SECOND AMENDMENT TO RIGHTS AGREEMENT
This Second Amendment (the "Amendment"), dated as of October 28, 2002,
between MGIC Investment Corporation, a Wisconsin corporation (the "Company"),
and Xxxxx Fargo Bank Minnesota, National Association ("Xxxxx Fargo"), to the
Rights Agreement between the Company and Xxxxx Fargo (as successor Rights Agent
to U.S. Bank National Association ("U.S. Bank") (as successor to Firstar Bank
Milwaukee, N.A.)), dated as of July 22, 1999 and as amended by the First
Amendment to Rights Agreement, dated as of October 28, 2002 (as so amended, the
"Rights Agreement").
W I T N E S S E T H
WHEREAS, the Company and U.S. Bank previously entered into the Rights
Agreement, pursuant to which U.S. Bank was appointed to serve as the Rights
Agent; and
WHEREAS, in addition to serving as Rights Agent, U.S. Bank served as
transfer agent for the Company's Common Shares prior to the date hereof; and
WHEREAS, Section 21 of the Rights Agreement provides that, if the Rights
Agent and the transfer agent of the Common Shares are the same Person, the
appointment of a successor transfer agent for the Common Shares shall without
further action be the appointment of such Person as successor Rights Agent; and
WHEREAS, as of the date hereof, the Company is appointing Xxxxx Fargo as
transfer agent for the Company's Common Shares and is discharging U.S. Bank from
such duties and, as a result, Xxxxx Fargo has become the Rights Agent under the
Rights Agreement by operation of Section 21 thereof; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, under
circumstances set forth therein, (i) the Company may supplement or amend any
provision of the Rights Agreement without the approval of any holders of
certificates representing Common Shares of the Company, and (ii) upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of Section 27 of the Rights Agreement, the Rights Agent shall execute such
supplement or amendment; and
WHEREAS, the Company desires to amend the Rights Agreement as set forth
herein and direct Xxxxx Fargo as Rights Agent to execute this Amendment.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Direction to Rights Agent. The Company hereby directs Xxxxx
Fargo, in its capacity as Rights Agent and in accordance with the terms of
Section 27 of the Rights Agreement, to execute this Amendment.
Section 2. Certification of Appropriate Officer. The undersigned officer of
the Company, being duly authorized on behalf of the Company, hereby certifies on
behalf of the Company to Xxxxx Fargo that (a) he is an "appropriate officer" as
such term is used in Section 27 of the Rights Agreement, and (b) this Amendment
is in compliance with Section 27 of the Rights Agreement.
Section 3. Amendment of Rights Agreement. The Rights Agreement shall be
amended as follows:
(a) "Xxxxx Fargo Bank Minnesota, National Association" shall be
substituted throughout the Rights Agreement and Exhibits thereto for
"Firstar Bank Milwaukee, N.A.," including substituting all abbreviations
therefor.
(b) Section 1(a) of the Rights Agreement is amended by deleting "15%"
wherever it appears in Section 1(a) and substituting "the Designated
Percentage" in place thereof.
(c) Section 1(c) of the Rights Agreement is amended by deleting
Section 1(c) and substituting the following in place thereof:
"(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that
a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any
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security if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations of the Exchange Act and (2) is
not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of, or
with respect to, acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or disposing
of any securities of the Company. It is understood that if such
Person is an Investment Adviser, securities that are held in the
portfolio of an Investment Company managed by that Investment
Adviser shall be deemed to be covered by such an agreement,
arrangement or understanding and shall be deemed to be
beneficially owned by such Investment Adviser. "Investment
Adviser" shall mean an investment adviser registered under the
Investment Advisers Act of 1940, as amended (or any successor to
such Act), and principally engaged in the business of managing
investment funds for Persons other than that Investment Adviser,
and a broker-dealer registered under the Exchange Act (or any
successor to such Act) which is not required to register under
such Investment Advisers Act. "Investment Company" shall mean an
investment company registered under the Investment Company Act of
1940, as amended (or any successor to such Act).
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary,
(x) the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder;
(y) an Investment Adviser and the Affiliates of that Investment
Adviser shall not be deemed to beneficially own securities owned by
their Associates unless the Associate is also their Affiliate; and
(z) (A) for so long as the Conditions (as hereinafter defined)
are satisfied, (I) an Affiliate of an Investment Adviser shall not be
deemed to beneficially own securities beneficially owned by that
Investment Adviser; and (II) giving effect to clause (I), an
Investment Adviser shall not be deemed to beneficially own securities
beneficially owned by an Affiliate of that Investment Adviser. It is
understood that if an Investment Company managed by an Investment
Adviser is an Affiliate of that Investment Adviser, clause (II) shall
not affect the provisions of Section 1 (c) (iii), which are that such
Investment Adviser shall be deemed to beneficially own securities that
are held in the portfolio of such Investment Company.
