Exhibit 3
SECOND AMENDMENT TO RIGHTS AGREEMENT
This Second Amendment is made this 16th day of January, 2002
to the Rights Agreement, dated as of February 23, 1999,
between Northeast Utilities (the "Company") and Northeast
Utilities Service Company (the "Rights Agent") as amended
(the "Rights Agreement"). Pursuant to Section 27(a) of the
Rights Agreement, the Company and the Rights Agent hereby
amend the Rights Agreement as follows:
1. In Section 1, the definition of "Acquiring Person" is
amended 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 15% or more of the
Common Shares of the Company then outstanding, but
shall not include the Company, any Subsidiary (as
such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any
Subsidiary of the Company, any entity holding
Common Shares for or pursuant to the terms of any
such plan, any trustee, administrator or fiduciary
of such a plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as a
result of an acquisition of Common Shares 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 Shares of the Company then
outstanding; provided, however, that if a Person
would, but for the foregoing, become an Acquiring
Person 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 Shares of the Company at any
time that the Person is or thereby becomes the
Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding (other than
Common Shares acquired solely as a result of
corporate action of the Company not caused,
directly or indirectly, by such Person), then such
Person shall be deemed to be an "Acquiring
Person". Notwithstanding the foregoing, if the
Board of Trustees of the Company determines in
good faith that a Person who would otherwise 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
Common Shares so that such Person would no longer
be an "Acquiring Person," as defined pursuant to
the foregoing provisions of this paragraph (a),
then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this
Agreement."
2. In Section 1, the definition of "Shares Acquisition
Date" is amended to read in its entirety as follows:
"(y) "Shares Acquisition Date" shall mean the
first date of public announcement (which, for
purposes of this definition, shall include,
without limitation, a report filed or amended
pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an
Acquiring Person has become an Acquiring Person."
3. Section 1 is further amended by deleting the definitions
of "Merger" contained in section 1(ee) and the definition of
"Merger Agreement" contained in section 1 (ff).
4. Section 3(a) is amended to read in its entirety as
follows:
"(a) Until the earlier of (i) the tenth day after
the Shares Acquisition Date or (ii) the tenth
Business Day (or such later date as may be
determined by action of the Company's Board of
Trustees prior to such time as any Person becomes
an Acquiring Person) after the date of the
commencement of, or of the first public
announcement of the intention of any Person to
commence, a tender or exchange offer the
consummation of which would result in 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, any entity
holding Common Shares for or pursuant to the terms
of any such plan, any trustee, administrator, or
fiduciary of such a plan) becoming the Beneficial
Owner of Common Shares of the Company aggregating
15% or more of the then outstanding Common Shares
(including in either case any such date which is
after the date of this Agreement and prior to the
Payment Date; the earlier of such dates being
herein referred to as the "Distribution Date";
provided, however, that if the tenth day or tenth
Business Day, as the case may be, after the
pertinent date occurs before the Record Date,
"Distribution Date" shall mean the Record Date),
(x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the
names of the holders thereof (which certificates
shall also be deemed 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 Shares. 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 Shares as of the
close of business on the Distribution Date, at the
address of such holder shown on the records of the
Company, a Right Certificate, in substantially the
form of Exhibit A hereto (a "Right Certificate"),
evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights
will be evidenced solely by such Right
Certificates."
5. Section 7(a) is amended to read in its entirety as
follows:
"(a) Subject to Section 7(e) hereof, each Right
shall be exercisable to purchase one Common Share,
subject to further adjustment as provided herein.
The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at
any time after the Distribution Date upon
surrender of the Right Certificate, with the form
of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the
principal office of the Rights Agent, together
with payment of the Purchase Price for each Common
Share as to which the Rights are exercised, at or
prior to the earliest of (i) the close of business
on February 23, 2009, subject to extension (the
"Final Expiration Date"), (ii) the time at which
the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date") and (iii) the time
at which such Rights are exchanged as provided in
Section 24 hereof."
6. Section 11(a)(ii) is amended to read in its entirety as
follows:
"(ii) Subject to Section 24 of this Agreement, in
the event any Person shall become an Acquiring
Person (a "Section 11(a)(ii) Event"), other than
pursuant to any transaction set forth in Section
13(a), each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have a
right to receive, upon exercise thereof at a price
equal to the then current Purchase Price per
Common Share multiplied by the number of Common
Shares for which a Right is then exercisable, in
accordance with the terms of this Agreement, such
number of Common Shares of the Company as shall
equal the result obtained by (x) multiplying the
then current Purchase Price per Common Share by
the number of Common Shares for which a Right is
then exercisable and dividing that product by (y)
50% of the then current per share market price of
the Common Shares of the Company (determined
pursuant to Section 11(d)) on the date the Person
became an Acquiring Person (such number of shares,
the "Adjustment Shares") provided that the
Purchase Price and the number of Adjustment Shares
shall be further adjusted as provided in this
Agreement to reflect any events occurring after
the date of such first occurrence."
7. The second paragraph of Exhibit B is amended to read in
its
entirety as follows:
"Until the earlier to occur of (i) 10 days
following a public announcement that a person or
group of affiliated or associated persons (other
than the Company, a subsidiary of the Company or
an employee benefit plan of the Company or a
subsidiary) (an "Acquiring Person") has acquired
beneficial ownership of 15% or more of the
outstanding Common Shares (the "Shares Acquisition
Date") or (ii) 10 business days (or such later
date as may be determined by action of the
Company's Board of Trustees prior to such time as
any person becomes an Acquiring Person) following
the commencement of, or announcement of an
intention to make, a tender offer or exchange
offer the consummation of which would result in
the beneficial ownership by a person or group
(other than the Company, a subsidiary of the
Company or an employee benefit plan of the Company
or a subsidiary) of 15% or more of such
outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of
the Record Date, by such Common Share
certificate."
8. In all other respects the Rights Agreement, as
heretofore amended, shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Second Amendment to be duly executed as of the day and year
first above written.
NORTHEAST UTILITIES
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chairman of the Board, President
and Chief Executive Officer
NORTHEAST UTILITIES SERVICE COMPANY
as Rights Agent
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, Secretary and
General Counsel
