RIGHTS AGREEMENT
dated as of January 8, 1999
by and between
Central Bancorp, Inc.
and
State Street Bank and Trust Company
as Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
Table of Contents
Page
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions . . . . . . . . . . . . . . . 1
ARTICLE II
THE RIGHTS
Section 2.1 Summary of Rights . . . . . . . . . . . . . . . . 5
Section 2.2 Legend on Common Stock Certificates . . . . . . . 5
Section 2.3 Exercise of Rights; Separation of Rights . . . . 6
Section 2.4 Adjustments to Exercise Price; Number of Rights . 7
Section 2.5 Date on Which Exercise is Effective . . . . . . . 8
Section 2.6 Execution, Authentication, Delivery and
Dating of Rights Certificates . . . . . . . . . . 8
Section 2.7 Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . 8
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . 9
Section 2.9 Persons Deemed Owners . . . . . . . . . . . . . . 9
Section 2.10 Delivery and Cancellation of Certificates . . . .
10
Section 2.11 Agreement of Rights Holders . . . . . . . . . . 10
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Distribution Date . . . . . . . . . . . . . . . . 10
Section 3.2 Flip-over . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
THE RIGHTS AGENT
Section 4.1 General . . . . . . . . . . . . . . . . . . . . . 12
Section 4.2 Merger or Consolidation or Change of Name
of Rights Agent . . . . . . . . . . . . . . . . . 12
Section 4.3 Duties of Rights Agent . . . . . . . . . . . . . 13
Section 4.4 Change of Rights Agent . . . . . . . . . . . . . 14
ARTICLE V
MISCELLANEOUS
Page
Section 5.1 Redemption . . . . . . . . . . . . . . . . . . . 15
Section 5.2 Expiration . . . . . . . . . . . . . . . . . . . 15
Section 5.3 Issuance of New Rights Certificates . . . . . . 15
Section 5.4 Supplements and Amendments . . . . . . . . . . . 15
Section 5.5 Fractional Shares . . . . . . . . . . . . . . . 15
Section 5.6 Rights of Action . . . . . . . . . . . . . . . . 15
Section 5.7 Holder of Rights Not Deemed a Shareholder . . . 16
Section 5.8 Notice of Proposed Actions . . . . . . . . . . . 16
Section 5.9 Notices . . . . . . . . . . . . . . . . . . . . 16
Section 5.10 Suspension of Exercisability . . . . . . . . . . 16
Section 5.11 Costs of Enforcement . . . . . . . . . . . . . . 17
Section 5.12 Successors . . . . . . . . . . . . . . . . . . . 17
Section 5.13 Benefits of this Agreement . . . . . . . . . . . 17
Section 5.14 Descriptive Headings . . . . . . . . . . . . . . 17
Section 5.15 Governing Law . . . . . . . . . . . . . . . . . 17
Section 5.16 Counterparts . . . . . . . . . . . . . . . . . . 17
Section 5.17 Severability . . . . . . . . . . . . . . . . . . 17
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is made and entered
into as of the 8th day of January, 1999 by and between Central
Bancorp, Inc., a Massachusetts corporation (the "Company"), and
State Street Bank and Trust Company, a Massachusetts trust
company (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one right (the "Right") in
respect of each share of Common Stock (as hereinafter defined)
of the Company outstanding as of the date the holding company
reorganization is consummated (the "Record Time") and authorized
the issuance of one Right in respect of each share of Common
Stock issued after the Record Time and prior to the Separation
Time (as hereinafter defined);
WHEREAS, each Right entitles the holder thereof, after the
Separation Date, to purchase securities of the Company (or, in
certain cases, of certain other entities) pursuant to the terms
and subject to the conditions set forth herein; and
WHEREAS, in connection with the matters referred to
herein, the Company desires to appoint the Rights Agent to act
on behalf of the Company for the benefit of the holders of
Rights, and the Rights Agent is willing so to act;
NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual agreements set forth herein, and for the benefit
of the holders of the Rights, the parties hereto hereby agree as
follows:
ARTICLE I - CERTAIN DEFINITIONS
--------- -------------------
1.1 CERTAIN DEFINITIONS.
-------------------
For purposes of this Agreement, the following terms have the
meaning indicated:
"Acquiring Person" shall mean any Person who is a
Beneficial Owner of 10% or more of the outstanding shares of
Common Stock; provided, however, that the term "Acquiring
Person" shall not include (i) any Person who shall become the
Beneficial Owner of 10% or more of the outstanding shares of
Common Stock solely as a result of an acquisition by the Company
of shares of Common Stock, until such time thereafter as such
Person shall become the Beneficial Owner (other than by means of
a stock dividend or stock split) of any additional shares of
Common Stock; or (ii) any Person who shall become the Beneficial
Owner of 10% or more of the outstanding shares of the Common
Stock solely as a result of purchasing the Common Stock directly
from the Company pursuant to a written agreement with the
Company; or (iii) the Company, a wholly owned Subsidiary of the
Company or any employee stock ownership or other employee
benefit plan of the Company or a wholly owned Subsidiary of the
Company.
"Adverse Person" shall mean a Person declared as such by
the Board of Directors of the Company, upon (i) a determination
that such Person, alone or together with its Affiliates and
Associates, has become the Beneficial Owner of 10% or more of
the outstanding shares of Common Stock and (ii) a determination
by the Board of Directors, including at least a majority of the
Disinterested Directors, after reasonable inquiry and
investigation, including such consultation with such persons as
such directors shall deem appropriate, that (A) such Beneficial
Ownership by such Person is intended to cause, is reasonably
likely to cause or will cause the Company to repurchase the
Common Stock beneficially owned by such Person or to cause
pressure on the Company to take action or enter into a
transaction or series of transactions which would provide such
Person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term
interests of the Company and its stockholders, but for the
actions and possible actions of such Person, would not be served
by taking such action or entering into such transactions or
series of transactions at that time or (B) such Beneficial
Ownership is having or is reasonably likely to have a material
adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's
ability to maintain its competitive position) on the business or
prospects of the Company; provided, however, that the Board of
Directors of the Company may determine not to declare a Person
to be an Adverse Person
1
if, prior to the time that such Person acquired 10% or more of
the shares of Common Stock then outstanding (or, in the case of
a Person who is the Beneficial Owner of 10% or more of the
outstanding Common Stock as of the date of this Agreement,
within 90 days following adoption of this Agreement), such
Person provided to the Board of Directors in writing a statement
of such Person's purpose and intentions in connection with the
proposed acquisition of Common Stock, together with any other
information reasonably requested of such Person by the Board of
Directors, and the Board of Directors, based on such statement
and reasonable inquiry and investigation, including consultation
with such persons as the directors shall deem appropriate,
determines to notify and notifies such Person in writing that it
will not declare such Person to be an Adverse Person; provided
further, that the Board of Directors, with the concurrence of a
least a majority of the Disinterested Directors, may expressly
condition in any manner a determination not to declare a Person
an Adverse Person on such conditions as the Board of Directors
may select, including without limitation, such Person's not
acquiring more than a specified amount of stock and/or on such
Person's not taking actions inconsistent with the purposes and
intentions disclosed by such Person in the statement provided to
the Board of Directors. In the event that the Board of
Directors should at any time determine, upon reasonable inquiry
and investigation, including consultation with such Persons as
the directors shall deem appropriate, that such Person has not
met or complied with any condition specified by the Board of
Directors, the Board of Directors, with the concurrence of at
least a majority of the Disinterested Directors, may at any time
thereafter declare such Person to be an Adverse Person pursuant
to the provisions hereof.
