RIGHTS AGREEMENT
dated as of January 8, 1999
by and between
Central Bancorp, Inc.
and
State Street and Trust Company
as Rights Agent
as amended by
Amendment No. 1 to Rights Agreement
dated as of July 26, 2001
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...................5
Section 2.4 Adjustments to Exercise Price; Number of Rights............7
Section 2.5 Date on Which Exercise is Effective........................7
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..8
Section 2.9 Persons Deemed Owners......................................9
Section 2.10 Delivery and Cancellation of Certificates..................9
Section 2.11 Agreement of Rights Holders................................9
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....................................................11
Section 4.2 Merger or Consolidation or Change of Name of Rights Agent..12
Section 4.3 Duties of Rights Agent.....................................12
Section 4.4 Change of Rights Agent.....................................13
ARTICLE V
MISCELLANEOUS
Page
Section 5.1 Redemption ................................................14
Section 5.2 Expiration.................................................14
Section 5.3 Issuance of New Rights Certificates........................14
Section 5.4 Supplements and Amendments.................................14
Section 5.5 Fractional Shares..........................................14
Section 5.6 Rights of Action...........................................14
Section 5.7 Holder of Rights Not Deemed a Shareholder..................15
Section 5.8 Notice of Proposed Actions.................................15
Section 5.9 Notices....................................................15
Section 5.10 Suspension of Exercisability...............................15
Section 5.11 Costs of Enforcement.......................................16
Section 5.12 Successors.................................................16
Section 5.13 Benefits of this Agreement.................................16
Section 5.14 Descriptive Headings.......................................16
Section 5.15 Governing Law..............................................16
Section 5.16 Counterparts...............................................16
Section 5.17 Severability...............................................16
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 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" is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
"Associate" means (i) any corporation or organization (other than the
Company or a majority-owned subsidiary of the Company) of which such Person is
an officer or partner or is, directly or indirectly, the Beneficial Owner of 10
percent or more of any class of equity securities, (ii) any trust or other
estate in which such Person has a substantial Beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary capacity, and (iii) any
relative or spouse of such Person who has the same home as such Person.
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), (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
-3-
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.
"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
-4-
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
tenth day after 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.
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.
-5-
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.
(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
-6-
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, 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
7
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,
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.
-8-
(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).
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
-9-
(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 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.
-10-
(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 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,
-11-
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.
(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
-12-
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.
(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
-13-
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.
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
-14-
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.
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 issue as
promptly as practicable a public announcement stating that the exercisability of
the Rights has been temporarily suspended.
-15-
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
------------
applicationthereof 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.
-16-
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).
