SECOND AMENDMENT TO
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
This Second Amendment to the Stockholder Protection Rights Agreement,
dated as of September 26, 1994, between Avondale Industries, Inc., a
Louisiana corporation (the "Company"), and ChaseMellon Shareholder
Services, LLC (successor to Boatmen's Trust Company, a Missouri
corporation), as Rights Agent (the "Rights Agent") as amended by the First
Amendment thereto (the "First Amendment") dated January 19, 1999 (as
amended, the "Rights Agreement"), is dated and effective as of June 3,
1999.
W I T N E S S E T H:
WHEREAS, the Company and the Rights Agent have heretofore entered into
the Rights Agreement, and pursuant to Section 5.4 of the Rights Agreement,
the Company and the Rights Agent may amend or supplement the Rights
Agreement in any respect without the approval of any holders of Rights
prior to the close of business on the Flip-in Date (as defined in the
Rights Agreement); and whereas a Flip-in Date has not occurred;
WHEREAS, all acts and things necessary to make this Amendment a valid
agreement according to its terms have been done and performed, and the
execution and delivery of this Amendment by the Company and the Rights
Agent have been in all respects authorized by the Company and the Rights
Agent.
NOW THEREFORE, in consideration of the premises and the mutual
agreements set forth in the Rights Agreement and this Amendment, the
parties hereby agree as follows:
1. The Rights Agreement is hereby amended by replacing all
references to "Newport News Shipbuilding, Inc." and "Newport News" included
in the definition of "Acquiring Person" in Section 1.1 with "Litton
Industries, Inc." and "Litton," respectively, so that the last sentence of
the definition of "Acquiring Person" in Section 1.1 shall hereafter read:
Notwithstanding anything herein to the contrary, the
term "Acquiring Person" shall not include Litton
Industries, Inc., a Delaware corporation, or its
Subsidiaries, Affiliates or Associates (hereinafter,
collectively, "Litton") as a result of the approval,
execution, delivery, performance, exercise of rights
pursuant to, amendment or consummation of any
transaction contemplated by (i) the Agreement and Plan
of Merger dated as of the date of this Amendment by and
among the Company and Litton, as it may be amended from
time to time (the "Acquisition Agreement") or (ii) the
Company Stock Option Agreement dated as of the date of
this Amendment by and among the Company and Litton, as
it may be amended from time to time (the "Option
Agreement").
2. The Rights Agreement is hereby further amended by replacing all
references to "Newport News" included in the definition of the terms
"Beneficial Owner," "Beneficial Ownership," and "Beneficially Own" in
Section 1.1 with "Litton," so that the last sentence of the definition of
the terms "Beneficial Owner," "Beneficial Ownership" and "Beneficially Own"
in Section 1.1 shall hereafter read:
Notwithstanding anything in this definition of
Beneficial Owner, Beneficial Ownership, and
Beneficially Own to the contrary, Litton shall not be
deemed to be the Beneficial Owner of, nor to have
Beneficial Ownership of, nor to Beneficially Own, any
of the Common Stock of the Company by reason of the
approval, execution, delivery, performance, exercise of
rights pursuant to, amendment or consummation of any
transaction contemplated by (i) the Acquisition
Agreement or (ii) the Option Agreement.
3. The parties acknowledge that pursuant to the First Amendment, the
Rights Agreement has been amended to add the following clause to the end of
the definition of "Expiration Time" in Section 1.1:
and (v) immediately prior to the Effective Time, as
defined in the Acquisition Agreement.
4. The parties further acknowledge that, pursuant to the First
Amendment, the Rights Agreement has been amended to add the following
sentence to the end of Section 4.3(c) thereof:
"Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage."
5. The Rights Agreement is hereby further amended by deleting all
references to the "Newport News Transaction" and "Newport News" in Section
5.19 and by replacing such references with the "Litton Transaction" and
"Litton," respectively, so that section 5.19 shall hereafter read in its
entirety:
Section 5.19. LITTON TRANSACTION.
Notwithstanding anything in this Agreement to the
contrary, the approval, execution, delivery,
performance, exercise of rights pursuant to, amendment
or consummation of any transaction contemplated by the
Acquisition Agreement or the Option Agreement shall not
cause (i) Litton to become an Acquiring Person, (ii) a
Stock Acquisition Date to occur, (iii) a Flip-in Date
to occur, (iv) a Flip-over Transaction or Event to
occur, or (v) the Separation Time to occur.
6. This Amendment to the Rights Agreement shall be governed by and
construed in accordance with the internal laws of the State of Louisiana.
7. This Amendment to the Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed an original, and all such counterparts shall together constitute
but one and the same instrument.
8. Except as expressly set forth herein, this Amendment to the
Rights Agreement shall not by implication or otherwise alter, modify, amend
or in any way affect any of the terms, conditions, obligations, covenants
or agreements contained in the Rights Agreement, all of which are ratified
and affirmed in all respects and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
the Rights Agreement to be duly executed on and as of the day and year
first above written.
Attest: AVONDALE INDUSTRIES, INC.
By: /S/ E.K. SIMON, JR. By: /S/ THOMAS M. KITCHEN
Name: E.K. Simon, Jr. Name: Thomas M. Kitchen
Title: V.P. Finance Title: Chief Financial Officer
Attest: CHASEMELLON SHAREHOLDER SERVICES, LLC
By: /S/ JANE A. MARTEN By: /S/ H. EUGENE BRADFORD
Name: Jane A. Marten Name: H. Eugene Bradford
Title: Assistant Vice Title: Vice President
President