SECOND AMENDMENT TO RIGHTS AGREEMENT
SECOND AMENDMENT (this "Second Amendment"), dated as of March 12, 2006, to
the Rights Agreement, dated as of June 21, 1996 (the "Rights Agreement") between
Xxxxxx-Xxxxxx, Inc., a Florida corporation (the "Company"), and Mellon Investor
Services LLC, a New Jersey limited liability company (as successor to
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability
company) as rights agent (the "Rights Agent"), as amended.
W I T N E S S E T H:
WHEREAS, the Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement;
WHEREAS, the Board of Directors has determined that it is in the best
interests of the Company to amend the Rights Agreement as set forth herein;
WHEREAS, pursuant to Section 28 of the Rights Agreement, the Company and
the Rights Agent may, if the Company so directs, amend the Rights Agreement from
time to time in accordance with the provisions of such Section 28;
WHEREAS, the Company has entered into an Agreement and Plan of Merger (the
"Merger Agreement") by and between The McClatchy Company, a Delaware corporation
("Parent") and the Company, dated as of March 12, 2006, pursuant to which the
Company will merge with and into Parent;
WHEREAS, all actions necessary to make this Second Amendment a valid
agreement, enforceable according to its terms have been taken and the execution
and delivery of this Second Amendment by the Company and the Rights Agent have
been in all respects duly authorized by the Company; and
WHEREAS, the Company desires to modify the terms of the Rights Agreement in
certain respects as set forth herein, and in connection therewith, is entering
into this Second Amendment and directing the Rights Agent to enter into this
Second Amendment;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, the Company and the Rights Agent agree as follows:
1. EFFECT OF SECOND AMENDMENT. Except as expressly provided in this
Second Amendment, all provisions of the Rights Agreement shall continue in full
force and effect.
2. CAPITALIZED TERMS. All capitalized, undefined terms used in this
Second Amendment shall have the meanings assigned thereto in the Rights
Agreement.
3. AMENDMENTS TO SECTION 1.
(a) The definition of "Acquiring Person" in Section 1 of the Rights
Agreement is hereby amended to read in its entirety as follows:
"Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as
such terms are
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the Common Shares
then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, or
(iii) any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan. Notwithstanding
the foregoing, (i) no Person shall become an "Acquiring Person" solely
as the result of an acquisition of Common Shares by the Company which,
by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to
20% or more of the Common Shares then outstanding; provided, however,
that if a Person becomes the Beneficial Owner of 20% or more of the
Common Shares then outstanding by reason of share acquisitions by the
Company and shall, after such share acquisitions, become the
Beneficial Owner of any additional Common Shares, then such Person
shall be deemed to be an "Acquiring Person"; (ii) if the Board of
Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph, has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number
of Common Shares so that such Person would no longer be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this
paragraph, then such Person shall not be deemed to have become an
"Acquiring Person" for any purposes of this Agreement and (iii) for so
long as the Merger Agreement is in full force and effect, neither
Parent nor any of its affiliates shall be deemed an Acquiring Person
on account of the execution, delivery, or public announcement of the
Merger Agreement and/or the consummation of the transactions
contemplated thereby.
(b) The definition of "Share Acquisition Date" in Section 1 of the Rights
Agreement is hereby amended to read in its entirety as follows:
"Share Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act but shall exclude any public announcement relating to the
Merger Agreement or the transactions contemplated by the Merger
Agreement) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(c) The definitions contained in Section 1 of the Rights Agreement shall
be supplemented by adding the following definitions in alphabetical order:
"Parent" shall mean The McClatchy Company, a Delaware corporation.
"Merger Agreement" shall mean the Agreement and Plan of Merger, by and
between Parent and the Company, dated as of March 12, 2006, as it may
be amended from time to time, pursuant to which the Company will merge
with and into Parent.
