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Exhibit 1
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AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT, dated as of June 4, 1998, to the Rights Agreement,
dated as of March 14, 1997, (the "Rights Agreement"), between Advanta Corp. (the
"Company") and ChaseMellon Shareholder Services, L.L.C. as Rights Agent (the
"Rights Agent").
The Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement. Pursuant to Section 26 of the Rights
Agreement, the Company and the Rights Agent may from time to time supplement or
amend the Rights Agreement in accordance with the provisions of Section 26
thereof. All acts and things necessary to make this Amendment a valid agreement,
enforceable according to its terms, have been done and performed, and the
execution and delivery of this Amendment by the Company and the Rights Agent
have been in all respects duly authorized by the Company and the Rights Agent.
In consideration of the foregoing and the mutual agreements
set forth herein, the parties have hereto agreed as follows:
1. Section 1 of the Rights Agreement is hereby modified and
amended by deleting paragraph (g).
2. Section 11(a)(ii) of the Rights Agreement is hereby
amended to read in its entirety as follows:
(ii) In the event any Person (other than an Exempted Person,
the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the
Company, or any Person organized, appointed or established by
the Company for or pursuant to the terms of any such plan),
alone or together with its Affiliates and Associates, shall,
at any time after the Rights Dividend Declaration Date, become
the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding or 15% or more of the shares of Class A
Common Stock then outstanding, unless the event causing the
15% threshold to be crossed is a transaction set forth in
Section 13(a) hereof or is an acquisition of shares of Common
Stock pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock at a price and on terms
determined by at least 75% of the members of the Board of
Directors of the Company, after receiving advice from one or
more investment banking firms, to be (a) at a price which is
fair to stockholders (taking into account all factors which
such members of the Board deem relevant, including, without
limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best
interests of the Company and its
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stockholders (hereinafter a "Qualifying Offer"), then,
promptly following the occurrence of such event, proper
provision shall be made so that (A) each holder of a Class A
Right (except as provided below and in Section 7(e) hereof)
shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with
the terms of this Agreement, in lieu of a number of one
ten-thousandths of a share of Preferred Stock, such number of
shares of Class A Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current
Purchase Price by the then number of one ten- thousandths of a
share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes
of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of
Class A Common Stock on the date of such first occurrence
(such number of shares, the "Class A Adjustment Shares") and
(B) each holder of a Class B Right (except as provided below
and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu
of a number of one ten-thousandths of a share of Preferred
Stock, such number of shares of Class B Common Stock of the
Company as shall equal the result obtained by (X) multiplying
the then current Purchase Price by the then number of one
ten-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (Y) dividing that
product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the
current market price (determined pursuant to Section 11(d)
hereof) per share of Class B Common Stock on the date of such
first occurrence (such number of shares, the "Class B
Adjustment Shares" and, together with the Class A Adjustment
Shares, the "Adjustment Shares").
3. Section 23(a) of the Rights Agreement is hereby amended by
deleting the phrase "provided, however, if the Board of Directors of the Company
authorizes redemption of the Rights in either of the circumstances set forth in
clauses (i) and (ii) below, then there must be Continuing Directors then in
office and such authorization shall require the concurrence of a majority of
such Continuing Directors:" and substituting it with "provided, however, if the
Board of Directors of the Company authorizes redemption of the Rights in either
of the
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circumstances set forth in clauses (i) and (ii) below, then such authorization
shall require the concurrence of at least 75% of the members of the Board of
Directors of the Company:"
4. Section 26 of the Rights Agreement is hereby amended by
deleting the text of clause (iii) and substituting it with " (iii) to shorten or
lengthen any time period hereunder (which lengthening or shortening, following
the first occurrence of an event set forth in clauses (i) and (ii) of the first
proviso to Section 23(a) hereof, shall require the concurrence of at least 75%
of the members of the Board of Directors of the Company) or"
5. Section 27(a)(ii) of the Rights Agreement is hereby
amended to read in its entirety as follows:
(ii) Notwithstanding anything contained in this Section 27(a)
to the contrary, the Company may not exchange any Rights
pursuant to this Section 27(a) unless such exchange is
approved by at least 75% of the members of the Board of
Directors of the Company.
6. Section 29 of the Rights Agreement is hereby amended to
read in its entirety as follows:
Determinations and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time,
including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company (with, where specifically
provided for herein, the concurrence of at least 75% of the
members of the Board of Directors of the Company) shall have
the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to
the Board (with, where specifically provided for herein, the
concurrence of at least 75% of the members of the Board of
Directors of the Company) or to the Company, or as may be
necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power
to (i) interpret the provisions of this Agreement, and (ii)
make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement).
All such actions,
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calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board (with,
where specifically provided for herein, the concurrence of at
least 75% of the members of the Board of Directors of the
Company) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights.
7. Section 31 of the Rights Agreement is hereby modified and
amended by deleting the last sentence thereof and replacing it with the
following:
Without limiting the foregoing, if any provision requiring a
super majority of the Board of Directors of the Company to act
is held by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such
determination shall then be made by the Board of Directors of
the Company in accordance with applicable law and the
Company's Restated Certificate of Incorporation and By-Laws.
8. Exhibit B (Form of Rights Certificate) to the Rights
Agreement is hereby modified and amended by deleting the last sentence of the
sixth paragraph and replacing it with the following:
Under certain circumstances set forth in the Rights Agreement,
the decision to redeem the Rights shall require the
concurrence of at least 75% of the members of the Board of
Directors of the Company).
9. This Amendment to the Rights Agreement shall be deemed to
be a contract 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 made and to be performed entirely within such state.
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10. This Amendment to the Rights Agreement 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
but one and the same instrument. Terms not defined herein shall, unless the
context otherwise requires, have the meanings assigned to such terms in the
Rights Agreement.
11. In all respects not inconsistent with the terms and
provisions of this Amendment to the Rights Agreement, the Rights Agreement is
hereby ratified, adopted, approved and confirmed. In executing and delivering
this Amendment, the Rights Agent shall be entitled to all the privileges and
immunities afforded to the Rights Agent under the terms and conditions of the
Rights Agreement.
12. If any term, provision, covenant or restriction of this
Amendment to the Rights Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment to the Rights
Agreement, and of the Rights Agreement, shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the paries hereto have caused this
Amendment to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: ADVANTA CORP.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxxxxxx X. Xxx
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Name: Xxxxx Xxxxx Name: Xxxxxxxxx X. Xxx
Title: Assistant Secretary Title: Senior Vice President,
Secretary and General
Counsel
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Xxxxx XxXxxxxxx By: /s/ Xxxxxx Xxxx
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Name: Xxxxx XxXxxxxxx Name: Xxxxxx Xxxx
Title: Assistant Vice President Title: Assistant Vice President
