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