Exhibit 99.1
FIFTH AMENDMENT TO RIGHTS AGREEMENT
Fifth Amendment to Rights Agreement (this "Amendment") entered
into as of this 16th day of February, 1999, by and between Northern Trust
Corporation, a Delaware corporation (the "Company"), and Norwest Bank
Minnesota, N.A., a national banking association, as Rights Agent (the
"Rights Agent").
WHEREAS, the Company entered into a Rights Agreement with Xxxxxx
Trust and Savings Bank (the "Original Rights Agent") dated as of October
17, 1989, as amended by a First Amendment thereto, dated as of September
17, 1997, a Second Amendment thereto, dated as of November 18, 1997, a
Third Amendment thereto, dated as of July 21, 1998, and a Fourth Amendment
thereto, dated as of November 18, 1998 (as so amended, the "Agreement");
WHEREAS, effective November 10, 1997, the Rights Agent was
appointed as successor to the Original Rights Agent in accordance with
Section 21 of the Agreement; and
WHEREAS, pursuant to Section 27 of the Agreement, the Company has
determined to modify the terms of the Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein set forth, and intending to be legally bound hereby, the
parties hereto agree that the Agreement shall be and hereby is amended in
the following manner:
1. Amendment of "Issuance of Rights Certificates" Section. The
first sentence of Section 3(a) of the Agreement is hereby amended in its
entirety to read as follows:
Until the earlier of (i) the twentieth day after the Stock
Acquisition Date, or (ii) the twentieth 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; provided, however, that no
deferral of a Distribution Date by the Board of Directors pursuant to
this clause (ii) may be made at any time during the Special Period)
after the commencement of, or first public announcement of the intent
of any Person (other than the Company or any of its subsidiaries or
any employee benefit plan of the Company or of any subsidiary of the
Company or any Person appointed as trustee by the Company or such
subsidiary pursuant to the terms of any such plan in such Person's
capacity as trustee) to commence, a tender of exchange offer, if upon
consummation thereof such Person, together with all Affiliates and
Associates of such Person, would be the Beneficial Owner of shares of
Common Stock and/or other securities representing 25% or more of the
Voting Power (the earlier of such days, including any such day which
is after the date of this Agreement and prior to the Record Date,
being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced by the certificates for the Common Stock of the
Company registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be Right
Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in
connection with the transfer of Common Stock.
2. Amendment of "Redemption" Section. Section 23 of the
Agreement is hereby amended in its entirety to read as follows:
Section 23. Redemption. (a) The Board of Directors of
the Company may, at its option, at any time prior to the earliest to
occur of (i) the date on which an Automatic Redemption Event (as
defined below) occurs pursuant to paragraph (c) of this Section 23,
(ii) the close of business on the twentieth day after the Stock
Acquisition Date or (iii) the Final Expiration Date, redeem all but
not less than all of the then outstanding Rights at a redemption price
of $.01 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereafter
referred to as the "Redemption Price").
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, and without any further action and
without any notice, the Rights will terminate, and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price. Within ten business days after the action of the Board of
Directors ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 23, the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Stock.
