares on November 10, 1997.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(c) Exhibits.
4.1 Amended and Restated Certificate of Incorporation.
4.2 Plan of Arrangement and Exchangeable Share Provisions
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NATIONAL-OILWELL, INC.
By: /s/ Steven W. Krablin
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Steven W. Krablin
Vice President and Chief
Financial Officer
Dated: November 17, 1997
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
4.1 Amended and Restated Certificate of Incorporation
4.2 Plan of Arrangement and Exchangeable Share Provisions
</TABLE>
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EXHIBIT 4.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
NATIONAL-OILWELL, INC.
FIRST: The name of the Corporation is National-Oilwell, Inc.
SECOND: The address of the registered office of the Corporation in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of the registered agent of the Corporation at such address is
The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted by
the Corporation is to engage in any lawful business, act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
FOURTH: CAPITAL STOCK.
I. AUTHORIZED SHARES
The total number of shares of stock that the Corporation shall have authority
to issue is, 85,013,289 shares of capital stock, consisting of (i) 75,000,000
shares of common stock, par value $.01 per share ("Common Stock"); (ii) 13,288
shares of Class A Common Stock, par value $.01 per share ("Class A Common
Stock"); (iii) one share of Special Voting Stock ("Special Voting Stock"; the
Class A Common Stock and the Common Stock and the Special Voting Stock are
collectively referred to as the "Common Shares"); and (iv) 10,000,000 shares of
preferred stock, par value $.01 per share ("Preferred Stock").
The Common Shares shall have the rights, preferences and limitations set forth
below. Capitalized terms used but not otherwise defined in Parts I or II of
this Article Fourth are defined in Part III of this Article Fourth.
II. COMMON SHARES
Except as otherwise provided in this Part II or as otherwise required by
applicable law, all shares of Special Voting Stock, Class A Common Stock and
Common Stock shall be identical in all respects and shall entitle the holders
thereof to the same rights and privileges, subject to the same qualifications,
limitations and restrictions.
SECTION 1. SPECIAL VOTING STOCK. Each outstanding share of Special Voting
Stock shall be entitled at any relevant date to the number of votes determined
in accordance with the "Plan of Arrangement" (as that term is defined in that
certain "Combination Agreement" dated as of May 14, 1997 (as amended), by and
between the Corporation and Dreco Energy Services Ltd.) on all matters
presented to the stockholders. No dividend or distribution of assets shall be
paid to the holders of Special Voting Stock. The Special Voting Stock is not
convertible into any other class or series of the capital stock of the
Corporation or into cash, property or other rights, and may not be redeemed.
Any shares of Special Voting Stock purchased or otherwise acquired by the
Corporation shall be deemed retired and shall be canceled and may not
thereafter be reissued or otherwise disposed of by the Corporation. At such
time as the Special Voting Stock has no votes attached to it because there are
no "Exchangeable Shares" (as that terms is defined in the Combination
Agreement) outstanding, the Special Voting Stock shall be canceled.
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SECTION 2. VOTING RIGHTS. Except as otherwise provided in this Part II or as
otherwise required by applicable law, all holders of Class A Common Stock and
Common Stock shall be entitled to one vote per share on all matters to be voted
on by the Corporation's stockholders. In respect of all matters concerning the
voting of shares, the Class A Common Stock, the Common Stock and the Special
Voting Stock shall vote as a single class and such voting rights shall be
identical in all respects.
SECTION 3. DISTRIBUTIONS. At the time of each Distribution, such Distribution
shall be made to the holders of Class A Common Stock and Common Stock in the
following priority:
(i) The holders of Class A Common Stock shall be entitled to receive all
or a portion of such Distribution (ratably among such holders based upon the
number of shares of Class A Common Stock held by each such holder as of the
time of such Distribution) equal to the aggregate Unreturned Original Cost of
the outstanding shares of Class A Common Stock as of the time of such
Distribution, and no Distribution or any portion thereof shall be made under
Section 2(ii) below until the entire amount of Unreturned Original Cost of
the outstanding shares of Class A Common Stock as of the time of such
Distribution has been paid in full. The Distributions made pursuant to this
paragraph 2(i) to holders of Class A Common Stock shall constitute a return
of Original Cost of Class A Common Stock.
(ii) After the holders of Class A Common Stock have received Distributions
equal to the entire Original Cost thereof pursuant to paragraph 2(i) above,
holders of Common Shares as a group, shall be entitled to receive the
remaining portion of such Distribution (ratably among such holders based upon
the number of Common Shares held by each such holder as of the time of such
Distribution).
(iii) If the Corporation is a party to a merger or consolidation in which
the stockholders of the Corporation receive Merger Consideration, all of the
Merger Consideration shall be deemed to be a Distribution for purposes of
allocating all of such Merger Consideration between the holders of Class A
Common Stock and the holders of Common Stock under this Section 2.
SECTION 4. STOCK SPLITS AND STOCK DIVIDENDS. The Corporation shall not in any
manner subdivide (by stock split, stock dividend or otherwise) or combine (by
stock split, stock dividend or otherwise) the outstanding Common Shares of one
class unless the outstanding Common Shares of the other class shall be
proportionately subdivided or combined. All such subdivisions and combinations
shall be payable only in Class A Common Stock to the holders of Class A Common
Stock and in Common Stock to the holders of Common Stock. In no event shall a
stock split or stock dividend constitute a return of Original Cost.
SECTION 5. CONVERSION. Immediately prior to the Public Offering Time, each
share of Class A Common Stock outstanding immediately prior to the Public
Offering Time shall be, without further action by the Corporation or the holder
thereof, changed and converted into a number of shares of Common Stock equal to
the sum of the Unreturned Original Cost on each such share of Class A Common
Stock as of the Public Offering Time divided by the Net Public Offering Price.
Each certificate representing shares of Class A Common Stock shall
automatically represent from and after the Public Offering Time that number of
shares of Common Stock into which such shares of Class A Common Stock have been
converted pursuant to the preceding sentence. When shares of Class A Common
Stock have been converted pursuant to this Section 4, they shall be irrevocably
canceled and not reissued. Following conversion of all of the shares of Class A
Common Stock, no other shares of Class A Common Stock shall be issued, at any
time, by the Corporation.
SECTION 6. REGISTRATION OF TRANSFER. The Corporation shall keep at its
principal office (or such other place as the Corporation reasonably designates)
a register for the registration of Common Shares. Upon
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the surrender of any certificate representing shares of any class of Common
Shares at such place, the Corporation shall, at the request of the registered
holder of such certificate, execute and deliver a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares of such class represented by the surrendered certificate, and the
Corporation forthwith shall cancel such surrendered certificate. Each such new
certificate will be registered in such name and will represent such number of
shares of such class as is requested by the holder of the surrendered
certificate and shall be substantially identical in form to the surrendered
certificate. The issuance of new certificates shall be made without charge to
the holders of the surrendered certificates for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
issuance.
SECTION 7. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to
the Corporation (an affidavit of the registered holder will be satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of any class of Common Shares, and in the case of
any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the holder is a financial
institution or other institutional investor its own agreement will be
satisfactory), or, in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated
certificate and dated the date of such lost, stolen, destroyed or mutilated
certificate.
SECTION 8. NOTICES. All notices referred to herein shall be in writing, shall
be delivered personally or by first class mail, postage prepaid, and shall be
deemed to have been given when so delivered or mailed to the Corporation at its
principal executive offices and to any stockholder at such holder's address as
it appears in the stock records of the Corporation (unless otherwise specified
in a written notice to the Corporation by such holder).
SECTION 9. AMENDMENT AND WAIVER. No amendment or waiver of any provision of
this Article Fourth shall be effective without the prior written consent of the
holders of a majority of the then outstanding Common Shares voting as a single
class; provided that no amendment as to any terms or provisions of, or for the
benefit of, any class of Common Shares that adversely affects the powers,
preferences or special rights of such class of Common Shares shall be effective
without the prior consent of the holders of a majority of the then outstanding
shares of such affected class of Common Shares, voting as a single class.
III. DEFINITIONS
"DISTRIBUTION" means each distribution made by the Corporation to holders of
Common Shares, whether in cash, property or securities of the Corporation or
any other entity and whether by dividend, liquidating distributions or
otherwise; provided that neither of the following shall be a Distribution: (a)
any redemption or repurchase by the Corporation of any Common Shares for any
reason or (b) any recapitalization or exchange of any Common Shares for other
securities of the Corporation, or any subdivision (by stock split, stock
dividend or otherwise) or any combination (by stock split, stock dividend or
otherwise) of any outstanding Common Shares.
"GENERAL CORPORATION LAW" means the General Corporation Law of the State of
Delaware, as amended from time to time.
"MERGER CONSIDERATION" means cash, property or securities of an entity other
than the Corporation received by the stockholders of the Corporation in any
merger or consolidation, valued at the fair market value thereof as determined
by the board of directors of the Corporation.
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"NET PUBLIC OFFERING PRICE" means the initial public offering price per share
of Common Stock set forth on the front cover page of the final prospectus
included in the Registration Statement referenced in the definition of Public
Offering Time and in the form first used to confirm sales of the Common Stock,
after deduction for any underwriting discount or commissions, but without
deduction for any expenses, incurred by the Corporation in connection with the
initial public offering.
"ORIGINAL COST" of each share of Class A Common Stock shall be equal to the
amount originally paid for such share when it was issued by the Corporation (as
proportionally adjusted for all stock splits, stock dividends and other
recapitalizations affecting the Class A Common Stock), all such shares shall be
deemed to have an Original Cost equal to $24,900 per share (as proportionally
adjusted for all stock splits, stock dividends and other recapitalizations
affecting the Class A Common Stock).
"PUBLIC OFFERING TIME" means the time the Corporation's Registration Statement
on Form S-1 relating to the initial public offering of its Common Stock is
declared effective under Section 8(a) of the Securities Act of 1933, as
amended, by the Securities and Exchange Commission.
"UNRETURNED ORIGINAL COST" of any share of Class A Common Stock means an
amount equal to the excess, if any, of (a) the Original Cost of such share,
over (b) the aggregate amount of Distributions made by the Corporation that
constitute a return of Original Cost of such share.
IV. PREFERRED STOCK
The Preferred Stock may be issued from time to time in one or more classes or
series, the shares of each class or series to have any designations and powers,
preferences, and rights, and qualifications, limitations, and restrictions
thereof as are stated and expressed in this Article IV and in the resolution or
resolutions providing for the issue of such class or series adopted by the
board of directors of the Corporation as hereafter prescribed.
Authority is hereby expressly granted to and vested in the board of directors
of the Corporation to authorize the issuance of the Preferred Stock from time
to time in one or more classes or series, and with respect to each class or
series of the Preferred Stock, to state by the resolution or resolutions from
time to time adopted providing for the issuance thereof the following:
(i) whether or not the class or series is to have voting rights, special, or
limited, or is to be without voting rights, and whether or not such class or
series is to be entitled to vote as a separate class either alone or together
with the holders of one or more other classes or series of stock;
(ii) the number of shares to constitute the class or series and the
designations thereof;
(iii) the preferences and relative, participating, optional, or other
special rights, if any, and the qualifications, limitations, or restrictions
thereof, if any, with respect to any class or series;
(iv) whether or not the shares of any class or series shall be redeemable at
the option of the Corporation or the holders thereof or upon the happening of
any specified event, and, if redeemable, the redemption price or prices
(which may be payable in the form of cash, notes, securities, or other
property), and the time or times at which, and the terms and conditions upon
which, such shares shall be redeemable and the manner of redemption;
(v) whether or not the shares of a class or series shall be subject to the
operation of retirement or sinking funds to be applied to the purchase or
redemption of such shares for retirement, and, if such retirement or
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sinking fund or funds are to be established, the periodic amount thereof, and
the terms and provisions relative to the operation thereof;
(vi) the dividend rate, whether dividends are payable in cash, stock of the
Corporation, or other property, the conditions upon which and the times when
such dividends are payable, the preference to or the relation to the payment
of dividends payable on any other class or classes or series of stock,
whether or not such dividends shall be cumulative or noncumulative, and if
cumulative, the date or dates from which such dividends shall accumulate;
(vii) the preferences, if any, and the amounts thereof which the holders
of any class or series thereof shall be entitled to receive upon the
voluntary or involuntary dissolution of, or upon any distribution of the
assets of, the Corporation;
(viii) whether or not the shares of any class or series, at the option of
the Corporation or the holder thereof or upon the happening of any specified
event, shall be convertible into or exchangeable for the shares of any other
class or classes or of any other series of the same or any other class or
classes of stock, securities, or other property of the Corporation and the
conversion price or prices or ratio or ratios or the rate or rates at which
such conversion or exchange may be made, with such adjustments, if any, as
shall be stated and expressed or provided for in such resolution or
resolutions; and
(ix) any other special rights and protective provisions with respect to any
class or series as may to the board of directors of the Corporation seem
advisable.
The shares of each class or series of the Preferred Stock may vary from the
shares of any other class or series thereof in any or all of the foregoing
respects and in any other manner. The board of directors of the Corporation may
increase the number of shares of the Preferred Stock designated for any
existing class or series by a resolution adding to such class or series
authorized and unissued shares of the Preferred Stock not designated for any
other class or series. The board of directors of the Corporation may decrease
the number of shares of the Preferred Stock designated for any existing class
or series by a resolution subtracting from such class or series authorized and
unissued shares of the Preferred Stock designated for such existing class or
series, and the shares so subtracted shall become authorized, unissued, and
undesignated shares of the Preferred Stock. The number of authorized shares of
Preferred Stock may be increased or decreased (but not below the number of
shares thereof then outstanding) by the affirmative vote of the holders of a
majority of the outstanding Common Stock, without a vote of the holders of the
Preferred Stock, or of any series thereof, unless a vote of any such holder is
required pursuant to any Preferred Stock Series Resolution.