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934 ("Exchange Act"), as in
effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "Beneficially Own":
(i) any securities which such Person or any of
such Person's Affiliates or Associates beneficially owns,
directly or indirectly, for purposes of Section 13(d) of
the Exchange Act or Rule 13d-3 promulgated thereunder (or
any comparable or successor law or regulation), in each
case as in effect on the date hereof;
(ii) any securities which such Person or any of
such Person's Affiliates or Associates has the right to
acquire (whether such right is exercisable immediately, or
only after the passage of time, compliance with regulatory
requirements, the fulfillment of a condition, or
otherwise) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants
or options, or otherwise, provided that a Person shall not
under this clause (ii) be deemed the Beneficial Owner of,
or to Beneficially Own, securities tendered pursuant to a
tender offer or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange;
(iii) any securities which such Person or any such
Person's Affiliates or Associates has the right to vote,
alone or in concert with others, pursuant to any
agreement, arrangement or understanding, provided that a
Person shall not under this clause (iii) be deemed the
Beneficial Owner of, or to Beneficially Own, any security
if the agreement, arrangement or understanding to vote
such security (A) arises solely from a revocable proxy
given to such Person or any of such Person's Affiliates or
Associates in response to a public proxy solicitation made
pursuant to and in accordance with the applicable rules
and regulations of the Exchange Act, and (B) is not also
then reportable on Schedule 13D or under the Exchange Act
(or any comparable or successor report);
(iv) any securities which are owned, directly or
indirectly, by any other Person with which such Person or
any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of
acquiring, holding, voting (other than voting pursuant to
a revocable proxy as described in the proviso to clause
(iii) hereof) or disposing of any securities of the
Company; and
2
(v) on any day on or after a Distribution Date,
all Rights that prior to such date were represented by
certificates for Common Stock that such Person owns on
such day.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the
Commonwealth of Massachusetts are authorized or obligated by law
or executive order to close.
"Close of Business" on any given date shall mean 5:00
p.m., eastern standard time, on such date; provided, however,
that if such date is not a Business Day, it shall mean 5:00
p.m., eastern standard time, on the next succeeding Business
Day.
"Common Stock" shall mean one share of Common Stock, par
value $1.00 per share, of the Company.
"Disinterested Director" shall mean (i) any member of the
Company's Board of Directors who is not an officer or employee
of the Company or any of its Subsidiaries and is not an
Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such Person or a representative or nominee of an
Acquiring Person, an Adverse Person or any such Affiliate or
Associate and was a member of the Company's Board of Directors
prior to the date of this Agreement, and (ii) any Person who
subsequently becomes a member of the Company's Board of
Directors who is not an Acquiring Person, an Adverse Person or
an Affiliate or Associate of any such Person or a representative
or nominee of an Acquiring Person, an Adverse Person or of any
such Affiliate or Associate, if such Person's nomination is
recommended or approved by a majority of the Disinterested
Directors.
"Distribution Date" shall mean (i) the first date of
public announcement by the Company (by any means) or by an
Acquiring Person (by means of filing a Schedule 13D under the
Exchange Act or any comparable or successor report or schedule
or an amendment thereto) that an Acquiring Person has become
such or (ii) the first date of public announcement by the
Company (by any means) that an Adverse Person has become such.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon
exercise of one whole Right. Until adjustment thereof in
accordance with the terms hereof, the Exercise Price shall equal
$22.00.
"Expiration Date" shall mean the earlier of (i) the
Redemption Date or (ii) the close of business on October 24,
2001.
"Flip-over Stock" of any Person shall mean the capital
stock (or similar equity interest) with the greatest voting
power in respect of the election of directors (or other Persons
similarly responsible for the direction of the business and
affairs) of such Person or, if such other Person is a Subsidiary
of another Person, the Person or Persons which ultimately
controls such first-mentioned Person.
