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EXHIBIT 2
Amendment No. 1 To Rights Agreement
AMENDMENT No. 1, dated as of December 7, 1994, to the Rights
Agreement between Ingersoll-Rand Company, a New Jersey
corporation (the "Company"), and the Bank of New York (the
"Rights Agent"), dated as of December 7, 1988 (the "Rights
Agreement").
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 mutual agreements set
forth herein, the parties hereto agree as follows:
1. Section 1(a) of the Rights Agreement is hereby modified
and amended in its entirety to read as follows:
(a) "Acquiring Person" shall mean any Person (as
such term is hereinafter defined) who or which,
together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined)
of 15% or more of the outstanding Common Stock;
provided, however, that an Acquiring Person shall not
include an Exempt Person (as such term is hereinafter
defined). Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as a result of an
acquisition of shares of Common Stock by the Company
which, by reducing the number of such shares then
outstanding, increases the proportionate number of
shares beneficially owned by such person to 15% or more
of the outstanding Common Stock; provided that if a
Person (other than an Exempt Person) becomes the
Beneficial Owner of 15% or more of the outstanding
Common Stock by reason of share purchases by the
Company and, after such share purchases by the Company,
becomes the Beneficial Owner of any additional shares
of Common Stock, such Person shall be deemed to be an
"Acquiring Person." The word "outstanding," when used
with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of
such securities then issued and outstanding together
with the number of such securities not then issued and
outstanding which such Person would be deemed to own
beneficially hereunder.
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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
Section 1(a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person", as defined
pursuant to the foregoing provisions of this Section
1(a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
2. The Rights Agreement is hereby further modified and
amended by inserting the following new Section 1(c) to the Rights
Agreement and renumbering existing Sections 1(c) through 1(u) of
the Rights Agreement (and cross references thereto in the Rights
Agreement) as Sections 1(d) through 1(v) respectively:
(c) "Adverse Person" shall mean any Person
declared to be an Adverse Person by the Board of
Directors upon a determination of the Board of
Directors that the criteria set forth in Section
11(a)(ii)(B) apply to such Person.
3. Section 1(v) of the Rights Agreement (prior to taking
into account the renumbering referred to in Section 2 hereof) is
hereby deleted in its entirety.
4. Section 3(a) of the Rights Agreement is hereby modified
and amended by deleting the numeral "20" in the ninth line
thereof and substituting therefor the numeral "15".
5. Section 3(a) of the Rights Agreement is hereby further
modified and amended by inserting the following new clause
immediately after the parenthetical clause in the thirteenth line
thereof:
or (iii) the determination by the Board of Directors of
the Company, pursuant to the criteria set forth in
Section 11(a)(ii)(B) hereof that a Person is an Adverse
Person.
6. Section 3(d) of the Rights Agreement is hereby modified
and amended by inserting the words "and as amended from time to
time" after the words, "December 7, 1988" in the fifth line of
the legend contained therein.
7. Section 3(d) of the Rights Agreement is hereby further
modified and amended by inserting the words ", Adverse Persons"
immediately after the words "Acquiring Persons" in the eighteenth
line of the legend contained therein.
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8. Section 4(b) of the Rights Agreement is hereby modified
and amended by inserting the words "or Adverse Person" after each
occurrence of the words "Acquiring Person".
9. Section 11(a)(ii)(A) of the Rights Agreement is hereby
modified and amended by deleting the phrase, ", other than
pursuant to a Permitted Tender Offer" from the third and fourth
lines thereof.
10. The Rights Agreement is hereby further modified and
amended by inserting the following new Section 11(a)(ii)(B) to
the Rights Agreement and renumbering Sections 11(a)(ii)(B) and
11(a)(ii)(C) (and cross references thereto in the Rights
Agreement) to Sections 11(a)(ii)(C) and 11(a)(ii)(D):
(B) the Board of Directors of the Company, by majority
vote, shall declare any Person to be an Adverse Person,
after (x) a determination that such Person, alone or
together with its Affiliates and Associates, has become the
Beneficial Owner of 10% or more of the outstanding shares of
Common Stock and (y) a determination by the Board of
Directors, after reasonable inquiry and investigation,
including such consultation, if any, with such Persons as
the Board of Directors shall deem appropriate, that (a) such
Beneficial Ownership by such Person is intended to cause, is
reasonably likely to cause or will cause the Company to
repurchase the Common Stock beneficially owned by such
Person or to cause pressure on the Company to take action or
enter into a transaction or series of transactions which
would provide such Person with short-term financial gain
under circumstances where the Board of Directors determines
that the best long-term interests of the Company and its
shareholders, but for the actions and possible actions of
such Person, would not be served by taking such action or
entering into such transactions or series of transactions at
that time or (b) such Beneficial Ownership is causing or
reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of relationships
with customers or impairment of the Company's ability to
maintain its competitive position) on the business or
prospects of the Company; provided, however, that the Board
of Directors of the Company may not declare a Person to be
an Adverse Person if, prior to the time that such Person
acquired 10% or more of the shares of Common Stock then
outstanding, such Person provided to the Board of Directors
in writing a statement of such Person's purpose and
intentions in connection with the proposed acquisition of
Common Stock, together with any other information reasonably
requested of such Person by the Board of Directors, and the
Board of Directors, based on such statement and reasonable
inquiry and investigation, including such consultation, if
any, with such Person as the Board of Directors shall deem
appropriate, determines to notify and notifies such Person
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in writing that it will not declare such Person to be an
Adverse Person; provided, further, that the Board of
Directors may expressly condition in any manner a
determination not to declare a Person an Adverse Person on
such conditions as the Board of Directors may select,
including without limitation, such Person's not acquiring
more than a specified amount of stock and/or on such
Person's not taking actions inconsistent with the purposes
and intentions disclosed by such Person in the statement
provided to the Board of Directors. No delay or failure by
the Board of Directors to declare a Person to be an Adverse
Person shall in any way waive or otherwise affect the power
of the Board of Directors subsequently to declare a Person
to be an Adverse Person. In the event that the Board of
Directors should at any time determine, upon reasonable
inquiry and investigation, including consultation with such
Persons as the Board of Directors shall deem appropriate,
that such Person has not met or complied with any condition
specified by the Board of Directors, the Board of Directors
may at any time thereafter declare such Person to be an
Adverse Person pursuant to the provisions of this Section
11(a)(ii)(B); or
11. Sections 11(a)(ii)(B) and (C) of the Rights Agreement
(prior to taking into account the renumbering referred to in
Section 9 hereof) are hereby modified and amended by inserting
the words "or Adverse Person" after each occurrence of the words
"Acquiring Person".
12. Section 11(a)(ii) of the Rights Agreement is hereby
modified and amended by (i) deleting the words "void to the
extent permitted by applicable law" in the twentieth and twenty
first lines of the last paragraph thereof and inserting in lieu
thereof the words "null and void" and (ii) deleting the clause
",to the extent permitted by applicable law," from the twenty
second and twenty third lines of the last paragraph thereof.
13. The Rights Agreement is hereby further modified and
amended by inserting the following new Section 11(q) to the
Rights Agreement:
(q) The failure by the Board of Directors to declare a
Person to be an Adverse Person following such Person
becoming the Beneficial Owner of 10% or more of the
outstanding Common Stock shall not imply that such Person is
not an Adverse Person or limit the Board of Directors' right
at any time in the future to declare such Person to be an
Adverse Person.
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14. Section 13(a) of the Rights Agreement is hereby
modified and amended by inserting the words "earlier of the" in
the second line thereof immediately prior to the words "Stock
Acquisition Date" and inserting the words "or the declaration by
the Board of Directors that a Person is an Adverse Person"
immediately following the words "the Stock Acquisition Date" in
the second line thereof.
15. Section 23(a) of the Rights Agreement is hereby
modified and amended by deleting the words "or (ii)" in the fifth
line thereof and inserting in lieu thereof the following:
, (ii) the declaration by the Board of Directors that
any Person is an Adverse Person or (iii)
16. Section 23(a) of the Rights Agreement is hereby further
modified and amended by inserting the words "or Adverse Person"
after each occurrence of the words "Acquiring Person".
17. The Rights Agreement is hereby further modified and
amended by inserting the following new Section 24 to the Rights
Agreement and renumbering existing Sections 24 through 32 of the
Rights Agreement (and cross references thereto in the Rights
Agreement) as Sections 25 through 33 respectively:
Section 24. Exchange. (a) The Board of Directors of
the Company may, at its option, at any time after any Person
becomes an Acquiring Person or an Adverse Person, 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 11(a)(ii) hereof) for
shares of 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 December 7, 1988 (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
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 shares of Common
Stock then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to paragraph (a) 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
shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or
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any defect in, such notice shall not affect the validity of
such exchange. The Company promptly 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 Rights Agent. 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
shares of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
may, in its discretion, take all such action as may be
necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights. In the event the
Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such
additional shares of Common Stock, the Company shall
substitute, for each share of Common Stock that would
otherwise be issuable upon exchange of a Right, a number of
shares of Preference Stock or fraction thereof such that the
current per share market price of one share of Preference
Stock multiplied by such number or fraction is equal to the
current per share market price of one share of Common Stock
as of the date of issuance of such shares of Preference
Stock or fraction thereof.
(d) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute
certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock,
the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this
paragraph (d), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
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18. Section 26 of the Rights Agreement (prior to taking
into account the renumbering referred to in Section 17 hereof) is
hereby modified and amended by inserting the words "or the
declaration by the Board of Directors that a Person is an Adverse
Person" immediately after the words "Stock Acquisition Date" in
the second and third lines thereof.
19. The Form of Right Certificate attached as Exhibit B to
the Rights Agreement is hereby modified and amended by inserting
the phrase "and as amended from time to time" after the words
"December 7, 1988" on the fifth line of the first paragraph of
the first page thereof.
20. The Form of Right Certificate attached as Exhibit B to
the Rights Agreement is hereby further modified and amended by
inserting the words "or Adverse Person" after each occurrence of
the words "Acquiring Person".
21. The Form of Right Certificate attached as Exhibit B to
the Rights Agreement is hereby further modified and amended by
deleting the words "and (ii)" from the seventh line of the fifth
paragraph of the fourth page thereof and inserting in lieu
thereof the following:
, (ii) the declaration by the Board of Directors that
any Person is an Adverse Person or (iii)
22. This Amendment to the Rights Agreement shall be governed
by and construed in accordance with the laws of the State of New
Jersey and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
23. This Amendment to the Rights Agreement may be executed
in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute 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.
24. 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.
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25. 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 parties hereto have caused this
Amendment to be duly executed and attested, all as of the date
and year first above written.
Attest: INGERSOLL-RAND COMPANY
By: /S/ Ronald G. Heller By: /S/ Patricia Nachtigal
Name: Ronald G. Heller Name: Patricia Nachtigal
Title: Secretary and Title: Vice President and
Assistant General General Counsel
Counsel
Attest: THE BANK OF NEW YORK,
as Rights Agent
By: /S/ Jeffrey Grosse By: /S/ John I. Sivertsen
Name: Jeffrey Grosse Name: John I. Sivertsen
Title: Assistant Vice Title: Vice President
President