FTI » Topics » SECTION 351 TRANSACTION

These excerpts taken from the FTI 10-K filed Feb 27, 2009.

SECTION 351 TRANSACTION

14.1 Incorporation. Upon either:

(a) Upon either:

 

36


(i) The approval of the Board of a plan to incorporate the Company (the “Incorporation Plan”), provided that prior to December 31, 2013, approval of the Holders of a majority of the Class A-1 Units shall also be required, or

(ii) The approval of an Incorporation Plan by the Holders of a majority of the Class A Units, provided that prior to December 31, 2013, approval of the holders of a majority of the Class A-1 Units shall also be required,

each Member will transfer such Member’s Units to a corporation specifically formed for such purpose (the “Corporation”) in exchange for stock of the Corporation in a transaction intended to qualify under Section 351 of the Code, (the “Section 351 Transaction”). In the Section 351 Transaction, the Corporation shall issue its stock to the Members in accordance with their respective Units, without regard to class. Each Member shall consent to and raise no objections against, and shall take all necessary and desirable actions in connection with the consummation of the Section 351 Transaction. In the case of a Member that is a corporation, the Member may, in lieu of transferring all of its Units to the Corporation, cause all of its shareholders to transfer all of their shares of stock in the Member to the Corporation.

(b) In the event that the Company is incorporated pursuant to this Section 14.1 but does not effect a Qualified Public Offering immediately thereafter, then the respective rights, preferences, privileges and restrictions of the Class A Unit and the Class A-1 Units as they substantially exist under this Agreement and the Unitholders Agreement shall continue and be in effect in such successor corporation. Further, the Members of the Company, who shall become stockholders of such successor corporation that does not effect a Qualified Public Offering immediately after such incorporation, hereby agree and acknowledge that they shall, upon such incorporation of the Company, enter into a stockholder agreement containing substantially the same rights, preferences, privileges and restrictions with respect to voting as exist in this Agreement and the Unitholders Agreement.

14.2 Expenses and Other Matters. The Company shall pay any and all organizational, legal and accounting expenses and filing fees incurred in connection with the Section 351 Transaction (including, without limitation, any fees related to a filing under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended). The Corporation shall issue its stock in the Section 351 Transaction in accordance with the Incorporation Plan, which shall specify the classes of stock for which the Units (or shares of stock of a Member that is a corporation, as applicable) shall be exchanged and which shall attach as an exhibit the form of organizational document which shall set forth the rights and privileges of such classes of stock. In addition, the Incorporation Plan shall attach as exhibits such other documents and agreements as the Board determines shall be necessary, if any, to confer the rights, privileges, preferences and obligations conferred on the holders of Units in this Agreement on the holders of such classes or series of stock which shall be issued in exchange for such Units.

SECTION 351 TRANSACTION

14.1 Incorporation. Upon either:

(a) Upon either:

 

36


(i) The approval of the Board of a plan to incorporate the Company (the “Incorporation Plan”), provided that prior to December 31, 2013, approval of the Holders of a majority of the Class A-1 Units shall also be required, or

(ii) The approval of an Incorporation Plan by the Holders of a majority of the Class A Units, provided that prior to December 31, 2013, approval of the holders of a majority of the Class A-1 Units shall also be required,

each Member will transfer such Member’s Units to a corporation specifically formed for such purpose (the “Corporation”) in exchange for stock of the Corporation in a transaction intended to qualify under Section 351 of the Code, (the “Section 351 Transaction”). In the Section 351 Transaction, the Corporation shall issue its stock to the Members in accordance with their respective Units, without regard to class. Each Member shall consent to and raise no objections against, and shall take all necessary and desirable actions in connection with the consummation of the Section 351 Transaction. In the case of a Member that is a corporation, the Member may, in lieu of transferring all of its Units to the Corporation, cause all of its shareholders to transfer all of their shares of stock in the Member to the Corporation.

(b) In the event that the Company is incorporated pursuant to this Section 14.1 but does not effect a Qualified Public Offering immediately thereafter, then the respective rights, preferences, privileges and restrictions of the Class A Unit and the Class A-1 Units as they substantially exist under this Agreement and the Unitholders Agreement shall continue and be in effect in such successor corporation. Further, the Members of the Company, who shall become stockholders of such successor corporation that does not effect a Qualified Public Offering immediately after such incorporation, hereby agree and acknowledge that they shall, upon such incorporation of the Company, enter into a stockholder agreement containing substantially the same rights, preferences, privileges and restrictions with respect to voting as exist in this Agreement and the Unitholders Agreement.

14.2 Expenses and Other Matters. The Company shall pay any and all organizational, legal and accounting expenses and filing fees incurred in connection with the Section 351 Transaction (including, without limitation, any fees related to a filing under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended). The Corporation shall issue its stock in the Section 351 Transaction in accordance with the Incorporation Plan, which shall specify the classes of stock for which the Units (or shares of stock of a Member that is a corporation, as applicable) shall be exchanged and which shall attach as an exhibit the form of organizational document which shall set forth the rights and privileges of such classes of stock. In addition, the Incorporation Plan shall attach as exhibits such other documents and agreements as the Board determines shall be necessary, if any, to confer the rights, privileges, preferences and obligations conferred on the holders of Units in this Agreement on the holders of such classes or series of stock which shall be issued in exchange for such Units.

SECTION 351
TRANSACTION

14.1 Incorporation. Upon either:

FACE="Times New Roman" SIZE="2">(a) Upon either:

 


36








(i) The approval of the Board of a plan to incorporate the Company (the “Incorporation Plan”),
provided that prior to December 31, 2013, approval of the Holders of a majority of the Class A-1 Units shall also be required, or

SIZE="2">(ii) The approval of an Incorporation Plan by the Holders of a majority of the Class A Units, provided that prior to December 31, 2013, approval of the holders of a majority of the Class A-1 Units shall also be required,

each Member will transfer such Member’s Units to a corporation specifically formed for such purpose (the “Corporation”) in exchange for
stock of the Corporation in a transaction intended to qualify under Section 351 of the Code, (the “Section 351 Transaction”). In the Section 351 Transaction, the Corporation shall issue its stock to the Members in accordance
with their respective Units, without regard to class. Each Member shall consent to and raise no objections against, and shall take all necessary and desirable actions in connection with the consummation of the Section 351 Transaction. In the
case of a Member that is a corporation, the Member may, in lieu of transferring all of its Units to the Corporation, cause all of its shareholders to transfer all of their shares of stock in the Member to the Corporation.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%">(b) In the event that the Company is incorporated pursuant to this Section 14.1 but does not effect a Qualified Public Offering immediately
thereafter, then the respective rights, preferences, privileges and restrictions of the Class A Unit and the Class A-1 Units as they substantially exist under this Agreement and the Unitholders Agreement shall continue and be in effect in
such successor corporation. Further, the Members of the Company, who shall become stockholders of such successor corporation that does not effect a Qualified Public Offering immediately after such incorporation, hereby agree and acknowledge that
they shall, upon such incorporation of the Company, enter into a stockholder agreement containing substantially the same rights, preferences, privileges and restrictions with respect to voting as exist in this Agreement and the Unitholders
Agreement.

14.2 Expenses and Other Matters. The Company shall pay any and all organizational, legal and accounting expenses and
filing fees incurred in connection with the Section 351 Transaction (including, without limitation, any fees related to a filing under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended). The Corporation shall issue its stock
in the Section 351 Transaction in accordance with the Incorporation Plan, which shall specify the classes of stock for which the Units (or shares of stock of a Member that is a corporation, as applicable) shall be exchanged and which shall
attach as an exhibit the form of organizational document which shall set forth the rights and privileges of such classes of stock. In addition, the Incorporation Plan shall attach as exhibits such other documents and agreements as the Board
determines shall be necessary, if any, to confer the rights, privileges, preferences and obligations conferred on the holders of Units in this Agreement on the holders of such classes or series of stock which shall be issued in exchange for such
Units.

SECTION 351
TRANSACTION

14.1 Incorporation. Upon either:

FACE="Times New Roman" SIZE="2">(a) Upon either:

 


36








(i) The approval of the Board of a plan to incorporate the Company (the “Incorporation Plan”),
provided that prior to December 31, 2013, approval of the Holders of a majority of the Class A-1 Units shall also be required, or

SIZE="2">(ii) The approval of an Incorporation Plan by the Holders of a majority of the Class A Units, provided that prior to December 31, 2013, approval of the holders of a majority of the Class A-1 Units shall also be required,