"Flip-over Transaction or Event" shall mean a transaction
or series of transactions in which, directly or indirectly, (i)
the Company shall consolidate with or merge with or into an
Acquiring Person, an Adverse Person, or any other Person acting
together in any respect with such Person, or an Acquiring Person
or Adverse Person or any other Person acting together in any
respect with such Person shall merge with or into the Company,
(ii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer)
assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) or (B) generating more
than 50% of the operating income or cash flow, of the Company
and its Subsidiaries (taken as a whole) to an Acquiring Person
or Adverse Person or any other Person acting together in any
respect with such Person (provided that for purposes of clauses
(i) and (ii), but without limitation, a Person shall be deemed
to be acting together in any respect with an Acquiring Person or
Adverse Person if such Person enters into any transaction of the
type described in clause (i) or (ii) within one year after the
time the Acquiring Person or Adverse Person has become such,
unless (x) such transaction was initiated by the Company and (y)
the Acquiring Person or Adverse Person or any Person acting
together in any respect with such Person has not acquired
control of the Board of Directors of the Company),
3
(iii) any Acquiring Person or Adverse Person shall (A) sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, to, from, or with, as the case
may be, the Company or any of its Subsidiaries, over any period
of 12 consecutive calendar months, assets or liabilities (x)
having an aggregate fair market value of more than $15,000,000
or (y) on terms and conditions less favorable to the Company
than the Company would be able to obtain through arm's-length
negotiations with an unaffiliated third party, (B) receive any
compensation for services from the Company or any of its
Subsidiaries, other than compensation for full-time employment
as a regular employee at rates in accordance with the Company's
(or its Subsidiaries') past practices, or (C) receive the
benefit, directly or indirectly (except proportionately as a
shareholder), over any period of 12 consecutive calendar months,
of any loans, advances, guarantees, pledges, insurance,
reinsurance or other financial assistance or any tax credits or
other tax advantage provided by the Company or any of its
Subsidiaries involving an aggregate principal amount in excess
of $5,000,000 or an aggregate cost or transfer of benefits from
the Company or any of its Subsidiaries in excess of $5,000,000
or, in any case, on terms and conditions less favorable to the
Company than the Company would be able to obtain through arm's
length negotiations with a third party, or (iv) as a result of
any reclassification of securities (including any reverse stock
split), or recapitalization, of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any
other transaction or series of transactions (whether or not with
or into or otherwise involving an Acquiring Person or Adverse
Person), the proportionate share of the outstanding shares of
any class of equity or convertible securities of the Company or
any of its Subsidiaries which is directly or indirectly owned by
any Acquiring Person or Adverse Person is increased by more than
1%. The terms "Acquiring Person" and "Adverse Person" shall
include any Acquiring Person and/or any Adverse Person and its
Affiliates and Associates (other than the Company, a wholly
owned Subsidiary of the Company or any employee stock ownership
or other employee benefit plan of the Company or a wholly owned
Subsidiary of the Company), counted together as a single Person.
"Market Price" per share of any security on any date (the
"Determination Date") shall mean the arithmetic average of the
daily closing prices per share of such security (determined as
described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding the
Determination Date; provided, however, that if an event of a
type analogous to any of the events described in Section 2.4
hereof shall have caused the closing price on one or more
Trading Days during such period of 20 Trading Days not to be
fully comparable with the closing price on the Determination
Date, each such closing price so used shall be appropriately
adjusted in order to make it fully comparable with the closing
price on the Determination Date. The closing price per share of
any security on any date shall be the last reported sale price,
regular way, or, in case no such sale takes place or is reported
on such date, the average of the closing bid and asked prices,
regular way, for such security, in either case as reported in
the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange, Inc. or, if such security is not listed or
admitted to trading on the New York Stock Exchange, Inc., as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which such security is listed or
admitted to trading or, if such security is not listed or
admitted to trading on any national securities exchange, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other self-
regulatory organization or registered securities information
processor (as such terms are used under the Exchange Act) as
then reports trading information concerning such security, or,
if on any such date such security is not listed or admitted to
trading on any national securities exchange or quoted by any
such organization, the average of the closing bid and asked
prices as furnished by any registered securities dealer that is
a market maker (as such term is used under the Exchange Act) in
such security and which is selected by the Board of Directors of
the Company; provided, however, that if on any such date such
security is not listed or admitted to trading on a national
securities exchange or traded in the over-the-counter market,
the closing price of such security on such date shall mean the
fair value of such security on such date as determined in good
faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights
Agent.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the
Exchange Act, as such Rule is in effect on the date of this
Agreement), corporation or other entity.
4
"Redemption Price" shall mean an amount (calculated to the
nearest one one-hundredth of a cent) equal to the Exercise
Price, as in effect at the Redemption Time, divided by 2200
(i.e., initially $0.01).
"Redemption Time" shall mean the time at which the right
to exercise the Rights shall terminate pursuant to Section 5.1
hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the later of (A) the tenth day, after the date on
which any Person (other than the Company, a majority-owned
Subsidiary of the Company or an employee stock ownership or
other employee benefit plan of the Company or a majority-owned
Subsidiary of the Company) commences a tender or exchange offer
which, if consummated, would result in such Person's becoming an
Acquiring Person and (B) such later date as the Board of
Directors of the Company may from time to time fix by resolution
adopted prior to the Separation Time and (ii) the Distribution
Date; provided that, if the foregoing results in the Separation
Time being prior to the Record Time, the Separation Time shall
be the Record Time and provided further that, if any tender or
exchange offer referred to in clause (i) of this definition is
cancelled, terminated or otherwise withdrawn prior to the
Separation Time, such offer shall be deemed, for purposes of
this definition, never to have been made.
"Subsidiary" of any Person shall mean any corporation or
other entity of which equity securities or equity interests
representing a majority of the voting power are owned, directly
or indirectly, or which is effectively controlled, by such
Person.
"Trading Day" shall mean, as to any stock or other
security, a day on which the principal national securities
exchange or NASDAQ on which such stock or other security is
listed, quoted or admitted to trading is open for the
transaction of business or, if such stock or other security is
not listed, quoted or admitted to trading on any national
securities exchange or NASDAQ, a Business Day.
ARTICLE II - THE RIGHTS
---------- ----------
2.1 Summary of Rights.
-----------------
As soon as practicable after the Record Time, the Company
will mail a copy of a letter to shareholders summarizing the
terms of the Rights to each holder of record of Common Stock as
of the Record Time, at such holder's address as shown by the
records of the Company.
2.2 Legend on Common Stock Certificates.
-----------------------------------
Certificates for the Common Stock issued after the Record
Time but prior to the Separation Time shall evidence one Right
for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed
to them the following legend:
Until the Separation Time (as defined in the Rights
Agreement referred to below), this certificate also
evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement, dated as
of the date the holding company reorganization is
consummated (as such may be amended from time to
time, the "Rights Agreement"), between Central
Bancorp, Inc. (the "Company") and State Street Bank
and Trust Company, the Rights Agent, the terms of
which are hereby incorporated herein by reference
and a copy of which is on file at the principal
executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may be exchanged for
shares of Common Stock or other securities or assets
of the Company, may expire, may become void (if they
are "Beneficially Owned" by an "Acquiring Person" or
"Adverse Person" or an Affiliate or Associate
thereof, as such terms are defined in the Rights
Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this
certificate. The Company will mail or arrange for
the mailing of a copy of the Rights Agreement to the
holder of this certificate without charge within
five days after the receipt of a written request
therefor.
5
Certificates representing shares of Common Stock that are issued
and outstanding at the Record Time shall evidence one Right for
each share of Common Stock evidenced thereby notwithstanding the
absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights.
----------------------------------------
(a) Subject to adjustment as herein set forth, each
Right will entitle the holder thereof, after the Separation
Time, to purchase, for the Exercise Price, one share of the
Common Stock at the Exercise Price.
