Item 3.03.
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Material Modification to Rights of Security Holders.
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On February 20, 2020, the Board of
Directors (the “Board”) of HP Inc. (“HP”), a Delaware corporation, declared a dividend of one preferred
share purchase right (Right) for each outstanding share of common stock, par value $0.01 per share, of HP (“HP Common Stock”),
and adopted a shareholder rights plan, as set forth in the Rights Agreement, dated as of February 20, 2020 (the “Rights Agreement”),
by and between HP and Equiniti Trust Company, as rights agent. The dividend is payable on March 2, 2020 to HP shareholders of record
as of the close of business on March 2, 2020. The Rights will expire on February 20, 2021.
In general terms, the Rights Agreement
works by imposing a significant penalty upon any person or group that acquires 20% or more of the outstanding shares of HP Common
Stock without the approval of the Board. The Rights Agreement should not interfere with any merger or other business combination
approved by the Board.
A summary of the terms of the Rights
Agreement follows:
The Rights. The Rights will initially
trade with, and will be inseparable from, the shares of HP Common Stock. New Rights will accompany any new shares of HP Common
Stock issued after March 2, 2020 until the expiration, exchange or redemption of the Rights.
Exercisability.
The Rights will not be exercisable until 10 days after the public announcement that a person or group has become an “Acquiring
Person” (as defined in the Rights Agreement) by obtaining beneficial ownership of 20% or more of the outstanding shares of
HP Common Stock. Prior to exercise, the Right does not give its holder any dividend, voting or liquidation rights.
The date when the
Rights become exercisable is referred to herein as the Rights Distribution Date. Until that date, HP Common Stock certificates
or, in the case of uncertificated shares, notations in the book-entry account system, will also evidence the Rights, and any transfer
of shares of HP Common Stock will constitute a transfer of Rights. After that date, the Rights will separate from the shares of
HP Common Stock and be evidenced by book-entry credits or by Rights certificates that HP will mail to all eligible holders of HP
Common Stock. Any Rights held by an Acquiring Person are null and void and may not be exercised.
Exercise Price.
Each Right will allow its holder to purchase from HP one one-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $0.01 per share (“Preferred Share”), for $100 (the “Exercise Price”), once the Rights become
exercisable. This portion of a Preferred Share will give the stockholder approximately the same dividend, voting and liquidation
rights as would one share of HP Common Stock.
Beneficial Ownership.
Certain synthetic interests in securities created by derivative positions — whether or not such interests are considered
to be ownership of underlying shares of HP Common Stock or are reportable for purposes of Regulation 13D of the Securities Exchange
Act of 1934, as amended — are treated as beneficial ownership of the number of shares of HP Common Stock equivalent to the
economic exposure created by the derivative position, to the extent actual shares of HP Common Stock are directly or indirectly
held by counterparties to the derivatives contracts. Swaps dealers unassociated with any control intent or intent to evade the
purposes of the Rights Agreement are excepted from such imputed beneficial ownership. In addition, shares held by Affiliates and
Associates of an Acquiring Person, and Notional Common Shares held by counterparties to a Derivatives Contract with an Acquiring
Person, will be deemed to be beneficially owned by the Acquiring Person (in each case as such capitalized terms are defined in
the Rights Agreement).
Consequences of a Person or Group Becoming
an Acquiring Person.
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Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase shares of HP Common Stock with a market value of $200, based on the market price of HP Common Stock prior to such acquisition.
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Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of the outstanding shares of HP Common Stock, the Board may extinguish the Rights by exchanging one share of HP Common Stock or an equivalent security for each Right, other than Rights held by the Acquiring Person.
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Flip Over. If the Company is later acquired in a merger or similar transaction after the Rights Distribution Date, all holders of Rights except the Acquiring Person may, for the Exercise Price, purchase shares of the acquiring corporation with a market value of $200 based on the market price of the acquiring corporation’s stock, prior to such transaction.
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Preferred Share Provisions.
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Each one one-hundredth of a Preferred Share, if issued:
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will not be redeemable.
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will entitle holders to quarterly dividend payments of $0.01 per share, or an amount equal to the dividend paid on one share of HP Common Stock, whichever is greater.
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will entitle holders upon liquidation either to receive $1.00 per share, or an amount equal to the payment made on one share of HP Common Stock, whichever is greater.
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will have the same voting power as one share of HP Common Stock.
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if shares of HP Common Stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of HP Common Stock.
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The value of a one one-hundredth interest in a Preferred Share
should approximate the value of one share of HP Common Stock.
Expiration. The Rights will expire
on February 20, 2021.
Redemption. The Board may redeem the
Rights for $0.01 per Right at any time before any person or group becomes an Acquiring Person. If the Board redeems any Rights,
it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the
redemption price of $0.01 per Right. The redemption price will be adjusted if HP effects a stock split or stock dividend of HP
Common Stock.
Anti-Dilution Provisions. The Board
may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights
to prevent dilution that may occur from a stock dividend, a stock split or other reclassification of the Preferred Shares or HP
Common Stock. No adjustments to the Exercise Price of less than 1% will be made.
Amendments. The terms of the Rights
Agreement may be amended by the Board without the consent of the holders of the Rights. After a person or group becomes an Acquiring
Person, the Board may not amend the Rights Agreement in a way that adversely affects holders of the Rights.
The summary of the Rights Agreement set forth
under this Item 3.03 is qualified in its entirety by reference to the complete terms and conditions of the Rights Agreement, which
is filed as Exhibit 4.1 to this Current Report on Form 8-K, and incorporated by reference into this Item 3.03. A copy of the Rights
Agreement is available free of charge from HP upon request.