4. AMENDMENTS TO SECTION 7.
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Section 7(a)(i) shall be amended to read as follows:
the earlier of (A) the Effective Time (as such term is defined in the
Merger Agreement) and (B) the later of (a) close of business on July
10, 2006 and (b) 5 Business Days after the termination of the Merger
Agreement (the "Final Expiration Date"), written notice of such Final
Expiration Date will be provided to the Rights Agent promptly after
such Final Expiration Date
5. AMENDMENTS TO SECTION 19.
The second sentence of Section 19(a) shall be amended to read as
follows:
The Company also agrees to indemnify the Rights Agent for, and to hold
it harmless against, any loss, liability, or expense incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent (as determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction) for anything
done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses
of defending against any claim of liability in the premises.
6. AMENDMENTS TO SECTION 21.
(a) Section 21(c) shall be amended in its entirety to read as follows:
The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct (as determined by a final,
non-appealable order, judgment, decree or ruling of a court of
competent jurisdiction).
(b) Section 21(g) shall be amended in its entirety to read as follows:
The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any one of the Chairman or Vice Chairman of the Board, the
President, a Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered to be taken by it in the absence of gross
negligence, bad faith or willful misconduct on the part of the Rights
Agent (as determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction) in accordance
with instructions of any such officer.
7. AMENDMENTS TO SECTION 27.
The address of the Rights Agent in Section 27 is hereby amended to
read as follows:
Mellon Investor Services LLC
Newport Office Center VII
000 Xxxxxxxxxx Xxxx.
Xxxxxx Xxxx, Xxx Xxxxxx 00000
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Attn: Relationship Manager
8. AMENDMENTS TO SECTION 33.
Section 33 shall be amended in its entirety to read as follows:
GOVERNING LAW. This Agreement and the rights and remedies of the
parties hereto shall be governed by and construed in accordance with
the internal laws of the State of Florida; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights
Agent shall be governed by, and construed in accordance with, the laws
of the State of New York applicable to contracts executed in and to be
performed in that state.
9. NEW SECTION 36. Section 36 is hereby added to the Rights Agreement to
read in its entirety as follows:
Section 36. The Merger Agreement. Notwithstanding anything contained
in this Agreement to the contrary, neither the approval, execution,
delivery or public announcement of the Merger Agreement nor the
consummation of the transactions contemplated thereby or the
performance by the Company of its obligations thereunder shall cause
(a) the Rights to become exercisable under the Rights Agreement, (b)
Parent or any of its affiliates to be deemed an Acquiring Person, or
(c) the Distribution Date or the Share Acquisition Date to occur.
10. NEW SECTION 37. Section 37 is hereby added to the Rights Agreement to
read in its entirety as follows:
Section 37. Termination Date. This agreement shall automatically
terminate and the Rights shall expire and no longer be outstanding
immediately at, and conditional upon, the Effective Time (as such term
is defined in the Merger Agreement) without any further action and
without any notice. If the Merger Agreement is terminated for any
reason prior to the Effective Time, this Section 37 shall not apply.
11. EFFECTIVE DATE. This Second Amendment is effective as of March 12,
2006, immediately prior to the execution and delivery of the Merger Agreement.
12. GOVERNING LAW. This Second Amendment shall be deemed to be a contract
made under the laws of the State of Florida 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; provided,
however, that all provisions of this Second Amendment regarding the rights,
duties and obligations of the Rights Agent shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
executed in and to be performed in that state.
13. COUNTERPARTS; FACSIMILE SIGNATURES. This Second Amendment may be
executed in one or more counterparts all of which shall be considered one and
the same instrument and shall become effective as of the date hereof when one or
more counterparts have been signed by each of the parties and delivered to each
of the other parties.
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14. HEADINGS. The headings in this Second Amendment are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed, all as of the day and year first above written.
XXXXXX-XXXXXX, INC.
By: /s/ P. Xxxxxxx Xxxxxx
-----------------------------------------
Name: P. Xxxxxxx Xxxxxx
Title: Chairman and Chief Executive Officer
MELLON INVESTOR SERVICES LLC, as Rights
Agent
By: /s/ Xxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Vice President
[SIGNATURE PAGE TO THE SECOND AMENDMENT TO THE RIGHTS AGREEMENT]
