AMENDMENT NO. 2 TO THE RIGHTS AGREEMENT
THIS AMENDMENT NO.2 TO THE RIGHTS AGREEMENT (the "Amendment")
is made as of June 15, 2000 by and between TECHNITROL, INC., a Pennsylvania
corporation (the "Company"), and Registrar and Transfer Company, a New Jersey
corporation (the "Rights Agent").
BACKGROUND
WHEREAS, the Company and the Rights Agent entered into a
Rights Agreement dated as of August 30, 1996 (the "Rights Agreement"); and
WHEREAS, pursuant to Section 7.b. of the Rights Agreement, the
purchase price (the "Purchase Price") for each share of common stock, $0.125 par
value (the "Common Shares"), of the Company pursuant to the exercise of two
Rights was initially $125.00 (equivalent to $62.50 for each one-half of a Common
Share); and
WHEREAS, on February 28, 1997 the Company effected a
two-for-one stock split on its Common Shares in the form of a one hundred
percent (100%) stock dividend (the "Stock Split"); and
WHEREAS, pursuant to Section 11.a.(i) of the Rights Agreement,
the Stock Split caused an automatic reduction in the Purchase Price by one-half
from $125.00 (equivalent to $62.50 for each one-half of a Common Share) to
$62.50 (equivalent to $31.25 for each one-half of a Common Share); and
WHEREAS, the Company and the Rights Agent entered into
Amendment No. 1 to the Rights Agreement dated as of March 25, 1998, pursuant to
which the Purchase Price was increased from $62.50 (equivalent to $31.25 for
each one-half of a Common Share) to $135.00 (equivalent to $67.50 for each
one-half of a Common Share) in order to maintain the effectiveness of the Rights
Plan because of the increase in the stock price of the Company's Common Shares
at such time; and
WHEREAS, the Board of Directors of the Company on June 15,
2000 after consultation with its investment bankers, determined an additional
increase in the Purchase Price was necessary in order to maintain the
effectiveness of the Rights Plan because of a subsequent, steep increase in the
stock price of the Company's Common Shares, and accordingly, authorized an
amendment to the Rights Agreement to increase the Purchase Price from $135.00
(equivalent to $67.50 for each one-half of a Common Share) to $300.00
(equivalent to $150.00 for each one-half of a Common Share); and
WHEREAS, the Company and the Rights Agent desire to amend the
Rights Agreement to increase the Purchase Price on the terms and conditions set
forth herein:
WHEREAS, the Company has the authority to amend the Rights
Agreement without any approval of the holders of Rights pursuant to Section 28
of the Rights Agreement; and
NOW, THEREFORE, the parties hereto, in consideration of the
premises and agreements contained herein, intending to be legally bound hereby,
agree as follows:
1. Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meaning given to such terms in the Rights
Agreement.
2. Amendment to Section 7.b. of the Rights Agreement. Section
7.b. of the Rights Agreement is hereby amended by deleting the phrase "shall be
$135.00 (equivalent to $67.50 for each one-half of a Common Share)" in the
second line and substituting in its place the phrase "shall be $300.00
(equivalent to $150.00 for each one-half of a Common Share)".
3. Amendment to Exhibit A of the Rights Agreement. The first
paragraph of Exhibit A of the Rights Agreement is hereby amended by deleting the
phrase:
(a) "at a purchase price of $135.00 per Common Share (the
"Purchase Price" ) (equivalent to $67.50 for each one-half of a Common Share)"
in the eleventh line and substituting in its place the phrase "at a purchase
price of $300.00 per Common Share (the "Purchase Price" ) (equivalent to $150.00
for each one-half of a Common Share)"; and
(b) "of March 25, 1998" in the last line and substituting in
its place the phrase "of June 15, 2000".
4. Amendment to Exhibit B of the Rights Agreement. The first
paragraph of Exhibit B of the Rights Agreement is hereby amended by deleting the
phrase "at a price of $135.00 per Common Share (the "Purchase Price" )
(equivalent to $67.50 for each one-half of a Common Share)" in the sixth and
seventh lines and substituting in its place the phrase "at a purchase price of
$300.00 per Common Share (the "Purchase Price" ) (equivalent to $150.00 for each
one-half of a Common Share)".
5. Miscellaneous.
(a) The term "Agreement" as used in the Rights Agreement and
the Exhibits thereto shall be deemed to refer to the Rights Agreement as amended
hereby. The foregoing amendments shall be effective as of the date hereof and,
except as set forth herein, the Rights Agreement shall remain in full force and
effect and shall be otherwise unaffected hereby.
(b) This Amendment shall inure to the benefit of, and be
binding upon, the parties hereto and their respective successors and assigns and
may be executed in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto by their duly elected
officers have executed this Agreement as of the date first above written.
ATTEST: TECHNITROL, INC.
By: /s/ Drew A. Moyer By: /s/ James M. Papada, III
------------------- -----------------------------
Name: Drew A. Moyer Name: James M. Papada, III
Title: Secretary Title: President
ATTEST: REGISTRAR AND TRANSFER COMPANY
By: /s/ Thomas L. Montrone By: /s/ William P. Tatler
------------------------------ --------------------------
Name: Thomas L. Montrone Name: William P. Tatler
Title: President and Secretary Title: Vice President
