BALDOR ELECTRIC COMPANY
AMENDMENT #1
TO THE
RIGHTS AGREEMENT
This Amendment #1 to the Rights Agreement (the "Amendment") is made and entered
into as of February 5, 1996, by and between Baldor Electric Company, a
Missouri corporation(the "Company"), and Wachovia Bank of North Carolina, N.A.
(the "Rights Agent").
Recitals
1. The Company and the Rights Agent executed a Rights Agreement (the "Rights
Agreement") dated May 6, 1988. Any capitalized, but undefined, terms
used herein shall have the meaning ascribed to them in the Rights
Agreement.
2. Section 9(a) of the Rights Agreement requires the Company to reserve a
number of shares of its Common Stock that will be sufficient to permit
the exercise in full of all outstanding Rights. The Company cannot
determine the number of shares necessary to be so reserved until the
Rights become exercisable and the Rights are not now exercisable;
accordingly, the Company now desires to amend the Rights Agreement,
as provided herein, to modify its obligation to reserve shares of
Common Stock.
3. Section 7(a) establishes the Expiration Date and the Final Expiration Date
of the Rights based on the earlier to occur of certain events, one of which
is set forth in Subsection (a)(i) of Section 7 and is the Close of Business
on May 25, 1998. The Company now desires to change the date reference in
Section 7(a)(i) to May 25, 2008.
4. Section 7(b) of the Rights Agreement provides that the Purchase Price shall
initially be $75.00, subject to adjustment as provided in the Rights
Agreement. After appropriate adjustments, the Purchase Price is currently
$18.50. The Company now desires to amend the Rights Agreement, as
provided herein, to increase the Purchase Price.
5. Pursuant to Section 26 of the Rights Agreement, the Company and the Rights
Agent are authorized to amend the Rights Agreement without the approval of
any holders of Rights Certificates if, prior to the Distribution Date, the
Company deems the change to be necessary or desirable, and the Rights Agent
determines that such change will not adversely affect its interest under
the Rights Agreement. The Company so deems it desirable and in the best
interests of the Company and its shareholders to amend and change the
provisions of the following:
a. Section 9(a) of the Rights Agreement, so the Company does not need to
reserve any Common Stock for issuance under the rights Agreement until
the Rights become exercisable;
b. Section 7(a)(i) of the Rights Agreement, to change the expiration date
reference therein to May 25, 2008, from May 25, 1998; and
c. Section 7(b) of the Rights Agreement, to increase the Purchase Price as
provided herein. The Rights Agent has determined that such amendments
and changes will not adversely affect its interests under the Rights
Agreement.
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual agree-
ments contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Reservation of Common Stock Amendment. Section 9(a) of the Rights Agreement
is hereby amended in its entirety to read as follows:
"The Company covenants and agrees that, from and after such time as the
Rights become exercisable and subject to the provisions of Section 11(b)
hereof, it will cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock, or any authorized and
issued shares of Common Stock held in its treasury, the number of
shares of Common Stock that will be sufficient to permit the exercise
in full of all outstanding Rights."
2. Change of Expiration Date Amendment. Section 7(a)(i) of the Rights
Agreement is hereby amended in its entirety to read as follows:
"Subject to Sections 7(e) and 23(a) hereof, the registered holder of any
Rights Certificate at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to purchase on the
reverse side thereof including the certificate contained therein duly
executed, to the Rights Agent at the principal corporate trust office
of the Rights Agent, together with payment of the Purchase Price for
each share of Common Stock as to which the Rights are exercised prior
to the earlier of:
a. the Close of Business on May 25, 2008, subject to the extension as
provided in Section 12(c) hereof (the "Final Expiration Date");
b. the time at which the Rights are redeemed as provided in Section
23 hereof; or
c. consummation of a transaction contemplated by Section 12(d) (such
earlier time being herein referred to as the "Expiration Date")."
3. Purchase Price Amendment. Section 7(b) of the Rights Agreement is hereby
amended in its entirety to read as follows:
"Effective February 5, 1996, the Purchase Price for each share of
Common Stock pursuant to the exercise of a Right shall be $120.00 and
shall be subject to adjustment from time to time thereafter as provided
in Section 13 hereof and shall be payable in lawful money of the
United States of America in accordance with Paragraph (c) below."
4. Savings Clause. All of the provisions of the Rights Agreement not amended
by this Amendment shall remain in full force and effect.
5. Miscellaneous.
a. This Amendment, as it amends the Rights Agreement, constitutes the entire
agreement and understanding of the parties with respect to the subject
matter hereof, and it supersedes all prior negotiations, commitments,
representations, and undertakings of the parties with respect to the
subject matter hereof.
b. This Amendment shall be binding upon and inure to the benefit of the
Company, the Rights Agent, and their respective successors and permitted
assigns.
c. This Amendment shall be deemed to be a contract made under the laws of
the State of Missouri and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to
contracts made and to be performed entirely with such State.
d. This Amendment may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and their respective corporate seals to be hereto affixed and attested, all on
the day and year first above written.
ATTEST: BALDOR ELECTRIC COMPANY
By: /s/ Xxxxx X. Xxxxx By: /s/ X. X. Xxxxxx
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Xxxxx X. Xxxxx X. X. Xxxxxx
Secretary President and Chief Executive Officer
ATTEST: WACHOVIA BANK OF NORTH CAROLINA, N.A.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
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Vice President Vice President
OFFICER'S CERTIFICATE
The undersigned, Xxxxx X. Xxxxx, the duly authorized Secretary of Baldor
Electric Company (the "Company"), hereby certifies that, pursuant to Section 26
of the Rights Agreement (the "Rights Agreement") dated May 6, 1988, by and
between the Company and Wachovia Bank of North Carolina, N.A., the attached
Amendment #1 to the Rights Agreement is in compliance with Section 26 of the
Rights Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Officer's Certificate as
of this 5th day of February, 1996.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Secretary