AMENDMENT NO. 1
TO
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amendment No. 1 to Amended and Restated Rights Agreement is
entered into as of January 21, 2000, between Deluxe Corporation, a Minnesota
corporation (the "Company"), and Norwest Bank Minnesota, National Association, a
national banking association (the "Rights Agent").
RECITALS
WHEREAS, the Company and the Rights Agent are parties to an Amended and
Restated Rights Agreement dated as of January 31, 1997 (the "Rights Agreement");
WHEREAS, there is no Acquiring Person as defined in the Rights
Agreement.
WHEREAS, the Board of Directors of the Company has determined that an
amendment to the Rights Agreement pursuant to Section 27 of the Rights Agreement
is necessary and desirable, and the Company and the Rights Agent desire to
evidence such amendment in writing.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties agree as follows:
(a) Section 1(a) of the Rights Agreement is amended to delete clauses
(f) and (i).
(b) Section 1(p) of the Rights Agreement is amended to read as follows:
(p) "Permitted Offer" shall mean an acquisition of shares of
Common Stock pursuant to a tender offer or an exchange offer for all
outstanding shares of Common Stock determined by the Board of Directors
in good faith prior to the occurrence of an Acquisition Event after
receiving advice from one or more investment or financial advisers and
such other advisers as the Board of Directors deems necessary or
desirable to be (x) fair to the Company's shareholders and (y), to the
extent deemed appropriate, otherwise in the best interests of the
Company, its shareholders, employees, customers, suppliers and
creditors, and the communities in which the Company does business.
(c) Section 7(e) of the Rights Agreement is amended to read as follows:
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of an Acquisition Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person or
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an Associate or Affiliate of an Acquiring Person who becomes a
transferee after such Acquiring Person becomes such, and (iii) a
transferee of an Acquiring Person or an Associate or Affiliate of an
Acquiring Person who becomes a transferee prior to or concurrently with
such Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from such
Acquiring Person or Associate or Affiliate to or on behalf of holders
of equity interests in such Acquiring Person or Associate or Affiliate
or to any Person with whom such Acquiring Person or Associate or
Affiliate has any continuing oral or written plan, agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors concludes in good faith is a part
of an oral or written plan, agreement, arrangement or understanding
which has as a primary purpose or effect avoidance of this Section
7(e), shall become null and void without any further action, and any
holder of such Rights shall have no rights whatsoever with respect to
such Rights under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to insure that the provisions
of this Section 7(e) are complied with, but shall have no liability to
any holder of Rights or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates or Associates or the transferees thereof hereunder.
(d) Section 11(a)(iii) of the Rights Agreement is amended to read as
follows:
(iii) In the event that there shall not be sufficient
authorized but unissued shares of Common Stock of the Company to permit
the exercise in full of the Rights, the Company shall use its best
efforts to have the shareholders of the Company take all such action as
may be necessary to authorize additional shares of Common Stock of the
Company for issuance upon exercise of the Rights. If the Board of
Directors determines in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for issuance upon
exercise in full of the Rights, the Company may suspend the
exercisability of the Rights to the extent necessary (but not more than
90 days) for the Company to seek shareholder approval for the
authorization of such additional shares. In the event of any suspension
under this Section 11(a)(iii), the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at the time
such suspension is no longer in effect.
(e) Section 11(b), (c) and (d) of the Rights Agreement is amended to
read as follows:
(b) In the case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Stock (or
securities convertible into Common Stock) at a price per share of
Common Stock (or having a conversion price per share of Common Stock,
if a security convertible into Common Stock) less than the current
market price of one share of Common Stock on such record date (as
determined pursuant to Section 11(d)), the Purchase Price to be in
effect after such record date
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shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such
record date, plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase, at such
current market price, and the denominator of which shall be the number
of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible). In case such subscription
price may be paid by delivery of consideration part or all of which
shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent. Shares of Common Stock
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in
the event that such rights or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or cash or non-cash assets (other than (i) a regular
periodic cash dividend or (ii) a dividend payable in Common Stock, but
including any dividend payable in stock other than Common Stock) or
subscription rights or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the current market price of one share of the Common Stock on such
record date (as determined pursuant to Section 11(d)), less the fair
market value (as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the evidences of indebtedness or cash
or non-cash assets so to be distributed on, or of such subscription
rights or warrants applicable to, one share of the Common Stock, and
the denominator of which shall be such current market price of one
share of the Common Stock. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted
to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
market price" of one share of the Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days (as such
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term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current market price of one share
of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (i) a dividend or
distribution on such Common Stock payable in shares of such Common
Stock or securities convertible into shares of such Common Stock (other
than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of
30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current market
price" per one share of such Common Stock shall be appropriately
adjusted to take into account ex-dividend trading. The closing price
for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last sale price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use
or, if on any such day the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected in good faith by the Board of Directors. If on any such
day no market maker is making a market in the Common Stock, the fair
value of such shares on such day as determined in good faith by the
Board of Directors shall be used in lieu of the closing price for such
day. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business
or, if the Common Stock is not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Stock is
not publicly held or not so listed or traded, the "current market
price" of one share of such Common Stock shall be deemed to be the fair
value per share of such Common Stock as determined in good faith by the
Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(f) Section 11(m) of the Rights Agreement is amended to read as
follows:
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their sole
discretion the Board of Directors shall determine in good faith to be
advisable in order that any (i) combination or
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subdivision of the Common Stock, (ii) issuance wholly for cash of any
shares of Common Stock at less than the current market price of one
share of the Common Stock, (iii) issuance wholly for cash of securities
which by their terms are convertible into or exchangeable for shares of
Common Stock, (iv) stock dividends or (v) issuance of rights, options
or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Common Stock shall not be taxable to such
shareholders.
(g) Section 11(o) of the Rights Agreement is amended to read as
follows:
(o) The Company shall not, after the Stock Acquisition Date,
except as permitted by Section 23 or 27, take (or permit any Subsidiary
to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights
(h) Section 13(e) of the Rights Agreement is amended to read as
follows:
(e) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a Section 13 Event if
such Section 13 Event is consummated with a Person or Persons who
acquired Common Stock pursuant to a Permitted Offer (or a wholly owned
Subsidiary of any such Person or Persons), (ii) the price per share of
Common Stock offered in such Section 13 Event is not less than the
price per share of Common Stock paid to all holders of Common Stock
whose shares were purchased pursuant to a Permitted Offer and (iii) the
form of consideration being offered to the remaining holders of Common
Stock pursuant to such Section 13 Event is the same as the form of
consideration paid pursuant to such Permitted Offer. Upon consummation
of any such transaction contemplated by this Section 13(e), all Rights
hereunder shall expire.
(i) Section 14(a) of the Rights Agreement is amended to read as
follows:
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date, or to distribute Right
Certificates which evidence fractional Rights. The Company may, in lieu
of such fractional Rights, pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York
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Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on theprincipal
national securities exchange on which the Rights are listed or admitted
to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system
then in use or, if on any such day the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected in good faith by the Board of Directors. If on any such day no
market maker is making a market in the Rights, the fair value of the
Rights on such day as determined in good faith by the Board of
Directors shall be used in lieu of the closing price for such day.
(j) Section 16 of the Rights Agreement is amended to read as follows:
Section 16. Agreement of Right Holders. Every holder of Rights
by accepting the Rights consents and agrees with the Company and the
Rights Agent and with every other holder of Rights that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the
Common Stock;
(b) on or after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the office or offices of
the Rights Agent designated for such purposes, duly endorsed
or accompanied by a proper instrument of transfer together
with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request; and
(c) subject to Sections 6(a) and 7(f), the Company
and the Rights Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered
as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice
to the contrary.
Notwithstanding anything in this Agreement or the Rights to the
contrary, the Company, the Rights Agent and the Board of Directors
shall not have any liability to any holder of a Right or other Person
as a result of the inability of the Company or the Rights Agent to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
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regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining performance
of such obligation; provided, however, that the Company shall use its
best efforts to have any such order, decree or ruling lifted, dissolved
or overturned at the earliest possible time.
(k) Section 23(a) of the Rights Agreement is amended to read as
follows:
(a) The Board of Directors may, at its option, at any time
prior to the earlier of the Close of Business (i) on the Stock
Acquisition Date or (ii) on the Final Expiration Date, redeem all but
not less than all of the then outstanding Rights at a redemption price
of $.01 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date of this
Agreement (such redemption price being hereinafter referred to as the
"Redemption Price"). The Board of Directors and the Company shall not
have any liability to any Person as a result of the redemption of
Rights pursuant to the terms hereof.
(l) Section 27 of the Rights Agreement is amended to read as follows:
Section 27. Supplements and Amendments. The Company and the
Rights Agent shall from time to time, if the Company so directs,
supplement or amend this Agreement without the approval of any holders
of Right Certificates (or, prior to the Distribution Date, the
associated Common Stock certificates) in order (i) to cure any
ambiguity herein, (ii) to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein,
(iii) to extend the period of redemption provided for in Section 23 or
the Final Expiration Date, notwithstanding anything to the contrary
provided in clause (v), (iv) prior to the Distribution Date, to
otherwise amend or supplement any provision herein in any manner which
the Company may deem necessary or desirable to effectuate the purposes
of this Agreement or (v) following the Distribution Date, to otherwise
amend or supplement any provision herein in any manner which the
Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than
an Acquiring Person or any Affiliate or Associate thereof); provided,
however, that this Agreement may not be supplemented or amended in any
way (other than pursuant to clauses (i) and (ii) above) at any time
after the occurrence of an Acquisition Event and provided, further,
that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, a period relating to when
the Rights may be redeemed if at the time of such supplement or
amendment the Rights are not redeemable. Upon the delivery of a
certificate from an appropriate officer of the Company 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 unless the Rights Agent shall have determined
in good faith that such supplement or amendment would adversely affect
its interests under this Agreement. Prior to
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the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
(m) Section 30 of the Rights Agreement is amended to read as follows:
Section 30. Administration and Interpretation by Directors.
The Board of Directors 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 or the Company or
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to interpret this
Agreement and to make all determinations deemed necessary or advisable
for the administration of this Agreement. All such acts,
interpretations and determinations done or made by the Board of
Directors in good faith shall be final, conclusive and binding on the
Company, the Rights Agent and the holders of the Rights. Accordingly,
the Board of Directors shall not be liable to the holders of the Rights
or any other party for any determination made, action taken or action
omitted to be taken pursuant to the terms of this Agreement, if such
determination, action or omitted action was made or taken or omitted in
good faith.
(n) Section 31 of the Rights Agreement is amended to read as follows:
Section 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.
(o) Effectiveness. This Amendment shall be deemed effective as of the
date first written above, as if executed on such date. Except as amended hereby,
the Rights Agreement shall remain in full force and effect and shall be
otherwise unaffected hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, all as of the date and year first above written.
DELUXE CORPORATION
By /s/ John H. LeFevre
Its Senior Vice President
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
By /s/ Barbara M. Novak
Its Vice President
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