FIRST AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT made and entered into as of the 24th day of June 1999
by and between General Housewares Corp., a Delaware corporation (the
"Company") and First Chicago Trust Company of New York, a New York
Corporation (the "Rights Agent"), under the Rights Agreement dated as of
November 10, 1998, by and between the Company and the Rights Agent (the
"Agreement").
WHEREAS, the Company and the Rights Agent have heretofore
executed and entered into the Agreement; and
WHEREAS, pursuant to Section 27 of the Agreement, the Company
may from time to time prior to the Distribution Date (as defined therein)
supplement or amend the Rights Agreement in accordance with the provisions
of Section 27 thereof; and
WHEREAS, the Board of Directors has determined that it is in
the best interests of the Company and its stockholders to amend the
Agreement.
NOW THEREFORE, the Company and the Rights Agent hereby amend
the Agreement as follows:
A. Paragraph (a) of Section 1 of the Agreement is hereby amended by
deleting paragraph (a) in its entirety and substituting therefore a
new paragraph (a) as follows:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the
Company, (iv) any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan, (v) any such Person who has reported or is required
to report such ownership (but less than 25%) on Schedule 13G
under the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange Act") (or
any comparable or successor report) or on Schedule 13D under
the Exchange Act (or any comparable or successor report) which
Schedule 13D does not state any intention to or reserve the
right to control or influence the management or policies of the
Company or engage in any of the actions specified in Item 4 of
such Schedule (other than the disposition of the Common Stock)
and, within 10 Business Days of being requested by the Company
to advise it regarding the same, certifies to the Company that
such Person acquired shares of Common Stock in excess of 14.9%
inadvertently or without knowledge of the terms of the Rights
and who, together with all Affiliates and Associates,
thereafter does not acquire additional shares of Common Stock
while the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding; provided, however, that if the
Person requested to so certify fails to do so within 10
Business Days, then such Person shall become an Acquiring
Person immediately after such 10 Business Day Period or (vi)
any Person who, on June 25, 1999, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding (an
"Existing 15% Holder"), if and so long as (1) such Existing 15%
Holder, together with its Affiliates and Associates, continues
to be the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding and (2) neither such Existing 15%
Holder nor any of its Affiliates or Associates is or becomes
the Beneficial Owner of any additional shares of Common Stock
or any other Person who is the Beneficial Owner of any shares
of Common Stock does not become an Affiliate or Associate of
such Existing 15% Holder. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an
acquisition of Common Stock by the Company which, by reducing
the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or
more of the Common Stock of the Company then outstanding,
provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the Common Stock of the Company then
outstanding by reason of such an acquisition and shall, after
such acquisition, become the Beneficial Owner of any additional
Common Stock, then such Person shall be deemed to be an
"Acquiring Person".
B. Paragraph (a) of Section 3 of the Agreement is hereby amended by
deleting paragraph (a) in its entirety and substituting therefore a
new paragraph (a) as follows:
(a) Until the earlier of (i) the close of business on the tenth
day after the Stock Acquisition Date (or, if the tenth day
after the Stock Acquisition Date occurs before the Record Date,
the close of business on the Record Date), or (ii) the close of
business on the tenth Business Day (or such later date as the
Board shall determine) after the date that a tender or exchange
offer 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 Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding (the
earlier of (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 the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and
not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of
the close of business on the Distribution Date, at the address
of such holder shown on the records of the Company, one or more
right certificates, in substantially the form of Exhibit A
hereto (the "Rights Certificates"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as
provided herein. In the event that an adjustment in the number
of Rights per share of Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Rights. As of and after the Distribution
Date, the Rights will be evidenced solely by such Rights
Certificates.
C. Paragraph (a)(ii) of Section 11 of the Agreement is hereby amended by
deleting paragraph (a)(ii) in its entirety and substituting therefore
a new paragraph (a)(ii) as follows:
(ii) In the event that any Person shall, at any time after the
Rights Dividend Declaration Date, become an Acquiring Person,
unless the event causing such Person to become an Acquiring
Person is a transaction set forth in Section 13(a) hereof, or
is an acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding shares of
Common Stock at a price and on terms determined by at least a
majority of the members of the Board of Directors who are not
officers of the Company and who are not representatives,
nominees, Affiliates or Associates of an Acquiring Person,
after receiving advice from one or more investment banking
firms, to be (a) at a price which is fair to stockholders
(taking into account all factors which such members of the
Board deem relevant including, without limitation, prices which
could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and its
stockholders (hereinafter, a "Qualifying Offer"), then,
promptly following the occurrence of any such event, proper
provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a share
of Preferred Stock, such number of shares of Common Stock of
the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number
of one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of
Common Stock on the date of such first occurrence (such number
of shares, the "Adjustment Shares").
D. This Amendment shall be deemed to be a contract made under the laws
of the State of Delaware 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.
E. This Amendment may be executed in any number of counterparts, each of
which shall for all purposes be deemed an original, and all of which
together shall constitute but one and the same instrument.
F. Except as expressly set forth herein, this Amendment shall not by
implication or otherwise alter, modify, amend or in any way affect
any of the terms, conditions, obligations, covenants or agreements
contained in the Agreement, all of which are ratified and affirmed in
all respects and shall continue in full force and affect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above written.
Attest: GENERAL HOUSEWARES
CORP.
By /s/ Alex Lee By /s/ Raymond J. Kulla
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Name: Alex Lee Name: Raymond J. Kulla
Title: Vice President Title: Vice President and General Counsel
Attest: FIRST CHICAGO TRUST COMPANY OF
NEW YORK
By /s/ Angela M. Robson By /s/ Tammie L. Marshall
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Name: Angela M. Robson Name: Tammie L. Marshall
Title: Administrator Title: Assistant Vice President