EXHIBIT 1
AMENDMENT TO RIGHTS AGREEMENT
THIS AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is made as of
this 31st day of March, 1999 by and between MERCURY INTERACTIVE CORPORATION, a
Delaware corporation (the "Company"), and CHASEMELLON SHAREHOLDER SERVICES, LLC,
successor to XXXXX FARGO BANK NATIONAL ASSOCIATION, a national bank association,
as rights agent (the "Rights Agent").
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement dated as of July 5, 1996 (the "Rights Agreement");
WHEREAS, the parties desire to amend the Rights Agreement in
connection with the execution and delivery of the Merger Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. The definition of "Acquiring Person" set forth in Section 1(a) of
the Rights Agreement is hereby amended by substituting the percentage "15%" for
the percentage "20%" in each place it appears in Section 1.
2. Section 1 of the Rights Agreement is hereby amended by amending
subsection (g) to read in its entirety as follows:
(g) Intentionally omitted.
3. Subsection (h) of Section 1 of the Rights Agreement is hereby
amended to read in its entirety as follows:
(h) "Distribution Date" shall mean the earlier of
(i) the Close of Business on the tenth day after the
Shares Acquisition Date or (ii) the Close of Business
on the tenth day (or such later date as may be determined
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by action of the Board of Directors) 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, assuming the successful consummation
thereof, such Person would be the Beneficial Owner of
15% or more of the shares of Common Stock then
outstanding.
4. Subsection (l) of Section 1 of the Rights Agreement is hereby
amended to read in its entirety as follows:
(l) "Permitted Offer" shall mean a tender offer
for all outstanding Common Shares made in the manner
prescribed by Section 14(d) of the Exchange Act and the
rules and regulations promulgated thereunder; provided,
however, that a majority of the directors then in
office have determined that the offer is both adequate
and otherwise in the best interests of the Company and
its stockholders (taking into account all factors that
the Board of Directors deem relevant, including without
limitation prices that could reasonably be achieved if
the Company or its assets were sold on an orderly basis
designed to realize maximum value).
5. Section 2 of the Rights Agreement is hereby amended by deleting
from the first sentence the following clause: "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)".
6. Section 7(b) of the Rights Agreement is hereby amended by
changing the Purchase Price to Two Hundred and Twenty Dollars ($220.00).
7. The first paragraph of Section 18 is hereby modified and amended
by inserting the following sentence at the end of the paragraph: "Anything to
the contrary notwithstanding, in no event shall the Rights Agent be liable for
special, indirect, punitive, consequential or incidental loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage."
8. Subsection (a) of Section 23 of the Rights Agreement is hereby
amended to read in its entirety as follows:
(a) 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 $.002 per Right, appropriately
adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof
(such redemption price being herein referred to as the
"Redemption Price"), and
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the Company may, at its option, pay the Redemption
Price either in Common Shares (based on the current per
share market price thereof (as determined pursuant to
Section 11(d) hereof) at the time of redemption) or
cash. Such redemption of the Rights by the Company 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.
9. Subsection (a) of Section 24 of the Rights Agreement is hereby
amended to read in its entirety as follows:
(a) Subject to applicable laws, rules and
regulations, and subject to subsection (c) below, the
Board of Directors of the Company may, at its option,
at any time after the occurrence of a Triggering Event,
exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section
7(e) hereof) for Common Shares at an exchange ratio of
one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the
"Ratio of Exchange"). 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.
10. Section 27 of the Rights Agreement is hereby amended to read in
its entirety as follows:
Section 27. Supplements and Amendments. Prior to the
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Distribution Date, the Company may supplement or amend this
Agreement in any respect without the approval of any holders
of Rights and the Rights Agent shall, if the Company so
directs, execute such supplement or amendment. From and
after the Distribution Date, the Company and the Rights
Agent may from time to time supplement or amend this
Agreement without the approval of any holders of Rights in
order to (i) cure any ambiguity, (ii) correct or supplement
any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten
or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner that the
Company may deem necessary or desirable; provided, however,
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that no such supplement or amendment made pursuant to this
sentence shall be made that adversely affects the interests
of the holders of Rights (other than an Acquiring Person or
an Affiliate or Associate of an Acquiring Person); provided,
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further, that this Agreement may not be supplemented or
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amended pursuant to clause (iii) of this sentence (A) to
lengthen a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable
or (B) to
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lengthen or shorten any other time period unless such
lengthening or shortening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits
to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company that
states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, and such
supplement or amendment does not change or increase the
Rights Agent's duties, liabilities or obligations the Rights
Agent shall execute such supplement 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.
11. Section 29 of the Rights Agreement is hereby amended to read in
its entirety as follows:
Section 29. Determinations and Actions by the Board of
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Directors, etc. For all purposes of this Agreement, any
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calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares
of which any Person is the Beneficial Owner, shall be made
in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and regulations under the Exchange Act.
The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted
to the Board, or the Company, or as may be necessary or
advisable in the administration of this Agreement,
including, without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y)
below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights Certificates and all other
parties and (y) not subject the Board to any liability to
the holders of the Rights. The Rights Agent shall always be
entitled to assume the Board acted in good faith and shall
be fully protected and incur no liability in reliance
thereon.
12. The Rights Agreement, as amended by this Amendment, shall remain
in full force and effect in accordance with its terms.
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IN WITNESS WHEREOF, the parties herein have caused this Amendment to be
duly executed and attested, all as of the date and year first above written.
ATTEST: MERCURY INTERACTIVE CORPORATION
By: /s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxxx Name: Xxxxxxxx Xxxxxx
Title: Administrative Assistant Title: Vice President of Finance and
Administration and Chief Financial
Officer and Secretary
ATTEST: CHASEMELLON SHAREHOLDER SERVICES, LLC
Rights Agent
By: /s/ Xxxxxx Xxxxxxx By: /s/ Xxx Xxxx
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Name: Xxxxxx Xxxxxxx Name: Xxx Xxxx
Title: Relationship Manager Title: Assistant Vice President
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