Document:

EX-4.2

Exhibit 4.2

CUSIP:
42809HAB3

ISIN: US42809HAB33

FACE OF NOTE

     Unless and until this Note is exchanged in whole or in part for Notes in definitive form, this
Note may not be transferred except as a whole by The Depository Trust Company, a New York
corporation (“DTC” or the “Depositary”), to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or any nominee to a successor Depositary or a nominee of any
successor Depositary. Unless this certificate is presented by an authorized representative of DTC
to the Issuer or its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as
is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede &
Co. has an interest herein.

No. 1

Hess Corporation

8.125% Note due 2019

Hess Corporation, a Delaware corporation (the “Issuer”), for value received, hereby promises to pay
to CEDE & Co. or registered assigns, at the office or agency of the Issuer in New York, New York,
the principal sum of
          Dollars on February 15, 2019, in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semiannually on February 15 and August 15 of each year, commencing
August 15, 2009, on said principal sum at said office or agency, in like coin or currency, at the
rate per annum specified in the title of this Note, from February 15 or August 15, as the case may
be, next preceding the date of this Note to which interest has been paid, unless the date hereof is
a date to which interest has been paid, in which case from the date of this Note, or unless no
interest has been paid on these Notes, in which case from February 3, 2009, until payment of said
principal sum has been made or duly provided for; provided, that payment of interest may be made at
the option of the Issuer by check mailed to the address of the Person entitled thereto as such
address shall appear on the Security register. Notwithstanding the foregoing, if the date hereof is
after the 1st day of February or August, as the case may be, and before the following February

 

 

15 or August 15, this Note shall bear interest from such February 15 or August 15; provided, that
if the Issuer shall default in the payment of interest due on such February 15 or August 15, then
this Note shall bear interest from the next preceding February 15 or August 15, to which interest
has been paid or, if no interest has been paid on these Notes, from February 3, 2009. The interest
so payable on any February 15 or August 15, will, subject to certain exceptions provided in the
Indenture referred to on the reverse hereof, be paid to the Person in whose name this Note is
registered at the close of business on February 1 or August 1, as the case may be, next preceding
such February 15 or August 15.

     Reference is made to the further provisions of this Note set forth on the reverse hereof. Such
further provisions shall for all purposes have the same effect as though fully set forth at this
place.

     This Note shall not be valid or become obligatory for any purpose until the certificate of
authentication hereon shall have been signed by the Trustee under the Indenture referred to on the
reverse hereof.

2

 

     IN WITNESS WHEREOF, Hess Corporation has caused this instrument to be signed by its duly
authorized officers.

Dated: February 3, 2009

	 	 	 	 	 
	[Company Seal]	HESS CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	John P. Rielly 	 
	 	 	Title:  	Senior Vice President and Chief Financial Officer 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	George C. Barry 	 
	 	 	Title:  	Vice President and Secretary 	 
	 

     This is one of the Global Notes of the series designated herein referred to in the
within-mentioned Indenture.

	 	 	 	 	 
	 	THE BANK OF NEW YORK MELLON, as Trustee

 	 
	 	By:  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 

3

 

REVERSE OF NOTE

Hess Corporation

8.125% Note due 2019

     This Note is one of a duly authorized issue of debentures, notes, bonds or other evidences of
indebtedness of the Issuer (hereinafter called the “Securities”) of the series hereinafter
specified, all issued or to be issued under and pursuant to an indenture dated as of March 1, 2006
(the “Indenture”) duly executed and delivered by the Issuer to The Bank of New York Mellon,
successor-in-interest to JPMorgan Chase Bank, N.A., as Trustee (herein called the “Trustee”), to
which Indenture and all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee,
the Issuer and the Holders of the Securities. The Securities may be issued in one or more series,
which different series may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject to different
redemption provisions (if any), may be subject to different sinking, purchase or analogous funds
(if any) and may otherwise vary as in the Indenture provided. This Note is one of a series of notes
designated as the 8.125% Notes due 2019 (the “Notes”) of the Issuer, issued in an initial aggregate
principal amount of $1,000,000,000.

     In case an Event of Default, as defined in the Indenture, with respect to the Notes, shall
have occurred and be continuing, the principal hereof may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.

