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AMENDMENT NO. 3
TO RIGHTS AGREEMENT
THIS AMENDMENT NO. 3 TO RIGHTS AGREEMENT (this "Amendment"),
dated as of January 26, 1997, is entered into by and between Measurex
Corporation, a Delaware corporation (the "Company"), and Bank of New York, a New
York banking corporation (the "Rights Agent").
WHEREAS, the Company and the Rights Agent are party to that
certain Rights Agreement dated as of December 14, 1988, as amended by Amendment
No. 1 dated as of May 30, 1990, and Amendment No. 2 dated as of September 16,
1991;
WHEREAS, the Board of Directors of the Company has determined
that it is in the best interests of the Company to enter into that certain
Agreement and Plan of Merger (the "Merger Agreement") dated as of January 26,
1997 with Honeywell Inc., a Delaware corporation ("Parent") and Honeywell
Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of
Parent (the "Purchaser"), pursuant to which Parent has agreed to acquire the
Company upon the terms and subject to the conditions set forth therein; and
WHEREAS, in connection with entering into the Merger
Agreement, the Company wishes to ensure that neither Parent nor Purchaser will
be deemed an "Acquiring Person" under the Rights Agreement by virtue of the
execution and consummation of the transactions contemplated by the Merger
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
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SECTION 1. Amendments to Rights Plan.
(a) Section 1 (a) of the Rights Agreement is hereby amended to
read in its entirety as follows:
(a) "Acquiring Person" shall mean any Person (as such
term is 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
such term is hereinafter defined) of 20% or more of the Common
Shares of the Company then outstanding, but shall not include:
(i) the Company, any Subsidiary (as such term is hereinafter
defined) of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such
plan; or (ii) Honeywell Inc. or Honeywell Acquisition Corp.,
solely to the extent that such Persons acquire Beneficial
Ownership of Common Shares of the Company in accordance with
the provisions of the Agreement and Plan of Merger by and
among Honeywell Inc., Honeywell Acquisition Corp. and Measurex
Corporation dated as of January 26, 1997, or any amendment
thereto (the "Merger Agreement"). Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the
result of any recapitalization of the Company or any other
action taken by the Company or its Affiliates or Associates,
including, without limitation, any repurchase of voting
securities by the Company, which has the effect of increasing
the proportionate number of shares beneficially owned by such
Person to more than 20% of the Common Shares of the Company
then outstanding; provided, however, that if any Person shall
become the Beneficial Owner of 20% or more of the Common
Shares of the Company then outstanding by reason of the taking
of such action or series of actions by the Company or such
Affiliates or Associates and such Person shall, after such
action or series of actions, increase its beneficial ownership
of Common Shares of the Company, then such Person shall be
deemed to be an "Acquiring Person."
(b) Section 1 (n) of the Rights Agreement is hereby amended to
read in its entirety as follows:
(n) A "Trigger Event" shall be deemed to have
occurred upon any Person (other than the Company, any
Subsidiary of the
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Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with
all Affiliates and Associates of such Person, becoming the
Beneficial Owner of 20% or more of the Common Shares of the
Company then outstanding. Notwithstanding the foregoing, no
Trigger Event shall be deemed to have occurred as the result
of the acquisition of Common Shares by the Company which, by
reducing the number of 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 in the event that a
Person shall become the Beneficial Owner of 20% or more of the
Common Shares of the Company then outstanding by reason of
share purchases by the Company, a Trigger Event shall be
deemed to have occurred upon such Person, after such share
purchases by the Company, becoming the Beneficial Owner of any
additional Common Shares of the Company. Notwithstanding the
foregoing, in no event shall any acquisition or ownership of
the Common Shares of the Company by Honeywell Inc. or
Honeywell Acquisition Corp. in accordance with the provisions
of the Merger Agreement constitute a Trigger Event for purpose
of this Agreement.
(c) Section 3 (a) of the Rights Agreement is hereby amended to
read in its entirety as follows:
(a) Until the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth business day (or
such later date as may be determined by action of the Board of
Directors 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, or any entity
specifically excluded from the definition of Acquiring Person
set forth in this Agreement, as amended) 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, or any entity specifically
excluded from the definition of Acquiring Person set forth in
this Agreement, as amended) to commence, a tender or exchange
offer
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the consummation of which would result in any Person becoming
the Beneficial Owner of Common Shares aggregating 20% or more
of the then outstanding Common Shares (including any such date
which 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) 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 countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, 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, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(d) Section 7 (a) of the Rights Agreement is hereby amended to
read in its entirety as follows:
(a) The registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the
Purchase Price for each one one-hundredth of a Preferred Share
as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on December 29, 1998
(the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date"), (iii) the Shares have been accepted for
payment pursuant to the Offer, as such terms are defined in
the Merger Agreement, or (iv) the time at which such Rights
are exchanged as provided in Section 24 hereof.
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SECTION 2. Miscellaneous.
(a) This Amendment may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
(b) This Amendment shall be governed by and interpreted in
accordance with the internal laws of the State of Delaware.
IN WITNESS WHEREOF, the Company and the Rights Agent have
caused this Amendment to be executed as of the date and year first above
written.
COMPANY
MEASUREX CORPORATION
Attest:
By:_______________________________ By:_____________________________________
Title: Title:
RIGHTS AGENT
BANK OF NEW YORK,
a New York banking corporation
Attest:
By:_______________________________ By:_____________________________________
Title: Title:
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