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AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is entered into
by Keystone International, Inc. a Texas corporation ("Keystone"), and
Continental Stock Transfer & Trust Company (the "Rights Agent"), effective as
of May 20, 1997.
WHEREAS, Keystone and NCNB Texas National Bank, as original rights
agent, entered into that certain Rights Agreement dated as of March 31, 1990
(the "Agreement"); and
WHEREAS, Keystone and Continental Stock Transfer & Trust Company
entered into an Appointment and Amendment to the Agreement dated as of July 2,
1992, whereunder Continental Stock Transfer & Trust Company was appointed, and
agreed to serve as, the Rights Agent; and
WHEREAS, Keystone and the Rights Agent desire to amend the Agreement
as provided therein pursuant to Section 27 of the Agreement, which authorizes
Keystone and the Rights Agent, if Keystone so directs, to supplement or amend
any provision of the Agreement without the approval of any holders of
Keystone's Common Stock (as defined in the Agreement).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth the parties hereto agree as follows:
1. The definition of "Acquiring Person" in Section 1 of the Agreement
is hereby amended and restated in its entirety to read as follows:
"Acquiring Person" means any Person (as 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 hereinafter defined) of 20% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company, (ii)
any Subsidiary (as hereinafter defined) of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established
by the Company or any Subsidiary of the Company for or pursuant to the
terms of any such plan; or (iv) Tyco International Ltd. ("Tyco"), a
Massachusetts corporation, and any Subsidiary or Affiliate of Tyco, so
long as neither Tyco nor any Subsidiary or Affiliate of Tyco is the
Beneficial Owner of more than 1% of the issued and outstanding capital
stock of the Company other than capital stock of the Company of which
Tyco or any Subsidiary or Affiliate of Tyco is the Beneficial Owner
solely by reason of (A) the Agreement and Plan of Merger dated May 20,
1997 by and among Tyco, T6 Acquisition Corp. and the Company, as
amended from time to time (the "Merger Agreement"), or (B) the
acquisition of shares of Common Stock pursuant to the Merger (as
defined in the Merger Agreement). If
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any of these exceptions to the definition of an Acquiring Person
apply, then the Person to whom the exception pertains shall not be an
Acquiring Person for any purpose under this Agreement, including,
without limitation, with respect to the definitions of Distribution
Date, Section 11(a)(ii) Event, Section 13 Event, Stock
Acquisition Date and Triggering Event.
Notwithstanding any provision of this Agreement to the
contrary, (i) no Distribution Date, Section 11(a)(ii) Event, Section
13 Event, Stock Acquisition Date or Triggering Event shall be deemed
to have occurred, (ii) neither Tyco nor any Subsidiary or Affiliate of
Tyco shall be deemed to have become an Acquiring Person, and (iii) no
holder of Rights shall be entitled to exercise such Rights under, or
be entitled to any other rights pursuant to, this Agreement solely by
reason of (A) the approval, execution or delivery of the Merger
Agreement, (B) the acquisition of shares of Common Stock pursuant to
the Merger (as defined in the Merger Agreement), or (C) the
consummation of the Merger (as defined in the Merger Agreement);
provided, however, that in the event Tyco or any Subsidiary or
Affiliate of Tyco becomes the Beneficial Owner after the date hereof
of any shares of Common Stock in any manner other than as set forth in
subsection (iv) of the previous paragraph, the provisions of this
sentence (other than this proviso) shall not be applicable; and
provided, further, that, notwithstanding Section 27 of this Agreement,
any supplement or amendment to this Agreement can, in the Company's
discretion, have retroactive effect with respect to Tyco and its
Subsidiaries and Affiliates, regardless of whether Tyco and its
Subsidiaries and Affiliates consent, and regardless of whether the
supplement or amendment has an adverse affect on Tyco or its
Subsidiaries or Affiliates.
2. Subsection 11(a)(ii) is hereby amended and restated in its entirety
to read as follows:
(ii) If any Person, alone or together with its Affiliates and
Associates, shall, at any time after the date of this Agreement,
become an Acquiring Person, then proper provision shall promptly be
made so that each holder of a Right, except as otherwise provided
below and in Section 7(e), shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of duly authorized,
validly issued, fully paid and nonassessable Depositary Shares (such
number of shares being referred to herein as the "Adjustment Shares")
as shall be equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of Depositary Shares for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as
the "Purchase
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Price" for each Right and for all purposes of this Agreement) by 50%
of the current market price (determined pursuant to Section 11(d)(i))
per share of Common Stock on the date of the first occurrence of a
Section 11(a)(ii) Event; provided that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13, then only the provisions of Section 13 shall
apply and no adjustment shall be made pursuant to this Section
11(a)(ii). After any Person has become an Acquiring Person, the
Company shall not enter into any transaction if at any time of or
immediately after such transaction there are rights, warrants,
instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
3. Except as specifically provided herein, the Agreement shall
continue in full force and effect in accordance with its terms without
amendment or modification.
4. This document may be executed in multiple counterparts, each of
which shall be deemed to be one and the same Amendment.
IN WITNESS WHEREOF, the undersigned parties hereby execute and agree
to be bound by this Amendment, effective as of the date first written above.
KEYSTONE INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
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Title: Vice President and General Counsel
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Countersigned:
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
as Rights Agent
By: /s/ X. Xxxxxxxxxx
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Name: X. Xxxxxxxxxx
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Title: Vice Pres.
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