     The Indenture contains provisions permitting the Issuer and the Trustee to amend the Indenture
and the Securities of any series with the written consent of the Holders of a majority in principal
amount of the outstanding Securities of all series affected by such supplemental indenture (all
such series voting as one class), and the Holders of a majority in principal amount of the
outstanding Securities of all series affected thereby (all such series voting as one class) by
written notice to the Trustee may waive future compliance by the Issuer with any provision of the
Indenture or the Securities of such series; provided, however, that without the consent of each
Holder affected thereby, no amendment or supplement and no waiver pursuant to Section 6.04 of the
Indenture shall (i) extend the stated maturity of the Principal of, or any sinking fund obligation
or any installment of interest on, such Holder’s Securities, or reduce the Principal amount thereof
or the rate of interest thereon (including any amount in respect of original issue discount), or
any premium payable with respect thereto, or reduce the amount of the Principal of an Original
Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 6.02 of the Indenture or the amount thereof provable in bankruptcy, or change
any place

 

 

of payment where, or the currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of any such payment
on or after the due date therefor: (ii) reduce the percentage in principal amount of outstanding
Securities of the relevant series the consent of whose Holders is required for any such
supplemental indenture, for any waiver of compliance with certain provisions of the Indenture or
certain Defaults and their consequences provided for in the Indenture; (iii) waive a Default in the
payment of Principal of or interest on any Security of such Holders; or (iv) modify any of the
provisions of Section 9.02 of the Indenture, except to increase any such percentage or to provide
that certain other provisions of the Indenture cannot be modified or waived without the consent of
the Holder of each outstanding Security affected thereby.

     It is also provided in the Indenture that, subject to certain conditions, the Holders of at
least a majority in aggregate principal amount of the outstanding Securities of all series affected
(voting as a single class), by notice to the Trustee, may waive an existing Default or Event of
Default with respect to the Securities of such series and its consequences, except a Default in the
payment of principal of or interest on any Security or in respect of a covenant or provision of the
Indenture which cannot be modified or amended without the consent of the Holder of each outstanding
Security affected. Upon any such waiver, such Default shall cease to exist, and any Event of
Default with respect to the Securities of such series arising therefrom shall be deemed to have
been cured, for every purpose of the Indenture; but no such waiver shall extend to any subsequent
or other Default or Event of Default or impair any right consequent thereto.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Note in the manner, at the respective times, at
the rate and in the coin or currency herein prescribed.

     The Notes are issuable in registered form without coupons in minimum denominations of $2,000
and integral multiples of $1,000 in excess of $2,000 and in book-entry form. The Notes may be
represented by one or more global notes (each, a “Global Note”) deposited with the Depositary and
registered in the name of the nominee of the Depositary, with certain limited exceptions. So long
as DTC or any successor Depositary or its nominee is the registered Holder of a Global Note, DTC,
such Depositary or such nominee, as the case may be, will be considered the sole owner or Holder of
the Notes represented by such Global Note for all purposes under the Indenture and the Notes.
Beneficial interest in the Notes will be evidenced only by, and transfer thereof will be effected
only through, records maintained by DTC and its participants. Except as provided below, an owner of
a beneficial interest in a Global Note will not be entitled to have Notes represented by such
Global Note registered in such owner’s name,

2

 

will not receive or be entitled to receive physical delivery of the Notes in certificated form
and will not be considered the owner or Holder thereof under the Indenture.

     No Global Note may be transferred except as a whole by the Depositary to a nominee of the
Depositary. Global Notes are exchangeable for certificated Notes only if (x) the Depositary
notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Notes
or if at any time the Depositary ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, and the Issuer fails within 90 days thereafter to appoint a
successor, (y) the Issuer in its sole discretion determines that such Global Notes shall be so
exchangeable or (z) there shall have occurred and be continuing an Event of Default or an event
which with the giving of notice or lapse of time or both would constitute an Event of Default with
respect to the Notes represented by such Global Notes. In such event, the Issuer will issue Notes
in certificated form in exchange for such Global Notes. In any such instance, an owner of a
beneficial interest in the Global Notes will be entitled to physical delivery in certificated form
of Notes equal in principal amount to such beneficial interest and to have such Notes registered in
its name. Notes so issued in certificated form will be issued in minimum denominations of $2,000
and integral multiples of $1,000 in excess of $2,000, and will be issued in registered form only,
without coupons.