(c) Notwithstanding anything contained in this Agreement to
the contrary, in the event that an Automatic Redemption Event occurs
at any time prior to the earliest to occur of (i) the date on which
the Board of Directors of the Company authorizes redemption of the
Rights pursuant to paragraph (a) of this Section 23, (ii) the close of
business on the twentieth day after the Stock Acquisition Date or
(iii) the Final Expiration Date, then effective immediately upon the
occurrence of such Automatic Redemption Event, by action of the Board
of Directors of the Company taken to approve the inclusion of this
paragraph (c) in Section 23 of the Agreement and without any further
action on the part of or notice from the Board of Directors of the
Company, the Rights shall be redeemed and shall terminate, and
thereafter, the only right of the holders of Rights shall be to
receive the Redemption Price. Each of the following shall be an
"Automatic Redemption Event":
(A) any Person (other than the Company or any of its
subsidiaries or any employee benefit plan of the Company or of
any subsidiary of the Company or any Person appointed as trustee
by the Company or such subsidiary pursuant to the terms of any
such plan in such Person's capacity as trustee) becomes the
Beneficial Owner of securities of the Company which in the
aggregate represent 14% or more of the Voting Power;
(B) any Person (other than the Company or any of its
subsidiaries or any employee benefit plan of the Company or of
any subsidiary of the Company or any Person appointed as trustee
by the Company or such subsidiary pursuant to the terms of any
such plan in such Person's capacity as trustee) commences, or
publicly announces its intent to commence, a tender or exchange
offer if upon consummation thereof such Person, together with all
Affiliates and Associates of such Person, would be the Beneficial
Owner of securities of the Company which in the aggregate
represent 15% or more of the Voting Power;
(C) any Person makes by public announcement or by written
communication that is or becomes the subject of a public
announcement, or publicly announces its intent to make, a bona
fide proposal to the Company or its stockholders for (1) a
merger, consolidation or similar transaction involving the
Company or any of its subsidiaries, (2) a purchase or other
acquisition of all or a substantial portion of the assets or
deposits of the Company and its Subsidiaries or (3) a purchase or
other acquisition of securities representing 15% or more of the
Voting Power (any transaction of the type described in clauses
(1), (2) or (3) of this paragraph (C), an "Acquisition
Transaction"); or
(D) any Person files an application or notice with the Board
of Governors of the Federal Reserve System, or any other federal
or state banking regulatory authority, which application or
notice seeks approval to engage in any transaction constituting
an Acquisition Transaction.
(d) Within ten business days after the Company becomes
aware of the occurrence of an Automatic Redemption Event, the Company
shall give notice of the redemption of the Rights to the holders of
the then outstanding Rights by mailing such notice to all such holders
at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Stock.
(e) Notwithstanding the provisions of Section 23(a) hereof,
if, within 270 days of a public announcement by a third party of an
intent or proposal to engage (without the current and continuing
concurrence of the Board of Directors of the Company) in a transaction
involving an acquisition of or business combination with the Company
or otherwise to become an Acquiring Person, there is an election of
Directors (whether at one or more stockholder meetings and/or pursuant
to written stockholder consent) resulting in a majority of the Board
of Directors of the Company being comprised of persons who were not
nominated by the Board of Directors of the Company in office
immediately prior to such election, then following the effectiveness
of such election for a period of 180 days (the "Special Period") the
Rights, if otherwise then redeemable absent the provisions of this
paragraph (c), shall be redeemable upon either of the following
conditions being satisfied, but not otherwise:
(A) by a vote of a majority of the Directors then in office,
provided that
(I) before such vote, the Board of Directors of the Company shall
have implemented the Value Enhancement Procedures (as defined
below) and
(II) promptly after such vote, the Company publicly announces
such vote and
(a) the manner in which the Value Enhancement Procedures
were implemented,
(b) any material financial, business, personal or other
benefit or relationship (an "Interest") which each Director
and each Affiliate of such Director (identifying each
Director and Affiliate separately in relation to each such
Interest) has in connection with any suggested, proposed or
pending transaction with or involving the Company (a
"Transaction"), or with any other party or Affiliate of any
other party to a Transaction, where such Transaction would
or might, or is intended to, be permitted or facilitated by
redemption of the Rights (an "Affected Transaction"), other
than treatment as a stockholder on a pro rata basis with
other stockholders or pursuant to compensation arrangements
as a director or employee of the Company or a subsidiary
which have been previously disclosed by the Company,
(c) the individual vote of each Director on the motion to
redeem the Rights, and
(d) the statement of any Director who voted for or against
the motion to redeem the Rights and desires to have a
statement included in such announcement, or
(B) if clause (A) is not applicable, by a vote of a majority of
the Directors then in office, provided that (I) if there is a
challenge to the Directors' action approving redemption and/or
any related Affected Transaction as a breach of the fiduciary
duty of care or loyalty, the Directors, solely for purposes of
determining the effectiveness of such redemption pursuant to this
clause (B), are able to establish the entire fairness of such
redemption and, if applicable, such related Affected Transaction,
and (II) the Company shall have publicly announced the vote of
the Board of Directors of the Company approving such redemption
and, if applicable, such related Affected Transaction, which
announcement shall set forth the information prescribed by
clauses (A) (II) (b), (c) and (d) above.
"Value Enhancement Procedures" shall mean:
(1) the selection by the Board of Directors of the Company of an
independent financial advisor (the "Independent Advisor") from among
financial advisors which have national standing, have established
expertise in advising on mergers, acquisitions and related matters and
have no Interest relating to an Affected Transaction, and have not
during the preceding year provided services to, been engaged by or
been a financing source for any other party to an Affected Transaction
or any Affiliate of any such party or of any Director (other than the
Company and its subsidiaries);
(2) whether or not there is a then-pending Affected Transaction, the
receipt by the Board of Directors of the Company from its Independent
Advisor of (a) such advisor's view (expressed in such form and subject
to such qualifications and limitations as the Independent Advisor
deems appropriate) regarding whether redemption of the Rights will
serve the best interests of the Company and its stockholders or (b)
such advisor's statement that it is unable to express such a view,
setting forth the reasons therefor;
(3) if there is a then-pending Affected Transaction,
(A) the establishment and implementation by the Board of
Directors of the Company, with the advice of its Independent
Advisor, of a process and procedures which the Board of Directors
of the Company and such advisor conclude would be most likely to
result in the best value reasonably available to stockholders
(regardless of whether such Affected Transaction involves a "sale
of control" or "break-up" of the Company for Delaware law
purposes),
(B) the Board of Directors of the Company (I) receiving the
opinion of its Independent Advisor, in customary form and content
for transactions of the type involved, that the Affected
Transaction is fair to the Company's stockholders from a
financial point of view and (II) determining, and the Independent
Advisor confirming, that it has no reason to believe that a
superior transaction is reasonably available for the benefit of
the Company's stockholders, and
(C) the execution of a definitive transaction agreement and other
definitive documentation necessary to effect the Affected
Transaction.
(f) Any notice of redemption which is mailed in the manner
provided in this Section 23 shall be deemed given, whether or not the
holder receives the notice. Such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23 and
other than in connection with the purchase or repurchase by any of
them of Common Stock prior to the Distribution Date. Moreover,
notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a
transaction set forth in Section 11(a) (ii) hereof until such time as
the Company's right of redemption hereunder has expired.
3. Amendment of "Exchange" Section. Paragraph (a) of Section
24 of the Agreement is hereby amended in its entirety to read as follows:
(a) The Board of Directors of the Company may, at its option, at
any time after the first occurrence of any event specified in Section
11(a)(ii)(A), (B) or (C), 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 11(a)(ii) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock 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 "Exchange Ratio"); provided, however,
that no such exchange of the Rights may be authorized by the Board of
Directors of the Company during the Special Period or at any time when the
Rights are not redeemable.
4. Amendment of "Supplements and Amendments" Section.
Section 27 of the Agreement is hereby amended in its entirety to read as
follows:
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, and subject to the
penultimate sentence of this Section 27(a) and the provisions of Section
27(b) hereof, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common
Stock. From and after the Distribution Date, and subject to the
penultimate sentence of this Section 27(a) and the provisions of Section
27(b) hereof, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders
of Rights Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, however, that this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of
this sentence, a time period relating to when the Rights may be redeemed,
or to modify the ability (or inability) of the Board of Directors of the
Company to redeem the Rights, in either case at any time when the Rights
are not then redeemable. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27,
the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price,
the Final Expiration Date, the Purchase Price or the number of one one-
hundredths of a share of Preferred Stock for which a Right is exercisable
unless at the time of such supplement or amendment there has been no Stock
Acquisition Date and such supplement or amendment shall not adversely
affect the interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person).
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common
Stock.
(b) Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made to this Agreement
during the Special Period or at a time when the Rights are not redeemable,
except as contemplated by clause (i) or (ii) of Section 27(a) hereof.
5. Agreement as Amended. The term "Agreement" as used in the
Agreement shall be deemed to refer to the Agreement as amended hereby, and
all references to the Agreement shall be deemed to include this Amendment.
6. Effectiveness. This Amendment shall be effective as of the
date first written above, and except as set forth herein, the Agreement
shall remain in full force and effect and otherwise shall be unaffected
hereby.
7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and attested as of the date first written above.
Attest: NORTHERN TRUST CORPORATION
/s/ Xxxx X. Xxxxx /s/ Xxxxx X. Xxxx
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Name: Xxxx X. Xxxxx Name: Xxxxx X. Xxxx
Title: Secretary Title: Senior Executive Vice President
Attest: NORWEST BANK MINNESOTA, N.A.
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
