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EXHIBIT 1
FIRST AMENDMENT TO THE RIGHTS AGREEMENT
AND CERTIFICATION OF COMPLIANCE WITH SECTION 27 THEREOF
Pursuant to Section 27 of the Rights Agreement (the "Agreement")
dated as of May 13, 1998, between Advanced Fibre Communications, Inc., a
Delaware corporation (the "Company"), and BankBoston, N.A. (the "Rights Agent"),
the Company and the Rights Agent hereby amend the Agreement as of October __,
1998, as provided below.
1. Certain Definitions. Section 1 of the Agreement shall be
amended as follows:
(a) The phrase "(upon approval by a majority of the
Continuing Directors (as such term is hereinafter defined))" shall be
deleted from the definition of Acquiring Person.
(b) The definition of "Continuing Director" shall be
deleted.
2. Issue of Rights Certificates. Section 3(a) of the Agreement
shall be amended by deleting the phrase "upon approval by a majority of the
Continuing Directors" in the first sentence of the paragraph.
3. Form of Rights Certificates. Section 4(b)(iii)(B) of the
Agreement shall be amended by replacing the phrase "a majority of the
Continuing" with the phrase "the Board of".
4. Exercise of Rights; Purchase Price; Expiration Date of Rights.
Section 7(e)(iii)(B) shall be amended by replacing the phrase "the a majority of
the Continuing" with the phrase "the Board of".
5. Adjustment of Purchase Price, Number of Shares or Number of
Rights. Section 11 shall be amended as follows:
(a) The phrase, " upon approval by a majority of the
Continuing Directors", which appears four times in subsection (a)(iii)
and once in subsection (d)(ii), shall be deleted.
(b) The phrase "a majority of the Continuing" in the
second sentence of subsection (b) and the first sentence of subsection
(c) shall be replaced with the phrase "the Board of".
(c) The phrase "a majority of the Continuing Directors" in
the second sentence of subsection (d)(i) shall be replaced with the
phrase "the Board of Directors of the Company".
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6. Fractional Rights and Fractional Shares. Section 14 (a) shall
be amended by deleting the phrase "upon approval by a majority of the Continuing
Directors," in the last sentence of the paragraph.
7. Issuance of New Rights Certificates. Section 22 shall be
amended by deleting the phrase "upon approval by a majority of the Continuing
Directors," in the first and second sentences of the paragraph.
8. Redemption and Termination. Section 23 shall be amended as
follows:
(a) The phrase "a majority of the Continuing Directors" in
the first and last sentences of subsection (a) shall be replaced with
the phrase "the Board of Directors of the Company".
(b) The phrase "a majority of the Continuing" in the first
sentence of subsection (b) shall be replaced with the phrase "the Board
of".
(c) The phrase "a majority of the Continuing Directors" in
the third sentence of subsection (b) shall be replaced with the phrase
"the Board of Directors of the Company".
9. Exchange. Section 24 shall be amended as follows:
(a) The phrase "a majority of the Company's Continuing Directors"
in the first sentence of subsection (a) shall be replaced with the phrase "the
Board of Directors of the Company".
(b) The phrase "a majority of the Continuing Directors" in the
first sentence of subsection (c) shall be replaced with the phrase "the Board of
Directors of the Company".
(c) The phrase, " upon approval by a majority of the Continuing
Directors," in the second sentence of subsection (c) shall be deleted.
10. Supplements and Amendments. Section 27 shall be amended by
deleting the phrase, " upon approval by a majority of the Continuing Directors,"
in the first and second sentences of the Section.
11. Determinations and Actions by the Board of Directors. Section
29 shall be amended as follows:
(a) The designation "(a)" at the beginning of Section
29 shall be deleted.
(b) The phrase "or the Continuing Directors" in the last
sentence of Section 29 shall be deleted.
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12. Severability. Section 31 shall be amended by deleting the
phrase ", upon approval by a majority of the Continuing Directors,".
The undersigned officer of the Company, being an appropriate
officer of the Company and authorized to do so by resolution of the board of
directors of the Company dated as of October __, 1998, hereby certifies to the
Rights Agent that these amendments are in compliance with the terms of Section
27 of the Agreement.
ADVANCED FIBRE COMMUNICATIONS, INC.
By:_________________________________
Name:
Title:
Acknowledged and Agreed:
BANK BOSTON, N.A.,
as Rights Agent
By:_______________________________
Name:
Title:
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