     The Notes may be redeemed at the option of the Issuer as a whole, or part, at any time prior
to maturity, upon mailing a notice of such redemption not less than 30 nor more than 60 days prior
to the date fixed for redemption to the Holders of Notes at their last registered addresses, all as
further provided in the Indenture, at a redemption price equal to the greater of (i) 100% of their
principal amount or (ii) the sum of the present values of the remaining scheduled payments of
principal and interest thereon (not including any portion of such payments of interest accrued as
of the date of redemption) discounted to the redemption date, on a semiannual basis assuming a
360-day year consisting of twelve 30-day months at the Adjusted Treasury Rate plus 50 basis points,
together with all accrued but unpaid interest, if any, to the date of redemption in either case.

     “Adjusted Treasury Rate” means, with respect to any date of redemption, the rate per year
equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such date of redemption.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed
that would be used, at the time of selection and

3

 

under customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the Notes.

     “Comparable Treasury Price” means, with respect to any date of redemption, the average of the
Reference Treasury Dealer Quotations for the date of redemption, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or if the trustee obtains fewer than three Reference
Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations.

     “Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

     “Reference Treasury Dealer” means each of Goldman, Sachs & Co., J.P. Morgan Securities Inc.
and Greenwich Capital Markets, Inc. and their respective successors and any other primary treasury
dealer the Issuer selects. If any of the foregoing ceases to be a primary U.S. Government
securities dealer in New York City, the Issuer must substitute another primary treasury dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any date of redemption, the average, as determined by the Trustee, of the bid and asked prices
for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m., New York City time,
on the third Business Day before the date of redemption.

     No recourse under or upon any obligation, covenant or agreement of the Issuer in the Indenture
or any indenture supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or
director, as such, of the Issuer or of any successor corporation, either directly or through the
Issuer or any successor corporation, under any rule of law, statute or constitutional provision or
by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as part of the
consideration for the issue hereof.

     Terms used herein which are not otherwise defined shall have the meanings set forth in the
Indenture.

4EX-4.1

Exhibit 4.1

AMENDMENT NO. 2 TO RIGHTS AGREEMENT

     This
Amendment No. 2 (this “Amendment”), dated as of February 4, 2009, to the Rights
Agreement, dated as of March 8, 1999, as amended as of May 31, 2002 (as so amended, the “Rights
Agreement”), between Footstar, Inc., a Delaware corporation (the “Corporation”), and Mellon
Investor Services LLC, a New Jersey limited liability company (formerly ChaseMellon Shareholder
Services, L.L.C.), as Rights Agent (the “Rights Agent”).

     The Corporation and the Rights Agent have heretofore executed and entered into the Rights
Agreement. Pursuant to Section 27 of the Rights Agreement, the Corporation and the Rights Agent may
from time to time supplement or amend the Rights Agreement in accordance with the provisions of
Section 27 thereof and the Corporation desires and directs the Rights Agent to so amend the Rights
Agreement. 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
Corporation has been in all respects authorized by the Corporation.

     In consideration of the foregoing premises and mutual agreements set forth in the Rights
Agreement and this Amendment, the parties hereto agree as follows:

     1. Section 1(a) of the Rights Agreement is hereby modified and amended in its entirety with
the following:

“Acquiring Person” shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of
4.75% or more of the then outstanding Common Shares (other than as a result
of a Permitted Offer (as hereinafter defined)) or was such a Beneficial
Owner at any time after the Amendment Date, whether or not such person
continues to be the Beneficial Owner of 4.75% or more of the then
outstanding Common Shares. Notwithstanding the foregoing, (A) the term
“Acquiring Person” shall not include (i) the Corporation, (ii) any
Subsidiary of the Corporation, (iii) any employee benefit plan of the
Corporation or of any Subsidiary of the Corporation, (iv) any Person or
entity organized, appointed or established by the Corporation for or
pursuant to the terms of any such plan, (v) a Grandfathered Shareholder or a
Grandfathered Transferee, unless and until such Grandfathered Shareholder or
Grandfathered Transferee, as applicable, without the prior approval of the
Board of Directors of the Corporation, shall after the Amendment Date become
the Beneficial Owner of more than the applicable Grandfathered Percentage of
the Common Shares of the Corporation (vi) an Exempt Person, or
(vii) any
Person, who or which together with all Affiliates and Associates of such
Person becomes the Beneficial Owner of 4.75% or more of the then outstanding
Common Shares as a result of the acquisition of Common Shares directly from
the Corporation, and (B) no Person (including, without limitation, any
Grandfathered Shareholder or Grandfathered Transferee) shall be deemed to be
an “Acquiring Person” either (X) as a result of the acquisition of Common
Shares by the Corporation which, by reducing the number of Common Shares
outstanding, increases the proportional number of shares Beneficially Owned
by such Person together with all Affiliates and Associates of such Person;
except

 

 

that if (i) a Person (including, without limitation, any Grandfathered
Shareholder or Grandfathered Transferee) would become an Acquiring Person
(but for the operation of this subclause X) as a result of the acquisition
of Common Shares by the Corporation, and (ii) after such share acquisition
by the Corporation, such Person, or an Affiliate or Associate of such
Person, becomes the Beneficial Owner of any additional Common Shares, then
such Person shall be deemed an Acquiring Person, or (Y) if such Person
became an Acquiring Person inadvertently, and (i) promptly after such Person
discovers that such Person would otherwise be an Acquiring Person (but for
the operation of this subclause Y), notifies the Board of Directors of the
Corporation that such Person did so inadvertently and (ii) within 2 days
after such notification, becomes the Beneficial Owner of less than 4.75% of
the outstanding Common Shares.”

     2. Section 1(c) of the Rights Agreement is hereby modified and amended in its entirety as
follows:

““Affiliate” and “Associate” shall mean, with respect to any Person, any
other Person (other than an Exempt Person) whose Common Shares would be
deemed constructively owned by such first Person, owned by a single “entity”
as defined in Section 1.382-3(a)(i) of the Treasury Regulations, or
otherwise aggregated with shares owned by such first Person pursuant to the
provisions of Section 382 of the Internal Revenue Code of 1986, as amended
(the “Code”), or any successor or replacement provision, and the Treasury
Regulations thereunder, provided, however, that a Person will not be deemed
to be the Affiliate or Associate of another Person solely because either or
both Persons are or were Directors of the Corporation.”

     3. Section 1(d) of the Rights Agreement is hereby modified and amended in its entirety as
follows:

“A Person shall be deemed the “Beneficial Owner” of and shall be deemed to
“Beneficially Own” any securities:

	 	(i)	 	which such Person or any of such Person’s Affiliates or
Associates Beneficially Owns, directly or indirectly;
	 
	 	(ii)	 	which such Person or any of such Person’s Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or any of
such Person’s Affiliates or Associates until such tendered securities
are accepted for purchase or exchange or (B) the right to vote pursuant
to any agreement, arrangement or understanding (whether or not in
writing) if, in the case of arrangements described in clause (A) or (B)
above, the effect of such right to acquire, agreement, arrangement or
understanding is to treat such Persons as an “entity” under Section
1.382-3(a)(1) of the Treasury

 

 

	 	 	 	Regulations; provided, however, that a Person shall not be deemed
the Beneficial Owner of, or to Beneficially Own, any security if the
agreement, arrangement or understanding (whether or not in writing)
to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act
and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
	 
	 	(iii)	 	which are Beneficially Owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person’s Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing, and
other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities) relating to the acquisition, holding, voting (except to
the extent contemplated by the proviso to Section 1(d)(ii)(B)) or
disposing of any securities of the Corporation, but only if the effect
of such agreement, arrangement or understanding is to treat such
Persons as an “entity” under Section 1.382-3(a)(1) of the Treasury
Regulations; or
	 
	 	(iv)	 	if such Person would be deemed to constructively own
such securities pursuant to Section 382 of the Code or any successor or
replacement provision, and the Treasury Regulations thereunder.

          Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Corporation, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding which such
Person would be deemed to Beneficially Own hereunder.”

