EXHIBIT 2
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT No. 1 (the "Amendment"), dated as of May 11, 2000, to the
Rights Agreement, dated as of May 1, 1998 (the "Rights Agreement"), between
Young & Rubicam Inc., a Delaware corporation (the "Company"), and The Bank of
New York, a New York banking corporation, as Rights Agent (the "Rights Agent").
RECITALS
A. The Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement.
B. WPP Group plc, an English public limited company ("Parent"), York
Merger Corp. ("Merger Sub"), a Delaware corporation and wholly owned subsidiary
of Parent, and the Company have proposed to enter into an Agreement and Plan of
Merger (the "Merger Agreement") pursuant to which Merger Sub will be merged with
and into the Company, with the Company as the surviving corporation (the
"Merger"), all on the terms and subject to the conditions set forth in the
Merger Agreement.
C. The Board of Directors has determined that it is in the best
interests of the Company and its stockholders to amend the Rights Agreement to
exempt the Merger and the Merger Agreement, and all of the transactions
contemplated thereby, in accordance with the terms thereof, from application of
the Rights Agreement.
D. Pursuant to Section 27 of the Rights Agreement, therefore, the
Board of Directors of the Company hereby resolves that an amendment to the
Rights Agreement as set forth herein is necessary and desirable to reflect the
foregoing, and the Company and the Rights Agent desire to evidence such
amendment in writing.
E. All acts and things necessary to make this Amendment a valid
agreement, enforceable 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 duly authorized by the Company and the Rights Agent.
In consideration of the foregoing and the mutual agreements set
forth herein, the Company and the Rights Agent hereby amend the Rights Agreement
as follows:
1. Section 1(a) of the Rights Agreement is modified and amended to
read in its entirety as follows:
(a) "Acquiring Person" shall mean (i) any Person (other than the H&F
Investors and other than any Permitted H&F 15% Transferee), who or
which, together with all Affiliates and Associates of such Person,
shall be or become the Beneficial Owner of fifteen percent (15%) or
more of the then outstanding shares of Common Stock (other than as a
result of an Approved Offer), (ii) the H&F Investors, if after the
Record Date, the H&F Investors, together with all of their Affiliates
and Associates, shall acquire Beneficial Ownership of any additional
shares of Common Stock, such that following the acquisition of such
additional shares of Common Stock, (A) the H&F Investors beneficially
own fifteen percent (15%) or more of the then outstanding shares of
Common Stock, and, (B) if the Management Voting Trust is then in
existence, following the acquisition of such additional shares of
Common Stock, the H&F Investors beneficially own a greater percentage
of the Diluted Shares Outstanding than the percentage of the Diluted
Shares Outstanding subject to the Management Voting Trust at the time
of the acquisition of such additional shares of Common Stock (it being
understood that neither sales by, nor termination of, the Management
Voting Trust shall result in the H&F Investors becoming an Acquiring
Person pursuant to this clause (ii) absent a subsequent acquisition of
beneficial ownership of additional shares of Common Stock by the H&F
Investors or any of their Affiliates or Associates) or (iii) any
person who or which is a Permitted H&F 15% Transferee, if
contemporaneously with or subsequent to the Transfer from the H&F
Investors that resulted in such Person becoming a Permitted H&F 15%
Transferee, such Permitted H&F 15% Transferee, together with all of
its Affiliates and Associates, shall purchase or otherwise become the
Beneficial Owner of any additional shares of Common Stock; provided,
however, that (w) a Person shall not become an Acquiring Person if
such Person, together with all of its Affiliates and Associates, shall
become the Beneficial Owner of fifteen percent (15%) or more of the
then outstanding shares of Common Stock (in the case of clause (i)
above) as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of shares of Common Stock by
the Company, unless and until such time as such Person shall purchase
or otherwise become (as a result of actions taken by such Person or
any of its Affiliates or Associates) the Beneficial Owner of any
additional shares of Common Stock; (x) "Acquiring Person" shall not
include any Company Entity; (y) "Acquiring Person" shall not include
any Person who or which, together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of fifteen percent (15%)
or more of the then outstanding shares of Common Stock (in the case of
clause (i) above) or any additional shares of Common Stock (in the
