AMENDMENT NO. 1 TO THE RIGHTS AGREEMENT
Exhibit
4.1
AMENDMENT
NO. 1 TO THE RIGHTS AGREEMENT
This
Amendment
No. 1 (this "Amendment") to the Rights Agreement dated
as of December 21, 2000 (the "Rights Agreement") between Puget Energy,
Inc., a Washington corporation (the "Company"), and Xxxxx Fargo Bank, N.A.,
as
successor to Mellon Investor Services LLC, as Rights Agent (the "Rights Agent")
is made as of October 25, 2007.
WITNESSETH:
WHEREAS,
on or about October 25, 2007 the Company proposes to enter into that certain
Agreement and Plan of Merger by and among the Company, Padua Holdings LLC,
a
Delaware limited liability company ("Parent"), Padua
Intermediate Holdings Inc., a Washington corporation and wholly owned subsidiary
of Parent, and Padua Merger Sub, Inc., a Washington corporation (the "Merger
Agreement"), and the Stock Purchase Agreement by and among the Company and
the
purchasers named therein (the "Investors") (the "Stock Purchase
Agreement");
WHEREAS,
following the consummation of the transactions contemplated by the Stock
Purchase Agreement, the Investors together with their Affiliates and Associates
will be a significant shareholder of the Company;
WHEREAS,
the Board of Directors of the Company (the "Board of Directors") believes that
it is in the best interests of the Company and its shareholders that the
transactions contemplated by the Merger Agreement and Stock Purchase Agreement
be consummated on the terms set forth in such agreements;
WHEREAS,
the Board of Directors desires to amend the Rights Agreement such that the
execution of the Merger Agreement and Stock Purchase Agreement and the
consummation of the transactions contemplated thereby will not cause Parent,
the
Investors, or their respective Affiliates or Associates to become an Acquiring
Person as a result of the acquisition of Common Shares pursuant to the Stock
Purchase Agreement;
WHEREAS,
Section 26 of the Rights Agreement provides that at any time prior to the time
any Person becomes an Acquiring Person, the Company may amend the Rights
Agreement without approval of any holders of the Rights, in order to supplement
or amend any provision thereunder as the Company directs;
WHEREAS,
this Amendment as set forth herein shall become effective immediately prior
to
the execution of the Merger Agreement and the Stock Purchase Agreement; provided
that this Amendment shall not be effective if such agreements are not executed;
and
WHEREAS,
capitalized terms used but not defined herein have the meanings assigned to
such
terms in the Rights Agreement;
NOW,
THEREFORE, in consideration of the recitals (which are deemed tobe a part of
this Amendment) and agreements contained herein, the parties hereto agree to
amend the Rights Agreement as follows:
1. The
definition of "Acquiring Person" in Section 1 of the Rights Agreement is hereby
amended and restated to read, from and after the date hereof, in its entirety
as
set forth below:
"Acquiring
Person" shall mean any Person who or which, alone or together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of
10%
or more of the Common Shares then outstanding, but shall not include: (a) Puget
Sound Energy, Inc., the Company, any Subsidiary of the Company, any employee
benefit or compensation plan of the Company or of any of its Subsidiaries,
or
any Person holding Common Shares for or pursuant to the terms of any such
employee benefit or compensation plan; (b) any Person who has become and is
the
Beneficial Owner of 10% or more of the Common Shares outstanding at the time
solely as the result of (i) a change in the aggregate number of Common Shares
outstanding since the last date on which such Person acquired Beneficial
Ownership of any Common Shares, (ii) the acquisition by such Person or one
or
more of its Affiliates or Associates of Beneficial Ownership of additional
Common Shares if such acquisition was made in the good faith belief that such
acquisition would not (A) cause the Beneficial Ownership by such Person,
together with its Affiliates and Associates, to equal or exceed 10% of the
Common Shares outstanding at the time of such acquisition and such good faith
belief was based on the good faith reliance on information contained in publicly
filed reports or documents of the Company that are inaccurate or out-of-date
or
(B) otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a) to occur or (iii) the acquisition by such Person or one or more
of
its Affiliates or Associates of Beneficial Ownership of additional Common Shares
if the Board of Directors of the Company determines that such acquisition was
made in good faith without the knowledge by such Person or Affiliates or
Associates that such Person would thereby become an Acquiring Person (which
determination of the Board of Directors of the Company shall be conclusive
and
binding on such Person, the Rights Agent, the holders of the Rights and all
other Persons); or (c) Padua Holdings LLC, a Delaware limited
liability company ("Parent"), the investors named in that
certain Stock Purchase Agreement, dated as of October 25, 2007, by and among
the
Company and such investors (the "Stock Purchase Agreement") or their respective
Affiliates or Associates, but only as a result of the (i) acquisition of Common
Shares pursuant to and in accordance with the Stock Purchase Agreement and
(ii)
the execution and delivery of, and the consummation of the transactions
contemplated by, the Merger Agreement, dated as of October 25, 2007, by and
among the Company, Parent, Padua Intermediate Holdings Inc., a Washington
corporation and wholly owned subsidiary of Parent, and Padua Merger Sub, Inc.,
a
Washington corporation (the "Merger Agreement") or the Stock Purchase Agreement.
Notwithstanding clause (b)(ii) or (b)(iii) of the prior sentence, if any Person
that is not an Acquiring Person due to such clause (b)(ii) or (b)(iii) does
not
reduce its percentage of Beneficial Ownership of Common Shares to less than
10%
by the Close of business on the tenth calendar day after notice from the Company
(the date of notice being the first day) that such Person's Beneficial Ownership
of Common Shares would make it an Acquiring Person, such Person shall, at the
end of such ten calendar day period, become an Acquiring Person (and such clause
(b)(ii) or (b)(iii) shall no longer apply to such Person). For
purposes of this definition, the determination whether any Person acted in
"good
faith" shall be conclusively determined by the Board of Directors of the
Company.
2. Notwithstanding
Section 7(a) of the Rights Agreement, the Rights Agreement shall terminate
and the Rights shall expire at the Effective Time, as defined in the Merger
Agreement.
3. This
Amendment shall become effective immediately prior to the execution of the
Merger Agreement and the Stock Purchase Agreement; provided that this Amendment
shall not be effective if such agreements are not executed.
4. Except
as expressly amended hereby, the Rights Agreement remains in full force and
effect.
5. 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 hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
PUGET
ENERGY, INC.
By: /s/
Xxxxxx X.
Xxxxxxxx
Name: Xxxxxx
X. Xxxxxxxx
Title: Chairman,
President and
CEO [Corporate
Seal]
XXXXX
FARGO BANK, N.A.
By: /s/
Xxxxxxx X.
Xxxxx
Name: Xxxxxxx
X. Xxxxx
Title: Vice
President [Corporate
Seal]