each Member will transfer such Member’s Units to a corporation specifically formed for such purpose (the “Corporation”) in exchange for
stock of the Corporation in a transaction intended to qualify under Section 351 of the Code, (the “Section 351 Transaction”). In the Section 351 Transaction, the Corporation shall issue its stock to the Members in accordance
with their respective Units, without regard to class. Each Member shall consent to and raise no objections against, and shall take all necessary and desirable actions in connection with the consummation of the Section 351 Transaction. In the
case of a Member that is a corporation, the Member may, in lieu of transferring all of its Units to the Corporation, cause all of its shareholders to transfer all of their shares of stock in the Member to the Corporation.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%">(b) In the event that the Company is incorporated pursuant to this Section 14.1 but does not effect a Qualified Public Offering immediately
thereafter, then the respective rights, preferences, privileges and restrictions of the Class A Unit and the Class A-1 Units as they substantially exist under this Agreement and the Unitholders Agreement shall continue and be in effect in
such successor corporation. Further, the Members of the Company, who shall become stockholders of such successor corporation that does not effect a Qualified Public Offering immediately after such incorporation, hereby agree and acknowledge that
they shall, upon such incorporation of the Company, enter into a stockholder agreement containing substantially the same rights, preferences, privileges and restrictions with respect to voting as exist in this Agreement and the Unitholders
Agreement.

14.2 Expenses and Other Matters. The Company shall pay any and all organizational, legal and accounting expenses and
filing fees incurred in connection with the Section 351 Transaction (including, without limitation, any fees related to a filing under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended). The Corporation shall issue its stock
in the Section 351 Transaction in accordance with the Incorporation Plan, which shall specify the classes of stock for which the Units (or shares of stock of a Member that is a corporation, as applicable) shall be exchanged and which shall
attach as an exhibit the form of organizational document which shall set forth the rights and privileges of such classes of stock. In addition, the Incorporation Plan shall attach as exhibits such other documents and agreements as the Board
determines shall be necessary, if any, to confer the rights, privileges, preferences and obligations conferred on the holders of Units in this Agreement on the holders of such classes or series of stock which shall be issued in exchange for such
Units.

SECTION 351
TRANSACTION

14.1 Incorporation. Upon either:

FACE="Times New Roman" SIZE="2">(a) Upon either:

 


36








(i) The approval of the Board of a plan to incorporate the Company (the “Incorporation Plan”),
provided that prior to December 31, 2013, approval of the Holders of a majority of the Class A-1 Units shall also be required, or

SIZE="2">(ii) The approval of an Incorporation Plan by the Holders of a majority of the Class A Units, provided that prior to December 31, 2013, approval of the holders of a majority of the Class A-1 Units shall also be required,

each Member will transfer such Member’s Units to a corporation specifically formed for such purpose (the “Corporation”) in exchange for
stock of the Corporation in a transaction intended to qualify under Section 351 of the Code, (the “Section 351 Transaction”). In the Section 351 Transaction, the Corporation shall issue its stock to the Members in accordance
with their respective Units, without regard to class. Each Member shall consent to and raise no objections against, and shall take all necessary and desirable actions in connection with the consummation of the Section 351 Transaction. In the
case of a Member that is a corporation, the Member may, in lieu of transferring all of its Units to the Corporation, cause all of its shareholders to transfer all of their shares of stock in the Member to the Corporation.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%">(b) In the event that the Company is incorporated pursuant to this Section 14.1 but does not effect a Qualified Public Offering immediately
thereafter, then the respective rights, preferences, privileges and restrictions of the Class A Unit and the Class A-1 Units as they substantially exist under this Agreement and the Unitholders Agreement shall continue and be in effect in
such successor corporation. Further, the Members of the Company, who shall become stockholders of such successor corporation that does not effect a Qualified Public Offering immediately after such incorporation, hereby agree and acknowledge that
they shall, upon such incorporation of the Company, enter into a stockholder agreement containing substantially the same rights, preferences, privileges and restrictions with respect to voting as exist in this Agreement and the Unitholders
Agreement.

14.2 Expenses and Other Matters. The Company shall pay any and all organizational, legal and accounting expenses and
filing fees incurred in connection with the Section 351 Transaction (including, without limitation, any fees related to a filing under the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as amended). The Corporation shall issue its stock
in the Section 351 Transaction in accordance with the Incorporation Plan, which shall specify the classes of stock for which the Units (or shares of stock of a Member that is a corporation, as applicable) shall be exchanged and which shall
attach as an exhibit the form of organizational document which shall set forth the rights and privileges of such classes of stock. In addition, the Incorporation Plan shall attach as exhibits such other documents and agreements as the Board
determines shall be necessary, if any, to confer the rights, privileges, preferences and obligations conferred on the holders of Units in this Agreement on the holders of such classes or series of stock which shall be issued in exchange for such
Units.

EXCERPTS ON THIS PAGE:

10-K (5 sections)
Feb 27, 2009

"SECTION 351 TRANSACTION" elsewhere:

Weatherford International (WFT)
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