Exhibit 2
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
Amendment No. 1, dated as of June 26, 2003 (the "Amendment"), between
NAUTICA ENTERPRISES, INC., a Delaware corporation (the "Company"), and MELLON
INVESTOR SERVICES LLC, a New Jersey limited liability company, as Rights Agent
(the "Rights Agent").
WHEREAS, the Company and the Rights Agent entered into a Rights Agreement,
dated as of November 2, 2001 (the "Rights Agreement");
WHEREAS, the Company and the Rights Agent desire to amend the Rights
Agreement in accordance with Section 28 of the Rights Agreement;
NOW, THEREFORE, in consideration of the premises and mutual agreements set
forth in the Rights Agreement and this Amendment, the parties hereby agree as
follows:
1. DEFINITION OF ACQUIRING PERSON. The first sentence of Section 1(a) of
the Rights Agreement is hereby amended to read in its entirety as follows:
"Acquiring Person" shall mean any Person (as such term is defined
below) who or which, together with all Affiliates and Associates (as such
terms are defined below) of such Person, shall be the Beneficial Owner (as
such term is defined below) of 15% or more of the Common Shares then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary
(as such term is defined below) of the Company or (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company or any
entity organized, appointed or established by the Company for or pursuant
to the terms of any such plan.
2. DEFINITION OF BENEFICIAL OWNERSHIP. The Rights Agreement is hereby
amended to add the following new sentence at the end of Section 1(c):
Notwithstanding anything to the contrary in this paragraph (c), for
purposes of determining whether a Person is an Acquiring Person, such
Person shall not be deemed the Beneficial Owner of and shall not be deemed
to beneficially own any and all Common Shares issued or issuable upon
exercise of options that are granted or first become exercisable after
June 26, 2003 pursuant to the terms of any stock option plan of the
Company approved or ratified by the affirmative votes of a majority of the
outstanding Common Shares entitled to vote at a duly commenced meeting of
the Company's stockholders.
3. NEW DEFINITIONS. Section 1 of the Rights Agreement is hereby amended to
add the following defined terms at the end thereof:
(dd) "Offeror" shall have the meaning set forth in Section 1(ee)
hereof.
(ee) "Qualifying Tender Offer" shall mean a tender offer by any
Person, alone or together with any of its Affiliates or Associates (such
Persons, individually and collectively, the "Offeror"), commenced and
mailed to the Company's stockholders, which tender offer meets all of the
following requirements:
(i) the tender offer must be made for any and all of the Common
Shares then outstanding (other than Common Shares beneficially owned by
the Offeror) solely for cash at the same price and at a price which must
be at least 25% greater than the highest closing price of the Common
Shares for the twenty (20) trading days immediately prior to the
commencement of the tender offer or, if applicable, any earlier
announcement of an intention by the Offeror to acquire the Company;
(ii) the tender offer must remain open for at least 120 days after
the Qualified Tender Offer Date (as such term is defined below) and shall
in no event be subject to the satisfaction of any conditions relating to
the business, financial condition, results of operations or prospects of
the Company other than such as are based on information publicly disclosed
by the Company, any financing conditions or any conditions relating to
approval of the Offeror's stockholders;
(iii) the Offeror must have retained an independent,
nationally-recognized investment banking firm and received such firm's
written opinion, dated as of the Qualifying Tender Offer Date, stating
that the price to be paid in the tender offer is fair from a financial
point of view to the Company's stockholders (other than the Offeror), and
a copy of such written opinion must have been included in the tender offer
materials sent to stockholders pursuant to the General Rules and
Regulations under the Exchange Act;
(iv) the Offeror must have (A) obtained firm written financing
commitments from recognized financing sources and/or have on hand cash or
cash equivalents, which financing commitments and/or cash or cash
equivalents shall be available at the time of the acceptance for purchase
of the shares pursuant to the tender offer (and the merger transaction
described in Section 24(b)(ii) hereof, if applicable) in an amount
sufficient to cover (x) the full amount of all financing necessary to
purchase all of the Common Shares then outstanding (other than Common
Shares beneficially owned by the Offeror) on a fully diluted basis
(treating all outstanding options, other rights to acquire Common Shares
and/or convertible securities as exercised or converted for this purpose)
and (y) all related expenses (including amounts necessary to refinance any
indebtedness of the Company or its subsidiaries which will become due upon
consummation of the Qualifying Tender Offer) and (B) set forth a copy of
any such financing commitments in the tender offer materials sent to
stockholders pursuant to the General Rules and Regulations under the
Exchange Act. Any such financing commitments shall be subject only to
customary terms and conditions, which shall in no event include conditions
requiring access by such financial institutions to non-public information
to be provided by the Company, conditions based on the accuracy of any
information concerning the Company, or conditions requiring the Company to
make any representations, warranties or covenants in connection with such
financing; and
(v) the Offeror must have irrevocably committed in writing to the
Company, and disclosed in the tender offer materials sent to stockholders
pursuant to the General Rules and Regulations under the Exchange Act, that
the Offeror shall not make any amendment to the original offer which
reduces the price or the number of Common Shares being sought, changes the
form of consideration offered or is in any other respect materially
adverse to the Company's stockholders.
