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Exhibit 4.1
AMENDMENT
SECOND AMENDMENT, dated as of October 22, 1998, to the Rights
Agreement, dated as of June 5, 1995 (the "Rights Agreement"), between Gryphon
Holdings, Inc. (the "Company") and State Street Bank and Trust Company, as
Rights Agent (the "Rights Agent"), as amended.
WHEREAS, the parties hereto are parties to the Rights
Agreement (capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Rights Agreement, as amended);
WHEREAS, on July 28, 1998, pursuant to resolutions duly and
validly adopted by the Board of Directors of the Company, the parties entered
into the First Amendment to the Rights Agreement to, among other things, lower
the percentage threshold at which a Beneficial Owner of Common Shares became an
Acquiring Person;
WHEREAS, the definition of "Acquiring Person" as amended by
the First Amendment contained a provision which was ambiguous and did not
clearly reflect the intention of the Company's Board of Directors; and
WHEREAS, pursuant to Section 27 of the Rights Agreement, the
Board of Directors deems it desirable and in the best interests of the Company
and its shareholders to further amend the Rights Agreement to clarify the
ambiguity and, in furtherance thereof, the parties hereto desire to amend the
Rights Agreement as provided herein and to give effect to such amendment as of
July 28, 1998.
NOW, THEREFORE, in consideration of the premises and the
mutual promises set forth herein and in the Rights Agreement, the parties hereto
agree as follows:
1. The definition of "Acquiring Person" as set forth in
Section 1(a) of the Rights Agreement is hereby amended 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
11.8% or more of the Common Shares then outstanding, but shall not
include (i) the Company or any Subsidiary (as such term is hereinafter
defined) of the Company, (ii) any employee benefit plan (including, but
not limited to, any employee stock ownership plan) of the Company or
any Subsidiary of the Company or any Person organized, appointed or
established by the Company or such Subsidiary as a fiduciary for or
pursuant to the terms of any such employee benefit plan or (iii) any
Person who would otherwise be an "Acquiring Person" but for the good
faith determination by the Board of Directors of the Company that such
Person has become an "Acquiring Person" inadvertently, provided that
such Person together with its Affiliates and Associates divest
themselves as promptly as practicable of beneficial
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ownership of a sufficient number of Common Shares so that such Person
together with its Affiliates and Associates beneficially own less than
11.8% of the Common Shares then outstanding. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as a result of
an acquisition 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 11.8% or more of the
Common Shares then outstanding, provided, however, that if a Person,
together with its Affiliates and Associates, shall become the
Beneficial Owner of 11.8% or more of the Common Shares 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 other than as a direct or indirect result of any
corporate action taken by the Company, then such Person shall be deemed
to be an "Acquiring Person."
2. The first sentence of clause (a) of Section 3 of the Rights
Agreement is hereby amended to read in its entirety as follows:
"(a) Until the earlier of the Close of Business on (i) the tenth
Business Day after the Shares Acquisition Date or (ii) the tenth
Business Day, or such specified or unspecified later date as may be
determined by action of the Board of Directors of the Company, after
the date of the commencement of (as determined by reference to Rule
l4d- 2(a), as now in effect under the Exchange Act), or first public
announcement of the intent of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan, including, but
not limited to, an employee stock ownership plan, of the Company or of
any Subsidiary of the Company, or any Person organized, appointed or
established by the Company or such Subsidiary as a fiduciary pursuant
to the terms of any such employee benefit plan) to commence (which
intention to commence remains in effect for five Business Days after
such announcement), a tender or exchange offer for an amount of Common
Shares of the Company which, together with the Common Shares already
beneficially owned by such Person, constitutes 11.8% or more of the
Common Shares then outstanding (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 described in clauses (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section
3) by the certificates for Common Shares registered in the names of the
holders thereof (which certificates for Common Shares shall also be
deemed to be Right Certificates) and not by separate Right
Certificates, and (y) the rights to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares."
3. The foregoing amendments to Section 1(a) and 3(a) of the
Rights Agreement are, and shall be deemed for all purposes to have been,
effective on and after July 28, 1998 as if this Second Amendment were executed
and delivered as of such date.
4. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts to be
made and performed entirely within such State.
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5. Except as expressly amended hereby, the Rights Agreement,
as previously amended, shall continue in full force and effect in accordance
with the provisions thereof.
6. This Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
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IN WITNESS WHEREOF, the Company and the Rights Agent have
executed this Amendment as of the date first above written.
GRYPHON HOLDINGS, INC.
By:
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Stephen A. Crane
President and CEO
ATTEST:
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STATE STREET BANK AND
TRUST COMPANY
By:
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ATTEST:
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