     4. Section 1(e) of the Rights Agreement
 is hereby modified and amended in its entirety as follows:

““Business
Day” shall mean any day other than a Saturday, a Sunday, or a day on
which the banking institutions in New York or New Jersey are authorized or
obligated by law or executive order to close.”

     5. Section 1(j) of the Rights Agreement is hereby modified and amended in its entirety as
follows:

““Grandfathered Percentage” shall mean, (A) with respect to any
Grandfathered Person, the percentage of the outstanding Common Shares that
such Grandfathered Person Beneficially Owned on the Amendment Date, or (B)
with respect to any Grandfathered Transferee, the percentage of the
outstanding Common Shares that such Grandfathered Transferee Beneficially
Owns immediately after giving effect to the transaction by which such
Grandfathered Transferee first becomes a Grandfathered Transferee; provided
that if the percentage of Common Shares Beneficially Owned by any
Grandfathered Person or Grandfathered Transferee, as applicable, is reduced
for any reason subsequent to the Amendment Date, the Grandfathered
Percentage with respect to such Grandfathered Shareholder or Grandfathered
Transferee, as applicable, shall be reduced to the same extent.”

     6. Section 1(k) of the Rights Agreement is hereby modified and amended in its entirety as
follows:

 

 

““Grandfathered Shareholder” shall mean any Person who as of the Close of
Business on the Amendment Date was the Beneficial Owner of 4.75% or more of
the Common Shares of the Corporation then outstanding. Any Grandfathered
Shareholder who subsequent to the Amendment Date becomes the Beneficial
Owner of less than 4.75% of the outstanding Common Shares shall cease to be
a Grandfathered Shareholder.”

     7. Section 1(l) of the Rights Agreement is hereby modified and amended in its entirety as
follows:

““Grandfathered Transferee” shall mean any Person who or which, together
with all Affiliates and Associates of such Person:

	 	(i)	 	acquires directly from a Grandfathered Shareholder in
any one transaction Common Shares such that, after giving effect to
such acquisition, such Person is the Beneficial Owner of 4.75% or more
of the outstanding Common Shares; and
	 
	 	(ii)	 	immediately prior to such acquisition Beneficially
Owned less than 1% of all then outstanding Common Shares.

Any Grandfathered Transferee who subsequent to the Amendment Date becomes
the Beneficial Owner of less than 4.75% of the outstanding Common Shares
shall cease to be a Grandfathered Transferee.”

     8. Section 1(o) of the Rights Agreement is hereby modified and amended in its entirety as
follows:

““Person” shall mean any individual, firm, partnership, corporation, limited
liability company, limited liability partnership, trust, association, joint venture
or other entity, group of persons making a “coordinated acquisition” of shares or
otherwise treated as an entity within the meaning of Section 1.382-3(a)(1) of the
Treasury Regulations or otherwise, and shall include any successor (by merger or
otherwise) of such entity.”

     9. The definition of “Qualifying Offer” and each reference to “Qualifying Offering” contained
in the Rights Agreement are hereby deleted in their entirety.

     10. The following new definitions are hereby added to Section 1 of the Rights Agreement:

“(x)
“Amendment Date” means February 4, 2009.

(y) “Exempt Person” means a Person whose Beneficial Ownership (together with all
Affiliates and Associates of such Person) of 4.75% or more of the then outstanding
Common Shares will not, as determined by the Board of Directors in its sole
discretion pursuant to a duly adopted resolution, jeopardize or endanger the
availability to the Corporation of its net operating loss carryforwards, provided,
however, that such a Person will cease to be an Exempt Person if the Board of
Directors makes a contrary determination with respect to the effect of such Person’s
Beneficial Ownership (together with all Affiliates and Associates of such Person) on
the availability to the Corporation of its net operating loss carryforwards.”

 

 

     11.	Section 3(a)
 of the Rights Agreement is hereby
 modified and amended to include the following at the end of such section:

“The Corporation shall promptly notify the Rights Agent in writing upon the occurrence
of a Distribution Date and of the identity of any such Acquiring Person, Associate or
Affiliate, or the nominee of any of the foregoing, and the Rights Agent may rely on such
notice in carrying out its duties under this Agreement.  If such notification is given orally,
the Corporation shall confirm same in writing on or prior to the Business Day next
following.  Until such notice is received by the Rights Agent, the Rights Agent shall not
be deemed to have any knowledge of the identity of any such Acquiring Person,
Associate or Affiliate, or the nominee of any of the foregoing, and the Rights Agent may
presume conclusively for all purposes that the Distribution Date has not occurred.”

     12. The date referred to in Section 7(a) of the Rights Agreement as the “Final Expiration
Date” is hereby modified and amended to read “March 8, 2012.”

     13. Section 7(c) of
 the Rights Agreement is hereby modified and amended by replacing the term
“appropriate” in each place in which such term appears in Section 7(c),
 with the term “necessary to comply with this Rights Agreement”.

     	14.	The
Rights Agreement is hereby modified and amended so that whenever the term “gross
negligence, bad faith or willful misconduct” appears, it shall mean gross negligence, bad faith or willful
misconduct which has been determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction.

     15.	Section 20 of the Rights Agreement is hereby modified and amended by deleting the
 term “in good faith” wherever it appears in Section 20.

     16.	Section 26 of
the Rights Agreement is hereby modified and
amended by replacing the address of the Rights Agent with the following:

“Mellon Investor Services LLC

480 Washington Boulevard

Jersey City, NJ 07310

Attention:  Edward Schmitt

with a copy to:

Mellon Investor Services LLC

480 Washington Boulevard

Jersey City, NJ 07310

Attention:  General Counsel”

     17. Exhibit C to the Rights Agreement is hereby modified and amended to read in its entirety
as set forth in Exhibit C to this Amendment.

     18. Except as expressly amended hereby, the Rights Agreement remains in full force and effect
in accordance with its terms.

     19. This Amendment shall be governed by and construed in accordance with the laws of the State
of Delaware applicable to contracts to be made and performed entirely within such State; except
that all provisions regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.

     20. This Amendment 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.

     21. Except as expressly set forth herein, this Amendment 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.

     22. Capitalized terms used herein but not defined shall have the meanings
 given to them in the Rights Agreement.

[remainder of page intentionally left blank]

 

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the
Rights Agreement to be duly executed as of the day and year first above written.

	 	 	 	 	 
	 	FOOTSTAR, INC.

 	 
	 	By:  	/s/  Jonathan Couchman	 
	 	 	Name:  	Jonathan Couchman	 
	 	 	Title:  	Chief Executive Officer	 
	 

	 	 	 	 	 
	 	MELLON INVESTOR SERVICES LLC,

as Rights Agent

 	 
	 	By:  	/s/
Edward Schmitt 	 
	 	 	Name:  	Edward Schmitt 	 
	 	 	Title:  	Assistant Vice President 	 

 

 

	 	 	 	 	 

CERTIFICATION

     The undersigned, Senior Vice President of Footstar, Inc., a Delaware corporation (the
“Corporation”) hereby certifies, on behalf of the Corporation, that Amendment No. 2, dated as of
February 4, 2009, to the Rights Agreement, dated as of March 8, 1999, as amended as of May
31, 2002 (as so amended, the “Rights Agreement”), between the Corporation and Mellon Investor
Services LLC, a New Jersey limited liability company (formerly ChaseMellon Shareholder Services,
L.L.C.), as Rights Agent, is in compliance with the terms of Section 27 of the Rights Agreement.

Dated:
February 4, 2009

	 	 	 	 	 
	 	FOOTSTAR, INC.

 	 
	 	By:  	/s/  Jonathan Couchman	 
	 	 	Name:  	Jonathan Couchman	 
	 	 	Title:  	Chief Executive Officer	 

 

 

	 	 	 	 	 

Exhibit C

SUMMARY OF RIGHTS TO PURCHASE

PREFERRED SHARES

     On
February 4, 2009, Footstar, Inc. (the “Corporation”) entered into Amendment No. 2
(“Amendment No. 2”) to its Rights Agreement, dated as of March 8, 1999, as amended as of May 31,
2002 (as so amended, the “Rights Agreement”), between the Corporation and Mellon Investor Services
LLC, a New Jersey limited liability company (formerly ChaseMellon Shareholder Services, L.L.C.), as
Rights Agent (the “Rights Agent”), pursuant to which the terms of the outstanding preferred share
purchase rights (the “Rights”) were amended. The summary below describes the Rights as so amended
by Amendment No. 2.