V. NO PREEMPTIVE RIGHTS
No holder of shares of stock of the Corporation shall have any preemptive or
other rights, except such rights as are expressly provided by contract, to
purchase or subscribe for or receive any shares of any class, or series
thereof, of stock of the Corporation, whether now or hereafter authorized, or
any warrants, options, bonds, debentures or other securities convertible into,
exchangeable for or carrying any right to purchase any shares of any class, or
series thereof, of stock; but such additional shares of stock and such
warrants, options, bonds, debentures or other securities convertible into,
exchangeable for or carrying any right to purchase any shares of any class, or
series thereof, of stock may be issued or disposed of by the board of directors
to such persons, and on such terms and for such lawful consideration, as in its
discretion it shall deem advisable or as to which the Corporation shall have by
binding contract agreed.
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VI. REGISTERED OWNER
The Corporation shall be entitled to treat the person in whose name any share
of its stock is registered as the owner thereof for all purposes and shall not
be bound to recognize any equitable or other claim to, or interest in, such
share on the part of any other person, whether or not the Corporation shall
have notice thereof, except as expressly provided by applicable law.
VII. GENERAL
Subject to the foregoing provisions of this Amended and Restated Certificate
of Incorporation, the Corporation may issue shares of its Preferred Stock and
Common Stock from time to time for such consideration (not less than the par
value thereof) as may be fixed by the board of directors of the Corporation,
which is expressly authorized to fix the same in its absolute discretion
subject to the foregoing conditions. Shares so issued for which the
consideration shall have been paid or delivered to the Corporation shall be
deemed fully paid stock and shall not be liable to any further call or
assessment thereon, and the holders of such shares shall not be liable for any
further payments in respect of such shares.
The Corporation shall have authority to create and issue rights and options
entitling their holders to purchase shares of the Corporation's capital stock
of any class or series or other securities of the Corporation, and such rights
and options shall be evidenced by instrument(s) approved by the board of
directors of the Corporation. The board of directors of the Corporation shall
be empowered to set the exercise price, duration, times for exercise, and other
terms of such rights or options; provided, however, that the consideration to
be received for any shares of capital stock subject thereto shall not be less
than the par value thereof.
FIFTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
I. DIRECTORS
The number, classification, and terms of the board of directors of the
Corporation and the procedures to elect directors, to remove directors, and to
fill vacancies in the board of directors shall be as follows:
(a) The number of directors that shall constitute the whole board of
directors shall from time to time be fixed exclusively by the board of
directors by a resolution adopted by a majority of the whole board of
directors serving at the time of that vote. In no event shall the number of
directors that constitute the whole board of directors be fewer than three.
No decrease in the number of directors shall have the effect of shortening
the term of any incumbent director. Directors of the Corporation need not be
elected by written ballot unless the by-laws of the Corporation otherwise
provide.
(b) The board of directors of the Corporation shall be divided into three
classes designated Class I, Class II, and Class III, respectively, all as
nearly equal in number as possible, with each director then in office
receiving the classification that at least a majority of the board of
directors designates. The initial term of office of directors of Class I
shall expire at the annual meeting of stockholders of the Corporation in
1997, of Class II shall expire at the annual meeting of stockholders of the
Corporation in 1998, and of Class III shall expire at the annual meeting of
stockholders of the Corporation in 1999, and in all cases as to each director
until his successor is elected and qualified or until his earlier death,
resignation or removal. At each annual meeting of stockholders beginning with
the annual meeting of stockholders in 1997, each director elected to succeed
a director whose term is then expiring shall hold his office until the third
annual meeting of
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stockholders after his election and until his successor is elected and
qualified or until his earlier death, resignation or removal. If the number
of directors that constitutes the whole board of directors is changed as
permitted by this Article V, the majority of the whole board of directors
that adopts the change shall also fix and determine the number of directors
comprising each class; provided, however, that any increase or decrease in
the number of directors shall be apportioned among the classes as equally as
possible.
(c) Vacancies in the board of directors resulting from death, resignation,
retirement, disqualification, removal from office, or other cause and newly-
created directorships resulting from any increase in the authorized number of
directors may be filled by no less than a majority vote of the remaining
directors then in office, though less than a quorum, who are designated to
represent the same class or classes of stockholders that the vacant position,
when filled, is to represent or by the sole remaining director (but not by
the stockholders except as required by law), and each director so chosen
shall receive the classification of the vacant directorship to which he has
been appointed or, if it is a newly-created directorship, shall receive the
classification that at least a majority of the board of directors designates
and shall hold office until the first meeting of stockholders held after his
election for the purpose of electing directors of that classification and
until his successor is elected and qualified or until his earlier death,
resignation, or removal from office.
(d) A director of any class of directors of the Corporation may be removed
before the expiration date of that director's term of office, only for cause,
by an affirmative vote of the holders of not less than eighty percent (80%)
of the votes of the outstanding shares of the class or classes or series of
stock then entitled to be voted at an election of directors of that class or
series, voting together as a single class, cast at the annual meeting of
stockholders or at any special meeting of stockholders called by a majority
of the whole board of directors for this purpose.
II. POWER TO AMEND BY-LAWS
The by-laws may be altered or repealed and new by-laws may be adopted (a) at
any annual or special meeting of stockholders if notice of the proposed
alteration, repeal or adoption of the new by-law or by-laws be contained in the
notice of such annual or special meeting by the affirmative vote of a majority
of the stock issued and outstanding and entitled to vote thereat, voting
together as a single class, or (b) by the affirmative vote of a majority of the
members present at any regular meeting of the board of directors, or at any
special meeting of the board of directors, without any action on the part of
the stockholders, if notice of the proposed alteration, repeal or adoption of
the new by-law or by-laws be contained in the notice of such regular or special
meeting.
III. STOCKHOLDERS' ACTION -- SPECIAL MEETINGS
After October 15, 1996, no action required to be taken or that may be taken at
any meeting of common stockholders of the Corporation may be taken without a
meeting, and, after such date, the power of common stockholders to consent in
writing, without a meeting, to the taking of any action is specifically denied.
Special meetings of the stockholders of the Corporation, and any proposals to
be considered at such meetings, may be called and proposed exclusively by (i)
the Chairman of the Board, (ii) the President or (iii) the board of directors,
pursuant to a resolution approved by a majority of the members of the board of
directors at the time in office, and no stockholder of the Corporation shall
require the board of directors to call a special meeting of common stockholders
or to propose business at a special meeting of stockholders. Except as
otherwise required by law or regulation, no business proposed by a stockholder
to be considered at an annual meeting of the stockholders (including the
nomination of any person to be elected as a director of the Corporation) shall
be considered by the stockholders at that meeting unless, no later than ninety
(90) days before the annual meeting of stockholders or (if later) ten days
after the first public notice of that meeting is sent to stockholders, the
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Corporation receives from the stockholder proposing that business a written
notice that sets forth (1) the nature of the proposed business with reasonable
particularity, including the exact text of any proposal to be presented for
adoption, and the reasons for conducting that business at the annual meeting;
(2) with respect to each such stockholder, that stockholder's name and address
(as they appear on the records of the Corporation), business address and
telephone number, residence address and telephone number, and the number of
shares of each class of stock of the Corporation beneficially owned by that
stockholder; (3) any interest of the stockholder in the proposed business; (4)
the name or names of each person nominated by the stockholder to be elected or
re-elected as a director, if any; and (5) with respect to each nominee, that
nominee's name, business address and telephone number, and residence address
and telephone number, the number of shares, if any, of each class of stock of
the Corporation owned directly and beneficially by that nominee, and all
information relating to that nominee that is required to be disclosed in
solicitations of proxies for elections of directors, or is otherwise required,
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (or any provision of law subsequently replacing
Regulation 14A), together with a duly acknowledged letter signed by the nominee
stating his or her acceptance of the nomination by that stockholder, stating
his or her intention to serve as director if elected, and consenting to being
named as a nominee for director in any proxy statement relating to such
election. The person presiding at the annual meeting shall determine whether
business (including the nomination of any person as a director) has been
properly brought before the meeting and, if the facts so warrant, shall not
permit any business (or voting with respect to any particular nominee) to be
transacted that has not been properly brought before the meeting.
Notwithstanding any other provisions of this Amended and Restated Certificate
of Incorporation or any provision of law that might otherwise permit a lesser
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the capital stock of the Corporation required by
law or by this Amended and Restated Certificate of Incorporation, the
affirmative vote of the holders of not less than eighty percent (80%) of the
shares of the Corporation then entitled to be voted in an election of
directors, voting together as a single class, shall be required to amend or
repeal, or to adopt any provision inconsistent with, this Article Fifth.
SIXTH: ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS AND INDEMNIFICATION
I. ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS
No director shall be personally liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty by such director as a
director, except for liability (a) for any breach of the director's duty of
loyalty to the Corporation or its stockholders, (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (c) under Section 174 of the General Corporation Law of the State of
Delaware, or (d) for any transaction from which the director derived an
improper personal benefit. Any amendment or repeal of this Part I of this
Article Sixth shall be prospective only, and neither the amendment nor repeal
of this Part I of this Article Sixth shall eliminate or reduce the effect of
this Part I of this Article Sixth in respect of any matter occurring, or any
cause of action, suit or claim that, but for this Part I of this Article Sixth
would accrue or arise, prior to such amendment or repeal. If the Delaware
General Corporation Law hereafter is amended to authorize corporate action
further eliminating or limiting the liability of directors, then the liability
of a director of the Corporation, in addition to the limitation on personal
liability provided herein, shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended from time to
time.
II. INDEMNIFICATION AND INSURANCE
SECTION 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a party or
is threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a person
of whom he or she is
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<PAGE> 9
the legal representative, is or was or has agreed to become a director or
officer of the Corporation or is or was serving or has agreed to serve at the
request of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director or
officer, or in any other capacity while serving or having agreed to serve as a
director or officer, shall be indemnified and held harmless by the Corporation
to the fullest extent authorized by the Delaware General Corporation Law, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than said Law permitted the Corporation
to provide prior to such amendment), against all expense, liability and loss
(including, without limitation, attorneys' fees, judgments, fines, excise taxes
pursuant to the Employee Retirement Income Security Act of 1974 or penalties
and amounts paid or to be paid in settlement) reasonably incurred or suffered
by such person in connection therewith and such indemnification shall continue
as to a person who has ceased to serve in the capacity which initially entitled
such person to indemnity hereunder and shall inure to the benefit of his or her
heirs, executors and administrators. The right to indemnification conferred in
this Part II of this Article Sixth shall be a contract right and shall include
the right to be paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition; provided, however, that,
if the Delaware General Corporation Law requires, the payment of such expenses
incurred by a current, former or proposed director or officer in his or her
capacity as a director or officer or proposed director or officer (and not in
any other capacity in which service was or is or has been agreed to be rendered
by such person while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final disposition of a
proceeding shall be made only upon delivery to the Corporation of an
undertaking, by or on behalf of such indemnified person, to repay all amounts
so advanced if it shall ultimately be determined that such indemnified person
is not entitled to be indemnified under this Part II or otherwise. The
Corporation may, by action of its board of directors, provide indemnification
to employees and agents of the Corporation, individually or as a group, with
the same scope and effect as the foregoing indemnification of directors and
officers.
SECTION 2. RIGHT OF CLAIMANT TO BRING SUIT. If a written claim from or on
behalf of an indemnified party under Section 1 of this Part II is not paid in
full by the Corporation within thirty days after such written claim has been
received by the Corporation, the claimant may at any time thereafter bring suit
against the Corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation) that the
claimant has not met the standard of conduct which makes it permissible under
the Delaware General Corporation Law for the Corporation to indemnify the
claimant for the amount claimed, but the burden of proving such defense shall
be on the Corporation. Neither the failure of the Corporation (including its
board of directors, independent legal counsel, or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because he or
she has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Corporation
(including its board of directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
SECTION 3. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the
advancement and payment of expenses conferred in this Part II shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, provision of this Amended and Restated Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise.
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<PAGE> 10
SECTION 4. INSURANCE. The Corporation may maintain insurance, at its expense,
to protect itself and any person who is or was serving as a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, including service with
respect to employee benefit plans, against any expense, liability or loss,
whether or not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware General Corporation
Law.
SECTION 5. SAVINGS CLAUSE. If this Part II or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify and hold harmless each director and
officer of the Corporation, as to costs, charges and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement with respect
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative to the full extent permitted by any applicable portion of this
Part II that shall not have been invalidated and to the fullest extent
permitted by applicable law.
