MK RAIL CORPORATION
SECOND AMENDMENT
DATED AS OF JUNE 20, 1996
TO RIGHTS AGREEMENT DATED AS OF JANUARY 19, 1996
AND AMENDED AS OF APRIL 5, 1996
AMENDMENT dated as of June 20, 1996 to the Rights Agreement (the
"Rights Agreement") dated as of January 19, 1996 and Amended as of April 5, 1996
between MK Rail Corporation, a Delaware corporation (the "Company"), and
Chase Mellon Shareholder Services, L.L.C. (the "Rights Agent").
Pursuant to resolutions adopted by the Board of Directors of the
Company on June 17, 1996 and the authority vested in the Board of Directors of
the Company by Section 27 of the Rights Agreement, the Rights Agreement is
hereby amended as follows:
PART I
The amendments to the Rights Agreement set forth in this Part I shall
be effective as of the date of execution of this Amendment by the undersigned.
i. Section 1(c) of the Rights Agreement is hereby amended and restated in
its entirety as follows:
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement; provided,
however, that no director or officer of the Company shall be deemed an
Affiliate or Associate of any other director or officer of the Company
solely as a result of his or her being a director or officer of the
Company; and provided further that
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the MK Creditors shall not be deemed Affiliates or Associates of one
another or of MK solely by reason of any or all of the following:
(1) negotiations by or among any of such MK Creditors or by or
among any of such MK Creditors and MK in connection with any
restructuring or reorganization of MK;
(2) the MK Creditors or MK agreeing upon, voting as a class
upon, or acting to effect confirmation of the MK Plan; or
(3) the MK Creditors or MK entering into, agreeing to be bound
by, or acting in accordance with the MK Rail Stockholders Agreement.
ii. Section 1(d) of the Rights Agreement is hereby amended and restated in
its entirety as follows:
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "Beneficially Own" and to have "Beneficial
Ownership" of any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement);
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement, or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own or to have
Beneficial Ownership of, (1) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Af filiates or Associates until such
tendered securities are accepted for purchase or exchange or
(2) securities issuable upon exercise of the Rights at any
time prior to the Distribution Date; or (B) the right to vote
pursuant to any agreement, arrangement, or understanding;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own or to have
Beneficial Ownership of, any security if the agreement,
arrangement, or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not
also then reportable on Schedule 13D under theExchange Act (or
any comparable or successor report); or
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(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement, or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(d)(ii)(B)), or
disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary:
(1) the phrase "then 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 actually issued and outstanding that such
Person would be deemed to own beneficially hereunder;
(2) none of the MK Creditors shall be deemed to be
the Beneficial Owner of, or to Beneficially Own, or to have
Beneficial Ownership of, Common Shares of the Company
Beneficially Owned by any other MK Creditor or MK solely by
reason of any or all of the following:
(a) negotiations by or among any of such MK
Creditors or by or among any of such MK Creditors and MK in
connection with any restructuring or reorganization of MK;
(b) the MK Creditors or MK agreeing upon,
voting as a class upon, or acting to effect confirmation of
the MK Plan; or
(c) the MK Creditors or MK entering into,
agreeing to be bound by, and acting in accordance with the MK
Rail Stockholders Agreement.
iii. Section 1 of the Rights Agreement is hereby amended by deleting
subsection (ll) in its entirety and adding new subsections (l-1),
(l-2), (l-3), (l-4), (l-5), and (l-6) immediately following subsection
(l) as follows:
(l-1) "Liquidating Trust" shall mean the Liquidating Trust
established pursuant to the terms of the MK Plan and the trustee
thereof.
(l-2) "MK" shall mean Morrison Knudsen Corporation, a Delaware
corporation, Morrison Knudsen Corporation, an Ohio corporation, and the
Subsidiaries of each, but
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shall not include the Company.
(l-3) "MK Creditors" shall mean the creditors of MK who are
designated to receive Common Shares of the Company in any case under
Title 11 of the United States Code or as a result of any creditor
foreclosure. The term MK Creditors shall also include the Liquidating
Trust.
(l-4) "MK Plan" shall mean a Conforming Plan as defined in
Section 5.3(a)(ii) of the Note Cancellation and Restructuring
Agreement.
(l-5) "MK Rail Stockholders Agreement" shall mean the
Stockholders Agreement relating to the Company in the form attached
hereto as Exhibit 1.