case of clauses (ii) and (iii) above) but who acquired beneficial
ownership of shares of Common Stock inadvertently, and such Person
promptly (and in any event within ten (10) Business Days after being
so requested by the Company) enters into an irrevocable commitment
satisfactory to the Board of Directors promptly (and in any event
within twenty (20) Business Days or such shorter period as shall be
determined by the Board of Directors) to divest, and thereafter
promptly divests as required by such commitment, sufficient shares of
Common Stock so that such Person, together with all of its Affiliates
and Associates, ceases to be a Beneficial Owner of fifteen percent
(15%) or more of the then outstanding shares of Common Stock (in the
case of clause (i) above) or such additional shares of Common Stock
(in the case of clauses (ii) and (iii) above); and (z) "Acquiring
Person" shall not include WPP Group plc, an English public limited
company ("WPP"), York Merger Corp., a Delaware corporation and wholly
owned subsidiary of WPP ("Merger Sub"), or any Affiliate or Associate
of WPP solely to the extent that each may, without being deemed an
Acquiring Person, execute and deliver the Agreement and
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Plan of Merger, dated as of May 11, 2000, by and among WPP, Merger Sub
and the Company, as it may be amended or supplemented from time to
time (the "Merger Agreement"), and consummate transactions
contemplated thereby.
2. The first paragraph of Section 3 of the Rights Agreement is amended
by inserting the following sentence after the first sentence thereof:
Notwithstanding the foregoing, no Distribution Date shall occur as a
result of the execution and delivery of the Merger Agreement or
consummation of the transactions contemplated thereby.
3. The first sentence of Section 7 of the Rights Agreement is modified
and amended to read in its entirety as follows:
(a) Subject to Sections 7(e), 7(f), 9(e) and 11(a)(iii) hereof, the
registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the Rights
Agent at its principal office or such other office designated by it
for such purpose, together with payment of the Purchase Price for each
one-hundredth of a Preferred Share (or other securities, cash and/or
assets, as the case may be) as to which the Rights are exercised, at
or prior to the earliest of (i) the close of business on May 1, 2008
(the "Final Expiration Date"), (ii) the date and time at which the
Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date"), (iii) the date and time at which the Rights are exchanged as
provided in Section 24 hereof, (iv) the date and time at which the
Rights expire pursuant to Section 13(d), or (v) immediately prior to
the consummation of the merger of Merger Sub with and into the Company
as contemplated by and in accordance with the Merger Agreement (the
"Merger") (such earliest date and time being referred to herein as the
"Expiration Date").
4. Section 13 of the Rights Agreement is amended by inserting the
following clause at the end of such Section:
(g) Notwithstanding anything in this Agreement to the contrary, this
Section 13 shall not apply to the Merger.
5. This Amendment shall become effective as of the date of the Merger
Agreement. If the Merger Agreement is terminated without the Effective Time (as
defined in the Merger Agreement) having occurred, this Amendment shall be null
and void.
6. This Amendment to the Rights Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely within such
State.
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7. This Amendment to the Rights Agreement may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute one and the same instrument. Terms not
defined herein shall, unless the context otherwise requires, have the meanings
assigned to such terms in the Rights Agreement.
8. In all respects not inconsistent with the terms and provisions of
this Amendment to the Rights Agreement, the Rights Agreement is hereby ratified,
adopted, approved and confirmed. In executing and delivering this Amendment, the
Rights Agent shall be entitled to all the privileges and immunities afforded to
the Rights Agent under the terms and conditions of the Rights Agreement.
9. If any term, provision, covenant or restriction of this Amendment
to the Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Amendment to the Rights
Agreement, and of the Rights Agreement, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the date and year first above written.
YOUNG & RUBICAM INC.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
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Name: Xxxxxxxxx X. Xxxxxxxx
Title: Executive Vice President, General
Counsel
THE BANK OF NEW YORK
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Assistant Vice President