SECTION 6. DEFINITIONS. For purposes of this Part II, reference to the
"Corporation" shall include, in addition to the Corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger prior to (or, in the case of an entity specifically
designated in a resolution of the board of directors, after) the adoption
hereof and which, if its separate existence had continued, would have had the
power and authority to indemnify its directors, officers and employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Part II with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
SEVENTH: No contract or transaction between the Corporation and one or more of
its directors, officers, or stockholders or between the Corporation and any
person (as used herein "person" means any corporation, partnership,
association, firm, trust, joint venture, political subdivision, or
instrumentality) or other organization in which one or more of its directors,
officers, or stockholders are directors, officers, or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or any committee thereof which authorizes the contract or
transaction, or solely because his, her, or their votes are counted for such
purpose, if: (i) the material facts as to his or her relationship or interest
and as to the contract or transaction are disclosed or are known to the board
of directors or the committee, and the board of directors or the committee in
good faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (ii) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by majority vote of the
stockholders; or (iii) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved, or ratified by the board
of directors, a committee thereof, or the stockholders. Interested directors
may be counted in determining the presence of a quorum at a meeting of the
board of directors or of a committee which authorizes the contract or
transaction.
EIGHTH: The Corporation reserves the right to amend, change, or repeal any
provision contained in the Amended and Restated Certificate of Incorporation in
the manner now or hereafter prescribed by law, and all rights and powers
conferred herein on stockholders, directors, and officers are subject to this
reserved power.
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<PAGE> 1
EXHIBIT 4.2
PLAN OF ARRANGEMENT
AND
EXCHANGEABLE SHARE PROVISIONS
<PAGE> 2
PLAN OF ARRANGEMENT
UNDER SECTION 186
OF THE BUSINESS CORPORATIONS ACT (ALBERTA)
INVOLVING AND AFFECTING DRECO ENERGY SERVICES LTD.
AND THE HOLDERS OF ITS CLASS "A" COMMON SHARES,
OPTIONS AND SHAREHOLDER RIGHTS
ARTICLE 1
INTERPRETATION
SECTION 1.1 DEFINITIONS. In this Plan of Arrangement unless there is something
in the subject matter or context inconsistent therewith, the following terms
shall have the respective meanings set out below and grammatical variations of
such terms shall have corresponding meanings:
"ABCA" means the Business Corporations Act (Alberta);
"ARRANGEMENT" means the arrangement under section 186 of the ABCA on the
terms and subject to the conditions set out in this Plan of Arrangement, subject
to any amendments thereto made (i) in accordance with Section 8.8 of the
Combination Agreement, (ii) in accordance with Section 6.1 hereof or (iii) at
the direction of the Court in the Final Order;
"ARRANGEMENT RESOLUTION" means the special resolution passed by the holders
of the Dreco Common Shares and the Optionholders at the Meeting;
"AUTOMATIC REDEMPTION DATE" has the meaning provided in the Exchangeable
Share Provisions;
"AVERAGE CLOSING PRICE" means the average closing price (computed and
rounded to the third decimal point) of shares of National-Oilwell Common Stock
on the NYSE during the 10 trading days ending on the last trading day prior to
the Effective Date;
"BUSINESS DAY" has the meaning provided in the Exchangeable Share
Provisions;
"CLASS A PREFERRED SHARE" means the one authorized Class A Preferred Share
of Dreco having the rights, privileges, restrictions and conditions set out in
Appendix A annexed hereto;
"COMBINATION AGREEMENT" means the agreement by and among National-Oilwell
and Dreco, dated as of May 14, 1997, as amended and restated from time to time,
providing for, among other things, this Plan of Arrangement and the Arrangement;
"COURT" means the Court of Queen's Bench of Alberta;
"DEPOSITARY" means Montreal Trust Company of Canada at its principal
transfer office in Calgary, Alberta;
"DISSENT PROCEDURES" has the meaning set out in Section 3.1;
"DRECO" means Dreco Energy Services Ltd., a corporation existing under the
ABCA;
"DRECO COMMON SHARES" means the Class "A" common shares in the capital of
Dreco;
"EFFECTIVE DATE" means the date shown on the certificate of arrangement
issued by the Registrar under the ABCA giving effect to the Arrangement;
"EFFECTIVE TIME" means 12:01 a.m. on the Effective Date;
"EXCHANGE PUT RIGHT" has the meaning provided in the Exchangeable Share
Provisions;
"EXCHANGE RATIO" means the ratio of exchange of Exchangeable Shares for
Dreco Common Shares, as determined under the Combination Agreement and subject
to adjustment as provided herein;
"EXCHANGEABLE SHARE CONSIDERATION" has the meaning provided in the
Exchangeable Share Provisions;
"EXCHANGEABLE SHARE PRICE" has the meaning provided in the Exchangeable
Share Provisions;
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"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares, which are set forth in
Appendix A hereto;
"EXCHANGEABLE SHARES" means the Exchangeable Shares in the capital of Dreco
provided for in this Plan of Arrangement;
"FINAL ORDER" means the final order of the Court approving the Arrangement;
"LIQUIDATION CALL RIGHT" has the meaning provided in Section 5.1;
"LIQUIDATION DATE" has the meaning provided in the Exchangeable Share
Provisions;
"MEETING" means the special meeting of the shareholders of Dreco and of the
Optionholders to be held to consider this Plan of Arrangement;
"NATIONAL-OILWELL" means National-Oilwell, Inc., a corporation under the
laws of Delaware;
"NATIONAL-OILWELL COMMON STOCK" has the meaning provided in the
Exchangeable Share Provisions;
"NYSE" means the New York Stock Exchange;
"OPTIONS" means all options to purchase Dreco Common Shares outstanding as
at the Effective Date under Dreco's Amended and Restated 1989 Employee Incentive
Stock Option Plan and under all private stock option agreements;
"OPTIONHOLDERS" means holders of Options;
"PROXY STATEMENT" means the Joint Management Information Circular and Proxy
Statement/Prospectus of National-Oilwell and Dreco prepared in connection with
the Arrangement;
"REDEMPTION CALL PURCHASE PRICE" has the meaning provided in Section 5.2;
"REDEMPTION CALL RIGHT" has the meaning provided in Section 5.2;
"SUBSIDIARY" has the meaning provided in the Exchangeable Share Provisions;
"TRANSFER AGENT" means the duly appointed transfer agent for the time being
of the Exchangeable Shares, and if there is more than one such agent then the
principal Canadian agent; and
"VOTING AND EXCHANGE TRUST AGREEMENT" means the agreement so entitled
between National-Oilwell, Dreco and the Trustee named therein to be dated as of
the Effective Date and provided for in the Combination Agreement, as amended
from time to time.
SECTION 1.2 SECTIONS, HEADINGS AND APPENDIXES. The division of this Plan of
Arrangement into sections and the insertion of headings are for reference
purposes only and shall not affect the interpretation of this Plan of
Arrangement. Unless otherwise indicated, any reference in this Plan of
Arrangement to a section or an Appendix refers to the specified section of or
Appendix to this Plan of Arrangement. The Appendixes are incorporated herein and
are part hereof.
SECTION 1.3 NUMBER, GENDER AND PERSONS. In this Plan of Arrangement, unless the
context otherwise requires, words importing the singular number include the
plural and vice versa, words importing any gender include all genders and words
importing persons include individuals, bodies corporate, partnerships,
associations, trusts, unincorporated organizations, governmental bodies and
other legal or business entities of any kind.
SECTION 1.4 DATE FOR ANY ACTION. In the event that any date on or by which any
action is required or permitted to be taken hereunder is not a Business Day,
such action shall be required or permitted to be taken on or by the next
succeeding day which is a Business Day.
SECTION 1.5 CURRENCY. Unless otherwise expressly stated herein, all references
to currency and payments in cash or money in this Plan of Arrangement are to
United States dollars.
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<PAGE> 4
SECTION 1.6 STATUTORY REFERENCES. Any reference in this Plan of Arrangement to
a statute includes such statute as amended, consolidated or re-enacted from time
to time, all regulations made thereunder, all amendments to such regulations
from time to time, and any statute or regulation which supersedes such statute
or regulations.
ARTICLE 2
ARRANGEMENT
SECTION 2.1 ARRANGEMENT. At the Effective Time on the Effective Date, the
following reorganization of capital and other transactions shall occur and shall
be deemed to occur in the following order without any further act or formality:
(a) The Articles of Amalgamation of Dreco shall be amended to (i)
create and authorize an unlimited number of Exchangeable Shares and one
Class A Preferred Share.
(b) Dreco shall issue to National-Oilwell one Class A Preferred Share
in consideration of the issuance to Dreco of one share of National-Oilwell
Common Stock. The stated capital of the Class A Preferred Share shall be
equal to the fair market value, as determined by the board of directors of
Dreco, of a share of National-Oilwell Common Stock. No certificate shall be
issued in respect of the Class A Preferred Share.
(c) Each Dreco Common Share (other than Dreco Common Shares held by
holders who have exercised their rights of dissent in accordance with
Section 3.1 hereof and who are ultimately entitled to be paid the fair
value for such shares and other than Dreco Common Shares held by
National-Oilwell or any Subsidiary thereof) will be exchanged at the
Exchange Ratio for a number of Exchangeable Shares, and each such holder
thereof will receive a whole number of Exchangeable Shares resulting
therefrom. In lieu of fractional Exchangeable Shares, each such holder who
otherwise would be entitled to receive a fraction of an Exchangeable Share
on the exchange shall be paid by Dreco an amount determined as set forth in
Section 4.3.
(d) Upon the exchange referred to in subsection (c) above, each such
holder of a Dreco Common Share shall cease to be such a holder, shall have
his name removed from the register of holders of Dreco Common Shares and
shall become a holder of the number of fully paid Exchangeable Shares to
which he is entitled as a result of the exchange referred to in subsection
(c), and such holder's name shall be added to the register of holders of
Exchangeable Shares accordingly.
(e) The aggregate stated capital of the Exchangeable Shares will be
equal to the aggregate stated capital immediately prior to the Effective
Date of the Dreco Common Shares which are exchanged pursuant to such
subsection 2.1(c) above, thereby excluding the stated capital attributable
to the fractional shares for which payment is made as contemplated in
subsection (c) above.
(f) The Articles of Amalgamation of Dreco shall be amended to reduce
the number of authorized Dreco Common Shares to one and the rights,
privileges, restrictions and conditions attaching to the Dreco Common
Shares shall be changed and restated as set forth in Appendix A.
(g) The one outstanding Class A Preferred Share will be exchanged for
one fully-paid and non-assessable Dreco Common Share and the holder thereof
shall cease to be a holder of the Class A Preferred Share, shall have its
name removed from the register of holders of Class A Preferred Shares and
shall become a holder of the Dreco Common Share to which it is entitled as
a result of the exchange referred to in this subsection (g), and such
holder's name shall be added to the register as holder of the Dreco Common
Share accordingly.
(h) The stated capital of the one Dreco Common Share shall be equal to
the stated capital of the one Class A Preferred Share immediately prior to
the exchange contemplated in subsection (g).
(i) The Articles of Amalgamation of Dreco shall be amended to delete
the Class A Preferred Share from the authorized share capital so that,
after giving effect to the foregoing provisions of this section 2.1,
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<PAGE> 5
the authorized capital of Dreco shall consist of an unlimited number of
Exchangeable Shares having the rights, privileges, restrictions and
conditions set forth in Appendix A hereto and one Common Share having the
rights, privileges, restrictions and conditions set forth in Appendix A
hereto.
(j) Each of the then outstanding Options will, without any further
action on the part of any Optionholder, be converted into an option to
purchase the number of shares of National-Oilwell Common Stock equal to the
number of Exchangeable Shares determined by multiplying the number of Dreco
Common Shares subject to such Option at the Effective Time by the Exchange
Ratio, at an exercise price per share of National-Oilwell Common Stock
equal to the exercise price per share of such Option immediately prior to
the Effective Time divided by the Exchange Ratio. If the foregoing
calculation results in an exchanged Option being exercisable for a fraction
of a share of National-Oilwell Common Stock, then the number of shares of
National-Oilwell Common Stock subject to such Option will be rounded down
to the nearest whole number of shares, and the exercise price per whole
share of National-Oilwell Common Stock will be as determined above. The
Dreco Options as so converted will (without further action on the part of
the optionholders) be further modified as necessary to effect such
conversion; provided, however, the term, exercisability, vesting schedule,
and all other terms and conditions of the Options will otherwise be
unchanged by the provisions of this paragraph (j) and shall operate in
accordance with their terms. The obligations of Dreco under the Dreco
Options as so converted shall be assumed by NOI and NOI shall be
substituted for Dreco as the sponsor of the Dreco Option Plan.
(k) All rights outstanding under the Shareholder Rights Plan Agreement
between Dreco and Montreal Trust Company of Canada dated as of November 15,
1996 (the "Rights Plan") immediately prior to the Effective Date shall, on
the Effective Date, be redeemed and cancelled, all on the terms and with
the effects and results contained in the Rights Plan, and the Rights Plan
shall be terminated.
ARTICLE 3
RIGHTS OF DISSENT
SECTION 3.1 RIGHTS OF DISSENT. Holders of Dreco Common Shares or Options may
exercise rights of dissent with respect to such shares or Options pursuant to
and in the manner set forth in section 184 of the ABCA and this Section 3.1 (the
"Dissent Procedures") in connection with the Arrangement, and holders who duly
exercise such rights of dissent and who:
(a) are ultimately entitled to be paid fair value for the Dreco Common
Shares or Options shall be deemed to have transferred such Dreco Common
Shares or Options to Dreco for cancellation on the Effective Date; or
(b) are ultimately not entitled, for any reason, to be paid the fair
value for their Dreco Common Shares or Options shall be deemed to have
participated in the Arrangement on the same basis as any non-dissenting
holder of Dreco Common Shares or Options,
but in no case shall Dreco be required to recognize such holders as holders
of Dreco Common Shares or Options on and after the Effective Date, and the
names of such persons shall be deleted from the registers of holders of
Dreco Common Shares or Options on the Effective Date.
