AMENDMENT TO RIGHTS AGREEMENT
Amendment No. 3 (this "Amendment"), dated as of May 12,
1997, to the Rights Agreement, dated as of January 30, 1986, as amended on
December 27, 1995, and May 9, 1997 (the "Rights Agreement"), between
Dynamics Corporation of America, a New York corporation (the "Company"),
and BankBoston (formerly The First National Bank of Boston), a national
banking association (the "Rights Agent"). All capitalized terms not
otherwise defined herein shall have the meaning ascribed to such term in
the Rights Agreement.
WHEREAS, the Company, CTS Corporation, an Indiana
corporation ("Parent"), and CTS First Acquisition Corp., a New York
corporation and a wholly-owned subsidiary of Parent ("Sub"), have proposed
to enter into an Agreement and Plan of Merger (the "Merger Agreement")
pursuant to which, among other things, (i) Sub will commence a tender offer
to acquire shares of the Company's outstanding common stock (the "Offer")
and (ii) thereafter Sub will merge into the Company (the "Merger") and each
outstanding share of common stock of the Company will be converted into the
right to receive shares of common stock of Parent, each subject to the
terms and conditions of the Merger Agreement;
WHEREAS, the Company and the Rights Agent desire to amend
the Rights Agreement to render the Rights inapplicable to the Offer, the
Merger and the other transactions contemplated by the Merger Agreement;
WHEREAS, the Company deems the following amendment to the
Rights Agreement to be necessary and desirable and in the best interests of
the holders of Rights Certificates; and
WHEREAS, Section 26 of the Rights Agreement permits the
Company from time to time to supplement and amend the Rights Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
agreements, provisions and covenants herein contained, the parties agree as
follows:
1. Section 1(i) of the Rights Agreement is hereby amended to
read in its entirety as follows:
"(i) "Expiration Date" shall mean the earliest to occur of
(a) February 14, 2006, or such other date to which the Rights may
be extended pursuant to Section 7 hereof, (b) the date on which the
Rights are redeemed as provided in Section 23 hereof and (c)
immediately prior to the Effective Time of the Merger (each as
defined in the Agreement and Plan of Merger, dated as of May 9,
1997, including any amendment or supplement thereto (the "Merger
Agreement"), among CTS Corporation ("Parent"), CTS First
Acquisition Corp. and the Company)."
2. Section 1 of the Rights Agreement is hereby amended by
adding the following new paragraph at the end of Section 1:
"Notwithstanding anything in this Agreement that might
otherwise be deemed to the contrary, none of Parent, any of its
Affiliates or Associates or any of its permitted assignees or
transferees shall be deemed an Acquiring Person and neither a
Distribution Date nor a Stock Acquisition Date shall be deemed to
occur, in each such case, by reason of the approval, execution or
delivery of the Merger Agreement, the announcement or completion
of the Offer (as defined in the Merger Agreement), the consumma-
tion of the Merger (as defined in the Merger Agreement) or the
consummation of the other transactions contemplated by the Merger
Agreement."
3. The Rights Agreement shall not otherwise be supplemented
or amended by virtue of this Amendment, but shall remain in full force and
effect. This Amendment may be executed in one or more counterparts, all of
which shall be considered one and the same amendment and each of which
shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the day and year first above written.
DYNAMICS CORPORATION OF AMERICA
By /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President,
General Counsel and
Secretary
BANKBOSTON, N.A. (Formerly
The First National Bank of
Boston)
By /s/ Xxxxxxxx X. Xxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxx
Title: Authorized Signatory