     On March 8, 1999, the Board of Directors of the Corporation declared a dividend distribution
of one Right for each outstanding share of Common Stock, par value $.01 per share (the “Common
Shares”), of the Corporation. The dividend was payable to the shareholders of record on March 19,
1999 (the “Record Date”), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect to Common Shares
issued after the Distribution Date. Except as set forth below, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the Corporation one one-thousandth of
a share of Series A Junior Participating Preferred Stock, $.01 par value per share (the “Preferred
Shares”), of the Corporation at a price of $100 per one one-thousandth of a Preferred Share (the
“Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement.

     The Rights Agreement was amended by Amendment No. 2 in order to protect stockholder value by
attempting to prevent a possible limitation on the Corporation’s ability to use its U.S. net
operating loss carryovers. The Corporation has experienced significant losses in the United
States, and under the Internal Revenue Code of 1986, as amended (the “Code”), and rules and
regulations promulgated by the Internal Revenue Service, the Corporation may “carry forward” these
losses in certain circumstances to offset any current and future taxable income and thus reduce
federal income tax liability, subject to certain requirements and restrictions. To the extent that
the net operating losses do not otherwise become limited, the Corporation believes that a
significant portion of such losses will be able to be utilized and, therefore, these net operating
losses could be a substantial asset to the Corporation. However, if the Corporation experiences an
“ownership change” as defined in Section 382 of the Code, the Corporation’s ability to use the net
operating losses could be severely limited.

     Initially, the Rights will be attached to all certificates representing Common Shares then
outstanding, and no separate Right Certificates will be distributed. The Rights will separate from
the Common Shares upon the earlier to occur of: (i) a person or group of affiliated or associated
persons (an “Acquiring Person”) having acquired Beneficial Ownership (as defined in the Rights
Agreement) of 4.75% or more of the outstanding Common Shares (except pursuant to a Permitted Offer
(as defined in the Rights Agreement)) or (ii) 10 days (or such later date as the Board of Directors
of the Corporation may determine) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer, the consummation of which would result in a person or group
becoming an Acquiring Person (the earlier of such dates being called the “Distribution Date”),
provided that an Acquiring Person does not include a Grandfathered Shareholder, a Grandfathered
Transferee or an Exempt Person (as such terms are defined in the Rights Agreement). The date that a
person or group becomes an Acquiring Person is the “Shares Acquisition Date.”

     The Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with, and only with, the Common Shares. Until the Distribution Date (or earlier
redemption or expiration

 

 

of the Rights) new Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates for Common Shares outstanding as of the Record Date, even without such
notation or a copy of the Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates evidencing the Rights (the
“Right Certificates”) will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date (and to each initial record holder of certain Common Shares
issued after the Distribution Date), and such separate Right Certificates alone will evidence the
Rights.

     The Rights are not exercisable until the Distribution Date and will expire at the close of
business on March 8, 2012, unless earlier redeemed by the Corporation as described below.

     In the event that any person becomes an Acquiring Person or an affiliate or associate thereof
(except pursuant to a Permitted Offer), each holder of a Right will thereafter have the right (the
“Flip-In Right”) to receive upon exercise the number of Common Shares or, in the discretion of the
Board of Directors of the Corporation, one one-thousandth of a Preferred Share (or, in certain
circumstances, other securities of the Corporation) having a value (immediately prior to such
triggering event) equal to two times the exercise price of the Right. Notwithstanding the
foregoing, following the occurrence of the event described above, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, Beneficially Owned by any Acquiring
Person or any affiliate or associate thereof will be null and void.

     In the event that, at any time following the Shares Acquisition Date, (i) the Corporation is
acquired in a merger or other business combination transaction in which the holders of all of the
outstanding Common Shares immediately prior to the consummation of the transaction are not the
holders of all of the surviving corporation’s voting power, or (ii) more than 50% of the
Corporation’s assets or earning power is sold or transferred, in either case with or to an
Acquiring Person or any affiliate or associate or any other person in which such Acquiring Person,
affiliate or associate has an interest or any person acting on behalf of or in concert with such
Acquiring Person, affiliate or associate, or, if in such transaction all holders of Common Shares
are not treated alike, any other person, then each holder of a Right (except Rights which
previously have been voided as set forth above) shall thereafter have the right (the “Flip-Over
Right”) to receive, upon exercise, common shares of the acquiring company (or in certain
circumstances, its parent) having a value equal to two times the exercise price of the Right. The
holder of a Right will continue to have the Flip-Over Right whether or not such holder exercises or
surrenders the Flip-In Right.

     The Purchase Price payable, and the number of Preferred Shares, Common Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment from time to time to
prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to holders of the Preferred Shares
of certain rights or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than the then current
market price of the Preferred Shares, or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular quarterly cash dividends or
dividends payable in Preferred Shares) or of subscription rights or warrants (other than those
referred to above).

     The number of outstanding Rights and the number of one one-thousandth of a Preferred Share
issuable upon exercise of each Right are also subject to adjustment in the event of a stock split
of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or
subdivisions,

 

 

consolidations or combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date.

     Preferred Shares purchasable upon exercise of the Rights will not be redeemable. Each
Preferred Share will be entitled to a minimum preferential quarterly dividend payment of $10.00 per
share but, if greater, will be entitled to an aggregate dividend per share of 1,000 times the
dividend declared per Common Share. In the event of liquidation, the holders of the Preferred
Shares will be entitled to a minimum preferential liquidation payment of $1,000 per share, provided
that the holders will be entitled to an aggregate payment per share of at least 1,000 times the
aggregate payment made per Common Share. These rights are protected by customary antidilution
provisions. In the event that the dividends on the Preferred Shares are in arrears in an amount
equal to six quarterly dividend payments, the holders of the Preferred Shares shall have the right,
voting as a class, to elect two directors in addition to the directors elected by the holders of
the Common Shares until all cumulative dividends on the Preferred Shares have been paid through the
last quarterly dividend payment date and dividends for the current dividend period declared and set
apart.

     With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are one one-thousandth or integral multiples of
one one-thousandth of a Preferred Share, which may, at the election of the Corporation, be
evidenced by depositary receipts), and in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Shares on the last trading day prior to the date of exercise.

     At any time prior to the earlier to occur of (i) a person becoming an Acquiring Person or (ii)
the expiration of the Rights, and under certain other circumstances, the Corporation may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the “Redemption Price”), which
redemption shall generally be effective upon the action of the Board of Directors of the
Corporation. Additionally, following the Shares Acquisition Date, the Corporation may redeem the
then outstanding Rights in whole, but not in part, at the Redemption Price, provided that such
redemption is in connection with a merger or other business combination transaction or series of
transactions involving the Corporation in which all holders of Common Shares are treated alike but
not involving an Acquiring Person or its affiliates or associates.

     All the provisions of the Rights Agreement, except those which concern the rights, duties or
obligations of the Rights Agent, may be amended by the Board of Directors of the Corporation prior
to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may
be amended by the Board of Directors of the Corporation in order to cure any ambiguity, defect or
inconsistency, to shorten or lengthen any time period under the Rights Agreement (subject to
certain limitations), or to make changes that do not adversely affect the interests of holders of
Rights (excluding the interests of any Acquiring Person), as long as such amendments do not change
the rights, duties or obligations of the Rights Agent.

     Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Corporation, including, without limitation, the right to vote or to receive dividends. While
the distribution of the Rights will not be taxable to shareholders of the Corporation, shareholders
may, depending upon the circumstances, recognize taxable income should the Rights become
exercisable, or when they are redeemed, or upon the occurrence of certain events thereafter.

     A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A dated March 9, 1999. A copy of Amendment No. 1
to Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a

 

 

Registration Statement on Form 8-A/A dated June 14, 2002. A copy of Amendment No. 2 to Rights
Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A/A dated February 4, 2009. Copies of the Rights
Agreement, Amendment No. 1 and Amendment No. 2 are available free of charge from the Corporation.
This summary description of the Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement, Amendment No. 1 and Amendment No. 2, which are
hereby incorporated herein by reference.

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