(B) As used in this Section 1 (c) (z) and in Section 1 (f) (1):
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"Conditions" shall mean that (I) the securities covered by
Section 1 (c) (z) (A) were not acquired and are not held with a
purpose or the effect of changing or influencing control (within the
meaning of Rule 12b-2 under the Exchange Act) of the Company, or in
connection with or as a participant in any transaction having that
purpose or effect, (II) giving effect to Section 1 (c) (z) (A), the
aggregate amount of securities beneficially owned by an Investment
Adviser and by all Investment Advisers the investment advisory
activities of which are commonly managed shall be less than 17.5% of
the Common Shares of the Company then outstanding, and (III)
disregarding Section 1 (c) (z) (A), the aggregate amount of securities
beneficially owned by all Affiliates of an Investment Adviser shall be
less than 20% of the Common Shares of the Company then outstanding. If
the Condition in clause (I) is initially satisfied but ceases to be
satisfied, or if the Conditions in either of clauses (II) or (III) are
not satisfied, and as promptly as practicable after the first of such
Conditions ceases to be satisfied, a sufficient number of Common
Shares is divested by the Affiliate of the Investment Adviser or the
Investment Adviser so that none of such Persons is an Acquiring Person
any longer, then none of such Persons shall be deemed to have been an
Acquiring Person as a result of the failure to satisfy such
Conditions. The Conditions shall be applied separately to each
Investment Adviser and its Affiliates so that if another Investment
Adviser which is not an Affiliate of the first Investment Adviser
fails to satisfy the Conditions, such failure shall not affect the
satisfaction of the Conditions by the first Investment Adviser and its
Affiliates.
For purposes of Condition (II), the investment advisory activities of
Investment Advisers are "commonly managed" if any person (i) that is a
member of the investment committee or group that determines general
investment advise to be given to, or (ii) who determines general
investment advise to be given to, clients of one Investment Adviser,
is also a (i) member of the investment committee or group that
determines general investment advise to be given to, or (ii)
determines general investment advise to be given to, clients of
another Investment Adviser."
(d) A new Section 1(f)(1) is hereby added to read in its entirety as
follows:
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"(f) (1) "Designated Percentage" shall mean 15%, except that in the
case of an Investment Adviser and any Investment Company (as such
terms are defined in Section 1 (c) (iii) hereof) advised by that
Investment Adviser, for so long as the Conditions (including the
penultimate and final sentences of the definition of Conditions and
the immediately succeeding paragraph which determines when Investment
Advisers are "commonly managed") are satisfied, "Designated
Percentage" shall mean 17.5%. It is understood that for purposes of
this Section 1 (f) (1) the reference in Condition (I) to Section 1 (c)
(z) (A) shall be deemed to refer to securities beneficially owned by
such Investment Adviser or Investment Company, and that the
divestiture provisions of the penultimate sentence of the definition
of Conditions shall also apply to an Investment Company."
(e) Section 26 (b) of the Rights Agreement is hereby amended by
deleting the address for notice or demand to be given to the Rights Agent
by the Company or by the holder of any Right Certificate and substituting
in lieu therefor the following:
Xxxxx Fargo Bank Minnesota, National Association
Attn: Xxxxx Fargo Shareowner Services
Manager of Account Administration
000 Xxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xx. Xxxx, Xxxxxxxxx 00000-0000
(f) Section 27 of the Rights Agreement is hereby amended by deleting
"15%" in the second sentence and substituting "the Designated Percentage"
in place thereof.
Section 4. Effectiveness and Continued Effectiveness. In accordance with
the resolutions of the Company's Board of Directors adopted on October 24, 2002,
the amendments to Section 1 of the Rights Agreement set forth in Sections 3 (b),
(c), (d) and (f) above are effective as of the time at which such resolutions
were adopted. The parties hereto hereby acknowledge and agree that, except as
specifically supplemented and amended, changed or modified in Section 3 above,
the Rights Agreement, as previously amended to the date hereof, shall be
unaffected by this Amendment and remain in full force and effect in accordance
with its terms.
Section 5. Execution in Counterparts. 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
one and the same instrument.
Section 6. Defined Terms. Except as otherwise expressly provided herein, or
unless the context otherwise requires, all terms used but not defined herein
have the meanings assigned to them in the Rights Agreement.
Section 7. Governing Law. This Amendment shall be deemed to be a contract
made under the laws of the State of Wisconsin 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.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year above written.
MGIC INVESTMENT CORPORATION
By:
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Xxxxxxx X. Xxxx
Senior Vice President,
General Counsel and Secretary
XXXXX FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By:
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Its:
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