Exhibit 1
AMENDMENT NO. 2 TO RIGHTS AGREEMENT
AMENDMENT No. 2 dated as of August 17, 1999, to the Rights Agreement,
dated as of August 15, 1989 (the "Rights Agreement"), as amended by Amendment
No. 1 (together, with the Rights Agreement, the "Rights Agreement, as amended"),
dated as of June 12, 1990, between Network Equipment Technologies, Inc., a
Delaware corporation (the "Company") and BankBoston, successor to The First
National Bank of Boston, as Rights Agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent entered into the Rights
Agreement, as amended, specifying the terms of the Rights (as defined therein);
WHEREAS, the Company and the Rights Agent desire to further amend the
Rights Agreement, as amended, in accordance with Section 27 of the Rights
Agreement, as amended;
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth in the Rights Agreement, as amended, and this Amendment No. 2, the parties
hereby agree as follows:
1. Section 2 of the Rights Agreement, as amended, is hereby amended as
follows:
The last sentence of Section 2 is hereby amended by deleting
such sentence in its entirety and substituting the following
sentence in its place:
"The Company may from time to time appoint such co-Rights
Agents as it may deemed necessary of desirable, upon ten (10)
days' prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights
Agent."
2. Section 7 of the Rights Agreement, as amended, is hereby amended as
follows:
(a) The definition of "Final Expiration Date" in Section 7(a) is
hereby amended by deleting clause (i) of the first sentence
thereof in its entirety and substituting the following in its
place:
"(i) the Close of Business on August 24, 2009 (the "Final
Expiration Date"),"
(a) The text of Section 7(b) is hereby amended by deleting sole
sentence thereof in its entirety and substituting the
following in its place:
"The Purchase Price for each one one-hundredth of a Preferred
Share pursuant to the exercise of a Rights shall initially be
$80, shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in
lawful money of
the United States of America in accordance with paragraph (c)
below."
3. Section 18 of the Rights Agreement, as amended, is hereby amended as
follows:
Section 18 is hereby amended by deleting the text in its
entirety and substituting the following in its place:
"The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement
and the exercise and performance of its duties hereunder. The
Company also agrees that the Rights Agent shall not, under any
circumstances, be liable to anyone for any acts or omissions
hereunder of the Rights Agent other than arising due to the
Rights Agent's gross negligence, bad faith or willful
misconduct."
4. Section 20 of the Rights Agreement, as amended, is hereby amended as
follows:
The text of Section 20(c) is hereby amended by deleting the
sole sentence thereof in its entirety and substituting the
following in its place:
"The Rights Agent shall be liable hereunder to the Company and
any other person only for its own gross negligence, bad faith
or willful misconduct."
5. Section 26 of the Rights Agreement, as amended, is hereby amended as
follows:
(a) The address of the Company contained in the notice
provision of Section 26 shall amended by deleting the address
in its entirety and substituting the following in its place:
Network Equipment Technologies, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
(b) The address of the Rights Agent contained in the notice
provision of Section 26 shall amended by deleting the address
in its entirety and substituting the following in its place:
BankBoston, N.A.
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
6. Section 29 of the Rights Amendment, as amended, is hereby amended as
follows:
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(a) The text of the present paragraph in Section 29 shall be
amended by numbering such paragraph (a).
(b) Section 29 of the Rights Amendment is hereby further amended
by adding a new sub-paragraph (b) at the end thereof as
follows:
"(b)(i) It is understood that the Independent Directors
Committee (as defined below) of the Board of Directors of the
Company shall review and evaluate this Agreement in order to
consider whether the maintenance of this Agreement continues
to be in the interests of the Company, its stockholders and
any other relevant constituencies of the Company, at least
every three years, or sooner than that if a majority of the
members of the Independent Directors Committee shall deem such
review and evaluation appropriate after giving due regard to
all relevant circumstances. Following each such review, the
Independent Directors Committee will communicate its
conclusions to the full Board of Directors, including any
recommendation in light thereof as to whether this Agreement
should be modified or the Rights should be redeemed. The
Independent Directors Committee shall be comprised of the
Directors of the Company who shall have been determined to be
independent by the determination by the Audit Committee of the
Board, in accordance with criteria adopted by it.
"(ii) The Independent Directors Committee shall have the power
to set its own agenda, and shall be able to retain at the
expense of the Company its choice of legal counsel, investment
bankers and other advisors. The Independent Directors
Committee has the authority to review all information of the
Company and to consider any and all factors the Committee
deems relevant to an evaluation of whether to maintain the
Agreement."
7. Exhibit B of the Rights Amendment, as amended, is hereby amended by
deleting Exhibit B in its entirety and replacing it with the
following:
Exhibit B Form of Right Certificate
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER AUGUST 24, 2009 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY
AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH
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TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SUCH AGREEMENT.]*
Right Certificate
NETWORK EQUIPMENT TECHNOLOGIES, INC.
This certifies that _______________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of August 15, 1989, as amended by Amendment No. 1, dated as
of June 12, 1990, and Amendment No. 2, dated as of August 17, 1999 (the "Rights
Agreement"), between Network Equipment Technologies, Inc., a Delaware
corporation (the "Company"), and BankBoston (as successor to The First National
Bank of Boston) (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights .Agreement)
and prior to 5:00 P.M., Boston, Massachusetts time, on August 24, 2009 at the
office of the Rights Agent designated for such purpose, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series A Junior Participating Preferred Stock, par value $.0l per share
(the "Preferred Shares") of the Company, at a purchase price of $80 per one
one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of August 24, 1999 based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
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* The portion of the legend in bracket shall be inserted only if applicable
and shall replace the preceding sentence.
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This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.0l per Right or (ii) may be exchanged in whole or in part for Preferred
Shares, shares of the Company's Common Stock, par value $.0l per share, or
substantially equivalent rights or other consideration as determined by the
Company.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
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stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ___________, ____.
[SEAL]
ATTEST: NETWORK EQUIPMENT TECHNOLOGIES, INC.
______________________________ By:_________________________________
Countersigned:
BANKBOSTON, as Rights Agent
By:___________________________
Authorized Signature
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed, all as of the day and year first above written.
NETWORK EQUIPMENT TECHNOLOGIES, INC.
By:/s/ XXXXXX X.X. XXXXX
-------------------------------------
Name: Xxxxxx X. X. Xxxxx
Title: President & CEO
BANKBOSTON
By:/s/ XXXXXXXX X. XXXXXXXX
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Director
