AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT, dated as of May 17, 2000, to the Rights Agreement, dated as
of September 14, 1998 (as heretofore amended, the "Rights Agreement"), by and
between Petco Animal Supplies, Inc., a Delaware corporation (the "Company"), and
American Stock Transfer and Trust Company, a New York corporation (the "Rights
Agent").
WHEREAS, the Company and the Rights Agent have heretofore executed and
entered into the Rights Agreement; and
WHEREAS, pursuant to Section 26 of the Rights Agreement, the Company
may from time to time supplement or amend the Rights Agreement in accordance
with the provisions of Section 26 thereof; and
WHEREAS, the Company intends to enter into an Agreement and Plan of
Merger (as it may be amended or supplemented from time to time, the "Merger
Agreement"), to be dated as of May 17, 2000, by and between the Company and BD
Recapitalization Corp., a Delaware corporation, as the same may be amended from
time to time; and
WHEREAS, the Board of Directors has determined that the Merger (as
defined in the Merger Agreement) and the other transactions contemplated by the
Merger Agreement are fair to and in the best interests of the Company and its
stockholders; and
WHEREAS, the Board of Directors has determined that it is in the best
interest of the Company and its stockholders to amend the Rights Agreement to
exempt the Merger Agreement and the transactions contemplated thereby from the
application of the Rights Agreement.
NOW, THEREFORE, the Company hereby amends the Rights Agreement as
follows:
1. The first sentence of Section 1.1 of the Rights Agreement is hereby
modified and amended to read in its entirety as follows:
"`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 outstanding but
shall not include (i) an Exempt Person (as such term is hereinafter
defined) or (ii) if as of the date hereof, any Person is the Beneficial
Owner of 15% or more of the Common Shares outstanding (an "Existing
Holder"), such Existing Holder shall not be or become an "Acquiring
Person" unless and until such time as such Existing Holder shall become
the Beneficial Owner of one or more additional Common Shares of the
Company (other than pursuant to a dividend or distribution paid or made
on by the Company on the outstanding Common Shares in Common Shares or
pursuant to a split or subdivision of the outstanding Common Shares),
unless, upon becoming the Beneficial Owner of such additional Common
Shares, such Existing Holder is not then the Beneficial Owner of 15% or
more of the Common Shares then outstanding; provided, however, that
neither BD Recapitalization Corp., a Delaware corporation (together
with its Affiliates and Associates and any assignee thereof pursuant to
the Merger Agreement) ("BD Recapitalization Corp."), nor any other
Person, shall be deemed to be or become an Acquiring Person by virtue
of the Agreement and Plan of Merger (as it may be amended or
supplemented from time to time, the "Merger Agreement") to be entered
into as of May 17, 2000, by and between the Company and BD
Recapitalization Corp., or as a result of the consummation of the
transactions contemplated thereby."
2. Section 1.7 of the Rights Agreement is hereby modified and amended
to read in its entirety as follows:
"'Exempt Person' shall mean the Company, any Subsidiary of the
Company, in each case including, without limitation, its fiduciary
capacity, any employee benefit plan of the Company or of any Subsidiary
of the Company or any entity or trustee holding shares of capital stock
of the Company for or pursuant to the terms of any such plan, or for
the purpose of funding other employee benefits for employees of the
Company or any Subsidiary of the Company in its capacity as an agent or
trustee for any such plan or BD Recapitalization Corp.; provided,
however, that BD Recapitalization Corp. will not be an Exempt Person in
the event that BD Recapitalization Corp. becomes the Beneficial Owner
of 15% or more of the Common Shares of the Company other than pursuant
to the terms of the Merger Agreement."
3. A Section 35 is hereby added to the Rights Agreement which shall
read in its entirety as follows:
Section 35. Certain Exclusions. Notwithstanding anything in
this Agreement to the contrary, a Shares Acquisition Date, Distribution
Date or Trigger Event (as each such term is defined in the Rights
Agreement) shall not be deemed to have occurred solely as a result of
(i) the approval, execution or delivery of the Merger Agreement, or
(ii) the announcement or consummation of the Merger (as defined in the
Merger Agreement) or any other transaction contemplated thereby.
4. Except as expressly amended hereby, the Rights Agreement remains in
full force and effect in accordance with its terms.
5. The Rights Agreement, as amended by this Amendment, and each Right
and each Right Certificate exist under and pursuant to the Delaware General
Corporation Law.
6. This Amendment to the Rights Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
7. This Amendment to the Rights Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
an original, and all such counterparts shall together constitute but one and the
same instrument.
8. Except as expressly set forth herein, this Amendment to the Rights
Agreement 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 Rights Agreement, all of which are ratified and affirmed in all
respects and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
the Rights Agreement to be duly executed as of the day and year first above
written.
PETCO ANIMAL SUPPLIES, INC.,
a Delaware corporation
By:
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Title:
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By:
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Title:
