EXHIBIT 4
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AMENDMENT No. 1 TO RIGHTS AGREEMENT
THIS AMENDMENT No. 1, dated as of June 15, 1998 (this "Amendment"),
is between BAY NETWORKS, INC., a Delaware corporation (the "Company"), and
THE FIRST NATIONAL BANK OF BOSTON (the "Rights Agent").
Recitals
A. The Company and the Rights Agent are parties to a Rights
Agreement dated as of February 7, 1995 (the "Rights Agreement").
B. Pursuant to Section 27 of the Rights Agreement, the Company
and the Rights Agent desire to amend the Rights Agreement as set forth
herein.
Accordingly, the Rights Agreement is hereby amended as follows:
1. Amendment of Section 1(m). Section 1(m) of the Rights
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Agreement is amended to read in its entirety as follows:
"(m) 'Exempt Person' shall mean (i) the Company or any
Subsidiary (as such term is hereinafter defined) of the Company, in
each case including, without limitation, in its fiduciary capacity
or any employee benefit plan of the Company or of any Subsidiary of
the Company, or any entity or trustee holding Common Stock for or
pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company or
(ii) Northern Telecom Limited ("Nortel") and any of its Affiliates,
so long as neither Nortel nor any of its Affiliates is the
Beneficial Owner of any Common Stock other than (A) Common Stock
with respect to which Nortel and its Affiliates are the Beneficial
Owner solely by reason of the Agreement and Plan of Merger dated as
of June 15, 1998, as may be amended from time to time (the "Merger
Agreement") among the Company, Nortel and a wholly owned subsidiary
of Nortel or the Option Agreement, as may be amended from time to
time, referred to therein (the "Option Agreement"), (B) any other
Common Stock beneficially owned by Nortel and its Affiliates not in
excess of 1% of the then outstanding Common Stock and (C) any other
Common Stock beneficially owned by Affiliates of Nortel (other than
its Subsidiaries) not in excess of 5% of the then outstanding
Common Stock. Notwithstanding any provision of this Rights
Agreement to the contrary, no Distribution Date or Stock
Acquisition Date shall be deemed to have occurred, neither Nortel
nor any of its Affiliates shall be deemed to have become an
Acquiring Person and no holder of Rights shall be entitled to
exercise such Rights under, or be entitled to any rights pursuant
to Sections 3(a), 7(a), 11(a) or 13(a), of this Rights Agreement
solely by reason of (X) the approval, execution or delivery of the
Merger Agreement or the Option Agreement or (Y) the consummation of
the merger or other transactions contemplated by and pursuant to
the Merger Agreement or the consummation of the transactions
contemplated by the Option Agreement; provided that in the event
that Nortel or any of its Affiliates becomes the Beneficial Owner
of any Common Stock in any manner other than as set forth above,
the provisions of this sentence (other than this proviso) shall not
be applicable."
2. Amendment of Section 7(a). Paragraph (a) of Section 7 of the
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Rights Agreement is amended by (x) deleting the word "or" immediately
preceding clause (iv) therein, (y) adding the following new phrase
immediately following clause (iv) therein: "or (v) immediately prior to
the Effective Time (as defined in the Merger Agreement)" and (z) in the
parenthetical at the end of 7(a) removing "and" between (iii) and (iv)
and then adding "and (v)" after (iv).
3. Effectiveness. This Amendment shall be deemed effective as of
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June 15, 1998 as if executed by both parties on such date. Except as
amended hereby, the Rights Agreement shall remain in full force and
effect and shall be otherwise unaffected hereby.
4. Miscellaneous. This Amendment shall be deemed to be a contract
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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 to be made and performed entirely within such
state. This Amendment may be executed in any number of counterparts,
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. If any term, provision, covenant or
restriction of this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, illegal, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Amendment shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed as of the date first written above.
BAY NETWORKS, INC.
/s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Vice President & Corporate Treasurer
THE FIRST NATIONAL BANK OF BOSTON
/s/
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Name:
Title:
Dated: June 29, 1998