ARTICLE 4
CERTIFICATES AND FRACTIONAL SHARES
SECTION 4.1 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES. At or
promptly after the Effective Time, Dreco shall deposit with the Depositary, for
the benefit of the holders of Dreco Common Shares exchanged pursuant to
subsection 2.1(c), certificates representing the Exchangeable Shares issued
pursuant to subsection 2.1(c) upon the exchange. Upon surrender to the
Depositary of a certificate which immediately prior to the Effective Time
represented outstanding Dreco Common Shares together with such other
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documents and instruments as would have been required to effect the transfer of
the shares formerly represented by such certificate under the ABCA and the
by-laws of Dreco and such additional documents and instruments as the Depositary
may reasonably require, the holder of such surrendered certificate shall be
entitled to receive in exchange therefor, and the Depositary shall deliver to
such holder, a certificate representing that number (rounded down to the nearest
whole number) of Exchangeable Shares which such holder has the right to receive
(together with any dividends or distributions with respect thereto pursuant to
Section 4.2 and any cash in lieu of fractional Exchangeable Shares pursuant to
Section 4.3), and the certificate so surrendered shall forthwith be cancelled.
In the event of a transfer of ownership of Dreco Common Shares which is not
registered in the transfer records of Dreco, a certificate representing the
proper number of Exchangeable Shares may be issued to a transferee if the
certificate representing such Dreco Common Shares is presented to the
Depositary, accompanied by all documents required to evidence and effect such
transfer. Until surrendered as contemplated by this Section 4.1, each
certificate which immediately prior to the Effective Time represented
outstanding Dreco Common Shares, shall be deemed at any time after the Effective
Time, but subject to Section 4.5, to represent only the right to receive upon
such surrender (a) the certificate representing Exchangeable Shares as
contemplated by this Section 4.1, (b) a cash payment in lieu of any fractional
Exchangeable Shares as contemplated by Section 4.3 and (c) any dividends or
distributions with a record date after the Effective Time theretofore paid or
payable with respect to Exchangeable Shares as contemplated by Section 4.2.
SECTION 4.2 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES. No
dividends or other distributions declared or made after the Effective Time with
respect to Exchangeable Shares with a record date after the Effective Time shall
be paid to the holder of any formerly outstanding Dreco Common Shares which were
exchanged pursuant to Section 2.1, and no cash payment in lieu of fractional
shares shall be paid to any such holder pursuant to Section 4.3, unless and
until the certificate representing such shares shall be surrendered in
accordance with Section 4.1. Subject to applicable law and to Section 4.5, at
the time of such surrender of any such certificate (or, in the case of clause
(c) below, at the appropriate payment date), there shall be paid to the holder
of the Exchangeable Shares resulting from exchange, in all cases without
interest, (a) the amount of any cash payable in lieu of a fractional
Exchangeable Share to which such holder is entitled pursuant to Section 4.3, (b)
the amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to such Exchangeable Shares, and
(c) the amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such Exchangeable Shares.
SECTION 4.3 NO FRACTIONAL SHARES. No certificates or scrip representing
fractional Exchangeable Shares shall be issued upon the surrender for exchange
of certificates pursuant to Section 4.1, and such fractional interests shall not
entitle the owner thereof to vote or to possess or exercise any rights as a
security holder of Dreco. In lieu of any such fractional interests, each person
entitled thereto will receive an amount of cash (rounded to the nearest whole
cent), without interest, equal to the product of (a) such fractional interest,
multiplied by (b) the Average Closing Price, such amount to be provided to the
Depositary by Dreco upon request.
SECTION 4.4 LOST CERTIFICATES. If any certificate which immediately prior to
the Effective Time represented outstanding Dreco Common Shares which were
exchanged pursuant to Section 2.1 has been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming such certificate to
be lost, stolen or destroyed, the Depositary will issue in exchange for such
lost, stolen or destroyed certificate, certificates representing Exchangeable
Shares (and any dividends or distributions with respect thereto and any cash
pursuant to Section 4.3) deliverable in respect thereof as determined in
accordance with Section 2.1. When authorizing such payment in exchange for any
lost, stolen or destroyed certificate, the person to whom certificates
representing Exchangeable Shares are to be issued shall, as a condition
precedent to the issuance thereof, give a bond satisfactory to Dreco,
National-Oilwell and the Transfer Agent, as the case may be, in such sum as
Dreco may direct or otherwise indemnify Dreco or National-Oilwell in a manner
satisfactory to Dreco and the Transfer Agent against any claim that may be made
against Dreco, National-Oilwell or the Transfer Agent with respect to the
certificate alleged to have been lost, stolen or destroyed.
SECTION 4.5 EXTINGUISHMENT OF RIGHTS. Any certificate which immediately prior
to the Effective Time represented outstanding Dreco Common Shares which were
exchanged pursuant to Section 2.1 and has not
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been deposited, with all other instruments required by Section 4.1, on or prior
to the tenth anniversary of the Effective Date shall cease to represent a claim
or interest of any kind or nature as a shareholder of Dreco. On such date, the
Exchangeable Shares to which the former registered holder of the certificate
referred to in the preceding sentence was ultimately entitled shall be deemed to
have been surrendered to Dreco, together with all entitlements to dividends,
distributions and interest thereon held for such former registered holder, for
no consideration and shall thereupon be cancelled and the name of the former
registered holder shall be removed from the register of holders of such Shares.
ARTICLE 5
CERTAIN RIGHTS AND OBLIGATIONS OF
NATIONAL-OILWELL TO ACQUIRE EXCHANGEABLE SHARES
SECTION 5.1 NATIONAL-OILWELL LIQUIDATION CALL RIGHT.
(a) National-Oilwell shall have the overriding right (the "LIQUIDATION
CALL RIGHT"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of Dreco as referred to in Article 5 of the
Exchangeable Share Provisions, to purchase from all but not less than all
of the holders (other than National-Oilwell and any Subsidiary thereof) of
Exchangeable Shares on the Liquidation Date all but not less than all of
the Exchangeable Shares held by such holders on payment by National-Oilwell
to each holder of the Exchangeable Share Price applicable on the last
Business Day prior to the Liquidation Date (the "LIQUIDATION CALL PURCHASE
PRICE"). In the event of the exercise of the Liquidation Call Right by
National-Oilwell, each holder shall be obligated to sell all the
Exchangeable Shares held by the holder to National-Oilwell on the
Liquidation Date on payment by National-Oilwell to the holder of the
Liquidation Call Purchase Price for each such share.
(b) To exercise the Liquidation Call Right, National-Oilwell must
notify Dreco's Transfer Agent in writing, as agent for the holders of
Exchangeable Shares, and Dreco of National-Oilwell's intention to exercise
such right at least 55 days before the Liquidation Date in the case of a
voluntary liquidation, dissolution or winding-up of Dreco and at least five
Business Days before the Liquidation Date in the case of an involuntary
liquidation, dissolution or winding-up of Dreco. The Transfer Agent will
notify the holders of Exchangeable Shares as to whether or not
National-Oilwell has exercised the Liquidation Call Right forthwith after
the expiry of the date by which the same may be exercised by
National-Oilwell. If National-Oilwell exercises the Liquidation Call Right,
on the Liquidation Date National-Oilwell will purchase and the holders will
sell all of the Exchangeable Shares then outstanding for a price per share
equal to the Liquidation Call Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Liquidation Call Right, National-Oilwell shall
deposit with the Transfer Agent, on or before the Liquidation Date, the
Exchangeable Share Consideration representing the total Liquidation Call
Purchase Price. Provided that such Exchangeable Share Consideration has
been so deposited with the Transfer Agent, on and after the Liquidation
Date the right of each holder of Exchangeable Shares will be limited to
receiving such holder's proportionate part of the total Liquidation Call
Purchase Price payable by National-Oilwell without interest upon
presentation and surrender by the holder of certificates representing the
Exchangeable Shares held by such holder and the holder shall on and after
the Liquidation Date be considered and deemed for all purposes to be the
holder of the National-Oilwell Common Stock delivered to it. Upon surrender
to the Transfer Agent of a certificate or certificates representing
Exchangeable Shares, together with such other documents and instruments as
may be required to effect a transfer of Exchangeable Shares under the ABCA
and the by-laws of Dreco and such additional documents and instruments as
the Transfer Agent may reasonably require, the holder of such surrendered
certificate or certificates shall be entitled to receive in exchange
therefor, and the Transfer Agent on behalf of National-Oilwell shall
deliver to such holder, the Exchangeable Share Consideration to which the
holder is entitled. If National-Oilwell does not exercise the Liquidation
Call Right in the manner described above, on the Liquidation Date the
holders of the Exchangeable Shares will be entitled
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to receive in exchange therefor the liquidation price otherwise payable by
Dreco in connection with the liquidation, dissolution or winding-up of
Dreco pursuant to Article 5 of the Exchangeable Share Provisions.
Notwithstanding the foregoing, until such Exchangeable Share Consideration
is delivered to the holder, the holder shall be deemed to still be a holder
of Exchangeable Shares for purposes of all voting rights with respect
thereto under the Voting and Exchange Trust Agreement.
SECTION 5.2 NATIONAL-OILWELL REDEMPTION CALL RIGHT.
(a) National-Oilwell shall have the overriding right ( the "REDEMPTION
CALL RIGHT"), notwithstanding the proposed redemption of the Exchangeable
Shares by Dreco pursuant to Article 7 of the Exchangeable Share Provisions,
to purchase from all but not less than all of the holders (other than
National-Oilwell or any Subsidiary thereof) of Exchangeable Shares on the
Automatic Redemption Date all but not less than all of the Exchangeable
Shares held by each such holder on payment by National-Oilwell to the
holder of the Exchangeable Share Price applicable on the last Business Day
prior to the Automatic Redemption Date (the "REDEMPTION CALL PURCHASE
PRICE"). In the event of the exercise of the Redemption Call Right by
National-Oilwell, each holder shall be obligated to sell all the
Exchangeable Shares held by the holder to National-Oilwell on the Automatic
Redemption Date on payment by National-Oilwell to the holder of the
Redemption Call Purchase Price for each such share.
(b) To exercise the Redemption Call Right, National-Oilwell must
notify the Transfer Agent in writing, as agent for the holders of
Exchangeable Shares, and Dreco of National-Oilwell's intention to exercise
such right not later than the date by which Dreco is required to give
notice of the Automatic Redemption Date. If National-Oilwell exercises the
Redemption Call Right, on the Automatic Redemption Date National-Oilwell
will purchase and the holders will sell all of the Exchangeable Shares then
outstanding for a price per share equal to the Redemption Call Purchase
Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Redemption Call Right, National-Oilwell shall
deposit with the Transfer Agent, on or before the Automatic Redemption
Date, the Exchangeable Share Consideration representing the total
Redemption Call Purchase Price. Provided that such Exchangeable Share
Consideration has been so deposited with the Transfer Agent, on and after
the Automatic Redemption Date the rights of each holder of Exchangeable
Shares will be limited to receiving such holder's proportionate part of the
total Redemption Call Purchase Price payable by National-Oilwell upon
presentation and surrender by the holder of certificates representing the
Exchangeable Shares held by such holder and the holder shall on and after
the Automatic Redemption Date be considered and deemed for all purposes to
be the holder of the National-Oilwell Common Stock delivered to such
holder. Upon surrender to the Transfer Agent of a certificate or
certificates representing Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the ABCA and the by-laws of National-Oilwell and
such additional documents and instruments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and the
Transfer Agent on behalf of National-Oilwell shall deliver to such holder,
the Exchangeable Share Consideration to which the holder is entitled. If
National-Oilwell does not exercise the Redemption Call Right in the manner
described above, on the Automatic Redemption Date the holders of the
Exchangeable Shares will be entitled to receive in exchange therefor the
redemption price otherwise payable by Dreco in connection with the
redemption of the Exchangeable Shares pursuant to Article 7 of the
Exchangeable Share Provisions. Notwithstanding the foregoing, until such
Exchangeable Share Consideration is delivered to the holder, the holder
shall be deemed to still be a holder of Exchangeable Shares for purposes of
all voting rights with respect thereto under the Voting and Exchange Trust
Agreement.
SECTION 5.3 EXCHANGE PUT RIGHT. Upon and subject to the terms and conditions
contained in the Exchangeable Share Provisions and the Voting and Exchange Trust
Agreement:
(a) a holder of Exchangeable Shares shall have the right (the
"Exchange Put Right") at any time to require National-Oilwell to purchase
all or any part of the Exchangeable Shares of the holder; and
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(b) upon the exercise by the holder of the Exchange Put Right, the
holder shall be required to sell to National-Oilwell, and National-Oilwell
shall be required to purchase from the holder, no later than the time or
times prescribed therefor herein or in the Exchangeable Share Provisions or
the Voting and Exchange Trust Agreement, that number of Exchangeable Shares
in respect of which the Exchange Put Right is exercised, in consideration
of the payment by National-Oilwell of the Exchangeable Share Price
applicable thereto and delivery by or on behalf of National-Oilwell of the
Exchangeable Share Consideration representing the total applicable
Exchangeable Share Price.
