AMENDMENT NO. 1 TO RIGHTS AGREEMENT
AMENDMENT NO. 1, dated as of August 15, 1997, by
and among Guest Supply, Inc., a New Jersey corporation (the
"Company"), First Fidelity Bank ("First Fidelity") and
ChaseMellon Shareholder Services, L.L.C.("ChaseMellon") to
the Rights Agreement between the Company and First Fidelity
dated as of July 15, 1988 (the "Rights Agreement").
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;
WHEREAS, the Company desires to appoint
ChaseMellon (the "Successor Rights Agent") as the sole and
successor Rights Agent (as defined in the Rights Agreement)
to First Fidelity effective as of the opening of business on
September 2, 1997 (the "Appointment Time"), pursuant to
Section 21 of the Rights Agreement;
WHEREAS, the Company desires to make certain
amendments to the Rights Agreement;
WHEREAS, the execution and delivery of this
Amendment by the Company, First Fidelity and the Successor
Rights Agent have been in all respects duly authorized by
each of them; and
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
Section 1. Section 1(a) of the Rights Agreement
is hereby amend to read in its entirety as follows:
"(a) "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 20% or more of the
Common Shares of the Company then outstanding, but
shall not include the Company, any Subsidiary (as
such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any
Subsidiary of the Company, or any Person holding
Common Shares for or pursuant to the terms of any
such plan. Notwithstanding the foregoing, subject
to the proviso in this sentence, no Person shall
become an "Acquiring Person" solely as the result
of (x) an acquisition after the date hereof of
Common Shares by the Company which, by reducing
the number of Common Shares outstanding, increases
the proportionate number of shares beneficially
owned by such Person to 20% or more of the Common
Shares of the Company then outstanding or (y) the
acquisition of Beneficial Ownership of 20% or more
of the Common Shares of the Company then
outstanding in the good faith belief that such
acquisition would not (A) cause such Beneficial
Ownership to exceed 20% of the Common Shares then
outstanding and such Person relied in good faith
in computing the percentage of its Beneficial
Ownership on publicly filed reports or documents
of the Company which are inaccurate or out-of-date
or (B) otherwise cause a Distribution Date to
occur; provided, however, that if such Person does
not reduce its percentage of Beneficial Ownership
of Common Shares to below 20% by 5:00 P.M. New
York City time on the tenth Business Day after
notice (the date of notice being the first day),
including by telephone or facsimile, from the
Company to such Person (requesting such Person to
reduce its Beneficial Ownership of Common Shares
to less than 20%), such Person shall, at the end
of such ten Business Day period, become an
Acquiring Person (and this sentence shall no
longer apply to such Person). For purposes of
this definition, the determination whether any
Person acted in "good faith" shall be conclusively
determined, and any notices hereunder must be
specifically authorized, by the Board of Directors
of the Company, acting by a vote of those
directors of the Company whose approval would be
required to redeem the Rights under Section 23."
Section 2. Section 1(c)(i) of the Rights
Agreement is hereby amended to read in its entirety as
follows:
"(i) which such Person or any of such
Person's Affiliates or Associates is deemed to
"beneficially own" within the meaning of Rule
13d-3 under the Exchange Act, as in effect on the
date of this Agreement;"
Section 3. Section 1(j) of the Rights Agreement
is hereby deleted in its entirety, and the subsequent
paragraphs of Section 1 of the Rights Agreement are hereby
relettered accordingly.
Section 4. Clause (i) of Section 7(a) of the
Rights Agreement is hereby amended to read in its entirety
as follows:
"the close of business on July 15, 2008 (the
"Final Expiration Date"),"
Section 5. Section 7(b) of the Rights Agreement
is hereby amended to read in its entirety as follows:
"(b) The Purchase Price for each one
one-hundredth of a Preferred Share pursuant to the
exercise of a Right shall initially be $30.00,
shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of
America in accordance with paragraph (c) below."
Section 6. Section 11(a)(ii) of the Rights
Agreement is hereby amended to read in its entirety as
follows:
"(ii) Subject to Section 24 of this
Agreement, in the event any Person shall become an
Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise
thereof at a price equal to the then current
Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the
terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the
Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing
that product by (y) 50% of the then current per
share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on
the date such Person became an Acquiring Person.
In the event that any Person shall become an
Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action
which would eliminate or diminish the benefits
intended to be afforded by the Rights.
From and after the occurrence of the event
described above, any Rights that are or were
acquired or beneficially owned by such Acquiring
Person (or any Associate or Affiliate of such
Acquiring Person) shall be void and any holder of
such Rights shall thereafter have no right to
exercise such Rights under any provision of this
Agreement. No Right Certificate shall be issued
pursuant to Section 3 that represents Rights
beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding
sentence or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon
the transfer of any Rights to an Acquiring Person
whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate
thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence shall
be cancelled."
Section 7. Section 11(a)(iii) of the Rights
Agreement is hereby amended to add a new last sentence
thereof as follows:
"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
Common Shares, the Company shall substitute, for
each Common Share that would otherwise be issuable
upon exercise of a Right, a number of Preferred
Shares or fraction thereof such that the current
per share market price of one Preferred Share
multiplied by such number or fraction is equal to
the current per share market price of one Common
Share as of the date of issuance of such Preferred
Shares or fraction thereof."
Section 8. Section 21 of the Rights Agreement is
hereby amended by deleting the fifth sentence thereof and
substituting in lieu thereof the following sentence:
"Any successor Rights Agent, whether
appointed by the Company or by such court, shall
be a corporation organized and doing business
under the laws of a state of the United States."
Section 9. Section 23 of the Rights Agreement is
hereby amended to read in its entirety as follows:
"(a) The Rights may be redeemed by action of
the Board of Directors pursuant to paragraph (b)
of this Section 23 and shall not be redeemed in
any other manner.
(b) The Board of Directors of the Company
may, at its option, at any time prior to such time
as any Person becomes an Acquiring Person, redeem
all but not less than all 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 hereof (such redemption price being
hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the
Board of Directors 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.
(c) Immediately upon the action of the Board
of Directors of the Company ordering the
redemption of the Rights pursuant to paragraph (b)
of this Section 23, and without any further action
and without any notice, the right to exercise the
Rights will terminate and the only right
thereafter of the holders of Rights shall be to
receive the Redemption Price. The Company shall
promptly give public notice of any such
redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not
affect the validity of such redemption. Within
10 days after such action of the Board of
Directors ordering the redemption of the Rights
pursuant to paragraph (b), the Company shall mail
a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the
Common Shares. 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 redemption will state the
method by which the payment of the Redemption
Price will be made. Neither the Company nor any
of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any
time in any manner other than that specifically
set forth in this Section 23 or in Section 24
hereof, and other than in connection with the
purchase of Common Shares prior to the
Distribution Date."
Section 10. Section 24(a) of the Rights Agreement
is hereby amended to add a new last sentence thereof as
follows:
"Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such
exchange at any time after any Person (other than
the Company, any subsidiary of the Company, any
employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding."
Section 11. Section 24(b) of the Rights Agreement
is hereby amended by deleting the first sentence thereof and
substituting in lieu thereof the following sentence:
"(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 Common Shares equal to the
number of such Rights held by such holder
multiplied by the Exchange Ratio."
Section 12. Section 2 of the Rights Agreement is
hereby amended by deleting the following phrase therefrom:
"and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to
the Distribution Date also be the holders of the
Common Shares)"
Section 13. The first sentence of Section 18 of
the Rights Agreement is hereby amended (i) by adding after
the phrase "loss, liability," the phrase "obligation,
damage," and (ii) by adding after the phrase "or expense"
the parenthetical "(including reasonable attorneys fees and
reasonable fees for other professional services)".
Section 14. The Company hereby appoints
ChaseMellon as sole and Successor Rights Agent, and
ChaseMellon hereby accepts such appointment, effective as of
the Appointment Time.
Section 15. Effective as of the Appointment Time,
all references in the Rights Agreement (and in any Exhibit
thereto) to "First Fidelity Bank" shall be deemed to be
amended to be references to "ChaseMellon Shareholder
Services, L.L.C."
Section 16. The legend set forth in Section 3(c)
of the Rights Agreement is amended, effective as of the
Appointment Time, to read in its entirety as follows:
"This certificate also evidences
and entitles the holder hereof to
certain Rights as set forth in a Rights
Agreement between Guest Supply, Inc. and
ChaseMellon Shareholder Services,
L.L.C., dated as of July 15, 1988, as
amended (the "Rights Agreement"), the
terms of which are hereby incorporated
herein by reference and a copy of which
is on file at the principal executive
offices of Guest Supply, Inc. Under
certain circumstances, as set forth in
the Rights Agreement, such rights will
be evidenced by separate certificates
and will no longer be evidenced by this
certificate. Guest Supply, Inc. will
mail to the holder of this certificate a
copy of the Rights Agreement without
charge after receipt of a written
request therefor. As described in the
Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person
(as defined in the Rights Agreement)
shall become null and void."
Section 17. Section 26 of the Rights Agreement is
amended, effective as of the Appointment Time, by replacing
the words:
"First Fidelity Bank
765 Broad Street
Newark, New Jersey 07101"
with the words:
"ChaseMellon Shareholder Services, L.L.C.
450 West 33rd Street, 15th Floor
New York, New York 10001"
Section 18. Effective as of the Appointment Time,
First Fidelity shall no longer be a Rights Agent for any
purposes of the Rights Agreement, and its agreement or
consent shall not be required for any amendment thereto or
in connection with any action taken thereunder. The parties
hereto agree that, effective as of the Appointment Time,
ChaseMellon shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally
named as the Rights Agent without further act or deed. The
parties hereto waive any requirements for notice or lapse of
time in connection with the foregoing resignation and
appointment.
Section 19. Section 2 of the Rights Agreement is
amended, effective as of the Appointment Time, to read in
its entirety as follows:
"The Company hereby appoints the Rights Agent
to act as Agent for the Company in accordance with
the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The
Company may from time to time appoint such
co-Rights Agent as it may deem necessary or
desirable."
Section 20. Section 31 of the Rights Agreement is
amended to read in its entirety as follows:
"The validity, interpretation and
construction of this Agreement and each
right certificate issued hereunder shall
be governed by the substantive laws of
the State of New Jersey."
Section 21. The amendments to the Rights
Agreement effected by Sections 1 through 11 and 20 of this
Amendment shall be effective as of the date of this
Amendment. The amendments to the Rights Agreement effected
by Sections 12 through 19 shall become effective as of the
Appointment Time.
Section 22. Except as expressly set forth herein,
the Rights Agreement shall remain in full force and effect.
Section 23. This Amendment may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together shall constitute but one
Amendment.
Section 24. The validity, interpretation and
construction of this Amendment shall be governed by the
substantive laws of the State of New Jersey.
* * *
IN WITNESS WHEREOF, this Amendment has been signed
by or on behalf of each of the parties hereto as of the day
and year first above written.
ATTEST: GUEST SUPPLY, INC.
By: /s/ Kathleen M. Ellerbusch By: /s/ Clifford W. Stanley
----------------------------- --------------------------
Name: Kathleen M. Ellerbusch Name: Clifford W. Stanley
Title: Executive Assistant Title: President
ATTEST: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Laura R. Picone By: /s/ Michael A. Nespoli
---------------------- -------------------------
Name: Laura R. Picone Name: Michael A. Nespoli
Title: Vice President Title: Vice President
ATTEST: FIRST FIDELITY BANK
By: /s/ D. Ann Harris By: /s/ Frances S. Beam
-------------------- ----------------------
Name: D. Ann Harris Name: Frances S. Beam
Title: Assistant Secretary Title: Vice President