(ff) "Qualifying Tender Offer Date" shall mean any date that a
tender offer described in Section 1(ee) hereof shall have been commenced
pursuant to the General Rules and Regulations under the Exchange Act, and
mailed to the Company's stockholders.
(gg) "Resolution" shall have the meaning set forth in Section
24(b)(i) hereof.
(hh) "Special Meeting" shall have the meaning set forth in Section
24(b)(i) hereof.
4. REDEMPTION. Section 24 of the Rights Agreement is hereby amended (i) to
delete existing paragraph (b), (ii) to add the following new paragraphs (b) and
(c), and (iii) to redesignate existing paragraph (c) as paragraph (d):
(b) Notwithstanding any other provision of this Agreement to the
contrary, the Rights shall be redeemed, without any approval of the Board
of Directors, under the following circumstances:
(i) In the event that a Qualifying Tender Offer is commenced by any
Offeror, the Board of Directors of the Company may, within 120 days after
the Qualifying Tender Offer Date, call a special meeting of stockholders
of the Company (the "Special Meeting") for the purpose of voting on a
resolution requesting that the Board of Directors keep the Rights
outstanding (the "Resolution"). The Special Meeting shall be held on a
date selected by the Board of Directors, which date shall be not more than
180 days after the Qualifying Tender Offer Date. If the Company's
stockholders at the Special Meeting vote in favor of the Resolution
pursuant to the standards set forth in this Section 24(b), then
notwithstanding any other provision of this Agreement to the contrary, the
Rights shall not be redeemed pursuant to this Section 24(b). The Board of
Directors shall set a date for determining the stockholders of record
entitled to notice of and to vote at the Special Meeting in accordance
with the Company's Certificate of Incorporation and By-laws and with
applicable law.
(ii) If (A) the Board of Directors does not, within 120 days after
the Qualifying Tender Offer Date, call a Special Meeting to be held within
the period set forth in Section 24(b)(i) hereof or (B) at the Special
Meeting, the Resolution does not receive the affirmative vote of a
majority of the Common Shares outstanding as of the record date for the
Special Meeting (excluding Common Shares beneficially owned by the
Offeror), then all of the Rights shall be redeemed at the Redemption
Price, effective immediately prior to the consummation of the purchase by
the Offeror of Common Shares tendered pursuant to the Qualifying Tender
Offer; PROVIDED, HOWEVER, that (w) the Offeror has not previously become
an Acquiring Person, (x) the Qualifying Tender Offer was commenced and
mailed to stockholders at least 120 days prior to the consummation of such
purchase; (y) as of such time, the Common Shares validly tendered and not
withdrawn (other than shares beneficially owned by the Offeror) represent
at least a majority of the then outstanding Common Shares on a fully
diluted basis (treating all outstanding options, other rights to acquire
Common Shares and/or convertible securities as exercised or converted for
this purpose); and (z) the Offeror has irrevocably committed and agreed in
writing to the Company to promptly, following acceptance of the shares
pursuant to the tender offer, complete a merger transaction with the
Company in which all Common Shares not tendered and purchased in the
Qualifying Tender Offer shall be converted into the right to receive an
amount in cash not less than the price paid or to be paid in the
Qualifying Tender Offer.
(iii) Nothing contained in this Section 24(b) shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary duties. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any Qualifying Tender Offer or
other offer, or to take any other action with respect to any Qualifying
Tender Offer or other offer (including, without limitation, the
commencement, prosecution, defense or settlement of any litigation and the
submission of additional or alternative offers or other proposals to the
Special Meeting) that the Board of Directors believes is necessary or
appropriate in the exercise of its fiduciary duties.
(iv) Nothing contained in this Section 24(b) shall be construed as
limiting or prohibiting the Company from proposing or engaging, at any
time, in any acquisition, disposition or other transfer of any securities
of the Company, any merger, consolidation or other business combination
involving the Company, any sale or other transfer of assets of the
Company, any liquidation, dissolution or winding-up of the Company, or any
other action by the Company.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 24, or the effectiveness of the redemption of the Rights
pursuant to paragraph (b) of this Section 24, and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price for each Right so held. The Company shall
promptly give public notice of any such redemption; PROVIDED, HOWEVER,
that the failure to give or any defect in such notice shall not affect the
validity of such redemption. Within 10 days after the action of the Board
of Directors ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 24, or the redemption of the Rights pursuant to
paragraph (b) of this Section 24, the Company shall give prompt written
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made.
5. MISCELLANEOUS. The term "Agreement" as used in the Rights Agreement
shall be deemed to refer to the Rights Agreement as amended hereby. The
amendments to the Rights Agreement set forth herein shall be effective as of the
date hereof and, except as set forth herein, the Rights Agreement shall remain
in full force and effect and shall be otherwise unaffected hereby. This
Amendment may be executed in any number of counterparts, and each of such
counterparts shall for all purposes be deemed an original, but all such
counterparts shall together constitute but one and the same instrument. Headings
of the several Sections of the Amendment are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof. This Amendment shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts to be made and performed
entirely within such State; PROVIDED, HOWEVER, that all provisions regarding the
rights, duties and obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
NAUTICA ENTERPRISES, INC.
By:/s/ XXXXX X. XXXXXX
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President &
Chief Financial Officer
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By:/s/ XXXXXXXXX XXXXX
-------------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Assistant Vice President