(b) Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the
certificate for the associated share of Common Stock and will be
transferable only together with, and will be transferred by a
transfer of, such associated share. Notwithstanding any other
provision of this Agreement, any Rights held by the Company or
any of its Subsidiaries other than in fiduciary capacity shall
not be exercisable. Nothing in the preceding sentence shall be
construed as limiting the right of the Company and its
Subsidiaries to acquire or transfer Rights.
(c) Subject to the terms and conditions herein set
forth, after the Separation Time and prior to the Expiration
Date, the Rights (i) may be exercised, and (ii) may be
transferred independently of the shares of Common Stock in
respect of which they were originally issued. Promptly
following the Separation Time, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Time,
at such holder's address as shown by the records of the Company
(the Company hereby agreeing to furnish copies of such records
to the Rights Agent for this purpose), (x) a certificate (a
"Rights Certificate") in substantially the form of Exhibit A
hereto appropriately completed, representing the number of
rights held by such holder at the Separation Time and having
such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any
rule or regulation of any national securities exchange or other
self-regulatory organization (as such terms are used under the
Exchange Act) on which the Rights may from time to time be
listed or through which the Rights may from time to time be
traded, or to conform to usage, and (y) a disclosure statement
describing the Rights.
(d) Subject to Sections 2.3(b) and 5.10, Rights may
be exercised on any Business Day after the Separation Time and
prior to the Expiration Time by submitting to the Rights Agent
the Rights Certificate evidencing such Rights with an election
to exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank
check or money order payable to the order of the Company, of a
sum equal to the Exercise Price multiplied by the number of
Rights being exercised together with a sum sufficient to cover
any transfer tax or charge which may be payable in respect of
any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for
shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an
Election to Exercise accompanied by payment as set forth in
Section 2.3(d) above, and subject to the conditions set forth in
this Agreement, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent for the stock or other
securities purchasable upon exercise of the Rights certificates
evidencing such number of shares or other securities to be
purchased (the Company hereby irrevocably authorizing its
transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 hereof not to issue
certificates representing fractional shares, requisition from
the depositary selected by the Company depositary receipts
representing the fractional shares to be purchased or
requisition from the Company the amount of cash to be paid in
lieu of fractional shares in accordance with Section 5.5 hereof
and (ii) after receipt of such certificates, depositary receipts
and/or cash, deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered (in the
case of certificates or depositary receipts) in such name or
names as may be designated by such holder.
6
(f) In case the holder of any Rights shall
exercise less than all the Rights evidenced by such holder's
Rights Certificate, a new Rights Certificate evidencing the
Rights which remain unexercised will be issued by the Rights
Agent to such holder or to such holder's duly authorized
assigns.
(g) The Company covenants and agrees that it will
(i) cause to be kept available until the Expiration Date out of
its authorized and unissued shares of capital stock a number of
shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Rights; (ii) immediately
upon the occurrence of the Separation Time, take all such action
as may be necessary to obtain the approval of such regulatory
agency or agencies as may be required by law for the issuance of
shares of the Common Stock upon the exercise of Rights
hereunder, if required by law; (iii) take all such action as may
be necessary to ensure that all shares delivered upon exercise
of Rights shall, at the time of delivery thereof (subject to
payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully paid and nonassessable;
(iv) take all such action as may be necessary to ensure that all
securities other than shares delivered upon exercise of Rights
shall, at the time of delivery thereof (subject to payment of
the Exercise Price), be duly and validly authorized, executed,
issued and delivered and valid and binding obligations of the
issuer thereof; (v) take all such action as may be necessary to
comply with any applicable requirements of the General Laws of
Massachusetts, the Securities Act of 1933 or the Exchange Act,
and the rules and regulations thereunder, and any other
applicable law, rule or regulation, in connection with the
issuance of any shares upon exercise of Rights; (vi) use its
best efforts to cause all shares and other securities issued
upon exercise of Rights to be listed on a national securities
exchange or traded in the over-the-counter market, as reported
by NASDAQ or another self-regulatory organization or registered
securities information processor (as such terms are used under
the Exchange Act), upon issuance; and (vii) pay when due and
payable any and all federal and state transfer taxes and charges
which may be payable in respect of the original issuance or
delivery of the Rights Certificates or of any shares issued upon
the exercise of Rights, provided that the Company shall not be
required to pay any transfer tax or charge which may be payable
in respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance or delivery of
certificates for shares in a name other than that of the holder
of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights.
-----------------------------------------------
(a) In the event the Company shall at any time after
the Record Time and prior to the Separation Time (i) declare or
pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of
Common Stock, then (x) the Exercise Price in effect after such
adjustment will be equal to the Exercise Price in effect
immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of
one share of Common Stock immediately prior to such dividend,
subdivision or combination would hold thereafter as a result
thereof and (y) each Right held prior to such adjustment will
become that number of Rights equal to the Expansion Factor, and
(z) the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to
which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common
Stock will have exactly one Right associated with it. Each
adjustment made pursuant to this paragraph shall be made as of
the payment or effective date for the applicable dividend,
subdivision or combination.
In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue any shares of
Common Stock otherwise than in a transaction referred to in the
preceding paragraph, each such share of Common Stock so issued
shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such
share.
(b) In the event the Company shall at any time
after the Record Time and prior to the Separation Time issue or
distribute any securities or assets in respect of, in lieu of or
in exchange for Common Stock (other than pursuant to a regular
periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a
merger, consolidation or binding share exchange), or otherwise,
the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of
the Company,
7
in its sole discretion, may deem to be appropriate
under the circumstances in order to adequately protect the
interests of the holders of Rights generally, and the Company
and the Rights Agent shall amend this Agreement as necessary to
provide for such adjustments.
(c) Each adjustment to the Exercise Price made
pursuant to this Section 2.4 shall be calculated to the nearest
cent. Whenever an adjustment to the Exercise Price is made
pursuant to this Section 2.4, the Company shall (i) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii)
promptly file with the Rights Agent and with each transfer agent
for the Common Stock a copy of such certificate and (iii) mail a
brief summary thereof to each holder of Rights.
(d) Irrespective of any adjustment or change in
the securities purchasable upon exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the securities so purchasable which were
expressed in the initial Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective.
