EXHIBIT 4.2
AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT No. 1, dated as of December 21, 2000, to the Rights
Agreement, dated as of August 17, 1994, by and between Litton Industries,
Inc. (the "Company") and The Bank of New York (as Rights Agent) (the "Rights
Agreement").
WHEREAS, the Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company may
from time to time supplement or amend the Rights Agreement in accordance with
the provisions of Section 27 thereof; and
WHEREAS, the Company intends to enter into an Agreement and Plan of Merger
(as it may be amended or supplemented from time to time, the "Merger
Agreement"), dated as of December 21, 2000, among the Company and Northrop
Grumman Corporation and LII Acquisition Corp., as the same may be amended from
time to time (all capitalized terms used in this Amendment and not otherwise
defined herein shall have the meaning ascribed thereto in the Merger Agreement);
and
WHEREAS, the Board of Directors has determined that the Offer, the Merger
and the other transactions contemplated by the Merger Agreement are fair to and
in the best interests of the Company and its common stockholders; and
WHEREAS, the Board of Directors has found that it is in the best interests
of the Company and its common stockholders, and has deemed it necessary and
desirable, to amend the Rights Agreement to exempt the Merger Agreement and the
transactions contemplated thereby from the application of the Rights Agreement.
NOW, THEREFORE, the Company hereby amends the Rights Agreement as follows:
1. Section 1(a) of the Rights Agreement is hereby modified, amended
and restated in its entirety as follows:
"Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or more
of the Common Shares of the Company then outstanding, but shall not include
(i) the Company; (ii) any Subsidiary (as such term is hereinafter defined)
of the Company; (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan; or (iv) Unitrin, Inc., a Delaware
corporation ("Unitrin"), and its subsidiaries as long as
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such entities in the aggregate beneficially own less than 12,658,000 Common
Shares. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or
more of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 15% or more
of the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional Common Shares of the
Company, then such Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would
no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to
be an "Acquiring Person" for any purposes of this Agreement.
Notwithstanding the foregoing, no Person (and no Affiliate or Associate of
any Person) shall be deemed to be the "Beneficial Owner" of or to
"beneficially own" particular securities if such Person is the Beneficial
Owner of or "beneficially owns" such securities solely as a result of its
status as an Affiliate or Associate of Unitrin and if such Person would not
otherwise be the Beneficial Owner of or "beneficially own" such securities.
Notwithstanding the foregoing, neither Northrop Grumman Corporation, a
Delaware corporation ("Parent"), LII Acquisition Corp., a Delaware
corporation ("Acquisition") shall be deemed to be an Acquiring Person by
virtue of the execution and delivery of the Agreement and Plan of Merger
(as it may be amended or supplemented from time to time, the "Merger
Agreement") to be entered into as of December 21, 2000, among the Company,
Parent and Acquisition, the consummation of the Offer, the conversion of
Shares into the right to receive Merger Consideration (as defined in the
Merger Agreement) in accordance with Section 2.8 of the Merger Agreement,
or the consummation of the Merger (as defined in the Merger Agreement)
(each of the foregoing, an "Exempt Event").
2. Section 1(1) of the Rights Agreement is hereby modified and amended
by adding the following sentence at the end thereof:
"No Exempt Event shall cause a Shares Acquisition Date."
3. Section 3(a) of the Rights Agreement is hereby modified and amended
by adding the following sentence at the end thereof:
"No Exempt Event shall cause a Distribution Date."
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4. Clauses (i), (ii), and (iii) of Section 7(a) of the Rights Agreement
are hereby modified, amended and restated in their entirety as follows:
"(i) the time immediately prior to the consummation of the Merger,
(ii) the later of the termination of the Merger Agreement or the
close of business on August 31, 2004 (the "Final Expiration Date"),
(iii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), or (iv) the time at which
such Rights are exchanged as provided in Section 24 hereof."
5. Section 29 of the Rights Agreement is hereby modified and amended
to add the following sentence at the end thereof:
"Notwithstanding the foregoing, nothing in this Agreement shall be
construed to give any holder of Rights or any other Person any legal or
equitable rights, remedy or claim under this Agreement in connection with
any transactions contemplated by the Merger Agreement."
6. This Amendment may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
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[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Amendment has been duly executed by the Company and the
Rights Agent as of the day and year first written above.
Attest: LITTON INDUSTRIES, INC.
By /s/ Lynne M.O. Brickner By /s/ John E. Preston
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Name: Lynne M. O. Brickner Name: John E. Preston
Title: Vice President and Secretary Title: Senior Vice President and
General Counsel
THE BANK OF NEW YORK
Attest: (As Rights Agent)
By /s/ James Dimino By /s/ Steven R. Myers
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Name: James Dimino Name: Steven R. Myers
Title: Vice President Title: Assistant Vice President
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