EXHIBIT 4.2
FIRST AMENDMENT TO RIGHTS AGREEMENT
THIS FIRST AMENDMENT (the "Amendment") to the Rights Agreement (the
"Rights Agreement") dated as of June 28, 2004, between Salton, Inc., a Delaware
corporation (the "Company"), and UMB Bank, N.A., as Rights Agent (the "Rights
Agent"") is dated as of the 7th day of June 2006.
WHEREAS, the Company desires to amend the Rights Agreement to: (i)
increase certain triggering thresholds for the determination of an Acquiring
Person from 20% to 25%; (ii) provide that the issuance, or the right to issue,
by the Company of Common Shares to a Person upon redemption by the Company of
Series A Preferred Shares shall not result in such Person becoming an Acquiring
Person; and (iii) provide that the issuance, or the right to issue, by the
Company of Common Shares to a Person in accordance with the anti-dilution
provisions of the Series A Preferred Shares shall not result in such Person
becoming an Acquiring Person; and
WHEREAS, Section 27 of the Rights Agreement authorizes the Board of
Directors of the Company to adopt the proposed amendment without the approval of
the Company's stockholders; and
WHEREAS, on June 2, 2006, this Amendment to the Rights Agreement was
adopted and approved by the Board of Directors of the Company in accordance with
the provisions of the Rights Agreement; and
WHEREAS, capitalized terms used but not defined herein have the
meanings assigned to such terms in the Rights Agreement;
NOW, THEREFORE, in consideration of the recitals (which are deemed to
be a part of this Amendment) and agreements contained herein, the parties hereto
agree to amend the Rights Agreement as follows:
1. Amendment to Section 1(a) of Rights Agreement. The definition of
"Acquiring Person" in Section 1(a) of the Rights Agreement is hereby deleted in
its entirety and replaced with the following:
"(a) "Acquiring Person" means any Person who or which, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 25% or more of the aggregate number of Common
Shares of the Company then outstanding; provided, however that (i) in
no event shall any Exempt Person be deemed to be an Acquiring Person,
(ii) 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 the Company's Common Shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to
25% or more of the Common Shares then outstanding; provided, however,
that if a Person shall become the Beneficial Owner of 25% or more of
the Common Shares of the Company then outstanding by reason of share
acquisitions by the Company and shall, after such share acquisitions
by the Company, (A) acquire, in one or more transactions, Beneficial
Ownership of an additional number of Common Shares which exceeds 0.25%
of the then-outstanding Common Shares and (B) beneficially own
after such acquisition 25% or more of the aggregate number of Common
Shares of the Company then outstanding, then such Person shall be
deemed to be an "Acquiring Person," (iii) no Person who or which,
together with all Affiliates and Associates of such Person, was the
Beneficial Owner of 20% or more of the aggregate number of Common
Shares of the Company issued and outstanding as of 5:00 p.m., New York
time, on June 28, 2004 shall be deemed to be an "Acquiring Person" for
purposes of this Agreement; provided, however, that if such Person or
any of its Affiliates and Associates, after 5:00 p.m., New York time,
on June 28, 2004, (A) acquires, in one or more transactions, Beneficial
Ownership of an additional number of Common Shares which exceeds 0.25%
of the then-outstanding Common Shares and (B) beneficially owns after
such acquisition 25% or more of the aggregate number of Common Shares
of the Company then outstanding, then such Person shall be deemed to be
an "Acquiring Person," (iv) the issuance, or the right to issue, by the
Company of Common Shares to a Person upon redemption by the Company of
the Series A Voting Convertible Preferred Stock, par value $.01, of the
Company ("Series A Preferred Shares") shall not result in such Person
becoming an Acquiring Person; provided, however, that if such Person or
its affiliates shall (A) become the Beneficial Owner of 25% or more of
the Common Shares of the Company then outstanding by reason of such
issuance and (B) thereafter acquire, in one or more transactions,
Beneficial Ownership of an additional number of Common Shares which
exceeds 0.25% of the then outstanding Common Shares, then such Person
shall be deemed to be an "Acquiring Person," (v) the issuance, or the
right to issue, by the Company of Common Shares to a Person in
accordance with the anti-dilution provisions of Series A Preferred
Shares shall not result in a Person becoming an Acquiring Person;
provided, however, that if such Person or its Affiliates shall (A)
become the Beneficial Owner of 25% or more of the Common Shares of the
Company then outstanding by reason of such issuance and (B) thereafter
acquire, in one ore more transactions, Beneficial Ownership of an
