EXHIBIT 4.3
ELECTRONIC CLEARING HOUSE, INC.
AND
OTR, INC.
AMENDMENT NUMBER TWO TO
AMENDED AND RESTATED RIGHTS AGREEMENT
DECEMBER 14, 2006
AMENDMENT NUMBER TWO TO
AMENDED AND RESTATED RIGHTS AGREEMENT
This Amendment Number Two to Amended and Restated Rights Agreement
(this "SECOND AMENDMENT") is made and entered into as of the 14th day of
December, 2006, by and between Electronic Clearing House, Inc., a Nevada
corporation ("COMPANY"), and OTR, Inc., an Oregon corporation ("RIGHTS AGENT").
RECITALS
A. Pursuant to that certain Rights Agreement dated September 30, 1996,
by and between the Company and the Rights Agent (the "ORIGINAL AGREEMENT"), the
Board of Directors of the Company authorized, declared and distributed a
dividend of one preferred share purchase right ("RIGHT") for each share of
Common Stock of the Company outstanding on September 30, 1996 ("RECORD DATE"),
each Right representing the right to purchase four one-hundredths of a Preferred
Stock share, and further authorized and directed the issuance of one Right with
respect to each Common Stock share that has or will become outstanding between
the Record Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date.
B. On January 29, 2003, the Company and the Rights Agent entered into
an Amended and Restated Rights Agreement (the "AMENDED AGREEMENT") that
completely amended and restated the Original Agreement to, among other matters,
clarify the effects on each Right of (i) dividends payable in common stock and
(ii) subdivisions, combinations or consolidations of Common Stock as the same
have been declared and implemented by the Company prior to January 29, 2003.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to such terms in the Amended Agreement.
C. Concurrent with the execution of the Amended Agreement, the Board of
Directors of the Company authorized and declared, and distributed as of the
January 29, 2003, a second dividend of one preferred share purchase right (the
"SECOND RIGHT") for each share of Common Stock of the Company outstanding on
January 29, 2003, each Second Right representing the right to purchase four
one-hundredths of a Preferred Stock share, upon the terms and subject to the
conditions set forth in the Amended Agreement, and further authorized and
directed the issuance of one Second Right with respect to each Common Stock
share that has or will become outstanding between January 29, 2003 and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date.
D. On September 27, 2004, the Company and the Rights Agent entered into
an Amendment Number One to Amended and Restated Rights Agreement (the
"AMENDMENT") to, among other matters, amend the purchase price of each
individual Right and Second Right such that each Right and Second Right would
have a similar economic effect as was intended for such Right and Second Right
under the Amended Agreement.
E. The Board of Directors of the Company has determined that it is in
the best interests of the Company and its shareholders to amend the Amended
Agreement (as amended),
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including all applicable sections, to revise the definition of "Acquiring
Person" to exempt Intuit Inc., a Delaware corporation therefrom.
F. Pursuant to Section 27 of the Amended Agreement, the Board of
Directors has the power and authority to direct the amendment of the Amended
Agreement (as amended) by the Company and the Rights Agent, such amendment to be
evidenced by a writing signed by both parties.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
1. AMENDMENT TO SECTION 1(A). Section 1(a) of the Amended Agreement is
hereby amended and restated 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
twenty-percent (20%) or more of the Common Stock of the Company then
outstanding, but shall not include the (i) Company, (ii) any Subsidiary
(as such term is hereinafter defined) of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the
Company, or of any entity holding Common Stock for or pursuant to the
terms of any such plan, and (iv) Intuit Inc., a Delaware corporation
("INTUIT"), provided, however, that if a Person is the Beneficial Owner
at the close of business on the date of this Agreement of
twenty-percent (20%) or more of the Common Stock of the Company, such
Person shall not be deemed an Acquiring Person unless and until such
Person acquires any additional Common Stock in any manner other than
pursuant to a stock dividend, stock split, recapitalization, or similar
transaction that does not affect the percentage of outstanding Common
Stock. 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 twenty-percent (20%) or more of the Common Stock of the
Company then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of twenty-percent (20%) or more of the
Common Stock of the Company 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 Stock of
the Company, then such Person shall be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if a majority of the Board of
Directors then in office determines in good faith that a Person who
should be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and
such Person divests as promptly as practicable a sufficient number of
shares of Common Stock so that such Person would no longer be an
Acquiring Person, as defined pursuant to the foregoing provisions of
this paragraph (a), then such a Person shall not be deemed to be an
"Acquiring
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Person" for any purposes to this Agreement. For the avoidance of doubt,
in no event shall the execution of the Agreement and Plan of Merger by
and among the Company, Intuit and Elan Acquisition Corporation be
deemed to be a Stock Acquisition Date or to result in a Distribution
Date."
2. AMENDMENT TO SECTION 3(A). Section 3(a) of the Amended Agreement is
hereby amended and restated to read in its entirety as follows:
"(a) Until the earlier of the close of business on (i) the
tenth day after the Stock Acquisition Date, or (ii) the tenth Business
Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement 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 entity holding
Common Stock for or pursuant to the terms of any such plan, or Intuit)
of, or of the first public announcement of the intention of 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
entity holding Common Stock for or pursuant to the terms of any such
plan, or Intuit) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the
Beneficial Owner of Common Stock aggregating twenty-percent (20%) or
more of the then outstanding Common Stock, irrespective of whether any
shares of Common Stock are actually purchased pursuant to such offer
(including any such date which is after the Record Date (with respect
to Rights) and the Effective Date (with respect to Second Rights) and
prior to the issuance of the Rights or the Second Rights, as the case
may be, the earliest of such dates being herein referred to as the
"Distribution Date"), (x) the Rights/Second Rights will be evidenced,
subject to the provisions of Section 3(b) hereof, by the certificates
for Common Stock registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not be
separate Rights Certificates, and (y) the right to receive Rights
Certificates will be transferable only in connection with the transfer
of Common Stock. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of 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, a Rights Certificate, in
substantially the form of Exhibit B attached hereto ("Rights
Certificate"), evidencing one Right or Second Right, as the case may
be, for each Common Stock share so held. As of the Distribution Date,
the Rights and Second Rights will be evidenced solely by such Rights
Certificates."
3. AMENDMENT TO SECTION 24(A). Section 24(a) of the Amended Agreement
is hereby amended and restated to read in its entirety as follows:
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"(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights and Second
Rights, which shall not include Rights or Second Rights that have
become void pursuant to the provisions of Section 11(a)(ii) hereof, for
Common Stock at an exchange ratio of one Common Stock share per Right
or per Second Right, as the case may be, 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 "Exchange Ratio." 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 of any such
Subsidiary, or of any entity holding Common Stock for or pursuant to
the terms of any such plan, or Intuit), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Stock then outstanding."
4. RATIFICATION OF AMENDED AGREEMENT. Except as expressly amended or
modified herein, all terms and conditions of the Amended Agreement and the
Amendment are hereby ratified, confirmed and approved and shall remain in full
force and effect. In the event of any conflict or inconsistency between this
Second Amendment, on the one hand, and the Amended Agreement and the Amendment,
on the other hand, this Second Amendment shall govern.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date first set forth above.
ELECTRONIC CLEARING HOUSE, INC. OTR, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
----------------------------- ---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇
Chairman of the Board and -------------------------------
Chief Executive Office Title: Vice President
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