EXHIBIT 4.1
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
This Amendment No. 1 dated as of August 24, 1998 (this "Amendment")
is between OTTER TAIL POWER COMPANY, a Minnesota corporation (the "Company"),
and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION (the "Rights Agent").
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement dated as of January 27, 1997 (the "Rights Agreement");
WHEREAS, the Rights Agreement may be amended subject to the procedures
set forth in Section 27 thereof; and
WHEREAS, a majority of the Continuing Directors (as defined in the
Rights Agreement) has approved the amendment of the Rights Agreement set
forth herein and the Company has provided the Rights Agent with a certificate
evidencing such approval.
NOW, THEREFORE, the Rights Agreement is hereby amended as follows:
1. Amendment of Section 1. Section 1 of the Rights Agreement is
amended to delete the definition of "Continuing Director" in its entirety.
2. Amendment of Section 11(o). Section 11(o) of the Rights
Agreement is amended to read in its entirety as follows:
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, 24
or 27, take (or permit any Subsidiary of the Company to take) any action
if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights unless such action is
approved by a majority of the Board of Directors of the Company.
3. Amendment of Section 23. Section 23 of the Rights Agreement is
amended to read in its entirety as follows:
Section 23. Redemption.
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(a) At least a majority of the Board of Directors of the Company
may, at their option, at any time prior to the earlier of (i) the Shares
Acquisition Date or (ii) the Final Expiration Date, redeem all but not
less than all of the then outstanding Rights at a redemption price of
$.01 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date of this Agree-
ment (such redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by the Board of
Directors of the Company may be made effective at such time and on such
basis and with such conditions as the Board of Directors of the Company
in their sole discretion may establish. The Company may, at its option,
pay the Redemption Price in cash, Common Shares (based on the "current
market price", as defined in Section 11(d)(i), of the Common Shares at
the time of the redemption) or any other form of consideration deemed
appropriate by a majority of the Board of Directors of the Company;
provided, however, that if the Company elects to pay the Redemption
Price in Common Shares, the Company shall not be required to issue any
fractional Common Shares, and the number of shares issuable to each
holder of Rights shall be rounded down to the next whole number.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a)
of this Section 23, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any
such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such
redemption. Within ten days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice
of redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24,
and other than in connection with the purchase of Common Shares prior
to the Distribution Date.
4. Amendment of Sections 24(a) and 24(b). Sections 24(a) and 24(b)
of the Rights Agreement are amended to read in their entirety as follows:
Section 24. Exchange.
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(a) At least a majority of the Board of Directors of the Company
may, at their option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to
the provisions of Section 7(e)), for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date of this Agreement, (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board
of Directors of the Company shall not be empowered to effect such
exchange at any time after any Person (other than an Exempt Person)
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of
This Section 24 and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Shares
for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of outstanding and
exercisable Rights (other than Rights which have become void pursuant
to the provisions of Section 11(a)(ii)) held by each holder of Rights.
5. Amendment of Section 27. Section 27 of the Rights Agreement
is amended to read in its entirety as follows:
Section 27. Supplements and Amendments.
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Prior to the Distribution Date and subject to the penultimate
sentence of this Section 27, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provisions of this
Agreement without the approval of any holders of certificates represent-
ing Common Shares. From and after the Distribution Date and subject to
the penultimate sentence of this Section 27, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement or amend
any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time
period hereunder or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii)
of this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any
other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits
to, the holders of Rights (other than an Acquiring Person and its
Affiliates and Associates). Upon delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment has been approved by a majority of the Board of
Directors of the Company and is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common
Shares.
6. Amendment of Paragraph 14 of Exhibit C. Paragraph 14 of Exhibit C
to the Rights Agreement is amended to read in its entirety as follows:
At any time after a Person becomes an Acquiring Person (subject to
Certain exceptions), and prior to the acquisition by a Person of 50% or
more of the outstanding Common Shares, the Board of Directors of the
Company may exchange all or part of the Rights for Common Shares at an
exchange ratio of one Common Share per Right, subject to adjustment.
7. Amendment of Paragraph 15 of Exhibit C. Paragraph 15 of Exhibit C
to the Rights Agreement is amended to read in its entirety as follows:
At any time before a Person has become an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"),
subject to adjustment. The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as such
Board of Directors of the Company may, in their sole discretion,
establish.
8. Deletion of Paragraph 16 of Exhibit C. Paragraph 16 of Exhibit C
to the Rights Agreement is deleted in its entirety.
9. Effectiveness. This Amendment shall be deemed effective as of
August 24, 1998 as if executed by both parties on such date. Except as amended
hereby, the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.
10. Miscellaneous. This Amendment shall be deemed to be a contract
made under the laws of the state of Minnesota 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.
This Amendment may be executed in any number of counterparts, each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument. If any
term, provision, covenant or restriction of this Amendment is held by a court
of competent jurisdiction or other authority to be invalid, illegal, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date set forth above.
OTTER TAIL POWER COMPANY
/s/ Xxx X. Xxxxxx
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Xxx X. Xxxxxx
Senior Vice President, Governmental
and Legal and Corporate Secretary
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxx
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Its Vice President