ARTICLE 6
AMENDMENT
SECTION 6.1 PLAN OF ARRANGEMENT AMENDMENT. Dreco reserves the right to amend,
modify and/or supplement this Plan of Arrangement at any time and from time to
time provided that any such amendment, modification, or supplement must be
contained in a written document that is (a) agreed to by National-Oilwell, (b)
filed with the Court and, if made following the Meeting, approved by the Court
and (c) communicated to holders of Dreco Common Shares and Options in the manner
required by the Court (if so required).
Any amendment, modification or supplement to this Plan of Arrangement may
be proposed by Dreco at any time prior to or at the Meeting (provided that
National-Oilwell shall have consented thereto) with or without any other prior
notice or communication, and if so proposed and accepted by the persons voting
at the Meeting (other than as may be required under the Court's interim order),
shall become part of this Plan of Arrangement for all purposes.
Any amendment, modification or supplement to this Plan of Arrangement which
is approved by the Court following the Meeting shall be effective only (a) if it
is consented to by Dreco, (b) if it is consented to by National-Oilwell and (c)
if required by the Court or applicable law, it is consented to by the holders of
the Dreco Common Shares or the Exchangeable Shares and Options as the case may
be.
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APPENDIX A TO THE PLAN
OF ARRANGEMENT OF DRECO
PROVISIONS ATTACHING TO THE CLASS A PREFERRED SHARE
The Class A Preferred Share in the capital of the Corporation shall have
attached thereto the following rights, privileges, restrictions and conditions:
DIVIDENDS
Subject to the prior rights of the holders of any shares ranking senior to
the Class A Preferred Share with respect to priority in the payment of
dividends, the holder of Class A Preferred Share shall be entitled to receive
dividends and the Corporation shall pay dividends thereon, as and when declared
by the board of directors of the Corporation as cumulative dividends in the
amount of $1.00 per share per annum payable annually on December 31 in each year
in arrears. Such dividends shall accrue from the date of issue to and including
the date to which the computation of dividends is to be made. A cheque for the
amount of the dividend less any required deduction shall be mailed by first
class mail to the address of the registered holder thereof.
DISSOLUTION
In the event of the liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other distribution of
assets of the Corporation among its shareholders for the purpose of winding-up
its affairs, subject to the prior rights of the holders of any shares ranking
senior to the Class A Preferred Share with respect to priority in the
distribution of assets upon liquidation, dissolution or winding-up, the holder
of the Class A Preferred Share shall be entitled to receive an amount equal to
the stated capital in respect of the Class A Preferred Share and dividends
remaining unpaid, including all cumulative dividends, whether or not declared.
After payment to the holder of the Class A Preferred Share of such amounts, such
holder shall not be entitled to share in any further distribution of the assets
of the Corporation.
VOTING RIGHTS
Except where specifically provided by the Act, the holder of the Class A
Preferred Share shall not be entitled to receive notice of or to attend meetings
of the shareholders of the Corporation and shall not be entitled to vote at any
meeting of shareholders of the Corporation.
PROVISIONS ATTACHING TO EXCHANGEABLE SHARES
The Exchangeable Shares in the capital of the Corporation shall have the
following rights, privileges, restrictions and conditions:
ARTICLE 1
INTERPRETATION
For the purposes of these rights, privileges, restrictions and conditions:
1.1 "ACT" means the Business Corporations Act (Alberta), as amended,
consolidated or reenacted from time to time.
"AGGREGATE EQUIVALENT VOTE AMOUNT" means, with respect to any matter,
proposition or question on which holders of National-Oilwell Common Stock are
entitled to vote, consent or otherwise act, the product of (i) the number of
Exchangeable Shares then issued and outstanding and held by holders other than
National-Oilwell and its Subsidiaries multiplied by (ii) the number of votes to
which a holder of one share of National-Oilwell Common Stock is entitled with
respect to such matter, proposition or question.
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"AUTOMATIC REDEMPTION DATE" means the date for the automatic redemption by
the Corporation of Exchangeable Shares pursuant to Article 7 of these share
provisions, which date shall be the first to occur of (a) the fifth anniversary
of the Effective Date of the Arrangement, (b) the date selected by the Dreco
Board of Directors at a time when less than 15% of the Exchangeable Shares
issuable on the Effective Date (other than Exchangeable Shares held by
National-Oilwell and its Subsidiaries and as such number of shares may be
adjusted as deemed appropriate by the Board of Directors to give effect to any
subdivision or consolidation of or stock dividend on the Exchangeable Shares,
any issuance or distribution of rights to acquire Exchangeable Shares or
securities exchangeable for or convertible into or carrying rights to acquire
Exchangeable Shares, any issue or distribution of other securities or rights or
evidences of indebtedness or assets, or any other capital reorganization or
other transaction involving or affecting the Exchangeable Shares) are
outstanding, (c) the Business Day prior to the record date for any meeting or
vote of the shareholders of the Corporation to consider any matter on which the
holders of Exchangeable Shares would be entitled to vote as shareholders of the
Corporation, but excluding any meeting or vote as described in clause (d) below
or (d) the Business Day following the day on which the holders of Exchangeable
Shares fail to take the necessary action at a meeting or other vote of holders
of Exchangeable Shares, if and to the extent such action is required, to approve
or disapprove, as applicable, any change to, or in the rights of the holders of,
Exchangeable Shares, if the approval or disapproval, as applicable, of such
change would be required to maintain the economic and legal equivalence of the
Exchangeable Shares and the National-Oilwell Common Stock.
"BOARD OF DIRECTORS" means the Board of Directors of the Corporation and
any committee thereof acting within its authority.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day when
banks are not open for business in one or more of Houston, Texas, Toronto,
Ontario and Calgary, Alberta.
"CLASS A PREFERRED SHARE" means the Class A Preferred Share in the capital
of the Corporation.
"COMMON SHARES" means the common shares in the capital of the Corporation.
"CORPORATION" means Dreco Energy Services Ltd., a corporation under the
laws of the Province of Alberta and includes any successor corporation.
"CURRENT MARKET PRICE" means, in respect of a share of National-Oilwell
Common Stock on any date, the average of the closing bid and ask prices of
National-Oilwell Common Stock during the period of 20 consecutive trading days
ending not more than five trading days before such date on the New York Stock
Exchange, or, if National-Oilwell Common Stock is not then traded on the New
York Stock Exchange, on such other principal U.S. stock exchange or automated
quotation system on which the National-Oilwell Common Stock is listed or quoted,
as the case may be, as may be selected by the Board of Directors for such
purpose; provided, however, that if in the opinion of the Board of Directors the
public distribution or trading activity of National-Oilwell Common Stock during
such period does not create a market which reflects the fair market value of a
share of National-Oilwell Common Stock, then the Current Market Price of a share
of National-Oilwell Common Stock shall be determined by the Board of Directors
based upon the advice of such qualified independent financial advisors as the
Board of Directors may deem to be appropriate, and provided further than any
such selection, opinion or determination by the Board of Directors shall be
conclusive and binding.
"EXCHANGE PUT RIGHT" has the meaning provided in Article 8.
"EXCHANGEABLE SHARE CONSIDERATION" means, for any acquisition of or
redemption of or distribution of assets of the Corporation in respect of or
purchase pursuant to the Exchange Put Right of Exchangeable Shares pursuant to
these share provisions, the Plan of Arrangement, the Support Agreement or the
Voting and Exchange Trust Agreement:
(a) certificates representing the aggregate number of shares of
National-Oilwell Common Stock deliverable in connection with such action;
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(b) a cheque or cheques payable at par at any branch of the bankers of
the payor in the amount of all declared and unpaid and undeclared but
payable cash dividends deliverable in connection with such action; and
(c) such stock or property constituting any declared and unpaid
non-cash dividends deliverable in connection with such action;
provided that (i) that part of the consideration which is the Current
Market Price of a share of National-Oilwell Common Stock shall be fully
paid and satisfied by the delivery of one share of National-Oilwell Common
Stock, (ii) that part of the consideration which represents non-cash
dividends remaining unpaid shall be fully paid and satisfied by delivery of
such non-cash items, (iii) any such stock shall be duly issued as fully
paid and non-assessable and any such property shall be delivered free and
clear of any lien, claim, encumbrance, security interest or adverse claim
or interest and (iv) such consideration shall be paid less any tax required
to be deducted and withheld therefrom and without interest.
"EXCHANGEABLE SHARE PRICE" means, for each Exchangeable Share, an amount
equal to the aggregate of:
(a) the Current Market Price of a share of National-Oilwell Common
Stock; plus
(b) an additional amount equal to the full amount of all cash
dividends declared and unpaid on such Exchangeable Share; plus
(c) an additional amount equal to all dividends declared on
National-Oilwell Common Stock which have not been declared on Exchangeable
Shares in accordance herewith; plus
(d) an additional amount representing non-cash dividends declared and
unpaid on such Exchangeable Share.
"EXCHANGEABLE SHARES" means the Exchangeable Shares of the Corporation
having the rights, privileges, restrictions and conditions set forth herein.
"LIQUIDATION AMOUNT" has the meaning provided in Section 5.1.
"LIQUIDATION CALL RIGHT" has the meaning provided in the Plan of
Arrangement.
"LIQUIDATION DATE" has the meaning provided in Section 5.1.
"NATIONAL-OILWELL" means National-Oilwell, Inc., a corporation organized
and existing under the laws of the State of Delaware and includes any successor
corporation.
"NATIONAL-OILWELL CALL NOTICE" has the meaning provided in Section 6.3.
"NATIONAL-OILWELL COMMON STOCK" means the shares of common stock of
National-Oilwell, with a par value of U.S. $0.01 per share, having voting rights
of one vote per share, and any other securities resulting from the application
of section 2.7 of the Support Agreement.
"NATIONAL-OILWELL DIVIDEND DECLARATION DATE" means the date on which the
board of directors of National-Oilwell declares any dividend on the
National-Oilwell Common Stock.
"NATIONAL-OILWELL SPECIAL SHARE" means the one share of Special Voting
Stock of National-Oilwell with a par value of U.S. $0.01 and having voting
rights at meetings of holders of National-Oilwell Common Stock equal to the
Aggregate Equivalent Voting Amount.
"PLAN OF ARRANGEMENT" means the plan of arrangement involving and affecting
the Corporation and the holders of its Class "A" common shares, options and
shareholder rights under section 186 of the Act, to which plan of arrangement
these share provisions are an appendix.
"PURCHASE PRICE" has the meaning provided in Section 6.3.
"REDEMPTION CALL PURCHASE PRICE" has the meaning provided in the Plan of
Arrangement.
"REDEMPTION CALL RIGHT" has the meaning provided in the Plan of
Arrangement.
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"REDEMPTION PRICE" has the meaning provided in Section 7.1.
"RETRACTED SHARES" has the meaning provided in subsection 6.1(i).
"RETRACTION CALL RIGHT" has the meaning provided in subsection 6.1(iii).
"RETRACTION DATE" has the meaning provided in subsection 6.1(ii).
"RETRACTION PRICE" has the meaning provided in Section 6.1.
"RETRACTION REQUEST" has the meaning provided in Section 6.1.
"SUBSIDIARY", in relation to any person, means any body corporate
partnership, joint venture, association or other entity of which more than 50%
of the total voting power of shares of stock or units of ownership or beneficial
interest entitled to vote in the election of directors (or members of a
comparable governing body) is owned or controlled, directly or indirectly, by
such person.
"SUPPORT AGREEMENT" means the Support Agreement between National-Oilwell
and the Corporation made as of [Effective Date], 1997.
"TRANSFER AGENT" means the duly appointed transfer agent for the time being
of the Exchangeable Shares, and if there is more than one such agent then the
principal Canadian agent.
"TRUSTEE" means the Trustee appointed under the Voting and Exchange Trust
Agreement, and any successor trustee.
"VOTING AND EXCHANGE TRUST AGREEMENT" means the Voting and Exchange Trust
Agreement between the Corporation, National-Oilwell and the Trustee made as of
[Effective Date], 1997.
ARTICLE 2
RANKING OF EXCHANGEABLE SHARES
2.1 The Exchangeable Shares shall rank junior to the Class A Preferred Share,
and shall be entitled to a preference over the Common Shares and any other
shares ranking junior to the Exchangeable Shares, with respect to the payment of
dividends and the distribution of assets in the event of the liquidation,
dissolution or winding-up of the Corporation, whether voluntary or involuntary,
or any other distribution of the assets of the Corporation among its
shareholders for the purpose of winding-up its affairs.
ARTICLE 3
DIVIDENDS
3.1 A holder of an Exchangeable Share shall be entitled to receive and the
Board of Directors shall, subject to applicable law, on each National-Oilwell
Dividend Declaration Date, declare a dividend on each Exchangeable Share (a) in
the case of a cash dividend declared on the National-Oilwell Common Stock, in an
amount in cash for each Exchangeable Share equal to the cash dividend declared
on each share of National-Oilwell Common Stock or (b) in the case of a stock
dividend declared on the National-Oilwell Common Stock to be paid in
National-Oilwell Common Stock, in such number of Exchangeable Shares for each
Exchangeable Share as is equal to the number of shares of National-Oilwell
Common Stock to be paid on each share of National-Oilwell Common Stock or (c) in
the case of a dividend declared on the National-Oilwell Common Stock in property
other than cash or National-Oilwell Common Stock, in such type and amount of
property for each Exchangeable Share as is the same as the type and amount of
property declared as a dividend on each share of National-Oilwell Common Stock.
Such dividends shall be paid out of money, assets or property of the Corporation
properly applicable to the payment of dividends, or out of authorized but
unissued shares of the Corporation.
3.2 Cheques of the Corporation payable at par at any branch of the bankers of
the Corporation shall be issued in respect of any cash dividends contemplated by
subsection 3.1(a) hereof and the sending of such a
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cheque to each holder of an Exchangeable Share (less any tax required to be
deducted and withheld from such dividends paid or credited by the Corporation)
shall satisfy the cash dividends represented thereby unless the cheque is not
paid on presentation. Certificates registered in the name of the registered
holder of Exchangeable Shares shall be issued or transferred in respect of any
stock dividends contemplated by subsection 3.1(b) hereof and the sending of such
a certificate to each holder of an Exchangeable Share shall satisfy the stock
dividend represented thereby. Such other type and amount of property in respect
of any dividends contemplated by subsection 3.1(c) hereof shall be issued,
distributed or transferred by the Corporation in such manner as it shall
determine and the issuance, distribution or transfer thereof by the Corporation
to each holder of an Exchangeable Share shall satisfy the dividend represented
thereby. In all cases any such dividends shall be subject to any reduction or
adjustment for tax required to be deducted and withheld from such dividends paid
or credited by the Corporation. No holder of an Exchangeable Share shall be
entitled to recover by action or other legal process against the Corporation any
dividend which is represented by a cheque that has not been duly presented to
the Corporation's bankers for payment or which otherwise remains unclaimed for a
period of six years from the date on which such dividend was payable.
3.3 The record date for the determination of the holders of Exchangeable Shares
entitled to receive payment of, and the payment date for, any dividend declared
on the Exchangeable Shares under Section 3.1 hereof shall be the same dates as
the record date and payment date, respectively, for the corresponding dividend
declared on the National-Oilwell Common Stock.
3.4 If on any payment date for any dividends declared on the Exchangeable
Shares under Section 3.1 hereof the dividends are not paid in full on all of the
Exchangeable Shares then outstanding, any such dividends which remain unpaid
shall be paid on a subsequent date or dates determined by the Board of Directors
on which the Corporation shall have sufficient moneys, assets or property
properly applicable to the payment of such dividends.
3.5 Except as provided in this Article 3, the holders of Exchangeable Shares
shall not be entitled to receive dividends in respect thereof.
ARTICLE 4
CERTAIN RESTRICTIONS
4.1 So long as any of the Exchangeable Shares are outstanding, the Corporation
shall not at any time without, but may at any time with, the approval of the
holders of the Exchangeable Shares given as specified in Section 10.1 of these
share provisions:
(a) pay any dividends on the Common Shares, or any other shares
ranking junior to the Exchangeable Shares, other than stock dividends
payable in any such other shares ranking junior to the Exchangeable Shares;
(b) redeem or purchase or make any capital distribution in respect of
Common Shares or any other shares ranking junior to the Exchangeable Shares
with respect to the payment of dividends or on any liquidation
distribution;
(c) redeem or purchase any other shares of the Corporation ranking
equally with the Exchangeable Shares with respect of the payment of
dividends or on any liquidation distribution; or
(d) amend the articles or by-laws of the Corporation, in either case
in any manner that would affect the rights of the holders of the
Exchangeable Shares.
The restrictions in subsections 4.1(a), 4.1(b), and 4.1(c) above shall not
apply if all dividends on the outstanding Exchangeable Shares corresponding
to dividends declared with a record date on or following the effective date
of the Plan of Arrangement on the National-Oilwell Common Stock shall have
been declared on the Exchangeable Shares and paid in full.
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ARTICLE 5
DISTRIBUTION ON LIQUIDATION
5.1 In the event of the liquidation, dissolution or winding-up of the
Corporation or any other distribution of the assets of the Corporation among its
shareholders for the purpose of winding-up its affairs, a holder of Exchangeable
Shares shall be entitled, subject to applicable law, to receive from the assets
of the Corporation in respect of each Exchangeable Share held by such holder on
the effective date of such liquidation, dissolution or winding-up (the
"LIQUIDATION DATE"), before any distribution of any part of the assets of the
Corporation to the holders of the Common Shares or any other shares ranking
junior to the Exchangeable Shares, an amount equal to the Exchangeable Share
Price applicable on the last Business Day prior to the Liquidation Date (the
"LIQUIDATION AMOUNT"). In connection with payment of the Liquidation Amount, the
Corporation shall be entitled to liquidate some of the National-Oilwell Common
Stock which would otherwise be deliverable to the particular holder of
Exchangeable Shares in order to fund any statutory withholding tax obligation.
5.2 On or promptly after the Liquidation Date, and subject to the exercise by
National-Oilwell of the Liquidation Call Right, the Corporation shall cause to
be delivered to the holders of the Exchangeable Shares the Liquidation Amount
for each such Exchangeable Share upon presentation and surrender of the
certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as the Transfer Agent may reasonably
require, at the registered office of the Corporation or at any office of the
Transfer Agent as may be specified by the Corporation by notice to the holders
of the Exchangeable Shares. Payment of the total Liquidation Amount for such
Exchangeable Shares shall be made by delivery to each holder, at the address of
the holder recorded in the securities register of the Corporation for the
Exchangeable Shares or by holding for pick up by the holder at the registered
office of the Corporation or at any office of the Transfer Agent as may be
specified by the Corporation by notice to the holders of Exchangeable Shares, on
behalf of the Corporation of the Exchangeable Share Consideration representing
the total Liquidation Amount. On and after the Liquidation Date, the holders of
the Exchangeable Shares shall cease to be holders of such Exchangeable Shares
and shall not be entitled to exercise any of the rights of holders in respect
thereof, other than the right to receive their proportionate part of the total
Liquidation Amount, unless payment of the total Liquidation Amount for such
Exchangeable Shares shall not be made upon presentation and surrender of share
certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Liquidation Amount
has been paid in the manner hereinbefore provided. The Corporation shall have
the right at any time on or after the Liquidation Date to deposit or cause to be
deposited the Exchangeable Share Consideration in respect of the Exchangeable
Shares represented by certificates that have not at the Liquidation Date been
surrendered by the holders thereof in a custodial account or for safe keeping,
in the case of non-cash items, with any chartered bank or trust company in
Canada. Upon such deposit being made, the rights of the holders of Exchangeable
Shares after such deposit shall be limited to receiving their proportionate part
of the total Liquidation Amount for such Exchangeable Shares so deposited,
against presentation and surrender of the said certificates held by them,
respectively, in accordance with the foregoing provisions. Upon such payment or
deposit of such Exchangeable Share Consideration, the holders of the
Exchangeable Shares shall thereafter be considered and deemed for all purposes
to be the holders of the National-Oilwell Common Stock delivered to them.
Notwithstanding the foregoing, until such payment or deposit of such
Exchangeable Share Consideration, the holder shall be deemed to still be a
holder of Exchangeable Shares for purposes of all voting rights with respect
thereto under the Voting and Exchange Trust Agreement.
5.3 After the Corporation has satisfied its obligations to pay the holders of
the Exchangeable Shares the Liquidation Amount per Exchangeable Share, such
holders shall not be entitled to share in any further distribution of the assets
of the Corporation.
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ARTICLE 6
RETRACTION OF EXCHANGEABLE SHARES BY HOLDER
6.1 A holder of Exchangeable Shares shall be entitled at any time subject to
the exercise by National-Oilwell of the Retraction Call Right and otherwise upon
compliance with the provisions of this Article 6, to require the Corporation to
redeem any or all of the Exchangeable Shares registered in the name of such
holder for an amount equal to the Exchangeable Share Price applicable on the
last Business Day prior to the Retraction Date (the "RETRACTION PRICE"). In
connection with payment of the Retraction Price, the Corporation shall be
entitled to liquidate some of the National-Oilwell Common Stock that would
otherwise be deliverable to the particular holder of Exchangeable Shares in
order to fund any statutory withholding tax obligation. To effect such
redemption, the holder shall present and surrender at the registered office of
the Corporation or at any office of the Transfer Agent as may be specified by
the Corporation in Schedule A hereto or by notice to the holders of Exchangeable
Shares the certificate or certificates representing the Exchangeable Shares
which the holder desires to have the Corporation redeem, together with such
other documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as the Transfer Agent may reasonably
require, and together with a duly executed statement (the "RETRACTION REQUEST")
in the form of Schedule A hereto or in such other form as may be acceptable to
the Corporation:
(i) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by such
certificate or certificates (the "RETRACTED SHARES") redeemed by the
Corporation;
(ii) stating the Business Day on which the holder desires to have the
Corporation redeem the Retracted Shares (the "RETRACTION DATE"), provided
that the Retraction Date shall be not less than five Business Days nor more
than 10 Business Days after the date on which the Retraction Request is
received by the Corporation and further provided that, in the event that no
such Business Day is specified by the holder in the Retraction Request, the
Retraction Date shall be deemed to be the tenth Business Day after the date
on which the Retraction Request is received by the Corporation; and
(iii) acknowledging the overriding right (the "RETRACTION CALL RIGHT")
of National-Oilwell to purchase all but not less than all the Retracted
Shares directly from the holder and that the Retraction Request shall be
deemed to be a revocable offer by the holder to sell the Retracted Shares
in accordance with the Retraction Call Right on the terms and conditions
set out in Section 6.3 below.
6.2 Subject to the exercise by National-Oilwell of the Retraction Call Right,
upon receipt by the Corporation or the Transfer Agent in the manner specified in
Section 6.1 hereof of a certificate or certificates representing the number of
Exchangeable Shares which the holder desires to have the Corporation redeem,
together with a Retraction Request, and provided that the Retraction Request is
not revoked by the holder in the manner specified in Section 6.7, the
Corporation shall redeem the Retracted Shares effective at the close of business
on the Retraction Date and shall cause to be delivered to such holder the total
Retraction Price with respect to such shares in accordance with Section 6.4
hereof. If only a part of the Exchangeable Shares represented by any certificate
are redeemed or purchased by National-Oilwell pursuant to the Retraction Call
right, a new certificate for the balance of such Exchangeable Shares shall be
issued to the holder at the expense of the Corporation.
6.3 Upon receipt by the Corporation of a Retraction Request, the Corporation
shall immediately notify National-Oilwell thereof. In order to exercise the
Retraction Call Right, National-Oilwell must notify the Corporation in writing
of its determination to do so (the "NATIONAL-OILWELL CALL NOTICE") within two
Business Days of such notification. If National-Oilwell does not so notify the
Corporation within two Business Days, the Corporation will notify the holder as
soon as possible thereafter that National-Oilwell will not exercise the
Retraction Call Right. If National-Oilwell delivers the National-Oilwell Call
Notice within such two Business Days, and provided that the Retraction Request
is not revoked by the holder in the manner specified in Section 6.7, the
Retraction Request shall thereupon be considered only to be an offer by the
holder to sell the Retracted Shares to National-Oilwell in accordance with the
Retraction Call Right. In such event, the
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Corporation shall not redeem the Retracted Shares and National-Oilwell shall
purchase from such holder and such holder shall sell to National-Oilwell on the
Retraction Date the Retracted Shares for a purchase price (the "PURCHASE PRICE")
per share equal to the Retraction Price per share. For the purposes of
completing a purchase pursuant to the Retraction Call Right, National-Oilwell
shall deposit with the Transfer Agent, on or before the Retraction Date the
Exchangeable Share Consideration representing the total Purchase Price. Provided
that such Exchangeable Share Consideration has been so deposited with the
Transfer Agent, the closing of the purchase and sale of the Retracted Shares
pursuant to the Retraction Call Right shall be deemed to have occurred as at the
close of business on the Retraction Date and, for greater certainty, no
redemption by the Corporation of such Retracted Shares shall take place on the
Retraction Date. In the event that National-Oilwell does not deliver a
National-Oilwell Call Notice within two Business Days or otherwise comply with
these Exchangeable Share provisions in respect thereto, and provided that
Retraction Request is not revoked by the holder in the manner specified in
Section 6.7, the Corporation shall redeem the Retracted Shares on the Retraction
Date and in the manner otherwise contemplated in this Article 6.
6.4 The Corporation or National-Oilwell, as the case may be, shall deliver or
cause the Transfer Agent to deliver to the relevant holder, at the address of
the holder recorded in the securities register of the Corporation for the
Exchangeable Shares or at the address specified in the holder's Retraction
Request or by holding for pick up by the holder at the registered office of the
Corporation or at any office of the Transfer Agent as may be specified by the
Corporation by notice to the holders of Exchangeable Shares, the Exchangeable
Share Consideration representing the total Retraction Price or the total
Purchase Price, as the case may be, and such delivery of such Exchangeable Share
Consideration to the Transfer Agent shall be deemed to be payment of and shall
satisfy and discharge all liability for the total Retraction Price or total
Purchase Price, as the case may be, except as to any cheque included therein
which is not paid on due presentation.
6.5 On and after the close of business on the Retraction Date, the holder of
the Retracted Shares shall not be entitled to exercise any of the rights of a
holder in respect thereof, other than the right to receive his proportionate
part of the total Retraction Price or total Purchase Price, as the case may be,
unless upon presentation and surrender of certificates in accordance with the
foregoing provisions, payment of the total Retraction Price or the total
Purchase Price, as the case may be, shall not be made, in which case the rights
of such holder shall remain unaffected until the Exchangeable Share
Consideration representing the total Retraction Price or the total Purchase
Price, as the case may be, has been paid in the manner hereinbefore provided. On
and after the close of business on the Retraction Date, provided that
presentation and surrender of certificates and payment of the Exchangeable Share
Consideration representing the total Retraction Price or the total Purchase
Price, as the case may be, has been made in accordance with the foregoing
provisions, the holder of the Retracted Shares so redeemed by the Corporation or
purchased by National-Oilwell shall thereafter be considered and deemed for all
purposes to be a holder of the National-Oilwell Common Stock delivered to it.
Notwithstanding the foregoing, until payment of such Exchangeable Share
Consideration to the holder, the holder shall be deemed to still be a holder of
Exchangeable Shares for purposes of all voting rights with respect thereto under
the Voting and Exchange Trust Agreement.
6.6 Notwithstanding any other provision of this Article 6, the Corporation
shall not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares would
be contrary to liquidity or solvency requirements or other provisions of
applicable law. If the Corporation believes that on any Retraction Date it would
not be permitted by any of such provisions to redeem the Retracted Shares
tendered for redemption on such date, and provided that National-Oilwell shall
not have exercised the Retraction Call Right with respect to the Retracted
Shares, the Corporation shall only be obligated to redeem Retracted Shares
specified by a holder in a Retraction Request to the extent of the maximum
number that may be so redeemed (rounded down to a whole number of shares) as
would not be contrary to such provisions and shall notify the holder at least
two Business Days prior to the Retraction Date as to the number of Retracted
Shares which will not be redeemed by the Corporation. In any case in which the
redemption by the Corporation of Retracted Shares would be contrary to liquidity
or solvency requirements or other provisions of applicable law, the Corporation
shall redeem Retracted Shares in accordance with Section 6.2 of these share
provisions on a pro rata basis and shall issue to each holder of Retracted
Shares a new certificate, at the expense of the Corporation, representing the
Retracted Shares not redeemed by the
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Corporation pursuant to Section 6.2 hereof. Provided that the Retraction Request
is not revoked by the holder in the manner specified in Section 6.7, the holder
of any such Retracted Shares not redeemed by the Corporation pursuant to Section
6.2 of these share provisions as a result of liquidity or solvency requirements
or applicable law shall be deemed by giving the Retraction Request to require
National-Oilwell to purchase such Retracted Shares from such holder on the
Retraction date or as soon as practicable thereafter on payment by
National-Oilwell to such holder of the Purchase Price for each such Retracted
Share, all as more specifically provided in the Voting and Exchange Trust
Agreement, and National-Oilwell shall make such purchase.
6.7 A holder of Retracted Shares may, by notice in writing given by the holder
to the Corporation before the close of business on the Business Day immediately
preceding the Retraction Date, withdraw its Retraction Request in which event
such Retraction Request shall be null and void and, for greater certainty, the
revocable offer constituted by the Retraction Request to sell the Retracted
Shares to National-Oilwell shall be deemed to have been revoked.
ARTICLE 7
REDEMPTION OF EXCHANGEABLE SHARES BY
THE CORPORATION
7.1 Subject to applicable law, and if National-Oilwell does not exercise the
Redemption Call Right, the Corporation shall on the Automatic Redemption Date
redeem the whole of the then outstanding Exchangeable Shares for an amount equal
to the Exchangeable Share Price applicable on the last Business Day prior to the
Automatic Redemption Date (the "REDEMPTION PRICE"). In connection with payment
of the Redemption Price, the Corporation shall be entitled to liquidate some of
the National-Oilwell Common Stock which would otherwise be deliverable to the
particular holder of Exchangeable Shares in order to fund any statutory
withholding tax obligation.
7.2 In any case of a redemption of Exchangeable Shares under this Article 7,
the Corporation, or the Transfer Agent on behalf of the Corporation, shall, at
least 45 days before an Automatic Redemption Date or before a possible Automatic
Redemption Date which may result from a failure of the holders of Exchangeable
Shares to take necessary action as described in clause (d) of the definition of
Automatic Redemption Date, send or cause to be sent to each holder of
Exchangeable Shares a notice in writing of the redemption or possible redemption
by the Corporation or the purchase by National-Oilwell under the Redemption Call
Right, as the case may be, of the Exchangeable Shares held by such holder. Such
notice shall set out the formula for determining the Redemption Price or the
Redemption Call Purchase Price, as the case may be, the Automatic Redemption
Date and, if applicable, particulars of the Redemption Call Right. In the case
of any notice given in connection with a possible Automatic Redemption Date,
such notice will be given contingently and will be withdrawn if the contingency
does not occur.
7.3 On or after the Automatic Redemption Date and subject to the exercise by
National-Oilwell of the Redemption Call Right, the Corporation shall cause to be
delivered to the holders of the Exchangeable Shares to be redeemed the
Redemption Price for each such Exchangeable Share upon presentation and
surrender at the registered office of the Corporation or at any office of the
Transfer Agent as may be specified by the Corporation in such notice of the
certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as the Transfer Agent may reasonably
require. Payment of the total Redemption Price for such Exchangeable Shares
shall be made by delivery to each holder, at the address of the holder recorded
in the securities register or at any office of the Transfer Agent as may be
specified by the Corporation in such notice, on behalf of the Corporation of the
Exchangeable Share Consideration representing the total Redemption Price. On and
after the Automatic Redemption Date, the holders of the Exchangeable Shares
called for redemption shall cease to be holders of such Exchangeable Shares and
shall not be entitled to exercise any of the rights of holders in respect
thereof, other than the right to receive their proportionate part of the total
Redemption Price, unless payment of the total Redemption Price for such
Exchangeable Shares shall not be made upon presentation and surrender of
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certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Redemption Price
has been paid in the manner hereinbefore provided. The Corporation shall have
the right at any time after the sending of notice of its intention to redeem the
Exchangeable Shares as aforesaid to deposit or cause to be deposited the
Exchangeable Share Consideration with respect to the Exchangeable Shares so
called for redemption, or of such of the said Exchangeable Shares represented by
certificates that have not at the date of such deposit been surrendered by the
holders thereof in connection with such redemption, in a custodial account or
for safe keeping, in the case of non-cash items, with any chartered bank or
trust company in Canada named in such notice. Upon the later of such deposit
being made and the Automatic Redemption Date, the Exchangeable Shares in respect
whereof such deposit shall have been made shall be redeemed and the rights of
the holders thereof after such deposit or Automatic Redemption Date, as the case
may be, shall be limited to receiving their proportionate part of the total
Redemption Price for such Exchangeable Shares so deposited, against presentation
and surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of such Exchangeable
Share Consideration, the holders of the Exchangeable Shares shall thereafter be
considered and deemed for all purposes to be holders of the National-Oilwell
Common Stock delivered to them. Notwithstanding the foregoing, until such
payment or deposit of such Exchangeable Share Consideration is made, the holder
shall be deemed to still be a holder of Exchangeable Shares for purposes of all
voting rights with respect thereto under the Voting and Exchange Trust
Agreement.
ARTICLE 8
EXCHANGE PUT RIGHT
8.1 Upon and subject to the terms and conditions contained in the Exchangeable
Share Provisions and the Voting and Exchange Trust Agreement:
(a) a holder of Exchangeable Shares shall have the right (the
"Exchange Put Right") at any time to require National-Oilwell to purchase
all or any part of the Exchangeable Shares of the holder; and
(b) upon the exercise by the holder of the Exchange Put Right and
provided that, at the time of purchase, the Exchangeable Shares are listed
on a recognized Canadian stock exchange, the holder shall be required to
sell to National-Oilwell, and National-Oilwell shall be required to
purchase from the holder, that number of Exchangeable Shares in respect of
which the Exchange Put Right is exercised, in consideration of the payment
by National-Oilwell of the Exchangeable Share Price applicable thereto
(which shall be the Exchangeable Share Price applicable on the last
Business Day prior to receipt of notice required under section 8.2) and
delivery by or on behalf of National-Oilwell of the Exchangeable Share
Consideration representing the total applicable Exchangeable Share Price.
8.2 The Exchange Put Right provided in section 8.1 hereof and in Article V of
the Voting and Exchange Trust Agreement may be exercised at any time by notice
in writing given by the holder to and received by the Trustee (the date of such
receipt, the "Exchange Put Date") accompanied by presentation and surrender of
the certificates representing such Exchangeable Shares, together with such
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the Act and the by-laws of the Corporation and such
additional documents and instruments as the Trustee may reasonably require, at
the principal transfer offices in Calgary, Alberta and Toronto, Ontario of the
Trustee, or at such other office or offices of the Trustee or of other persons
designated by the Trustee for that purpose as may from time to time be
maintained by the Trustee for that purpose. Such notice may be (i) in the form
of the panel, if any, on the certificates representing Exchangeable Shares, (ii)
in the form of the notice and election contained in any letter of transmittal
distributed or made available by the Corporation for that purpose, or (iii) in
other form satisfactory to the Trustee (or such other persons aforesaid), shall
stipulate the number of Exchangeable Shares in respect of which the right is
exercised (which may not exceed the number of shares represented by certificates
surrendered to the Trustee), shall be irrevocable unless the exchange is not
completed in accordance herewith and with the Voting and Exchange Trust
Agreement and shall constitute the holder's authorization to the Trustee (and
such other persons aforesaid) to effect the exchange on behalf of the holder.
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8.3 The completion of the sale and purchase referred to in section 8.1 shall be
required to occur, and National-Oilwell shall be required to take all actions on
its part necessary to permit it to occur, not later than the close of business
on the third Business Day following the Exchange Put Date.
8.4 The surrender by the holder of Exchangeable Shares under section 8.2 shall
constitute the representation, warranty and covenant of the holder that the
Exchangeable Shares so purchased are sold free and clear of any lien,
encumbrance, security interest or adverse claim or interest.
8.5 If a part only of the Exchangeable Shares represented by any certificate
are to be sold and purchased pursuant to the exercise of the Exchange Put Right,
a new certificate for the balance of such Exchangeable Shares shall be issued to
the holder at the expense of the Corporation.
8.6 Upon receipt by the Trustee of the notice, certificates and other documents
or instruments required by section 8.2, the Trustee shall deliver or cause to be
delivered, on behalf of National-Oilwell and subject to receipt by the Trustee
from National-Oilwell of the applicable Exchangeable Share Consideration, to the
relevant holder at the address of the holder specified in the notice or by
holding for pick-up by the holder at the registered office of the Corporation or
at any office of the Trustee (or other persons aforesaid) maintained for that
purpose, the Exchangeable Share Consideration representing the total applicable
Exchangeable Share Price, within the time stipulated in section 8.3. Delivery by
National-Oilwell to the Trustee of such Exchangeable Share Consideration shall
be deemed to be payment of and shall satisfy and discharge all liability for the
total applicable Exchangeable Share Price, except as to any cheque included
therein which is not paid on due presentation.
8.7 On and after the close of business on the Exchange Put Date, the holder of
the Exchangeable Shares in respect of which the Exchange Put Right is exercised
shall not be entitled to exercise any of the rights of a holder in respect
thereof, other than the right to receive the total applicable Exchangeable Share
Price, unless upon presentation and surrender of certificates in accordance with
the foregoing provisions, payment of the Exchangeable Share Consideration shall
not be made, in which case the rights of such holder shall remain unaffected
until such payment has been made. On and after the close of business on the
Exchange Put Date provided that presentation and surrender of certificates and
payment of the Exchangeable Share Consideration has been made in accordance with
the foregoing provisions, the holder of the Exchangeable Shares so purchased by
National-Oilwell shall thereafter be considered and deemed for all purposes to
be a holder of the National-Oilwell Common Stock delivered to it.
Notwithstanding the foregoing, until payment of the Exchangeable Share
Consideration to the holder, the holder shall be deemed to still be a holder of
Exchangeable Shares for purposes of all voting rights with respect thereto under
the Voting and Exchange Trust Agreement.
ARTICLE 9
VOTING RIGHTS
9.1 Except as required by applicable law and the provisions hereof, the holders
of the Exchangeable Shares shall not be entitled as such to receive notice of or
to attend any meeting of the shareholders of the Corporation or to vote at any
such meeting.
ARTICLE 10
AMENDMENT AND APPROVAL
10.1 The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be added to, changed or removed but, except as
hereinafter provided, only with the approval of the holders of the Exchangeable
Shares given as hereinafter specified.
10.2 Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition attaching to the
Exchangeable Shares or any other matter requiring the approval or consent of the
holders of the Exchangeable Shares shall be deemed to have been sufficiently
given
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if it shall have been given in accordance with applicable law subject to a
minimum requirement that such approval be evidenced by resolution passed by not
less than 66 2/3% of the votes cast on such resolution by persons represented in
person or by proxy at a meeting of holders of Exchangeable Shares duly called
and held at which the holders of at least 50% of the outstanding Exchangeable
Shares at that time are present or represented by proxy (excluding Exchangeable
Shares beneficially owned by National-Oilwell or its Subsidiaries). If at any
such meeting the holders of at least 50% of the outstanding Exchangeable Shares
at that time are not present or represented by proxy within one-half hour after
the time appointed for such meeting then the meeting shall be adjourned to such
date not less than 10 days thereafter and to such time and place as may be
designated by the Chairman of such meeting. At such adjourned meeting the
holders of Exchangeable Shares present or represented by proxy thereat may
transact the business for which the meeting was originally called and a
resolution passed thereat by the affirmative vote of not less than 66 2/3% of
the votes cast on such resolution by persons represented in person or by proxy
at such meeting shall constitute the approval or consent of the holders of the
Exchangeable Shares. For the purposes of this section, any spoiled votes,
illegible votes, defective votes and abstinences shall be deemed to be votes not
cast.
