EXECUTION COPY
AMENDMENT NO. 2, dated as of
December 3, 1998, to the Rights
Agreement dated as of October 16, 1987,
and amended as of October 15, 1997 (as
amended, the "Rights Agreement"),
between HOMESTAKE MINING COMPANY, a
Delaware corporation (the "Company"),
and BANKBOSTON N.A., a national banking
association, as successor to BANK OF
AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, a national banking
corporation, as Rights Agent (the
"Rights Agent").
WHEREAS the Board of Directors of Homestake Canada
Inc., an Ontario corporation ("HCI"), has authorized the
issuance of one right (as such number may be adjusted from
time to time) for each Exchangeable Share of HCI (the "HCI
Exchangeable Shares"), each right initially representing the
right to purchase one HCI Exchangeable Share (the "HCI
Rights");
WHEREAS, as provided in the Arrangement Agreement
dated as of September 28, 1998, among Prime Resources Group
Inc., Homestake Canada Holdings Company, the Company and HCI
(the "Arrangement Agreement"), the HCI Rights are intended to
provide rights to acquire additional HCI Exchangeable Shares
(or in certain circumstances other securities) on terms
substantially the same as the rights issued under the Rights
Agreement confer the right to acquire shares of common stock
of the Company or preferred stock of the Company that is
essentially the economic equivalent of common stock of the
Company (or in certain circumstances other securities); and
WHEREAS pursuant to Section 26 of the Rights
Agreement the Board of Directors of the Company has determined
that an amendment to the Rights Agreement as set forth herein
is necessary and desirable to reflect the foregoing and the
Company and the Rights Agent desire to evidence such amendment
in writing.
NOW, THEREFORE, in consideration of the mutual
agreements contained herein and other good and valuable
consideration, the sufficiency and receipt of which are hereby
acknowledged, the Company and the Rights Agent agree as
follows:
ARTICLE I
Amendments to the Rights Agreement
SECTION 1.01. The definitions of "Acquiring Person",
"Beneficial Owner" and "Book Value" in Section 1 of the Rights
Agreement are hereby amended, effective as of the date of this
Amendment, by deleting the text of such definitions in their
entireties and by replacing each of them with the following:
"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 Common Shares
representing more than 15% of the aggregate number of Common
Shares and HCI Exchangeable Shares then outstanding but shall
not include (a) 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
or HCI Exchangeable Shares for or pursuant to the terms of any
such employee benefit or compensation plan, (b) the holder of
the Homestake Special Voting Stock or (c) any such Person who
has become and is such a Beneficial Owner solely because (i)
of a change in the aggregate number of Common Shares or HCI
Exchangeable Shares outstanding since the last date on which
such Person acquired Beneficial Ownership of any Common Shares
or HCI Exchangeable Shares or (ii) it acquired such Beneficial
Ownership in the good faith belief that such acquisition would
not (x) cause such Beneficial Ownership to exceed 15% of the
aggregate number of Common Shares and HCI Exchangeable Shares
then outstanding and such Person relied in good faith in
computing the percentage of its Beneficial Ownership on
publicly filed reports or documents of the Company or HCI that
are inaccurate or out-of-date or (y) otherwise cause a
Distribution Date or the adjustment provided for in Section
11(a) to occur. Notwithstanding clause (c)(ii) of the prior
sentence, if any Person that is not an Acquiring Person due to
such clause (c)(ii) does not reduce its percentage of
Beneficial Ownership of Common Shares and HCI Exchangeable
Shares to 15% or less by the Close of Business on the fifth
Business Day after notice from the Company (the date of notice
being the first day) that such Person's Beneficial Ownership
of Common Shares or HCI Exchangeable Shares or any combination
thereof so exceeds 15%, such Person shall, at the end of such
five Business Day period, become an Acquiring Person (and such
clause (c)(ii) 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, acting by a vote of those directors of the
Company whose approval would be required to redeem the Rights
under Section 24.
