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EXHIBIT 4.1.2
AMENDMENT TO RIGHTS AGREEMENT
This Amendment (this "AMENDMENT") to Rights Agreement (the "RIGHTS
AGREEMENT") is effective as of _______ __, 1999 by and between Western Digital
Corporation, a Delaware corporation (the "CORPORATION") and American Stock
Transfer & Trust Company, a New York corporation (the "RIGHTS AGENT").
Capitalized terms used herein but not defined herein shall have their defined
meanings set forth in the Rights Agreement.
BACKGROUND
A. The Corporation and the Rights Agent entered into the Rights Agreement
effective as of October 15, 1998.
B. The Rights Agreement provides that the Continuing Directors have certain
powers to the exclusion of other directors.
C. In response to a recent ruling by the Delaware Supreme Court, the
parties wish to amend the terms of the Rights Agreement to eliminate the concept
and powers of the Continuing Directors.
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
1. Section 1(j) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"[This Section intentionally left blank.]"
2. Section 1(g)(g) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"[This Section intentionally left blank.]"
3. Section 11(a)(ii) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
(ii) Subject to Section 23(a) and Section 24, in the event any Person
(other than an Exempt Person), 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, unless the event causing the 15% threshold to be crossed is a
transaction set forth in Section 13(a), 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
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terms determined by the Board of Directors of the Corporation after receiving
advice from one or more investment banking firms, to be (a) at a price which is
fair to stockholders of the Corporation (taking into account all factors which
such members of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Corporation or its assets were sold on
an orderly basis designed to realize maximum value) and (b) otherwise in the
best interests of the Corporation and its stockholders, then, proper provision
shall be made so that each holder of a Right (except as provided below and in
Section 7(e)) 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 one-thousandths of a share of Preferred
Stock, such number of shares of Common Stock of the Corporation as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
then number of one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such 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)) per share of Common Stock on the date of such
occurrence (such number of shares is herein called the "Adjustment Shares");
provided that the Purchase Price and the number of Adjustment Shares shall be
further adjusted as provided in this Agreement to reflect any events occurring
after the date of such occurrence; and provided, further, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13, then only the provisions of Section 13
shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
4. Section 23(a) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"(a) The Board of Directors of the Corporation may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth (10th) day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth
(10th) day following the Record Date), subject to extension as provided in
Section 27 or (ii) the Close of Business on the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.001 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "REDEMPTION
PRICE"). Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the occurrence of an event described
in Section 11(a)(ii) until such time as the Corporation's right of redemption
hereunder has expired. The Corporation may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the Current Market Price, as
defined in Section 11(d)(i), of the Common Stock at the time of redemption) or
any other form of consideration deemed appropriate by the Board of Directors.
Such redemption of the Rights by the Corporation may be made effective at such
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish."
5. Section 24(a) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
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"(a) Subject to applicable laws, rules and regulations, and subject to
subsection (c) below, at any time after the occurrence of a Triggering Event,
the Board of Directors of the Corporation, may cause the Corporation to exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section 7(e))
for Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "RATIO OF EXCHANGE"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such exchange
at any time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding."
6. Section 24(c) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"(c) In the event that there shall not be sufficient Common Stock
authorized but unissued to permit any exchange of Rights as contemplated in
accordance with Section 24(a), the Corporation shall either take such action as
may be necessary to authorize additional shares of Common Stock for issuance
upon exchange of the Rights or alternatively, at the option of the Board of
Directors, with respect to each Right (i) pay cash in an amount equal to the
Current Value (as hereinafter defined), in lieu of issuing Common Stock in
exchange therefor, or (ii) issue debt or equity securities or a combination
thereof, having a value equal to the Current Value, in lieu of issuing Common
Stock in exchange for each such Right, where the value of such securities shall
be determined by a nationally recognized investment banking firm selected by the
Board of Directors, or (iii) deliver any combination of cash, property, Common
Stock and/or other securities having a value equal to the Current Value in
exchange for each Right. For purposes of this Section 24(c) only, the "Current
Value" shall mean the product of the current per share market price of Common
Stock (determined pursuant to Section 11(d) on the date of the occurrence of the
event described above in subparagraph (a)) multiplied by the number of shares of
Common Stock for which the Right otherwise would be exchangeable if there were
sufficient shares available. To the extent that the Corporation determines that
some action need be taken pursuant to clauses (i), (ii), or (iii) of this
Section 24(c), the Board of Directors may temporarily suspend the exercisability
of the Rights for a period of up to sixty (60) days following the date on which
the event described in Section 24(a) shall have occurred, in order to seek any
authorization of additional Common Stock and/or to determine the appropriate
form of distribution to be made pursuant to the above provision and to determine
the value thereof. In the event of any such suspension, the Corporation shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended."
7. Section 24(e) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"(e) The Corporation may, at the option of the Board of Directors, at any
time before any Person has become an Acquiring Person, exchange all or part of
the then outstanding Rights for rights of substantially equivalent value, as
determined reasonably and with good faith by the Board of Directors, based upon
the advice of one or more nationally recognized investment banking firms."
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8. Section 24(f) is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"(f) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (e) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of rights in exchange therefore as has been determined
by the Board of Directors in accordance with subsection (e) above. The
Corporation shall give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Corporation shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the transfer agent for the Common Stock of the
Corporation. 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
exchange will state the method by which the exchange of the Rights will be
effected."
9. Section 27 is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"27. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date and subject to the penultimate sentence of
this Section 27, the Board of Directors of the Corporation may, in its sole and
absolute discretion and the Rights Agent shall, if the Board of Directors so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock,
whether or not such supplement or amendment is adverse to any holders of Rights.
From and after the Distribution Date, and subject to the penultimate sentence of
this Section 27, the Board of Directors may, and the Rights Agent shall, if the
Board of Directors so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions hereunder, (iii) shorten
or lengthen any time period hereunder, or (iv) otherwise change or supplement
the provisions hereunder in any manner which the Board of Directors may deem
necessary or desirable and which shall not materially and adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of any such Person); provided, however, this
Agreement may not be supplemented or amended after the Distribution Date to (A)
make the Rights again redeemable after the Rights have ceased to be redeemable,
or (B) change any other time period unless such change is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to the
holders of Rights (other than any Acquiring Person and its Associates or
Affiliates). Upon the delivery of a certificate from an appropriate officer of
the Corporation which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Prior to the Distribution Date, the interests of
the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock."
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10. Section 29 is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"29. DETERMINATION 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 Corporation shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board of Directors of the
Corporation or to the Corporation, 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, but not limited to, a determination to redeem or not
redeem the Rights, or to amend this Agreement). All such actions, 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
of Directors of the Corporation in good faith, shall (x) be final, conclusive
and binding on the Corporation, the Rights Agent, the holders of the Rights and
all other parties, and (y) not subject any member of the Board of Directors to
any liability to the holders of the Rights or to any other Person."
11. Section 31 is hereby deleted in its entirety and the following is
inserted in lieu thereof:
"31. SEVERABILITY.
If any term, provision, covenant or restriction of this 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 Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Corporation
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23, if lapsed, shall be reinstated
and shall not expire until the Close of Business on the tenth (10th) Business
Day following the date of such determination by the Board of Directors of the
Corporation."
12. Exhibit C is hereby deleted in its entirety and Exhibit C attached
hereto and incorporated herein by reference is inserted in lieu thereof.
13. Except as expressly set forth in this Amendment all other terms of the
Rights Agreement shall remain in full force and effect.
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14. This Amendment shall be governed by and construed in accordance with
the laws of the State of Delaware applicable to contracts made and to be
performed entirely within such State.
15. 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 but one and the same instrument.
IN WITNESS WHEREOF, the Corporation and the Rights Agent have executed this
Amendment effective as of the date first above written.
THE CORPORATION:
WESTERN DIGITAL CORPORATION
A DELAWARE CORPORATION
By:
--------------------------------------
Michael A. Cornelius
Vice President, Law and Administration
and Secretary
THE RIGHTS AGENT:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
A NEW YORK CORPORATION
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
OF
WESTERN DIGITAL CORPORATION
On September 10, 1998 (the "RIGHTS DIVIDEND DECLARATION DATE") the Board of
Directors of Western Digital Corporation (the "CORPORATION") declared a dividend
of one Right (a "RIGHT") for each outstanding share of Corporation Common Stock
to be distributed to stockholders of record at the close of business on November
30, 1998. Each Right entitles the registered holder to purchase from the
Corporation one one-thousandth of a share (a "UNIT") of Series A Junior
Participating Preferred Stock (the "PREFERRED STOCK") at a "PURCHASE PRICE" of
$150, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "RIGHTS AGREEMENT") between the Corporation and
American Stock Transfer & Trust Company, as Rights Agent.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
November 19, 1998. A copy of the Rights Agreement is available free of charge
from the Corporation. This summary description of the Rights does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference. A more detailed summary is
also attached to the Form 8-A and to the Corporation's current report on Form
8-K filed with the Securities and Exchange Commission in connection with the
adoption of the rights plan, and can be viewed on the Securities and Exchange
Commission's web site at www.sec.gov or obtained from the Corporation upon
request.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed.
Until the Distribution Date (as described below), (i) the Rights will be
evidenced by the Common Stock certificates and will be transferred with and only
with such Common Stock certificates, (ii) new Common Stock certificates issued
after November 30, 1998 will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any certificates
for Common Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on October 14, 2008, unless earlier redeemed or
exchanged by the Corporation as described below.
The Rights will separate from the Common Stock and a Distribution Date will
occur (the "DISTRIBUTION DATE") upon the earlier of 10 days (or such longer time
as may be determined by the Corporation's board) following (i) a public
announcement (or determination by the Corporation's board) that a person or
group of affiliated or associated persons (an "ACQUIRING PERSON") has acquired,
or obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock (the "STOCK ACQUISITION DATE"), or (ii) the
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commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 15% or more of such outstanding shares of Common
Stock.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that on or at any time following the Rights Dividend
Declaration Date, a person becomes the beneficial owner of more than 15% of the
then outstanding shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock which the board of directors determines to be
fair to and otherwise in the best interests of the Corporation and its
stockholders), then each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Corporation) having a value equal to two
times the Purchase Price of the Right. Rights are exercisable following the
occurrence of the foregoing only after such time as the Rights are no longer
redeemable by the Corporation, as set forth below. Notwithstanding any of the
foregoing, following the occurrence of the event set forth in this paragraph,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void.
In the event that, at any time following the Stock Acquisition Date, (i)
the Corporation is acquired in a merger or other business combination
transaction in which the Corporation is not the surviving corporation or in
which the Corporation's outstanding Common Stock is exchanged for cash, stock or
other property (other than a merger which follows an offer for all outstanding
shares described in the preceding paragraph), or (ii) 50% or more of the
Corporation's assets or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the Purchase Price of the
Right.
The Purchase Price payable, and the number of Units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution, as set forth in the Rights
Agreement. With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Rights, fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share), or
fractional shares of Common Stock will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Rights,
Preferred Stock, or Common Stock, respectively, on the last trading date prior
to the date of exercise.
In general, the Corporation may redeem the Rights in whole, but not in
part, at a price of $.001 per Right, at any time until ten days following the
Stock Acquisition Date (or such later date as may be determined by the
Corporation's board). Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $.001 redemption price.
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At any time after a person becomes beneficial owner of 15% or more of the
Common Stock then outstanding, and prior to the first date upon which that
person becomes the beneficial owner of at least 50% of the outstanding Common
Stock, the Corporation may, by majority vote of the board of directors, exchange
some or all of the outstanding Rights (other than those that have become void)
for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted for splits, dividends, and similar transactions
(the "RATIO OF EXCHANGE"). Immediately upon the action of the Board of Directors
ordering the exchange of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the number of Common Shares
equal to the Ratio of Exchange.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.
Other than those provisions relating to the redemption price of the Rights,
any of the provisions of the Rights Agreement may be supplemented or amended by
the Board of Directors prior to the Distribution Date, without approval of the
Rights holders, whether or not a supplement or amendment is adverse to the
Rights holders. After the Distribution Date, the provisions of the Rights
Agreement (other than the provisions relating to the redemption price or the
final expiration date of the Rights) may be amended by the Board of Directors in
order to make changes which do not materially and adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring Person),
provided, however, that the Rights Agreement may not be amended to (i) make the
Rights again redeemable after the Rights have ceased to be redeemable, or (ii)
change any other time period unless such change is for the benefit of the
holders (excluding any Acquiring Person).
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