ARTICLE 11
RECIPROCAL CHANGES, ETC. IN RESPECT OF
NATIONAL-OILWELL COMMON STOCK
11.1 (a) Each holder of an Exchangeable Share acknowledges that the Support
Agreement provides, in part, that National-Oilwell will not:
(i) issue or distribute National-Oilwell Common Stock (or securities
exchangeable for or convertible into or carry rights to acquire shares of
National-Oilwell Common Stock) to the holders of all or substantially all
of the then outstanding National-Oilwell Common Stock by way of stock
dividend or other distribution; or
(ii) issue or distribute rights, options or warrants to the holders of
all or substantially all of the then outstanding National-Oilwell Common
Stock entitling them to subscribe for or to purchase shares of
National-Oilwell Common Stock (or securities exchangeable for or
convertible into or carrying rights to acquire shares of National-Oilwell
Common Stock); or
(iii) issue or distribute to the holders of all or substantially all
of the then outstanding shares of National-Oilwell Common Stock (A) shares
or securities of National-Oilwell of any class other than National-Oilwell
Common Stock (other than shares convertible into or exchangeable for or
carrying rights to acquire National-Oilwell Common Stock), (B) rights,
options or warrants other than those referred to in subsection 11.1(a)(ii)
above, (C) evidences of indebtedness of National-Oilwell or (D) assets of
National-Oilwell;
unless one or both of the Corporation and National-Oilwell is permitted
under applicable law to issue and distribute the economic equivalent on a
per share basis of such rights, options, warrants, securities, shares,
evidences of indebtedness or assets and the items referred to in clauses
(i), (ii) and (iii) above, as applicable, are issued or distributed
simultaneously to holders of Exchangeable Shares.
(b) Each holder of an Exchangeable Share acknowledges that the Support
Agreement further provides, in part, that National-Oilwell will not:
(i) subdivide, redivide or change the then outstanding shares of
National-Oilwell Common Stock into a greater number of shares of
National-Oilwell Common Stock; or
(ii) reduce, combine or consolidate or change the then outstanding
shares of National-Oilwell Common Stock into a lesser number of shares of
National-Oilwell Common Stock; or
(iii) reclassify or otherwise change the shares of National-Oilwell
Common Stock or effect an amalgamation, merger, reorganization or other
transaction involving or affecting the shares of National-Oilwell Common
Stock;
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unless the Corporation is permitted under applicable law to simultaneously
make the same or an economically equivalent change to, or in the rights of
the holders of, the Exchangeable Shares and the same or an economically
equivalent change is simultaneously made to, or in the rights of the
holders of, the Exchangeable Shares.
The Support Agreement further provides, in part, that, with the exception of
certain ministerial amendments, the aforesaid provisions of the Support
Agreement shall not be changed without the approval of the holders of the
Exchangeable Shares given in accordance with Section 10.1 of these share
provisions.
ARTICLE 12
ACTIONS BY THE CORPORATION UNDER
SUPPORT AGREEMENT
12.1 The Corporation will take all such actions and do all such things as shall
be necessary or advisable to perform and comply with and to ensure performance
and compliance by National-Oilwell with all provisions of the Support Agreement,
the Voting Trust and Exchange Agreement and National-Oilwell's Amended and
Restated Certificate of Incorporation applicable to the Corporation and
National-Oilwell, respectively, in accordance with the terms thereof including,
without limitation, taking all such actions and doing all such things as shall
be necessary or advisable to enforce to the fullest extent possible for the
direct benefit of the Corporation all rights and benefits in favour of the
Corporation under or pursuant thereto.
12.2 The Corporation shall not propose, agree to or otherwise give effect to
any amendment to, or waiver or forgiveness of its rights or obligations under,
the Support Agreement, the Voting Trust and Exchange Agreement or
National-Oilwell's Amended and Restated Certificate of Incorporation without the
approval of the holders of the Exchangeable Shares given in accordance with
Section 10.1 of these share provisions other than such amendments, waivers
and/or forgiveness as may be necessary or advisable for the purpose of:
(a) adding to the covenants of the other party or parties to such
agreement for the protection of the Corporation or the holders of
Exchangeable Shares; or
(b) making such provisions or modifications not inconsistent with such
agreement or certificate as may be necessary or desirable with respect to
matters or questions arising thereunder which, in the opinion of the Board
of Directors, it may be expedient to make, provided that the Board of
Directors shall be of the opinion, after consultation with counsel, that
such provisions and modifications will not be prejudicial to the interests
of the holders of the Exchangeable Shares; or
(c) making such changes in or corrections to such agreement or
certificate which, on the advice of counsel to the Corporation, are
required for the purpose of curing or correcting any ambiguity or defect or
inconsistent provision or clerical omission or mistake or manifest error
contained therein, provided that the Board of Directors shall be of the
opinion, after consultation with counsel, that such changes or corrections
will not be prejudicial to the interests of the holders of the Exchangeable
Shares.
ARTICLE 13
LEGEND
13.1 The certificates evidencing the Exchangeable Shares shall contain or have
affixed thereto a legend, in form and on terms approved by the Board of
Directors, with respect to the Support Agreement, the provisions of the Plan of
Arrangement relating to the Liquidation Call Right, the Retraction Call Right
and the Redemption Call Right, and the Voting and Exchange Trust Agreement
(including the provisions with respect to the voting rights and exchange
provisions thereunder).
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ARTICLE 14
MISCELLANEOUS
14.1 Any notice, request or other communication to be given to the Corporation
by a holder of Exchangeable Shares shall be in writing and shall be valid and
effective if given by mail (postage prepaid) or by telecopy or by delivery to
the registered office of the Corporation and addressed to the attention of the
President. Any such notice, request or other communication, if given by mail,
telecopy or delivery, shall only be deemed to have been given and received upon
actual receipt thereof by the Corporation.
14.2 Any presentation and surrender by a holder of Exchangeable Shares to the
Corporation or the Transfer Agent of certificates representing Exchangeable
Shares in connection with the liquidation, dissolution or winding-up of the
Corporation or the retraction, redemption or exchange of Exchangeable Shares
shall be made by registered mail (postage prepaid) or by delivery to the
registered office of the Corporation or to such office of the Transfer Agent as
may be specified by the Corporation, in each case addressed to the attention of
the President of the Corporation. Any such presentation and surrender of
certificates shall only be deemed to have been made and to be effective upon
actual receipt thereof by the Corporation or the Transfer Agent, as the case may
be, and the method of any such presentation and surrender of certificates shall
be at the sole risk of the holder.
14.3 Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of the Corporation shall be in writing and
shall be valid and effective if given by mail (postage prepaid) or by delivery
to the address of the holder recorded in the securities register of the
Corporation or, in the event of the address of any such holder not being so
recorded, then at the last known address of such holder. Any such notice,
request or other communication, if given by mail, shall be deemed to have been
given and received on the fifth Business Day following the date of mailing and,
if given by delivery, shall be deemed to have been given and received on the
date of delivery. Accidental failure or omission to give any notice, request or
other communication to one or more holders of Exchangeable Shares shall not
invalidate or otherwise alter or affect any action or proceeding to be or
intended to be taken by the Corporation.
14.4 For greater certainty, the Corporation shall not be required for any
purpose under these share provisions to recognize or take account of persons who
are not so recorded in such securities register.
14.5 All Exchangeable Shares acquired by the Corporation upon the redemption or
retraction thereof shall be cancelled.
PROVISIONS ATTACHING TO THE CLASS "A" COMMON SHARE
The Class "A" common share ("Common Share") in the capital of the
Corporation shall have attached thereto the following rights, privileges,
restrictions and conditions:
DIVIDENDS
Subject to the prior rights of the Exchangeable Shares and any other shares
ranking prior to the Common Share, the holder of the Common Share shall be
entitled to receive such dividends as may be declared by the Board of Directors
out of property of the Corporation legally available therefor.
LIQUIDATION
Subject to the prior rights of the Exchangeable Shares and any other shares
ranking prior to the Common Share, the holder of the Common Share shall, upon
any liquidation, dissolution or winding-up of the Corporation, whether voluntary
or involuntary, or other distribution of the assets of the Corporation for the
purpose of winding-up its affairs, be entitled to receive the remaining property
and assets of the Corporation.
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VOTING
The holder of the Common Share shall be entitled to receive notice of and
to attend all meetings of shareholders (other than separate meetings of other
classes or series of shares), and the Common Share shall be entitled to one
vote.
RESTRICTIONS
So long as any of the Exchangeable Shares of the Corporation are
outstanding, the Corporation shall not at any time without, but may at any time
with, the approval of the board of directors and of the holder of the Common
Share issue any further Exchangeable Shares of the Corporation, except as
specifically required in accordance with the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares of the Corporation.
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SCHEDULE "A"
NOTICE OF RETRACTION
To the Corporation and National-Oilwell, Inc. ("National-Oilwell")
This notice is given pursuant to Article 6 of the provisions (the "SHARE
PROVISIONS") attaching to the Exchangeable Shares of the Corporation and all
capitalized words and expressions used in this notice which are defined in the
Share Provisions have the meaning attributed to such words and expressions in
such Share Provisions.
The undersigned hereby notifies the Corporation that, subject to the
Retraction Call Right referred to below, the undersigned desires to have the
Corporation redeem in accordance with Article 6 of the Share Provisions:
[ ] all share(s) represented by the accompanying certificate; or
[ ] __________ share(s) only.
The undersigned hereby notifies the Corporation that the Retraction Date
shall be __________ .
NOTE: The Retraction Date must be a Business Day and must not be less than
five Business Days nor more than 10 Business Days after the date upon
which this notice and the accompanying shares are received by the
Corporation. In the event that no such business day is correctly
specified above, the Retraction Date shall be deemed to be the tenth
Business Day after the date on which this notice is received by the
Corporation.
The undersigned acknowledges the Retraction Call Right of National-Oilwell
to purchase all but not less than all the Retracted Shares from the undersigned
and that his notice shall be deemed to be a recoverable offer by the undersigned
to sell the Retracted Shares to National-Oilwell in accordance with the
Retraction Call Right on the Retraction Date for the Retraction Price and on the
other terms and conditions set out in Section 6.3 of the Share Provisions. If
National-Oilwell determines not to exercise the Retraction Call Right, the
Corporation will notify the undersigned of such fact as soon as possible. This
notice of retraction, and offer to sell the Retracted Shares to
National-Oilwell, may be revoked and withdrawn by the undersigned by notice in
writing given to the Corporation at any time before the close of business on the
Business Date immediately preceding the Retraction Date.
The undersigned acknowledges that if, as a result of liquidity or solvency
provisions of applicable law, the Corporation is unable to redeem all Retracted
Shares, the undersigned will be deemed to have exercised the Exchange Right (as
defined in the Voting and Exchange Trust Agreement) so as to require
National-Oilwell to purchase the unredeemed Retracted Shares.
The undersigned hereby represents and warrants to the Corporation and
National-Oilwell that the undersigned has good title to, and owns, the share(s)
represented by the accompanying certificate free and clear of all liens, claims,
encumbrances, security interests and adverse claims or interests.
<TABLE>
<S> <C> <C>
- ----------------------------- ----------------------------- -----------------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
</TABLE>
[ ] Please check box if the legal or beneficial owner of the Retracted Shares is
a non-resident of Canada.
[ ] Please check box if the securities and any cheque(s) or other non-cash
assets resulting from the retraction of the Retracted Shares are to be held
for pick-up by the shareholder at the principal transfer office of Montreal
Trust Company of Canada (the "TRANSFER AGENT") in Toronto, Ontario, failing
which the securities and any cheque(s) or other non-cash assets will be
delivered to the shareholder in accordance with the share provisions.
E-25
<PAGE> 26
NOTE: This panel must be completed and the accompanying certificate,
together with such additional documents as the Transfer Agent may
require, must be deposited with the Transfer Agent at its principal
transfer office in Toronto, Ontario. The securities and any cheque(s)
or other non-cash assets resulting from the retraction or purchase of
the Retracted Shares will be issued and registered in, and made
payable to, or transferred into, respectively, the name of the
shareholder as it appears on the register of the Corporation and the
securities, cheque(s) and other non-cash assets resulting from such
retraction or purchase will be delivered to the shareholder in
accordance with the Share Provisions.
<TABLE>
<S> <C>
- ----------------------------------------------------- -----------------------------------------------------
Name of Person in Whose Name Securities or Cheque(s) Date
or Other Non-cash Assets Are To Be Registered,
Issued or Delivered (please print)
- ----------------------------------------------------- -----------------------------------------------------
Street Address or P.O. Box Signature of Shareholder
- ----------------------------------------------------- -----------------------------------------------------
City, Province Signature Guaranteed by
</TABLE>
NOTE: If the notice of retraction is for less than all of the share(s)
represented by the accompanying certificate, a certificate
representing the remaining shares of the Corporation will be issued
and registered in the name of the shareholder as it appears on the
register of the Corporation or its lawful transferee.
E-26