A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own", and shall be deemed
to have "Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's
Affiliates or Associates is deemed to "beneficially own"
within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act, as in effect on the
date of this Rights Agreement;
(ii) which such Person or any of such Person's
Affiliates or Associates has: (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement,
arrangement or understanding (written or oral), or upon
the exchange or retraction of HCI Exchangeable Shares, or
upon the exercise of conversion rights, exchange rights,
rights (other than the Rights or the HCI Rights),
warrants or options, or otherwise; provided, however,
that a Person shall not be deemed under this clause (A)
the Beneficial Owner of, or to beneficially own, or to
have Beneficial Ownership of, any securities tendered
pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted
for purchase or exchange thereunder or cease to be
subject to withdrawal by the tendering security holder;
or (B) the right to vote pursuant to any agreement,
arrangement or understanding (written or oral); provided,
however, that a Person shall not be deemed under this
clause (B) the Beneficial Owner of, or to beneficially
own, or to have Beneficial Ownership of, any security if
(1) the agreement, arrangement or understanding (written
or oral) to vote such security arises solely from a
revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made
generally to all holders of Common Stock or HCI
Exchangeable Shares pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange
Act and (2) the beneficial ownership of such security is
not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (written or oral)
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in
clause (ii)(B) of this definition) or disposing of any
securities of the Company or of HCI.
Notwithstanding the foregoing, nothing contained in this
definition shall cause a Person ordinarily engaged in business
as an underwriter of securities to be the "Beneficial Owner"
of, or to "beneficially own" or to have "Beneficial Ownership"
of, any securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with the
Company or with HCI.
"Book Value", when used with reference to Common
Shares issued by any Person, shall mean the amount of equity
of such Person applicable to each Common Share, determined (i)
in accordance with generally accepted accounting principles in
effect in the jurisdiction in which such Person is
incorporated and on the date as of which such Book Value is to
be determined, (ii) using all the consolidated assets and all
the consolidated liabilities of such Person on the date as of
which such Book Value is to be determined, except that no
value shall be included in such assets for goodwill arising
from consummation of a business combination, and (iii) after
giving effect to (A) the exercise of all rights, options and
warrants to purchase such Common Shares (other than the Rights
or the HCI Rights), and the conversion of all securities
convertible into such Common Shares, at an exercise or
conversion price, per Common Share, which is less than such
Book Value before giving effect to such exercise or conversion
(whether or not exercisability or convertibility is
conditioned upon occurrence of a future event), (B) all
dividends and other distributions on the capital stock of such
Person declared prior to the date as of which such Book Value
is to be determined and to be paid or made after such date,
and (C) any other agreement, arrangement or understanding
(written or oral), or transaction or other action contemplated
prior to the date as of which such Book Value is to be
determined that would have the effect of thereafter reducing
such Book Value.
SECTION 1.02. Section 1 of the Rights Agreement is
hereby amended, effective as of the date of this Amendment, by
adding the text of the following definitions:
"Arrangement Agreement" shall mean the arrangement
agreement dated as of September 28, 1998, among Prime
Resources Group Inc., Homestake Canada Holdings Company, the
Company and HCI.
"HCI" shall mean Homestake Canada Inc., an Ontario
corporation.
"HCI Exchangeable Shares" shall mean the
Exchangeable Shares of HCI having the rights, privileges,
restrictions and conditions substantially set forth in
Schedule 2 to the Arrangement Agreement.
"HCI Rights" shall mean the rights to purchase HCI
Exchangeable Shares (or other securities) as provided in the
HCI Rights Agreement.
"HCI Rights Agreement" shall mean the Rights
Agreement dated as of December 3, 1998, between HCI and
Montreal Trust Company of Canada, as Rights Agent, as amended
from time to time.
"Homestake Special Voting Stock" shall mean the
Special Voting Stock of the Company, par value $1.00,
initially issued by the Company to and deposited with Montreal
Trust Company of Canada, as Trustee.
ARTICLE II
Miscellaneous
SECTION 2.01. Except to the extent amended by or
inconsistent with this Amendment No. 2, the Company and the
Rights Agent hereby ratify and reconfirm the Rights Agreement
in its entirety.
SECTION 2.02. This Amendment No. 2 may be executed
in any number of counterparts, each of which so executed shall
be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 2.03. THIS AMENDMENT NO. 2 SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER THE LAW OF THE STATE OF DELAWARE
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF SUCH STATE APPLICABLE TO CONTRACTS
TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE, PROVIDED,
HOWEVER, THAT THE RIGHTS AND
OBLIGATIONS OF THE RIGHTS AGENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the parties hereto have caused
this Amendment No. 2 to be duly executed as of the day and
year first above written.
HOMESTAKE MINING COMPANY,
by
/s/ Xxxxx Xxxx
----------------------
Name: Xxxxx Xxxx
Title: Vice President
BANKBOSTON N.A.,
as Rights Agent,
by
/s/ X. Xxxxxxxxxxx
--------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: Sr. Acct. Manager
