FOURTH AMENDMENT TO RIGHTS AGREEMENT
FOURTH AMENDMENT TO RIGHTS AGREEMENT, made as of April 15, 1998 between
Imo Industries Inc., a Delaware corporation (the "Company"), and First Chicago
Trust Company of New York, a New York corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on April 30, 1997, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right for each share of
Common Stock, par value $1.00 per share, of the Company outstanding at the close
of business on the Record Date, May 4, 1997, and has authorized the issuance of
one Right for each share of Common Stock of the Company issued between the
Record Date and the Distribution Date, each Right initially representing the
right to purchase one one-hundredth of a share of Series B Junior Participating
Preferred Stock of the Company (the "Rights"); and
WHEREAS, on April 30, 1997, the Company and the Rights Agent entered into
a Rights Agreement to set forth certain terms and conditions with respect to the
grant of the Rights; on June 25, 1997, the Company and the Rights Agent entered
into an Amendment to Rights Agreement to amend Section 3(a) and Section
11(a)(ii)(B) thereof; on July 25, 1997, the Company and the Rights Agent entered
into a Second Amendment to Rights Agreement to further amend Section 3(a)
thereof; and on August 21, 1997, the Company and the Rights Agent entered into a
Third Amendment to Rights Agreement to amend Section 1(a), Section 3(a), Section
7(a), and Section 13 thereof (such Rights Agreement, as so amended, is
hereinafter referred to as the "Agreement"); and
WHEREAS, pursuant to Section 26 of the Agreement, the Company has the
right to amend the Agreement, and the Board of Directors of the Company has
approved certain amendments to the Agreement, to provide as set forth in this
Fourth Amendment.
NOW, THEREFORE, in consideration of the premises and covenants set forth
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Defined Terms. Each capitalized term used in this Fourth Amendment and
not otherwise defined shall have the meaning assigned to it in the Agreement,
unless the context clearly indicates to the contrary.
2. Amendment to Section 1(a). Section 1(a) of the Agreement is amended and
restated so as to provide in its entirety as follows:
" (a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding, but
shall not include the Company, any Subsidiary of the Company, 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 for or
pursuant to the terms of any such plan. Notwithstanding anything in this
Agreement to the contrary, neither II Acquisition Corp. ("II
Acquisition"), any subsidiary of II Acquisition that is established to
effect the Merger (as defined in this Section 1(a)) (any such subsidiary
being referred to herein as "Merger Sub"), nor any Affiliate or Associate
of II Acquisition or Merger Sub shall be deemed to be an Acquiring Person
as a result of the execution, delivery and performance under, or
consummation of any one or more transactions (each, a "Permitted Event"
and collectively, the "Permitted Events") contemplated by, the Share
Purchase Agreement, dated as of July 25, 1997, as the same may be amended
from time to time, by and among II Acquisition and the Company (the
"Acquisition Agreement"), pursuant to which II Acquisition is offering to
acquire all outstanding shares of Common Stock of the Company. "Permitted
Events" shall include, without limitation, (i) consummation of the Offer
(as defined in the Acquisition Agreement), (ii) contribution by II
Acquisition to Merger Sub of Common Stock, and (iii) consummation of any
merger (a "Merger") that is contemplated by Section 1.03 of the
Acquisition Agreement."
3. Amendment to Section 11(a)(ii)(B). Section 11(a)(ii)(B) of the
Agreement is amended and restated so as to provide in its entirety as follows:
"(B) any Person (other than the Company; any Subsidiary of the Company;
any employee benefit plan of the Company or of any Subsidiary of the
Company; any Person or entity organized, appointed or established by the
Company for or pursuant to any such plan; and Merger Sub (as defined in
Section 1(a) hereof)), alone or together with its Affiliates and
Associates, shall, at any time after the Rights Dividend Declaration Date,
become the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding, unless the event causing the 15% threshhold to be
crossed (1) is a transaction set forth in Section 13(a) hereof or (2) is
an acquisition of shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock at a price and
on terms determined by at least a majority of the members of the Board of
Directors who are not officers of the Company and who are not
representatives, nominees, Affiliates or Associates of an Acquiring
Person, after receiving advice from one or more investment banking firms,
to be (x) at a price which is fair to stockholders (taking into account
all factors which such members of the Board deem relevant including,
without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize
maximum value) and (y) otherwise in the best interests of the Company and
its stockholders, provided, however, that the exception under this clause
(2) of this Section 11(a)(ii)(B) shall cease to apply with respect to a
tender offer or exchange offer that has been determined by at least a
majority of the Board of Directors who are not officers of the Company and
who are not representatives, nominees, Affiliates or Associates of an
Acquiring Person, to be fair to stockholders or otherwise in the best
interests of the Company and its stockholders if such determination is
subsequently withdrawn, in which event such Person shall be deemed to have
crossed the 15% threshhold on the date of the withdrawal of such
determination, or".
4. Effect of Amendment. The parties acknowledge and agree that all of the
terms, provisions, covenants and conditions of the Agreement shall hereafter
continue in full force and effect in accordance with the terms thereof except to
the extent amended, modified, deleted or revised herein.
5. Counterparts. This Amendment may be executed on separate counterparts,
each of which is deemed to be an original and all of which taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed
as of the date first above written.
Attest:
By: /s/ Xxxxxx X. Xxxxxxx, III
Xxxxxx X. Xxxxxxx, III
Vice President and Secretary
IMO INDUSTRIES INC.
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Vice President, Treasurer, Chief Financial Officer,
and Assistant Secretary
Attest:
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Customer Service Officer
FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Vice President