-----------------------------------
Each person in whose name any certificate for shares issued
upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price for such Rights
(and any applicable taxes and other governmental charges payable
by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next
succeeding Business Day on which the stock transfer books of the
Company are open.
2.6 Execution, Authentication, Delivery and Dating of
-------------------------------------------------
Rights Certificates.
--------------------
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, President or one of
its Vice Presidents, under its corporate seal reproduced thereon
attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such
offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Company learns of the Separation Time,
the Company will notify the Rights Agent of such Separation Time
and will deliver Rights Certificates executed by the Company to
the Rights Agent for countersignature, and the Rights Agent
shall manually countersign and deliver such Rights Certificates
to the holders of the Rights pursuant to Section 2.3(c) hereof.
No Rights Certificate shall be valid for any purpose until
manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the
date of countersignature thereof by the Rights Agent.
2.7 Registration, Registration of Transfer and Exchange.
---------------------------------------------------
(a) After the Separation Time, the Company will cause
to be kept a register (the "Rights Register") in which, subject
to such reasonable regulations as it may prescribe, the Company
will provide for the registration and transfer of Rights. The
Rights Agent is hereby appointed "Rights Registrar" for the
purpose of maintaining the Rights Register for the Company and
registering Rights and transfers of Rights after the Separation
Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will
have the right to examine the Rights Register at all reasonable
times after the Separation Time.
After the Separation Time and prior to the Expiration
Time, upon surrender for registration of transfer or exchange of
any Rights Certificate, and subject to the provisions of Section
2.7(c) below, the Company will execute,
8
and the Rights Agent will countersign and deliver, in the name
of the holder or the designated transferee or transferees, as
required pursuant to the holder's instructions, one or more new
Rights Certificates evidencing the same aggregate number of
Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b)
hereof, all Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be the valid obligations
of the Company, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for
registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form
satisfactory to the Company or the Rights Agent, as the case may
be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the
issuance of any new Rights Certificate under this Section 2.7,
the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not be required to register
the transfer or exchange of any Rights after the Rights have
been redeemed pursuant to Section 5.1 hereof or become void
pursuant to Section 3.1(b) hereof.
2.8 Mutilated, Destroyed, Lost and Stolen Rights
--------------------------------------------
Certificates.
------------
(a) If any mutilated Rights Certificate is surrendered
to the Rights Agent prior to the Expiration Time, the Company
shall execute and the Rights Agent shall countersign and deliver
in exchange therefor a new Rights Certificate evidencing the
same number of Rights as did the Rights Certificate so
surrendered.
(b) If there shall be delivered to the Company and
the Rights Agent prior to the Expiration Time (i) evidence to
their satisfaction of the destruction, loss or theft of any
Rights Certificate and (ii) such security or indemnity as may be
required by them to save each of them and any of their agents
harmless, then, in the absence of notice to the Company or the
Rights Agent that such Rights Certificate has been acquired by a
bona fide purchaser, the Company shall execute and upon its
request the Rights Agent shall countersign and deliver, in lieu
of any such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new
Rights Certificate under this Section 2.8, the Company may
require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses
of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant
to this Section 2.8 in lieu of any mutilated, destroyed, lost or
stolen Rights Certificate shall evidence an original additional
contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Rights Certificate shall be
at any time enforceable by anyone, and shall be entitled to all
the benefits of this Agreement equally and proportionately with
any and all other Rights duly issued hereunder.
2.9 Persons Deemed Owners.
---------------------
Prior to due presentment of a Rights Certificate (or, prior
to the Separation Time, the associated Common Stock certificate)
for registration of transfer, the Company, the Rights Agent and
any agent of the Company or the Rights Agent may deem and treat
the person in whose name such Rights Certificate (or, prior to
the Separation Time, such Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to
the contrary. As used in this Agreement, unless the context
otherwise requires, the term "holder" of any Rights shall mean
the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
9
2.10 Delivery and Cancellation of Certificates.
-----------------------------------------
All Rights Certificates surrendered upon exercise or for
redemption, registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be
promptly cancelled by the Rights Agent. The Company may at any
time deliver to the Rights Agent for cancellation any Rights
Certificates previously countersigned and delivered hereunder
which the Company may have acquired in any manner whatsoever,
and all Rights Certificates so delivered shall be promptly
cancelled by the Rights Agent. No Rights Certificates shall be
countersigned in lieu of or in exchange for any Rights
Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent
shall return all cancelled Rights Certificates to the Company.
2.11 Agreement of Rights Holders.
---------------------------
Every holder of Rights by accepting the same consents and
agrees with the Company and the Rights Agent and with every
other holder of Rights that:
(a) prior to the Separation Time, each Right will
be transferable only together with, and will be transferred by a
transfer of, the associated share of Common Stock;
(b) after the Separation Time, the Rights
Certificates will be transferable only on the Rights Register as
provided herein;
(c) prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated
Common Stock certificate) for registration of transfer, the
Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation time, the
associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons
will under the circumstances set forth in Section 3.1(b) become
void; and
(e) This Agreement may be supplemented or amended
from time to time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
----------- -----------------------------------------
CERTAIN TRANSACTIONS
--------------------
3.1 Distribution Date.
-----------------
(a) In the event that prior to the Expiration Time a
Distribution Date shall occur, then, if applicable law does not
preclude Rights owned by certain Persons referred to in Section
3.1(b) hereof to become void pursuant to the provisions thereof,
the Company shall take such action as shall be necessary to
ensure and provide that, except as provided below, each Right
shall constitute the right to purchase from the Company, upon
exercise thereof in accordance with the terms hereof (but
subject to Sections 5.1 and 5.10 hereof), that number of shares
of Common Stock having an aggregate Market Price on the
Distribution Date equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the
holders of Rights generally in the event that on or after such
Distribution Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred
with respect to the Common Stock).
(b) Notwithstanding the foregoing, to the extent
permitted by applicable law, any Rights that are or were
Beneficially Owned on or after the Distribution Date by an
Acquiring Person, an Adverse Person, or an Affiliate or
Associate thereof or by a transferee, direct or indirect, of any
of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no rights to
exercise or transfer such Rights. For purposes of the preceding
sentence, a transferee of an Acquiring Person, Adverse Person or
Affiliate or Associate thereof shall include only a Person who
(i) becomes a transferee after the Acquiring Person or Adverse
Person becomes such or (ii) becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person
10
becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring
Person or Adverse Person to holders of equity interests in such
Acquiring Person or Adverse Person or to any Person with whom
the Acquiring Person or Adverse Person has any continuing
agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 3.1(b). If any Rights
Certificate is presented for assignment or exercise and the
Person presenting the same does not complete the certification
set forth at the end of the form of assignment or notice of
election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and
Associates) as the Company shall reasonably request, then the
Company shall be entitled to conclusively deem the Beneficial
Owner thereof to be an Acquiring Person or an Adverse Person, or
an Affiliate or Associate thereof or a transferee of any of the
foregoing and accordingly will, to the extent permitted by
applicable law, deem the Rights evidenced thereby to be void and
not transferable or exercisable.
(c) The Board of Directors of the Company may, at
its option, at any time after a Distribution Date and prior to
the time that an Acquiring Person or an Adverse Person becomes
the Beneficial Owner of more than 50% of the outstanding shares
of Common Stock, but only if applicable law does not preclude
Rights owned by certain Persons referred to in Section 3.1(b)
hereof to become void pursuant to the provisions thereof, elect
to exchange all (but not less than all) of the then outstanding
Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for shares of
Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted in order to protect the
interests of holders of Rights generally in the event that after
the Separation Time an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred
with respect to the Common Stock (such exchange ratio, as
adjusted from time to time, being hereinafter referred to as the
"Exchange Ratio").
Immediately upon the action of the Board of
Directors of the Company electing to exchange the Rights,
without any further action and without any notice, the right to
exercise the Rights will terminate and each Right will
thereafter represent only the right to receive a number of
shares of Common Stock equal to the Exchange Ratio. Promptly
after the action of the Board of Directors electing to exchange
the Rights, the Company shall give notice thereof (specifying
the steps to be taken to receive shares of Common Stock in
exchange for Rights) to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice in accordance
with Section 5.9.
(d) In the event that there shall not be
sufficient treasury shares or authorized but unissued shares of
Common Stock of the Company to permit the exercise or exchange
in full of the Rights in accordance with Section 3.1(a) or (c),
the Company shall take such action as shall be necessary to
ensure and provide, to the extent permitted by applicable law
and any agreements or instruments in effect on the Distribution
Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option,
either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a
fair value equal to twice the Exercise Price, or (B) without
payment of consideration (except as otherwise required by
applicable law), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise
Price, or (y) if the Board of Directors of the Company elects to
exchange the Rights in accordance with Section 3.1(c), debt or
equity securities or other assets (or a combination thereof)
having a fair value equal to the product of the Market Price of
a share of Common Stock on the Distribution Date times the
Exchange Ratio in effect on the Distribution Date, where in any
case set forth in (x) or (y) above the fair value of such debt
or equity securities or other assets shall be as determined in
good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking
firm.
3.2 Flip-over. (a) Prior to the Expiration Time the
Company shall not enter into any agreement with any Acquiring
Person, any Adverse Person or any Affiliate or Associate of an
Acquiring Person or Adverse Person with respect to, or
consummate or permit to occur, any Flip-over Transaction or
Event, unless and until it shall have entered into a
supplemental agreement with the Person engaging in such Flip-
over Transaction or Event (the "Flip-over Entity"), for the
benefit of the holders of the Rights, providing that, upon
consummation or occurrence of the
11
Flip-over Transaction or Event (i) each Right shall thereafter
constitute the right to purchase from the Flip-over Entity, upon
exercise thereof in accordance with the terms hereof, that
number of shares of Flip-over Stock of the Flip-over Entity
having an aggregate Market Price on the date of consummation or
occurrence of such Flip-over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the
event that after such date of consummation or occurrence an
event of a type analogous to any of the events described in
Section 2.4(a) or (b) shall have occurred with respect to the
Flip-over Stock) and (ii) the Flip-over Entity shall thereafter
be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this
Agreement. The provisions of this Section 3.2 shall apply to
successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the
Rights will be redeemed pursuant to Section 5.1 hereof in
connection therewith, the Company shall not enter into any
agreement with respect to, or consummate or permit to occur, any
Flip-over Transaction or Event if at the time thereof there are
any rights, warrants or securities outstanding or any other
arrangements, agreements or instruments which would eliminate or
otherwise diminish in any respect the benefits intended to be
afforded by this Agreement to the holders of Rights upon
consummation or occurrence of such transaction or event.
ARTICLE IV - THE RIGHTS AGENT
---------- ----------------
4.1 General.
-------
(a) The Company hereby appoints the Rights Agent to
act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company agrees to pay to the Rights Agent
reasonable compensation as shall be agreed to in writing from
time to time for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable
expenses (including expenses incurred by the Rights Agent under
Section 4.4) and counsel fees and other disbursements incurred
in the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending
against any claim of liability.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by
it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or
persons.
4.2 Merger or Consolidation or Change of Name of Rights
---------------------------------------------------
Agent.
-----
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the
shareholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties
hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 4.4 hereof. In case, at the time such successor Rights
Agent succeeds to the agency created by this Agreement, any of
the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent
or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates will have the full force provided
in the Rights Certificates and in this Agreement.
12
(b) In case at any time the name of the Rights
Agent is changed and at such time any of the Rights Certificates
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in is changed name; and
in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent.
----------------------
The Rights Agent undertakes the duties and obligations
imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel will be full and complete authorization
and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent deems it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by a person
believed by the Rights Agent to be the Chairman of the Board,
the President or any Vice President and by the Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the certificates for securities purchasable
upon exercise of Rights or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due authorization,
execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any certificate for securities
purchasable upon exercise of Rights or Rights Certificate
(except its countersignature thereof); nor will it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights
Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void
pursuant to Section 3.1(b) hereof) or any adjustment required
under the provisions of Section 2.4, 3.1 or 3.2 hereof or
responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate contemplated
by Section 2.4 describing any such adjustment); nor will it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
securities purchasable upon exercise of Rights or any Rights or
as to whether any securities purchasable upon exercise of Rights
will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
13
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance
of its duties hereunder from any person believed by the Rights
Agent to be the Chairman of the Board, the President or any Vice
President or the Secretary or any Assistance Secretary or the
Treasurer or any Assistant Treasurer of the Company, and to
apply to such persons for advice or instructions in connection
with its duties, and it shall not be liable for any action taken
or suffered by it in good faith in accordance with instructions
of any such person. Any application by the Rights Agent for
written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this Rights Agreement
and the date on and/or after which such action shall be taken or
such omission shall be effective. Until the Rights Agent has
received written instructions in response to such application
specifying the action to be taken or omitted, the Rights Agent
shall not be liable for any inaction or omission related to the
subject of the proposal included in any such application.
(h) The Rights Agent and any shareholder,
director, officer or employee of the Rights Agent may buy, sell
or deal in Common Stock, Rights or other securities of the
Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as
though it were not the Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
4.4 Change of Rights Agent.
----------------------
The Rights Agent may resign and be discharged from its
duties under this Agreement upon 60 days' notice (or such lesser
notice as is acceptable to the Company) in writing mailed to the
Company and to each transfer agent of Common Stock by registered
or certified mail, and to the holders of the Rights in
accordance with Section 5.9. The Company may remove the Rights
Agent upon 60 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Rights
in accordance with Section 5.9. If the Rights Agent should
resign or be removed or otherwise become incapable of acting,
the Company will appoint a successor to the Rights Agent. If
the Company fails to make such appointment within a period of 30
days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the holder of
any Rights or the Rights Agent may apply to any court of
competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or or any
other state of the United States which is authorized under such
laws to exercise the powers of the Rights Agent contemplated by
this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights
Agent will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment, the Company will file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Stock, and mail a notice thereof in writing to the
holders of the Rights. Failure to give any notice provided for
in this Section 4.4, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights
Agent, as the case may be.
14
ARTICLE V - MISCELLANEOUS
--------- -------------
5.1 Redemption.
----------
(a) The Board of Directors of the Company may, at its
option, at any time prior to the Distribution Date, or ten days
thereafter, subject to extension by a vote of two-thirds of the
Board of Directors, elect to redeem all (but not less than all)
the then outstanding Rights at the Redemption Price.
(b) Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, without
any further action and without any notice, the right to exercise
the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in
cash. Promptly after the action of the Board of Directors
electing to redeem, and thereby redeeming, the Rights, the
Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such
notice in accordance with Section 5.9.
5.2 Expiration.
----------
No Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights
are redeemed, as provided in Section 5.1 hereof.
5.3 Issuance of New Rights Certificates.
-----------------------------------
Notwithstanding any of the provisions of this Agreement or
of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any
adjustment or change in the number or kind or class of shares of
stock purchasable upon exercise of Rights made in accordance
with the provisions of this Agreement.
5.4 Supplements and Amendments.
--------------------------
The Company and the Rights Agent may from time to time
supplement or amend this Agreement without the approval of any
holder of Rights (i) in any respect prior to the Distribution
Date (other than to change the Redemption Price or the
Expiration Time, except as contemplated elsewhere herein), (ii)
to make any changes following the close of business on the
Distribution Date which the Company may deem necessary or
desirable and which shall not materially adversely affect the
interests of the holders of Rights generally or (iii) in order
to cure any ambiguity or to correct or supplement any provision
contained herein which may be inconsistent with any other
provisions herein or otherwise defective. The Rights Agent will
duly execute and deliver any supplement or amendment hereto
requested by the Company which satisfies the terms of the
preceding sentence.
5.5 Fractional Shares.
-----------------
If the Company elects not to issue certificates representing
fractional shares upon exercise of Rights, the Company shall, in
lieu thereof, (a) evidence such fractional shares by depositary
receipts issued pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such
agreement shall provide that each holder of a depositary receipt
shall have all of the rights, privileges and preferences to
which such holder would be entitled as a beneficial owner of
such fractional share, or (b) pay to the registered holder of
such Rights the same fraction of the Market Price (determined as
of the date of exercise) of one share of the stock issuable upon
such exercise.
5.6 Rights of Action.
----------------
Subject to the terms of this Agreement, rights of action in
respect of this Agreement, other than rights of action vested
solely in the Rights Agent, are vested in the respective holders
of the Rights; and any holder of any Rights, without the consent
of the Rights Agent or of the holder of any other Rights, may on
such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may
institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner
provided in such holder's Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations of, and
injunctive relief against actual or threatened violations of the
obligations of, any Person subject to this Agreement.
15
5.7 Holder of Rights Not Deemed a Shareholder.
-----------------------------------------
No holder, as such, of any Rights shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of
shares or any other securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon
the holder of any Rights, as such, any of the rights of a
shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 5.8
hereof), or to receive dividends or subscription rights, or
otherwise, until such Rights shall have been exercised in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions.
--------------------------
In case the Company shall propose after the Separation Time
and prior to the Expiration Time (i) to effect or permit (in
cases where the Company's permission is required) occurrence of
any Distribution Date or Flip-over Transaction or Event or (ii)
to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each
holder of a Right, in accordance with Section 5.9 hereof, a
notice of such proposed action, which shall specify the
Distribution Date or the date on which such Flip-over
Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20
Business Days prior to the date of the taking of such proposed
action.
5.9 Notices.
-------
Notices or demands authorized or required by this Agreement
to be given or made by the Rights Agent or by the holder of any
Rights to or on the Company shall be sufficiently given or made
if delivered or sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the
Rights Agent) as follows:
Central Bancorp, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, President and
Chief Executive Officer
Any notice or demand authorized or required by this Agreement to
be given or made by the Company or by the holder of any Rights
to or on the Rights Agent shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the
Company) as follows:
State Street Bank and Trust Company
0 Xxxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxx
Client Administrator
Notices or demands authorized or required by this Agreement to
be given or made by the Company or the Rights Agent to or on the
holder of any Rights shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to
the Separation Time, on the registry books of the transfer agent
for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice.
5.10 Suspension of Exercisability.
----------------------------
To the extent that the Company determines in good faith that
some action need be taken pursuant to Section 3.1(d) or to
comply with federal or state securities laws, the General Laws
of Massachusetts or any conditions imposed by the Board of
Governors of the Federal Reserve System in connection with its
approval of the issuance of Common Stock upon the exercise of
the Rights hereunder, the Company may suspend the exercisability
of the Rights following the date of the occurrence of the
Separation Time or the Distribution Date in order to take such
action or comply with such laws. In the event of any such
suspension, the Company shall
16
issue as promptly as practicable a public announcement
stating that the exercisability of the Rights has been
temporarily suspended.
5.11 Costs of Enforcement.
--------------------
The Company agrees that if the Company or any other
Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the
holder of any Rights for the costs and expenses (including legal
fees) incurred by such holder in actions to enforce such
holder's rights pursuant to any Rights or this Agreement.
5.12 Successors.
----------
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
5.13 Benefits of this Agreement.
--------------------------
Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the holders
of the Rights any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the
holders of the Rights.
5.14 Descriptive Headings.
--------------------
Descriptive headings appear herein for convenience only and
shall not control or affect the meaning or construction of any
of the provisions hereof.
5.15 Governing Law.
-------------
This Agreement and each Right issued hereunder shall be
deemed to be a contract made under the laws of the Commonwealth
of Massachusetts and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable
to contracts to be made and performed entirely within such
state.
5.16 Counterparts.
------------
This Agreement may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together
constitute but one and the same instrument.
5.17 Severability.
------------
If any term or provision hereof or the application thereof
to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision
shall be ineffective as to such jurisdiction to the extent of
such invalidity or unenforceability without invalidating or
rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or
unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above
written.
CENTRAL BANCORP, INC.
By /s/ Xxxx X. Xxxxxxx
-----------------------------
Xxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
STATE STREET BANK AND TRUST COMPANY
By /s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Title: Senior Vice President
17
Exhibit A
FORM OF
RIGHTS CERTIFICATE
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER OCTOBER 24, 2001 OR EARLIER IF
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
AFFILIATES OR ASSOCIATES THEREOF (AS THOSE TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF
ANY OF THE FOREGOING MAY BECOME NULL AND VOID.
Rights Certificate
CENTRAL BANCORP, INC.
This certifies that __________________________________, or
registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the
Rights Agreement dated as of January 8, 1999 (the "Rights
Agreement") by and between Central Bancorp, Inc., a
Massachusetts corporation (the "Company"), and State Street Bank
and Trust Company (the "Rights Agent"), to purchase from the
Company at any time after the Separation Time and prior to the
earlier of the Redemption Date (as such terms are defined or
referred to in the Rights Agreement) or 5:00 p.m., eastern
standard time, on, October 24, 2001, at the office of the Rights
Agent designated for such purpose or at the office of its
successors as Rights Agent, one fully paid and nonassessable
share of Common Stock, $1.00 par value per share, of the Company
(the "Common Shares"), at a purchase price of $22.00 per one
Common Share (the "Exercise Price"), subject to adjustment as
provided in the Rights Agreement upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights represented by this Rights
Certificate (and the number of Common Shares which may be
purchased upon exercise thereof) set forth above, and the
Exercise Price per share set forth above, are the number of
Rights and the Exercise Price as of January 8, 1999, based upon
the Common Shares as constituted at such date.
As provided in the Rights Agreement, the Exercise Price and
the number of Common Shares, which may be purchased upon the
exercise of the Rights represented by this Rights Certificate
are subject to modification and adjustment upon the occurrence
of certain events. This Rights Certificate is subject to all of
the terms, provisions and conditions of the Rights Agreement,
which terms, provisions and conditions are hereby incorporated
herein by reference and made a part hereof, and to which Rights
Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the
holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date
representing Rights entitling the holder thereof to purchase a
like aggregate number of Common Shares, as the Rights
represented by the Rights Certificate or the Rights Certificates
surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of
whole Rights not exercised. Subject to the provisions of the
Rights Agreement, the Rights represented by this Rights
Certificate may be redeemed by the Company, at its option, at a
redemption price of $.01 per Right.
No fractional Common Shares will be issued upon the
exercise of any Right or Rights represented hereby (at the
option of the Company, be represented by depositary receipts),
but in lieu thereof, a cash payment shall be made, as provided
in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Common Shares or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until
the Right or Rights represented by the Rights Certificate shall
have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal. Dated as of
____________________.
Attest: CENTRAL BANCORP, INC.
By By
Title: Title:
Countersigned:
_____________________________
By
Authorized Signatory
Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _______________________ hereby sells,
assigns and transfer unto
________________________________________________________________
(Please print name and address of transferee)
______________________________ this Rights Certificate, together
with all right, title and interest therein, and does hereby
irrevocably constitute and appoint _____________________________
attorney, to transfer this Rights Certificate on the books of
Central Bancorp, Inc. with full power of substitution.
Dated:
Signature
Signature Guaranteed:
Certificate
(to be completed, if true)
Signatures must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association
or credit union with membership in an approved signature
guarantee medallion program) pursuant to Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended.
The undersigned hereby certifies that the Rights
represented by this Rights Certificate are not Beneficially
Owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such capitalized terms are defined in the
Rights Agreement).
Dated:
Signature
Signature Guaranteed:
Form of Reverse Side of Rights Certificate --
continued
NOTICE
The signature to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as
written upon the face of the Rights Certificate in every
particular, without alteration or enlargement or any change
whatsoever, and must be guaranteed by an eligible guarantor
institution (a bank, stockbroker, savings and loan association
or credit union with membership in an approved signature
guarantee medallion program) pursuant to Rule 17Ad-15 under the
Securities Exchange Act of 1934, as amended.
In the event that the foregoing Certificate is not duly
executed, with signature guaranteed, the Company shall deem the
Rights represented by this Rights Certificate to be Beneficially
Owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such capitalized terms are defined in the
Rights Agreement), and shall affix a legend to that effect on
any Rights Certificate issued in exchange for this Rights
Certificate.
Form of Reverse Side of Rights Certificate --
continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise the Rights Certificate.)
TO CENTRAL BANCORP, INC.
The undersigned hereby irrevocably elects to exercise
__________ Rights represented by this Rights Certificate to
purchase the Common Shares issuable upon the exercise of such
Rights and requests a certificate for such Common Shares be
issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights
represented by this Rights Certificate, a new Rights Certificate
for the balance remaining of such Rights shall be registered in
the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated:
Signature
Signature Guaranteed:
Form of Reverse Side of Rights Certificate--
continued
Certificate
(to be completed, if true)
The undersigned hereby certifies that the Rights
represented by this Rights Certificate are not Beneficially
Owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such capitalized terms are defined in the
Rights Agreement).
Dated:
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the
foregoing Certificate, if applicable, must correspond to the
name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any
change whatsoever, and must be guaranteed by an eligible
guarantor institution (a bank, stockbroker, savings and loan
association or credit union with membership in an approved
signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended.
In the event that the foregoing Certificate is not duly
executed, with signature guaranteed, the Company shall deem the
Rights represented by this Rights Certificate to be Beneficially
Owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such capitalized terms are defined in the
Rights Agreement).
