EXHIBIT 1
FIRST AMENDMENT TO RIGHTS AGREEMENT
This Amendment is made as of November 18, 1999 between Xxxxxxx Company, a
Minnesota corporation (the "Company"), and Norwest Bank Minnesota, National
Association (the "Rights Agent"), to the Rights Agreement dated as of November
19, 1996 (the "Original Agreement") between the Company and the Rights Agent.
Whereas, the Company and the Rights Agent have entered into the Original
Agreement; and
Whereas, the Board of Directors of the Company has determined to amend the
Original Agreement in accordance with Section 27 thereof.
Accordingly, in consideration of the premises and the mutual agreements set
forth in this Amendment, the parties hereby agree as follows:
1. Section 1(a) of the Original Agreement is hereby amended in its
entirety to read as follows:
(a) "Acquiring Person" shall mean any Person (as such term is
defined in this Agreement) who or which, together with all Affiliates
and Associates (as such terms are defined in this Agreement) of such
Person, shall be the Beneficial Owner (as such term is defined in this
Agreement) of 20% or more of the Common Shares of the Company then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary
(as such term is defined in this Agreement) of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the
Company, or (iv) any entity holding Common Shares for or pursuant to
the terms of any such plan described in clause (iii) of this sentence.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company
which, by reducing the number of Common Shares outstanding, increases
the proportionate number of shares beneficially owned by such Person to
20% or more of the Common Shares of the Company then outstanding;
PROVIDED, HOWEVER, that if a Person shall, together with all Affiliates
or Associates of such Person, become the Beneficial Owner of 20% or
more of the Common Shares of the Company then outstanding by reason of
share acquisitions by the Company and if such Person or such Person's
Affiliates or Associates shall, after such share acquisitions by the
Company, become the Beneficial Owner of any additional Common Shares of
the Company, and, immediately after becoming the Beneficial Owner of
such additional Common Shares, such Person shall, together with all
Affiliates and Associates of such Person, be the Beneficial Owner of
20% or more of the Common Shares of the Company then outstanding, then
such Person (unless such Person shall be (1) the Company, (2) any
Subsidiary of the Company, (3) any employee benefit plan of the Company
or of any Subsidiary of the Company, or (4) any entity holding Common
Shares for or pursuant to the terms of any such plan described in
clause (3) of this sentence) shall be deemed an "Acquiring Person." An
entity other than the Company or any Subsidiary of the Company holding
Common Shares for or pursuant to the terms of an employee benefit plan
of the Company or of any Subsidiary of the Company and in addition
being the Beneficial Owner of Common Shares that are not held for or
pursuant to the terms of any such plan shall be deemed to constitute an
Acquiring Person, notwithstanding anything herein stated, if, but only
if, it, together with its Affiliates and Associates, shall be the
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Beneficial Owner of 20% or more, exclusive of those Common Shares held
by it for or pursuant to the terms of any such plan, of the Common
Shares then outstanding. Notwithstanding the foregoing, 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 (a), has become such
inadvertently (including, without limitation, because (A) such Person
was unaware that it beneficially owned a percentage of the Common
Shares that would otherwise cause such Person to be an "Acquiring
Person" or (B) such Person was aware of the extent of its Beneficial
Ownership but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement), and without any intention
of changing or influencing control of the Company, 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 (a),
then such Person shall not be deemed to be an "Acquiring Person" for
any purposes of this Agreement.
2. Section 1(g) of the Original Agreement is hereby deleted in its
entirety. Paragraphs (h) through (p) of Section 1 of the Original Agreement
shall not be renamed on account of the deletion.
3. Section 3(a) of the Original Agreement is hereby amended in its
entirety to read as follows:
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the Close of Business on the 15th
day after the Shares Acquisition Date or (ii) the Close of Business on
the 15th day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any Person
becomes an Acquiring Person) after the date of the commencement by 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 or any entity holding Common Shares for or pursuant to the
terms of any such plan) of, or of the first public announcement of the
intention of 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 or any entity holding Common Shares for or pursuant to
the terms of any such plan) to commence (which intention shall not have
been withdrawn within five business days (as defined in Rule 14d-1 of
the General Rules and Regulations under the Exchange Act) after such
public announcement), a tender or exchange offer the consummation of
which would result in beneficial ownership by a Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) of 20% or
more of the then outstanding Common Shares (including any such date
that is after the date of this Agreement and prior to the issuance of
the Rights, the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common
Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates where the
context so requires) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the
Rights Agent will
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countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown
on the records of the Company, one or more Right Certificates, in
substantially the form of Exhibit B hereto (the "Right Certificates"),
evidencing one Right for each Common Share so held, subject to
adjustment pursuant to Section 11(i). In the event that an adjustment
in the number of Rights per Common Share has been made pursuant to
Section 11(i), at the time Right Certificates are distributed, the
Company may, to the extent provided in Section 14(a), make the
necessary and appropriate adjustments (as set forth in Section 14(a))
so that Right Certificates are distributed representing only whole
numbers of Rights and pay cash in lieu of fractional Rights pursuant
to Section 14(a). As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
4. Section 11(a)(ii) of the Original Agreement is hereby amended in
its entirety to read as follows:
(ii) Subject to Section 24 of this Agreement, in the event any
Person shall become an Acquiring Person (other than pursuant to any
Section 13 Event occurring after the Distribution Date or within 15
days prior thereto), proper provision shall be made so that each holder
of a Right, subject to Section 11(a)(iii), shall thereafter have a
right to receive, upon exercise thereof by payment of the amount equal
to the product of the number of one one-hundredths of a Preferred Share
which would otherwise be issuable upon exercise of a Right and the then
current Purchase Price in accordance with the terms of this Agreement,
in lieu of Preferred Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is exercisable immediately prior to
the occurrence of the Section 11(a)(ii) Event and (y) dividing that
product by 50% of the current per share market price of the Company's
Common Shares (determined pursuant to Section 11(d) hereof) on the date
of such occurrence.