additional number of Common Shares which exceeds 0.25% of the then
outstanding Common Shares, then such Person shall be deemed to be an
"Acquiring Person" and (vi) if the Board of Directors 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, 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. Amendment to Summary of Stockholder Rights Agreement. The third
full paragraph entitled "Acquiring Person" in the Summary of Stockholder Rights
Agreement attached as Exhibit C to the Rights Agreement is hereby deleted in its
entirety and replaced with the following:
"Acquiring Person. An "Acquiring Person" is a person or group
of affiliated or associated persons who have acquired beneficial
ownership of 25% or more of the outstanding Common Shares, other than
the Company, any subsidiary of the Company, or any employee benefit
plan of the Company or its subsidiaries ("Exempt Persons"); provided,
however that (i) in no event shall any Exempt Person be deemed to be an
Acquiring Person, (ii) no person shall become an Acquiring Person, as
the result of an acquisition of Common Shares by the Company which
increases the proportionate
number of shares beneficially owned by such person and its affiliates
and associates to 25% or more of the Common Shares then outstanding
(provided, however, that if such person becomes the beneficial owner of
25% or more of the Common Shares then outstanding by reason of share
acquisitions by the Company and, after such share acquisitions, (A)
acquires beneficial ownership of an additional number of Common Shares
which exceeds 0.25% of the then-outstanding Common Shares and (B)
beneficially owns after such acquisition 25% or more of the aggregate
number of Common Shares then outstanding, then such person shall be
deemed to be an Acquiring Person), (iii) no person who or which,
together with all affiliates and associates of such person, was the
Beneficial Owner of 20% or more of the aggregate number of Common
Shares of the Company issued and outstanding as of 5:00 p.m., New York
time, on June 28, 2004 shall be deemed to be an "Acquiring Person"
(provided, however, that if such person or any of its affiliates and
associates, after 5:00 p.m., New York time, on June 28, 2004, (A)
acquires, in one or more transactions, beneficial ownership of an
additional number of Common Shares which exceeds 0.25% of the
then-outstanding Common Shares and (B) beneficially owns after such
acquisition 25% or more of the aggregate number of Common Shares of the
Company then outstanding, then such person shall be deemed to be an
Acquiring Person), (iv) the issuance, or the right to issue, by the
Company of Common Shares to a person upon redemption by the Company of
the Series A Voting Convertible Preferred Stock, par value $.01, of the
Company ("Series A Preferred Share") shall not result in such person
becoming an Acquiring Person (provided, however, that if such person or
its affiliates shall (A) become the beneficial owner of 25% or more of
the Common Shares of the Company then outstanding by reason of such
issuance and (b) thereafter acquire, in one or more transactions,
beneficial ownership of an additional number of Common Shares which
exceeds 0.25% of the then outstanding Common Shares, then such persons
hall be deemed to be an Acquiring Person), (v) the issuance, or the
right to issue, by the Company of Common Shares to a person in
accordance with the anti-dilution provisions of Series A Preferred
Shares shall not result in a person becoming an Acquiring Person
(provided, however, that if such person or its affiliates shall (A)
become the beneficial owner of 25% or more of the Common Shares of the
Company then outstanding by reason of such issuance and (B) thereafter
acquire, in one ore more transactions, beneficial ownership of an
additional number of Common Shares which exceeds 0.25% of the then
outstanding Common Shares, then such person shall be deemed to be an
Acquiring Person) and (vi) if the Board of Directors of the Company
determines in good faith that a person who would otherwise be an
Acquiring Person 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, then such person
shall not be deemed to be an Acquiring Person for any purposes of the
Rights Agreement."
3. Except as expressly amended hereby, the Rights Agreement remains in
full force and effect.
4. This Amendment shall be deemed to be a contract made under the laws
of the State of Delaware, and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and performed entirely within such State.
5. This Amendment to the Rights Agreement shall be effective as of the
date hereof, and all references to the Rights Agreement shall, from and after
such time, be deemed to be references to the Rights Agreement as amended hereby.
6. This Amendment may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
SALTON, INC. UMB Bank, N.A.
By: By:
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Name: Name:
Title: Title:
