EXHIBIT 3
FIRST AMENDMENT
to
RIGHTS AGREEMENT
FIRST AMENDMENT dated as of March 3, 1997 ("this Amendment")
between ADT Limited, a Bermuda company limited by shares (the "Company")
and Citibank, N.A., New York branch, a national banking association
organized under the laws of the United States of America acting solely
through its branch located at 111 Wall Street, New York, NY 10043 (the
"Rights Agent").
WHEREAS, the above-mentioned parties have previously entered
into that certain Rights Agreement dated as of November 6, 1996 (the
"Agreement");
WHEREAS, the Board of Directors deems it desirable and in the
best interests of its shareholders that certain modifications to the terms and
conditions of the Agreement be effected to protect the Company's long-term
value for its shareholders.
WHEREAS, the provisions of this Amendment are in futherance of
the Agreement's original intent to enhance the Board of Directors' ability to
protect the shareholders of the Company against, amongst other things,
unsolicited attempts to acquire control of the Company which do not offer an
adequate price to all shareholders or otherwise are not in the best interests
of the Company and its shareholders.
WHEREAS, such parties wish to amend the Agreement in the manner
set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. All capitalized terms used herein, unless otherwise defined
herein, shall have the meanings given them in the Agreement, and each
reference in the Agreement to "this Agreement", "hereof", "herein",
"hereunder" or "hereby" and each other similar reference shall be deemed to
refer to the Agreement as amended hereby. All references to the Agreement in
any other agreement between or among any of the parties hereto relating to the
transactions contemplated by the Agreement shall be deemed to refer to the
Agreement as amended hereby.
2. The definition of "Continuing Director" in Section 1 is
hereby replaced in its entirety with the following:
"Continuing Director" means any member of the Board of
Directors of the Company, while such Person is a member of
the Board, who is not (i) an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or (ii) a
representative or nominee of an Acquiring Person or of any
such Affiliate or Associate or (iii) any Person elected to
the Board as a result of a proxy solicitation or initiative
referred to in Section 23(a)(y) and either (a) was a member
of the Board immediately prior to the time any Person
becomes an Acquiring Person or (b) subsequently becomes a
member of the Board, if such Person's nomination for
election or election to the Board is recommended or approved
by a majority of the Continuing Directors."
3. Section 23(a) is hereby replaced in its entirety with the
following:
"Section 23. Redemption. (a) The Board of Directors
of the Company may, at its option, at any time prior to the
earlier of (i) the close of business on the tenth day
following the Share Acquisition Date (or such later date as
a majority of the Continuing Directors may designate prior
to such time as the Rights are no longer redeemable) and
(ii) the Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of
$.01 per Right as appropriately adjusted to reflect any
share subdivision or consolidation, dividend of shares or
similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the
"Redemption Price"); provided that, if the Board of
Directors of the Company authorizes redemption of the Rights
in either of the circumstances set forth in clauses (x) or
(y) below then there must be Continuing Directors in office
and such authorization shall require the concurrence of a
majority of the Continuing Directors: (x) such authorization
occurs on or after the Share Acquisition Date or (y) such
authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation or similar
shareholder initiative) in a majority of the directors of
the Company in office at the commencement of such
solicitation or initiative if any Person who is a
participant in such solicitation or initiative has stated
(or if upon the commencement of such solicitation or
initiative a majority of the directors of the Company has
determined in good faith) that such Person (or any of its
Affiliates or Associates) intends to take, or may consider
taking, any action which would result in such Person
becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event. Notwithstanding anything
contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired, as the same may
be extended pursuant to the terms of this Agreement."
4. Section 26 is hereby replaced in its entirety with the
following:
"Section 26. Supplements, Deletions and Amendments.
Prior to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement, remove
or amend any provision of this Agreement without the
approval of any holders of Rights. From and after the
Distribution Date, the Company and the Rights Agent shall,
if the Company so directs, supplement, remove or amend this
Agreement without the approval of any holders of Rights in
order (a) to cure any ambiguity, (b) to correct, remove or
supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein
or (c) to change, remove or supplement the provisions hereof
in any manner which the Company may deem necessary or
desirable and which, in the opinion of the Company, shall
not adversely affect the interests of the holders or Rights
(other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person). Notwithstanding the foregoing, (x)
after any Person has become an Acquiring Person; or (y) on
or after the date of a change (resulting from a proxy or
consent solicitation or similar shareholder initiative) in a
majority of the directors of the Company in office at the
commencement of such solicitation or initiative if any
Person who is a participant in such solicitation or
initiative has stated (or upon the commencement of such
solicitation or initiative a majority of the directors of
the Company has determined in good faith) that such Person
(or any of its Affiliates or Associates) intends to take, or
may consider taking, any action which would result in such
Person becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event, any supplement, deletion
or amendment shall be effective only if there are Continuing
Directors then in office, and such supplement, deletion or
amendment shall have been approved by a majority of such
Continuing Directors. Upon the delivery of a certificate
from an appropriate officer of the Company which states that
the proposed supplement, deletion or amendment is in
compliance with the terms of this Section, the Rights Agent
shall execute such supplement, deletion or amendment. Prior
to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the
holders of Common Shares."
5. This Amendment shall be shall be governed by and construed
in accordance with the laws of Bermuda.
6. This Amendment may be signed in any number of counterparts,
each of which shall be deemed an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
7. Except as expressly amended hereby, the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, this Amendment has been duly executed as a
deed by the respective authorized officers of the parties hereto, in each case
as of the day and year first above written.
ADT LIMITED
By: /s/ S.J. Ruzika
THE COMMON SEAL ) -----------------------
OF ADT LIMITED ) Name: S.J. Ruzika
was affixed to this deed ) Title: Director
in the presence of: )
By: /s/ M.A. Ashcroft
-----------------------
Name: M.A. Ashcroft
Title: Director
CITIBANK, N.A.
By: /s/ Nancy Ward
-----------------------
Name: Nancy Ward
Title: Vice President
111 Wall Street
New York, NY 10043
Attention: Mark Woodward