From and after the first occurrence of a Section 11(a)(ii)
Event or a Section 13 Event, any Rights that are beneficially owned by
any Acquiring Person (or any Associate or Affiliate thereof) or were
beneficially owned by any Acquiring Person (or any Associate or
Affiliate thereof) after the Acquiring Person became an Acquiring
Person shall become null and void without any further action and no
holder of such Rights shall thereafter have any rights to exercise such
Rights or any other rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. No Right
Certificate shall be issued pursuant to Section 3 that represents
Rights that would be void pursuant to the preceding sentence; no Right
Certificate shall be issued at any time upon the transfer of any Rights
to an Acquiring Person or any Associate or Affiliate of such Acquiring
Person whose Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate of such an Acquiring Person or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person or any Associate or Affiliate of such an Acquiring Person whose
Rights would be void pursuant to the preceding sentence shall be
canceled. The Company shall use all reasonable efforts to ensure that
the provisions of this Section 11(a)(ii) are complied with, but shall
have no liability to any holder of a Right Certificate or other
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Person as a result of its failure in good faith to make any
determinations with respect to an Acquiring Person or its Affiliates
or Associates.
5. Section 23(a) of the Original Agreement is hereby amended in its
entirety to read as follows:
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (x) such time as a Person becomes
an Acquiring Person or (y) the Close of Business on 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 Agreement (such
redemption price being hereinafter referred to as the "Redemption
Price"). The Redemption Price shall be payable in cash by the Company.
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 its sole
discretion may establish. Except for the obligation to pay the
Redemption Price, the Board of Directors and the Company shall not have
any liability to any Person as a result of the redemption of Rights
pursuant to the terms of this Section 23.
6. Section 27 of the Original Agreement is hereby amended in its
entirety to read as follows:
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may and the Rights
Agent shall, if so directed by the Company, from time to time supplement or
amend this Agreement without the approval of any holders of Common Shares or
Right Certificates in order (i) to extend the Final Expiration Date,
notwithstanding anything to the contrary provided in clause (iv) hereof, (ii) to
cure any ambiguity, or to correct or supplement any provision contained in this
Agreement which may be defective or inconsistent with any other provisions in
this Agreement, (iii) prior to the Distribution Date, to otherwise change or
supplement any provision in this Agreement in any manner which the Company may
deem necessary or desirable, or (iv) following the Distribution Date, to
otherwise change or supplement any provision in this Agreement in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than Right
Certificates evidencing Rights that shall have become null and void pursuant to
Section 11(a)(ii)). Without limiting the foregoing, the Company may at any time
prior to such time as any Person becomes an Acquiring Person amend this
Agreement to lower the thresholds set forth in Sections 1(a) and 3(a) hereof
from 20% to not less than the greater of (i) the sum of .001% and the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person (other than (1) the Company, (2) any Subsidiary
of the Company, (3) any employee benefit plan of the Company or any Subsidiary
of the Company, or (4) any entity holding Common Shares for or pursuant to the
terms of any plan described in clause (3) of this sentence) or (ii) 10%.
7. Section 30 of the Original Agreement is hereby amended in its
entirety to read as follows:
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
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8. The Original Agreement shall remain in full force and effect
without amendment, except for this Amendment and any other amendment made in
accordance with Section 27 of the Agreement. All terms used in this Amendment
that are defined in the Original Agreement but are not defined herein shall
have the meanings ascribed to them in the Original Agreement. The Summary of
Rights contained in Exhibit C to the Original Agreement is a summary of the
Original Agreement without regard to this Amendment and does not limit or
affect this Amendment in any way. All references in the Original Agreement to
"this Agreement," "the Agreement," or "hereof" and all references in this
Amendment to the Agreement shall hereafter be deemed to be references to the
Original Agreement as amended by this Amendment and any other amendment made
in accordance with Section 27 of the Agreement.
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In witness whereof, the parties have caused this Amendment to be duly
executed as of the date first written above.
XXXXXXX COMPANY
By /s/ Xxxxx X. Xxxxx
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Its President and Chief Executive Officer
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NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Xxxx Xxxxx
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Its Corporate Officer
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