(l-6) "Note Cancellation and Restructuring Agreement" shall
mean the Note Cancellation and Restructuring Agreement by and among the
Company and MK in the form attached hereto as Exhibit 2.
iv. Section 1(m) of the Rights Agreement is hereby amended and restated in
its entirety as follows:
(m) "Person" shall mean any individual, firm, corporation, or
other entity (including a trust), and shall include any assignee or
successor (by merger or otherwise) of such entity.
PART II
The amendments to the Rights Agreement set forth in this Part II shall
become effective only upon the Note Cancellation and Restructuring Agreement
becoming effective in accordance with Section 2 thereof.
1. Section 1(a) of the Rights Agreement shall be amended and restated 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
15% or more of the Common Shares of the Company then
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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 entity holding
Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing:
(1) a Grandfathered Stockholder shall not be deemed an
Acquiring Person for purposes of this Agreement unless and until (A)
such Grandfathered Stockholder, or any Affiliate or Associate of such
Grandfathered Stockholder, acquires, after the time that such Person
first becomes a Grandfathered Stockholder, Beneficial Ownership of any
additional Common Shares of the Company, in which case such Person
shall no longer be deemed a "Grandfathered Stockholder," or (B) in the
case of a Grandfathered Stockholder who, together with all Affiliates
and Associates of such Grandfathered Stockholder, Beneficially Owns 20%
or more of the Common Shares of the Company then outstanding, a Change
of Control Event (as such term is hereinafter defined) occurs with
respect to such Grandfathered Stockholder, in which case, such Person
shall no longer be deemed a "Grandfathered Stockholder;" provided,
however, that the exception set forth in Section 1(a)(1)(B) hereof
regarding the occurrence of a Change in Control Event shall not be
applicable with respect to any Grandfathered Stockholder who does not,
upon the occurrence of such Change in Control Event, Beneficially Own,
together with its Affiliates and Associates, 20% or more of the Common
Shares of the Company then outstanding.
(2) 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, together with all Affiliates
and Associates of such Person, to 15% or more of the Common Shares of
the Company then outstanding; provided, however, that if a Person,
together with all Affiliates and Associates of such 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;"
(3) 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; and
(4) for purposes of determining whether any MK Creditor
(together with its Affiliates or Associates) Beneficially Owns 15% or
more of the Common Shares of the Company then outstanding, Common
Shares of the Company Beneficially Owned by such MK Creditor solely as
a result of the receipt of such Common Shares pursuant to the
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MK Plan or by reason of foreclosure by such MK Creditor shall not be
aggregated with Common Shares of the Company held by such MK Creditor
(or its Affiliates or Associates), in good faith and not for the
purpose of circumventing the provisions of this Rights Agreement, as an
agent, custodian, executor, or trustee for or on behalf of one or more
Beneficial Owners.
(5) a disbursing agent holding Common Shares of the Company
following effectiveness of an MK Plan that occurs after the condition
to effectiveness required to be added to the MK Plan by Exhibit D of
the Note Cancellation Agreement (the "Mandatory Added Condition") is
satisfied, which Plan provides for distribution by the disbursing agent
to MK Creditors of Common Shares of the Company owned by MK, shall not
be deemed to be an Acquiring Person solely by reason of Beneficial
Ownership of such shares to the extent within forty-five (45) days
following the Effective Date of the MK Plan it distributes the Common
Shares to MK Creditors or shareholders of MK; provided the disbursing
agent does not vote or otherwise take any action with respect to the
Common Shares other than distribute them to MK Creditors or
shareholders of MK.
2. Section 1(c) of the Rights Agreement is hereby amended and restated in
its entirety as follows:
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement; provided,
however, that no director or officer of the Company shall be deemed an
Affiliate or Associate of any other director or officer of the Company
solely as a result of his or her being a director or officer of the
Company; and provided further that the MK Creditors shall not be deemed
Affiliates or Associates of one another or of MK solely by reason of
any or all of the following:
(1) negotiations by or among any of such MK Creditors or by or
among any of such MK Creditors and MK in connection with any
restructuring or reorganization of MK;
(2) the MK Creditors or MK agreeing upon, voting as a class
upon, or acting to effect confirmation of the MK Plan;
(3) the receipt of Common Shares of the Company by any of such
MK Creditors pursuant to the terms of the MK Plan or as a result of
foreclosure by any of such MK Creditors; provided, however, that prior
to actual receipt of Common Shares of the Company by the MK Creditors
pursuant to the MK Plan or as a result of foreclosure by any of such MK
Creditors, each MK Creditor who receives such Common Shares of the
Company shall have agreed in writing to be bound by the terms of the MK
Rail Stockholders Agreement; or
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(4) the MK Creditors or MK entering into, agreeing to be bound
by, or acting in accordance with the MK Rail Stockholders Agreement.
3. Section 1(d) of the Rights Agreement is hereby amended and restated in
its entirety as follows:
(d) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "Beneficially Own" and to have "Beneficial
Ownership" of any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in
effect on the date of this Agreement);
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement, or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own or to have
Beneficial Ownership of, (1) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Af filiates or Associates until such
tendered securities are accepted for purchase or exchange or
(2) securities issuable upon exercise of the Rights at any
time prior to the Distribution Date; or (B) the right to vote
pursuant to any agreement, arrangement, or understanding;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own or to have
Beneficial Ownership of, any security if the agreement,
arrangement, or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement, or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(d)(ii)(B)), or
disposing of any securities of the Company.
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Notwithstanding anything in this definition of Beneficial
Ownership to the contrary:
(1) the phrase "then 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 actually issued and outstanding that such
Person would be deemed to own beneficially hereunder;
(2) none of the MK Creditors shall be deemed to be
the Beneficial Owner of, or to Beneficially Own, or to have
Beneficial Ownership of, Common Shares of the Company
Beneficially Owned by any other MK Creditor or MK solely by
reason of any or all of the following:
(a) negotiations by or among any of such MK
Creditors or by or among any of such MK Creditors and MK in
connection with any restructuring or reorganization of MK;
(b) the MK Creditors or MK agreeing upon,
voting as a class upon, or acting to effect confirmation of
the MK Plan;
(c) the receipt of Common Shares of the
Company by any of such MK Creditors pursuant to the terms of
the MK Plan or as a result of foreclosure by any of such MK
Creditors; provided, however, that prior to actual receipt of
Common Shares of the Company by the MK Creditors pursuant to
the MK Plan or as a result of foreclosure by any of such MK
Creditors, each MK Creditor who receives such Common Shares of
the Company shall have agreed in writing to be bound by the
terms of the MK Rail Stockholders Agreement; or
(d) the MK Creditors or MK entering into,
agreeing to be bound by, and acting in accordance with the MK
Rail Stockholders Agreement.
4. Section 1(f) of the Rights Agreement is hereby amended by adding the
following paragraph at the end of said section:
Notwithstanding the foregoing, a Change of Control
Event shall not be deemed to have occurred as a result of a
merger of MK with any other party if (1) said merger is
effected in conjunction with the effectiveness of an MK Plan,
following satisfaction of the Mandatory Added Condition, which
Plan provides for the distribution, following said merger, to
MK Creditors of Common Shares of the Company held by MK in an
amount sufficient so that MK (or the surviving entity of the
merger) will no longer be a Grandfathered Stockholder
following said distribution and (2) promptly following the
merger, as a result of distribution of Common Shares of the
Company to MK Creditors, MK (or the surviving entity of
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the merger) is no longer a Grandfathered Stockholder.
5 Section 1(l) of the Rights Agreement shall be amended and restated in
its entirety as follows:
(l) "Grandfathered Stockholder" shall mean any Person
who, together with all Affiliates and Associates of such
Person, Beneficially Owned 15% or more of the Common Shares of
the Company then outstanding on the date of the original
adoption of this Agreement; provided, however, that the term
Grandfathered Stockholder shall not include the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such
plan; and provided further that if any Grandfathered
Stockholder, together with all Affiliates and Associates of
such Grandfathered Stockholder, shall no longer be the
Beneficial Owner of 15% or more of the Common Shares of the
Company then outstanding, such Person shall no longer be
deemed a Grandfathered Stockholder for purposes of this
Agreement.
4. Section 3(a) of the Rights Agreement is hereby amended and restated in
its entirety as follows:
(a) Until the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth business day (or
such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company,
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) of, or of the first
public announcement of the intention of any Person (other than
the Company, any Subsidiary of the Company, 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) to commence, a tender or
exchange offer, the consummation of which would result in any
Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares
(including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier
of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable
only in connection with the transfer of Common Shares. As soon
as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign, and
the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record
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holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially
the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
duly executed and attested, all as of the day and year first above written.
MK RAIL CORPORATION
Attest:
By___________________ By________________________
Name: John C. Pope, Chairman
Title:
CHASE MELLON SHAREHOLDER
SERVICES, L.L.C.
Attest:
By___________________ By________________________
Name: Name:
Title: Title: