EX-10.2
5
ex10-2.htm
EXHIBIT
10.2
AMENDED
AND RESTATED
IMPLEMENTATION
AND STOCKHOLDER AGREEMENT
BETWEEN
THE
PNC FINANCIAL SERVICES GROUP, INC.
AND
BLACKROCK,
INC.
DATED
AS OF FEBRUARY 27, 2009
Table
of Contents
Page
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ARTICLE
I
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DEFINITIONS
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Section
1.1
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Certain
Defined Terms
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1
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Section
1.2
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Other
Defined Terms
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7
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Section
1.3
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Other
Definitional Provisions
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7
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Section
1.4
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Methodology
for Calculations
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8
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ARTICLE
II
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SHARE
OWNERSHIP
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Section
2.1
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BlackRock
Capital Stock
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8
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Section
2.2
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Prohibition
of Certain Communications and Actions
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9
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Section
2.3
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Additional
Purchases of Voting Securities
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11
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Section
2.4
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BlackRock
Share Repurchases
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12
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ARTICLE
III
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TRANSFER
RESTRICTIONS
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Section
3.1
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General
Transfer Restrictions
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12
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Section
3.2
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Restrictions
on Transfer
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12
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Section
3.3
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Right
of Last Refusal
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13
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Section
3.4
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Legend
on Securities
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14
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Section
3.5
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Change
of Control
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15
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ARTICLE
IV
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CORPORATE
GOVERNANCE
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Section
4.1
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Composition
of the Board
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15
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Section
4.2
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Vote
Required for Board Action; Board Quorum
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16
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Section
4.3
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Committees
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18
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Section
4.4
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Certificate
of Incorporation and Bylaws to be Consistent
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18
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Section
4.5
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Information
Rights
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19
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Section
4.6
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Voting
Agreements
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20
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Section
4.7
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Related
Party Transactions
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21
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Section
4.8
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Bank
Holding Company
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21
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Section
4.9
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Dividend
Payout Ratio
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21
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i
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ARTICLE
V
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[Intentionally
Omitted]
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ARTICLE
VI
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MISCELLANEOUS
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Section
6.1
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Conflicting
Agreements
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22
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Section
6.2
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Termination
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22
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Section
6.3
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Ownership
Information
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22
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Section
6.4
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Savings
Clause
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22
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Section
6.5
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Amendment
and Waiver
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22
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Section
6.6
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Severability
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23
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Section
6.7
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Entire
Agreement
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23
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Section
6.8
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Successors
and Assigns
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23
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Section
6.9
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Counterparts
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23
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Section
6.10
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Remedies
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23
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Section
6.11
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Notices
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24
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Section
6.12
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Governing
Law; Consent to Jurisdiction
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25
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Section
6.13
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Interpretation
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25
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ii
AMENDED
AND RESTATED
IMPLEMENTATION
AND STOCKHOLDER AGREEMENT
AMENDED
AND RESTATED
IMPLEMENTATION AND STOCKHOLDER AGREEMENT dated as of February
27, 2009, between BlackRock, Inc., a
Delaware corporation (formerly New
Boise, Inc. a
Delaware corporation ("BlackRock")), and The PNC Financial
Services Group, Inc., a Pennsylvania corporation ("PNC").
WHEREAS,
BlackRock and PNC are parties to an
Implementation and Stockholder
Agreement, dated as of February 15, 2006, as amended by Amendment No. 1, dated
as of September 29, 2006, (as so amended, the "Original
Agreement");
WHEREAS,
BlackRock and Xxxxxxx Xxxxx & Co., Inc. ("Xxxxxxx Xxxxx") propose to enter
into a series of transactions whereby Xxxxxxx Xxxxx will exchange (i) 49,865,000
shares of BlackRock Common Stock (as defined herein) for a like number of shares
of Series B Participating Preferred Stock (as defined herein) and (ii)
12,604,918 shares of Series A Participating Preferred Stock (as defined herein)
for a like number of shares of Series B Participating Preferred Stock (the
"Xxxxxxx Xxxxx Exchanges");
WHEREAS,
concurrently with the Xxxxxxx Xxxxx Exchange, PNC will exchange (i)17,872,000
shares of BlackRock Common Stock for a like number of shares of Series B
Participating Preferred Stock and (ii) up to 2,940,866 shares of BlackRock
common stock for a like number shares of Series C Participating Preferred Stock
(as defined herein) (the "PNC Exchanges" and together with the Xxxxxxx Xxxxx
Exchanges, the "Exchange Transactions");
WHEREAS,
in connection with the Exchange Transactions, BlackRock and PNC wish to amend
and restate the Original Agreement in its entirety;
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
obligations hereinafter set forth, the parties hereto hereby agree as
follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Certain Defined
Terms. As used herein, the following terms shall have the
following meanings:
"Affiliate"
means, with respect to any Person, any other Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with, such specified Person; provided, however, that solely
for purposes of this Agreement, notwithstanding anything to the contrary set
forth herein, neither BlackRock nor any of its Controlled Affiliates shall be
deemed to be a Subsidiary or Affiliate of PNC solely by virtue of the Beneficial
Ownership by PNC of BlackRock Capital Stock, the election of Directors nominated
by PNC to the Board, the election of any other Directors nominated by the Board
or any other action taken by PNC in accordance with the terms and conditions of,
and subject to the limitations and restrictions set forth on such Person in,
this Agreement (and irrespective of the
characteristics
of the aforesaid relationships and actions under applicable law or accounting
principles).
"Agreement"
means this Amended and Restated
Implementation and Stockholder Agreement as it
may be amended, supplemented, restated or modified from time to
time.
"Beneficial
Ownership" by a Person of any securities includes ownership by any Person who,
directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise, has or shares (i) voting power which includes the
power to vote, or to direct the voting of, such security; and/or (ii) investment
power which includes the power to dispose, or to direct the disposition, of such
security; and shall otherwise be interpreted in accordance with the term
"beneficial ownership" as defined in Rule 13d-3 adopted by the Commission under
the Exchange Act; provided that for
purposes of determining Beneficial Ownership, a Person shall be deemed to be the
Beneficial Owner of any securities which may be acquired by such Person pursuant
to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise
(irrespective of whether the right to acquire such securities is exercisable
immediately or only after the passage of time, including the passage of time in
excess of 60 days, the satisfaction of any conditions, the occurrence of any
event or any combination of the foregoing), except that in no event will PNC be
deemed to Beneficially Own any securities which it has the right to acquire
pursuant to Section 2.3 unless, and then only to the extent that, it shall have
actually exercised such right. For purposes of this Agreement, a
Person shall be deemed to Beneficially Own any securities Beneficially Owned by
its Affiliates (including as Affiliates for this purpose its officers and
directors only to the extent they would be Affiliates solely by reason of their
equity interest) or any Group of which such Person or any such Affiliate is or
becomes a member; provided, however, that
securities Beneficially Owned by PNC shall not include, for any purpose under
this Agreement, any Voting Securities or other securities held by such Person
and its Affiliates in trust, managed, brokerage, custodial, nominee or other
customer accounts; in trading, inventory, lending or similar accounts of such
Person and Affiliates of such Person which are broker-dealers or otherwise
engaged in the securities business; or in pooled investment vehicles sponsored,
managed and/or advised or subadvised by such Person and its Affiliates except,
if they Beneficially Own more than 25% of the ownership interests in a pooled
investment vehicle, to the extent of their ownership interests therein; provided that in each
case, such securities were acquired in the ordinary course of business of their
securities business and not with the intent or purpose of influencing control of
BlackRock or avoiding the provisions of this Agreement. The term
"Beneficially Own" shall have a correlative meaning.
"Board"
means the Board of Directors of BlackRock.
"Business
Day" shall mean any day that is not a Saturday, a Sunday or other day on which
banks are required or authorized by law to be closed in New York, New
York.
"By-Laws"
means the By-Laws of BlackRock, as amended or supplemented from time to
time.
"Capital
Stock" means, with respect to any Person at any time, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting)
2
of
capital stock, partnership interests (whether general or limited) or equivalent
ownership interests in or issued by such Person.
A
"Change of Control of PNC" shall be deemed to occur when the Board of Directors
of PNC determines that a Change in Control of PNC has occurred, as a Change in
Control of PNC may be defined from time to time by the Board of Directors of
PNC. Provided, however, that at a minimum, a Change in Control of PNC
shall, without any action by the Board of Directors of PNC, be deemed to occur
if:
(a) any
Person, excluding employee benefit plans of PNC, is or becomes the Beneficial
Owner, directly or indirectly, of securities of PNC representing a majority of
the combined voting power of PNC's then outstanding securities;
(b) PNC
consummates a merger, consolidation, share exchange, division or other
reorganization or transaction of PNC (a "Fundamental Transaction") with any
other Person, other than a Fundamental Transaction that results in the voting
securities of PNC outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least a majority of the combined voting power
immediately after such Fundamental Transaction of (i) PNC's outstanding
securities, (ii) the surviving entity's outstanding securities, or (iii) in the
case of a division, the outstanding securities of each entity resulting from the
division;
(c) the
shareholders of PNC approve a plan of complete liquidation or winding-up of PNC
or an agreement for the sale or disposition (in one transaction or a series of
transactions) of all or substantially all PNC's assets;
(d) as
a result of a proxy contest, individuals who prior to the conclusion thereof
constituted the Board of Directors of PNC (including for this purpose any new
director whose election or nomination for election by PNC's shareholders in
connection with such proxy contest was approved by a vote of at least two-thirds
of the directors then still in office who were directors prior to such proxy
contest) cease to constitute at least a majority of the Board of Directors of
PNC (excluding any Board seat that is vacant or otherwise unoccupied);
or
(e) during
any period of twenty-four (24) consecutive months, individuals who at the
beginning of such period constituted the Board of Directors of PNC (including
for this purpose any new director whose election or nomination for election by
PNC's shareholders was approved by a vote of at least two thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board of
Directors of PNC (excluding any Board seat that is vacant or otherwise
unoccupied).
"Commission"
means the United States Securities and Exchange Commission.
"Common
Stock" means the shares of Common Stock, par value $0.01 per share, of BlackRock
and any securities issued in respect thereof, or in substitution therefor, in
connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
3
"control"
(including the terms "controlled by" and "under common control with"), with
respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee or executor, by contract or any other
means, or otherwise to control such Person within the meaning of such term as
used in Rule 405 under the Securities Act.
"Controlled
Affiliate" of any Person means a Person that is directly or indirectly
controlled by such other Person.
"Director"
means any member of the Board (other than any advisory, honorary or other
non-voting member of the Board).
"Equivalent
Securities" means at any time shares of any class of Capital Stock or other
securities or interests of a Person which are substantially equivalent to the
Voting Securities of such Person other than by reason of not having voting
rights, including, for the avoidance of doubt, the Series A Participating
Preferred Stock, Series B Participating Preferred Stock and Series C
Participating Preferred Stock.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated by the Commission from time to time thereunder (or under
any successor statute).
"Fair
Market Value" means, as to any securities or other property, the cash price at
which a willing seller would sell and a willing buyer would buy such securities
or property in an arm's-length negotiated transaction without time
constraints. With respect to any securities that are traded on a
national securities exchange, Fair Market Value shall mean the arithmetic
average of the closing prices of such securities on their principal market for
the ten consecutive trading days immediately preceding the applicable date of
determination and with respect to shares of Participating Preferred Stock of any
series shall be the same price per share as the Fair Market Value per share of
the Common Stock. The Fair Market Value of any property or assets,
other than securities described in the preceding sentence, with an estimated
value of less than 1% of the Fair Market Value of all of the issued and
outstanding BlackRock Capital Stock shall be determined by the Board (acting
through a majority of the Independent Directors) in its good faith
judgment. The Fair Market Value of all other property or assets shall
be determined by an Independent Investment Banking Firm, selected by a majority
of the Independent Directors, whose determination shall be final and binding on
the parties hereto. The fees and expenses of such Independent
Investment Banking Firm shall be paid by BlackRock.
"Group"
shall have the meaning assigned to it in Section 13(d)(3) of the Exchange
Act.
"Independent
Director" means any Director who (i) is or would be an "independent director"
with respect to BlackRock, pursuant to Section 303A.02 of the New York Stock
Exchange Listed Company Manual (or any successor provision) and (ii) was not
nominated or proposed for nomination by or on behalf of, PNC, any Significant
Stockholder, any Affiliates or Designated Directors of PNC or a Significant
Stockholder.
4
"Independent
Investment Banking Firm" means an investment banking firm of nationally
recognized standing that in the reasonable judgment of the Person or Persons
engaging such firm, taking into account any prior relationship with PNC, any
Significant Stockholder, or BlackRock is independent of such Person or
Persons.
"Material
Effect" means a determination by the Board that the fundamental economics and
operations of the business of BlackRock have been materially and adversely
affected as a result of a Change of Control of PNC (taking into account
BlackRock's revenues, earnings, corporate governance, management practices,
culture and compensation practices).
"Ownership
Cap" means, at any time of determination, with respect to PNC and its
Affiliates, each of (i) 49.9 percent of the Total Voting Power of the Voting
Securities of BlackRock issued and outstanding at such time (such percentage,
the "Voting Ownership Cap") and (ii) 38.0 percent of the sum of the Voting
Securities and the Participating Preferred Stock of BlackRock issued and
outstanding at such time and issuable upon the exercise of any options or other
rights outstanding at that time which, if exercised, would result in the
issuance of additional Voting Securities or Participating Preferred Stock (the
"Total Ownership Cap").
"Ownership
Percentage" means, with respect to any Person, at any time, the quotient,
expressed as a percentage, of (i) with respect to the Voting Ownership Cap (A)
the Total Voting Power of all Voting Securities of another Person Beneficially
Owned by such Person and its Affiliates divided by (B) the Total Voting Power of
all Voting Securities of such other Person issued and outstanding at that time
and (ii) with respect to the Total Ownership Cap, (A) the Total Voting Power of
all Voting Securities and the total number of Equivalent Securities of another
Person Beneficially Owned by such Person and its Affiliates divided by (B) the
Total Voting Power of all Voting Securities and the total number of Equivalent
Securities of such other Person issued and outstanding at that time and issuable
upon the exercise of any options or other rights outstanding at that time which,
if exercised, would result in the issuance of additional Voting Securities or
Equivalent Securities.
"Ownership
Threshold" means, at any time of determination, with respect to PNC and its
Affiliates, 20 percent of the BlackRock Capital Stock issued and outstanding at
such time.
"Participating
Preferred Stock" means Series A Participating Preferred Stock, Series B
Participating Preferred Stock and Series C Participating Preferred
Stock.
"Person"
means any individual, corporation, limited liability company, limited or general
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, other entity, government or any agency or political
subdivision thereof or any Group comprised of two or more of the
foregoing.
"Securities
Act" means the Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission from time to time thereunder (or under any
successor statute).
"Series
A Participating Preferred Stock" means the Series A Participating Preferred
Stock, par value $.01 per share, of BlackRock and any securities issued in
respect thereof, or in substitution therefor, or in substitution therefor in
connection with any stock split,
5
dividend
or combination, or any reclassification, recapitalization, merger,
consolidation, exchange or other similar reorganization.
"Series
B Participating Preferred Stock" means the Series B Participating Preferred
Stock, par value $.01 per share, of BlackRock and any securities issued in
respect thereof, or in substitution therefor, or in substitution therefor in
connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
"Series
C Participating Preferred Stock" means the Series C Participating Preferred
Stock, par value $.01 per share, of BlackRock and any securities issued in
respect thereof, or in substitution therefor, or in substitution therefor in
connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
"Significant
Stockholder" means, at any time of determination, any Person other than PNC and
its Affiliates that Beneficially Owns 20 percent or more of the BlackRock
Capital Stock issued and outstanding at that time.
"Subsidiary"
means, with respect to any Person, any corporation or other organization,
whether incorporated or unincorporated, (i) of which such Person or any other
Subsidiary of such Person is a general partner (excluding partnerships, the
general partner interests of which held by such Person or any Subsidiary of such
Person do not have a majority of the voting or similar interests in such
partnership), or (ii) at least a majority of the securities or other interests
of which having by their terms ordinary voting power to elect a majority of the
board of directors or others performing similar functions with respect to such
corporation or other organization is directly or indirectly owned or controlled
by such Person or by any one or more of its Subsidiaries, or by such Person and
one or more of its Subsidiaries.
"Total
Voting Power" means the total number of votes entitled to be cast by the holders
of the outstanding Capital Stock and any other securities entitled, in the
ordinary course, to vote on matters put before the holders of the Capital Stock
generally.
"Transfer"
means, directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of (by operation of law or otherwise), either
voluntarily or involuntarily, or to enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment,
pledge, encumbrance, hypothecation or similar disposition of (by operation of
law or otherwise), any Capital Stock or any interest in any Capital Stock; provided, however, that a
merger, amalgamation, plan of arrangement or consolidation or similar business
combination transaction in which PNC is a constituent corporation (or otherwise
a party including, for the avoidance of doubt, a transaction pursuant to which a
Person acquires all or a portion of PNC's outstanding Capital Stock, whether by
tender or exchange offer, by share exchange, or otherwise) shall not be deemed
to be the Transfer of any BlackRock Capital Stock Beneficially Owned by PNC
provided that the primary purpose of any such transaction is not to avoid the
provisions of this Agreement and that the successor or surviving person to such
a merger, amalgamation, plan of arrangement or consolidation or similar business
combination transaction, if not PNC, expressly assumes all obligations of PNC
under this Agreement. For
6
purposes
of this Agreement, the term Transfer shall include the sale of an Affiliate of
PNC or PNC's interest in an Affiliate which Beneficially Owns BlackRock Capital
Stock unless such Transfer is in connection with a merger, amalgamation, plan of
arrangement or consolidation or similar business combination transaction
referred to in the first proviso of the previous sentence.
"Voting
Securities" means at any time shares of any class of Capital Stock or other
securities or interests of a Person which are then entitled to vote generally,
and not solely upon the occurrence and during the continuation of certain
specified events, in the election of directors or Persons performing a similar
function with respect to such Person, and any securities convertible into or
exercisable or exchangeable at the option of the holder thereof for such shares
of Capital Stock.
Section
1.2 Other Defined
Terms. The following terms shall have the meanings
defined for such terms in the Sections set forth below:
| |
TERM
|
SECTION
| |
| |
Additional
BlackRock Stock Purchase
|
Section
2.3
| |
| |
BlackRock
|
Preamble
| |
| |
PNC
|
Preamble
| |
| |
PNC
Designee
|
Section
4.1(a)
| |
| |
BlackRock
Party
|
Section
3.3(a)
| |
| |
Closing
|
Section
2.1(d)
| |
| |
DGCL
|
Section
1.4
| |
| |
Final
Transfer Notice
|
Section
3.2(a)(ii)
| |
| |
Initial
Transfer Notice
|
Section
3.2(a)(ii)
| |
| |
Last
Look Price
|
Section
3.2(a)(ii)
| |
| |
Litigation
|
Section
6.12(a)
| |
| |
Management
Designee
|
Section
4.1(a)
| |
| |
Xxxxxxx
Xxxxx
|
Preamble
| |
| |
Xxxxxxx
Xxxxx Exchanges
|
Preamble
| |
| |
Xxxxxxx
Xxxxx Sale
|
Preamble
| |
| |
PNC
Exchanges
|
Preamble
| |
| |
Prohibited
Actions
|
Section
2.2(h)
| |
| |
Related
Person
|
Section
4.7
| |
| |
Stock
Issuance
|
Section
2.3
| |
| |
Transaction
Agreement
|
Section
2.1(d)
| |
| |
Transferring
Party
|
Section
3.2(a)(ii)
| |
Section
1.3 Other Definitional
Provisions. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Article and Section references are to this Agreement unless otherwise
specified.
The
meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
7
Section
1.4 Methodology for
Calculations. For purposes of calculating the number of
outstanding shares of Capital Stock or Voting Securities and the number of
shares of Capital Stock or Voting Securities of any Person Beneficially Owned by
any other Person as of any date, any shares of Capital Stock or Voting
Securities held in treasury or belonging to any Subsidiary of such Person which
are not entitled to be voted or counted for purposes of determining the presence
of a quorum pursuant to Section 160(c) of the
Delaware General Corporation Law
(or any successor statute (the "DGCL")) shall be disregarded.
ARTICLE
II
SHARE
OWNERSHIP
Section
2.1 BlackRock Capital
Stock.
(a) Except
as provided in paragraph (b) below, PNC covenants and agrees with BlackRock that
it shall not, and shall not permit any of its Affiliates to, directly or
indirectly, acquire, offer or propose to acquire or agree to acquire, whether by
purchase, tender or exchange offer, through the acquisition of control of
another Person (whether by way of merger, consolidation or otherwise), by
joining a partnership, syndicate or other Group or otherwise, the Beneficial
Ownership of any additional BlackRock Capital Stock, if after giving effect to
such acquisition or action, PNC, together with its Affiliates, would
Beneficially Own BlackRock Capital Stock representing more than its Voting
Ownership Cap or Total Ownership Cap.
(b) Notwithstanding
the foregoing, the acquisition (whether by merger, consolidation, exchange of
equity interests, purchase of all or part of the equity interests or assets or
otherwise) by PNC or an Affiliate thereof of any Person that Beneficially Owns
BlackRock Capital Stock, or the acquisition of BlackRock Capital Stock in
connection with securing or collecting a debt previously contracted in good
faith in the ordinary course of PNC's or such Affiliate's banking, brokerage or
securities business, shall not constitute a violation of its Ownership Cap;
provided that
(i) the primary purpose of any such transaction is not to avoid the provisions
of this Agreement, including its Ownership Cap (or the higher amount provided by
Section 2.4 if then applicable), and (ii) that in the case of an acquisition of
another Person, it uses reasonable best efforts to negotiate terms in connection
with the relevant acquisition agreement requiring such other Person to divest
itself of sufficient BlackRock Capital Stock it Beneficially Owns so that its
Voting Ownership Cap or Total Ownership Cap (or the higher amount provided by
Section 2.4 if then applicable) would not be exceeded pro forma for the
acquisition, with such divestiture to be effected concurrently with, or as
promptly as practicable following, the consummation of such acquisition (but in
no event more than 120 days following such consummation, or such longer period
not in excess of 243 days following such consummation as may be necessary due to
the possession of material non-public information or so that neither it nor any
of its Affiliates incurs any liability under Section 16(b) of the Exchange Act
if, for purposes of Section 16(b), they have not acquired Beneficial Ownership
of any other shares of BlackRock Capital Stock or derivatives thereof after the
date of the transaction that resulted in PNC exceeding its Ownership Cap) and,
to the extent such divestiture does not occur despite the use of such reasonable
best efforts, the successor or surviving Person to such transaction, if not PNC
or such Affiliate, expressly assumes all obligations of PNC or such Affiliate,
as the case
8
may
be, under this Agreement; and provided, further, that the
provisions of paragraph (c) below are complied with.
(c) i)
If at any time other than to the extent permitted by Section 2.4 PNC or any of
its Affiliates Beneficially Owns in the aggregate BlackRock Capital Stock
representing more than its Voting Ownership Cap or Total Ownership Cap, then PNC
shall, as soon as is reasonably practicable after its Ownership Percentage first
exceeds its Voting Ownership Cap or Total Ownership Cap (but in no event
more than 120 days thereafter, or such longer period not in excess of 243 days
following such consummation as may be necessary due to the possession of
material non-public information or so that neither it nor any of its Affiliates
incur liability under Section 16(b) of the Exchange Act if, for purposes of
Section 16(b), they have not acquired Beneficial Ownership of any other shares
of BlackRock Capital Stock or derivatives thereof after the date of the
transaction that resulted in PNC exceeding its Ownership Cap) Transfer (after
the lapse of any minimum holding period) a number of shares of BlackRock Capital
Stock sufficient to reduce the amount of BlackRock Capital Stock Beneficially
Owned by it and its Affiliates to an amount representing not greater than its
Ownership Cap (or the higher amount provided by Section 2.4 if then
applicable).
(ii) Notwithstanding
any other provision of this Agreement, in no event may PNC or any of its
Affiliates, directly or indirectly, including through any agreement or
arrangement, exercise any voting rights, during the term of this Agreement, in
respect of any BlackRock Capital Stock Beneficially Owned by it and its
Affiliates representing in excess of its Voting Ownership Cap (or the higher
amount provided by Section 2.4 if then applicable).
(d) Any
BlackRock Capital Stock acquired and Beneficially Owned by PNC following the
Closing (the "Closing") of the transactions contemplated by the Transaction
Agreement and Plan of Merger, dated as of February 15, 2006 (the
"Transaction Agreement") shall be subject to the restrictions contained in this
Agreement as fully as if such shares of BlackRock Capital Stock were acquired by
it at or prior to the Closing.
ii) Notwithstanding
Section 2.1(a), PNC shall not and shall cause its Affiliates not to acquire
Beneficial Ownership of any shares of BlackRock Capital Stock from any Person
other than BlackRock or a Significant Stockholder (other than pursuant to an
acquisition effected in a manner contemplated by Section 2.1(b)) if after giving
effect to such acquisition PNC, together with its Affiliates, would Beneficially
Own BlackRock Capital Stock representing more than 90 percent of its Voting
Ownership Cap.
Section
2.2 Prohibition of Certain Communications and
Actions. PNC shall not and shall cause its Affiliates and its
and their directors, officers and other agents not to (w) solicit, seek or offer
to effect, or effect, (x) negotiate with or provide any information to the
Board, any director or officer of BlackRock, any stockholder of BlackRock, any
employee or union or other labor organization representing employees of
BlackRock or any other Person with respect to, (y) make any statement or
proposal, whether written or oral, either alone or in concert with others, to
the Board, any director or officer of BlackRock or any stockholder of, any
employee or union or other labor organization representing employees of
BlackRock or any other Person with respect to, or (z) make any public
announcement (except as required by law in respect of actions permitted hereby)
or proposal or offer whatsoever (including, but not limited
9
to,
any "solicitation" of "proxies" as such terms are defined or used in Regulation
14A under the Exchange Act) with respect to
(a) any
acquisition, offer to acquire, or agreement to acquire, directly or indirectly,
by purchase or any other action the purpose or result of which would be to
Beneficially Own (i) BlackRock Capital Stock or direct or indirect right to
acquire any BlackRock Capital Stock or Voting Securities of any successor to or
person in control of BlackRock in an amount which, when added to any other
BlackRock Capital Stock then Beneficially Owned by PNC or any of its Affiliates
would cause the total amount of Voting Securities of BlackRock Beneficially
Owned by PNC or any of its Affiliates to exceed its Voting Ownership Cap or
Total Ownership Cap, or (ii) any equity securities of any Controlled Affiliate
of BlackRock (in each case except to the extent such acquisition, offer or
agreement would be permissible under Section 2.1),
(b) any
form of business combination or similar or other extraordinary transaction
involving BlackRock or any Controlled Affiliate of BlackRock, including, without
limitation, a merger, tender or exchange offer or sale of any substantial
portion of the assets of BlackRock or any Controlled Affiliate of
BlackRock,
(c) any
form of restructuring, recapitalization or similar transaction with respect to
BlackRock or any Controlled Affiliate of BlackRock,
(d) any
purchase of any assets, or any right to acquire any asset (through purchase,
exchange, conversion or otherwise), of BlackRock or any Controlled Affiliate of
BlackRock, other than investment assets of BlackRock or any Controlled Affiliate
of BlackRock in the ordinary course of its banking, brokerage or securities
business and other than an insubstantial portion of such assets in the ordinary
course of business,
(e) being
a member of a Group for the purpose of acquiring, holding or disposing of any
shares of Capital Stock of BlackRock or any Controlled Affiliate of
BlackRock,
(f) selling
any share of BlackRock Capital Stock in an unsolicited tender offer that is
opposed by the Board,
(g) any
proposal to seek representation on the Board except as contemplated by this
Agreement or, other than as permitted by the proviso to Section 4.6(a) any
proposal to seek to control or influence the management, Board or policies of
BlackRock or any Controlled Affiliate of BlackRock, or
(h) encourage,
join, act in concert with or assist (including, but not limited to, providing or
assisting in any way in the obtaining of financing for, or acting as a joint or
co-bidder with) any third party to do any of the foregoing (the actions referred
to in the foregoing provisions of this sentence being referred to as "Prohibited
Actions"). If at any time PNC or any Affiliate thereof is approached
by any Person requesting PNC or any Affiliate to encourage, join, act in concert
with or assist any Person in a Prohibited Action involving the
assets, businesses or securities of BlackRock or any of its Controlled
Affiliates or any other Prohibited Actions, PNC will promptly inform BlackRock
of the nature of such contact and the parties thereto.
10
Nothing
in this Section 2.2 shall limit the ability of any Director, including any PNC
Designee, to act in his or her capacity as a Director in respect of Board
matters.
Section
2.3 Additional Purchases of
Voting Securities. From and after the Closing, at any time
that BlackRock effects an issuance (a "Stock Issuance") of additional Voting
Securities other than in connection with any employee restricted stock, stock
option, incentive or other employee benefit plan to any Person or Persons other
than PNC or any Affiliate thereof PNC shall, subject to Section 2.1, have the
right (a) to purchase from BlackRock (in each instance, an "Additional BlackRock
Stock Purchase") additional Voting Securities of the same class or series issued
in the Stock Issuance or, at PNC's option, additional shares of Series B
Participating Preferred Stock, such that following the Stock Issuance, such
purchase and any exchange pursuant to clause (b) of this Section 2.3, PNC will
Beneficially Own shares and/or other securities representing the lesser of (x)
its Voting Ownership Cap and its Total Ownership Cap and (y) the same Ownership
Percentage as it owned immediately prior to such Stock Issuance and (b) if as a
result of such Stock Issuance PNC's Beneficial Ownership of the Total Voting
Power of BlackRock Capital Stock decreases to less than 38.0%, to exchange such
number of shares of Series B Participating Preferred Stock for shares of Common
Stock on a one-for-one basis such that following the Stock Issuance, any
purchase pursuant to clause (a) of this Section 2.3 and such exchange, PNC will
Beneficially Own shares of Common Stock and/or other securities representing not
more than 38.0% of the Total Voting Power of BlackRock Capital Stock; provided,
however, that PNC shall not have such right to purchase additional shares of
Common Stock and/or Series B Participating Preferred Stock pursuant to clause
(a) of this Section 2.3 to the extent that the total of all Stock Issuances
(other than in connection with any employee restricted stock, stock option or
stock incentive plan) constituting a public offering including the Stock
Issuance in question since the Closing do not have the effect, after taking into
account any repurchases of BlackRock Capital Stock by BlackRock since the
Closing and any Transfers of BlackRock Capital Stock by PNC and its Affiliates
in accordance with Section 3.2(a)(i) or (ii), of decreasing the Total Voting
Power of BlackRock Capital Stock issued and outstanding after giving effect to
such Stock Issuance Beneficially Owned by PNC and its Affiliates to 90% or less
of PNC's Ownership Cap. If PNC exercises its right pursuant to
clause (a) of this Section 2.3 within 30 days after the pricing date
of such Stock Issuance and if the purchaser or purchasers of Voting
Securities in such Stock Issuance pays cash in consideration for such
securities, PNC shall pay an equal per security amount of cash consideration in
the Additional BlackRock Stock Purchase following such Stock
Issuance. In all other cases, the price that PNC shall pay to
purchase the additional Voting Securities shall be the Fair Market
________________________________
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1
|
To
illustrate the foregoing, assume that immediately before a Stock Issuance
by BlackRock, the Ownership Percentage of PNC and its Affiliates was 38%
(which increase resulted from repurchases conducted by BlackRock as
contemplated by Section 2.4). If such Stock Issuance was a
public offering and resulted in PNC's Ownership Percentage being diluted
to 35%, then PNC would not be entitled to acquire additional Voting
Securities or shares of Series B Participating Preferred Stock in
connection with that Stock Issuance. If, however, a subsequent Stock
Issuance diluted PNC's Ownership Percentage to, e.g., 30%, PNC would be
entitled to acquire additional Voting Securities or shares of Series B
Participating Preferred Stock which, after taking into account all of
Xxxxxxx Xxxxx'x purchases pursuant to the comparable provision of its
Second Amended and Restated Stockholder Agreement with BlackRock, dated
the date hereof, would be sufficient to give PNC an Ownership Percentage
of 90% of its initial Ownership Cap. Any subsequent Stock
Issuance could also result in PNC having the right to make an Additional
BlackRock Stock Purchase.
|
11
Value
per unit of the class or series of Voting Securities. BlackRock shall
give PNC written notice of any Stock Issuance as far in advance as practicable
and also on the date of completion.
Section
2.4 BlackRock Share
Repurchases. If BlackRock engages in any share repurchase
program or self-tender that has the effect of causing the Beneficial Ownership
of BlackRock Capital Stock by PNC and its Affiliates to exceed its Voting
Ownership Cap or Total Ownership Cap, subject to any restrictions in the
Exchange Act, PNC shall, at the request of BlackRock, promptly sell such number
of shares of BlackRock Capital Stock to BlackRock as shall cause the Beneficial
Ownership of BlackRock Capital Stock by PNC and its Affiliates not to exceed its
Voting Ownership Cap or Total Ownership Cap; provided, that PNC shall be
permitted to Beneficially Own not more than 49.9 percent of the Total
Voting Power of the Voting Securities of BlackRock issued and outstanding if
such increased Beneficial Ownership by PNC is solely due to share repurchases or
self-tenders by BlackRock.
ARTICLE
III
TRANSFER
RESTRICTIONS
Section
3.1 General Transfer
Restrictions. The right of PNC and its Affiliates to Transfer
any BlackRock Capital Stock is subject to the restrictions set forth in this
Article III, and no Transfer of BlackRock Capital Stock by PNC or any of its
Affiliates may be effected except in compliance with this Article
III. Any attempted Transfer in violation of this Agreement shall be
of no effect and null and void, regardless of whether the purported transferee
has any actual or constructive knowledge of the Transfer restrictions set forth
in this Agreement, and shall not be recorded on the stock transfer books of
BlackRock.
Section
3.2 Restrictions on
Transfer.
(a) PNC
shall not, and shall not permit its Affiliates to, Transfer any Beneficially
Owned BlackRock Capital Stock or agree to Transfer, directly or indirectly, any
Beneficially Owned BlackRock Capital Stock; provided that the
foregoing restriction shall not be applicable to Transfers:
(i) to an
Affiliate of PNC which agrees in writing with BlackRock to be bound by this
Agreement as fully as if it were an initial signatory hereto;
(ii) pursuant
to (A) the restrictions of Rule 144 under the Securities Act applicable to sales
of securities by Affiliates of an issuer (regardless of whether PNC is deemed at
such time to be an Affiliate of BlackRock) or (B) privately negotiated
transactions to any Person described in Rule 13d-1(b)(1) under the Exchange Act
who is eligible to report the holdings of BlackRock Capital Stock on
Schedule 13G and who after consummation of such transaction would have
Beneficial Ownership of BlackRock Capital Stock representing in the aggregate
not more than 10% of the Total Voting Power of BlackRock Capital Stock; or any
other Person who after consummation of such transaction would have Beneficial
Ownership of BlackRock Capital Stock representing in the aggregate not more than
5% of the Total Voting Power of BlackRock Capital Stock; provided, that PNC or
the Affiliate proposing to Transfer pursuant to this Section 3.2(a)(ii)(B) (the
"Transferring Party") promptly provide to BlackRock
12
written
notice (an "Initial Transfer Notice"), stating such Transferring Party's
intention to effect such a Transfer, and stating that PNC will comply with the
provisions of Section 3.3 and prior to making any Transfer or entering into any
definitive agreement to do so shall provide to BlackRock a further written
notice (a "Final Transfer Notice") stating such Transferring Party's intention
to effect the specific transfer described therein (including price and terms
(the "Last Look Price"));
(iii) pursuant
to a distribution to the public, registered under the Securities Act, in which
PNC uses its commercially reasonable efforts to (A) effect as wide a
distribution of such BlackRock Capital Stock as is reasonably practicable, and
(B) not knowingly, after inquiry, sell any shares of BlackRock Capital Stock
to:
(1) any
Person described in Section 13d-1(b)(1) under the Exchange Act who is eligible
to report the holdings of BlackRock Capital stock on Schedule 13G and who after
consummation of such offering would have Beneficial Ownership of BlackRock
Capital Stock representing in the aggregate more than 10% of the Total Voting
Power of BlackRock Capital Stock; or
(2) any
other Person who after consummation of such offering would have Beneficial
Ownership of BlackRock Capital Stock representing in the aggregate more than 5%
of the Total Voting Power of BlackRock Capital Stock; or
(iv) with the
prior written consent of a majority of the Independent Directors.
(b) If
PNC wishes or is required to Transfer an amount of BlackRock Capital Stock
constituting more than 10% of the Total Voting Power of BlackRock Capital Stock,
PNC and BlackRock shall coordinate regarding optimizing the manner of
distribution and sale of such shares, including whether such sale should occur
through an underwritten offering and shall cooperate in the marketing of any
such offering.
(c) PNC
shall reimburse BlackRock for any fees and expenses incurred in connection with
any Transfer by PNC pursuant to this Section 3.2 (other than any Transfer
pursuant to Sections 3.3(a) and 3.3(b)).
Section
3.3 Right of Last
Refusal.
(a) Upon
receipt of a Final Transfer Notice, unless the proposed Transfer described
therein is being made in a tax-free or tax-deferred Transfer, including to a
charitable organization or foundation, BlackRock will have an irrevocable and
transferable option to purchase all of the BlackRock Capital Stock subject to
such Final Transfer Notice at the Last Look Price and otherwise on the terms and
conditions described in the Final Transfer Notice. BlackRock and/or
its transferees (collectively, and/or separately the "BlackRock Party") shall,
within 10 Business Days from receipt of the Final Transfer Notice, indicate if
it intends to exercise such option by sending irrevocable written notice of any
such exercise to the Transferring Party, and such BlackRock Party shall then be
obligated to purchase all such
13
BlackRock
Capital Stock on terms and conditions no less favorable (other than date of
closing) to Transferring Party than those set forth in the Final Transfer
Notice.
(b) If
a BlackRock Party elects to purchase all of such BlackRock Capital Stock, the
BlackRock Party and the Transferring Party shall be legally obligated to
consummate such transaction and shall use their commercially reasonable efforts
to consummate such transaction as promptly as practicable but in any event
within 10 Business Days following the delivery of such election notice or, if
later, 5 Business Days after receipt of all required regulatory approvals (but
in no event more than 60 days after the delivery of such election
notice).
(c) If
a BlackRock Party does not elect to purchase all of such BlackRock Capital Stock
pursuant to this Section 3.3 (or if, having made such election, does not
complete such purchase within the applicable time period specified in Section
3.3(b)), then the Transferring Party shall be free for a period of 30 days from
the date the election notice was due to be received from a BlackRock Party to
enter into definitive agreements to Transfer such BlackRock Capital Stock in
accordance with Section 3.2(a)(ii) for not less than the Last Look Price;
provided that any such definitive agreement provides for the consummation of
such Transfer to take place within nine months from the date of such definitive
agreement and is otherwise on terms not more favorable to the transferee in any
material respect than were contained in the Final Transfer Notice. In
the event that the Transferring Party has not entered into such a definitive
agreement with such 30-day period, or has so entered into such an agreement but
has not consummated the sale of such BlackRock Capital Stock within nine months
from the date of such definitive agreement, then the provisions of this Section
3.3 shall again apply, and such Transferring Party shall not Transfer or offer
to Transfer such BlackRock Capital Stock not so Transferred without again
complying with this Section 3.3, to the extent applicable.
(d) Each
of the time periods set forth in Section 3.3(a)-(c) above shall be doubled if
the number of shares PNC seeks to Transfer (as set forth in the Final Transfer
Notice) exceeds 4.5% of the Total Voting Power of the BlackRock Capital Stock,
or shares of Series B Preferred Stock convertible upon transfer into in excess
of 4.5% of the Total Voting Power of BlackRock Capital Stock, issued and
outstanding at that time.
Section
3.4 Legend on
Securities.
(a) Each
certificate representing shares of BlackRock Capital Stock Beneficially Owned by
PNC or its Affiliates and subject to the terms of this Agreement shall bear the
following legend on the face thereof:
"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER LIMITATIONS SET FORTH IN A CERTAIN AMENDED AND
RESTATED
IMPLEMENTATION AND STOCKHOLDER AGREEMENT DATED AS OF DECEMBER 31, 2008,
BETWEEN BLACKROCK, INC. (THE "COMPANY") AND THE PNC FINANCIAL
SERVICES
14
GROUP,
INC., AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE "AGREEMENT"), COPIES OF
WHICH AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE
COMPANY."
(b) Upon
any acquisition by PNC or its Affiliates of additional shares of BlackRock
Capital Stock, PNC shall, or shall cause such Affiliate to, submit the
certificates representing such shares of BlackRock Capital Stock to BlackRock so
that the legend required by this Section 3.4 may be placed thereon (if not so
endorsed upon issuance).
(c) BlackRock
may make a notation on its records or give instructions to any transfer agents
or registrars for BlackRock Capital Stock in order to implement the restrictions
on Transfer set forth in this Agreement.
(d) In
connection with any Transfer of shares of Beneficially Owned BlackRock Capital
Stock, the transferor shall provide BlackRock with such customary certificates,
opinions and other documents as BlackRock may reasonably request to assure that
such Transfer complies fully with this Agreement and with applicable securities
and other laws. In connection with any Transfer pursuant to Section
3.2(a)(ii), (iii) or (iv), BlackRock shall remove such portion of the foregoing
legend as is appropriate in the circumstances.
Section
3.5 Change of
Control. Upon a Change of Control of PNC within the first five
years after the Closing and a determination of Material Effect by the Board
within twelve months after the occurrence of such Change in Control, PNC (or any
successor Person) shall, as promptly as practicable after receiving notice of
such Material Effect, initiate and thereafter as promptly as practicable
(consistent with applicable legal requirements including normal blackout
periods and Section 16(b) of the Exchange Act) Transfer in accordance with the
provisions of Sections 3.2 and/or 3.3 of this Agreement or such other manner as
the parties shall have agreed is optimal in the circumstances and will not
result in an "assignment" of any investment advisory agreements of BlackRock and
its Controlled Affiliates under the U.S. Investment Advisers Act of 1940) all
shares of BlackRock Capital Stock Beneficially Owned by it and its Affiliates
immediately after giving effect to such Change of Control. The
parties shall cooperate in completing and marketing such Transfer, and shall
take into account all relevant considerations, including market conditions, in
determining the timing and manner of such Transfer.
ARTICLE
IV
CORPORATE
GOVERNANCE
Section
4.1 Composition of the
Board.
(a) Following
the Closing, BlackRock and PNC shall each use its best efforts to cause the
election of each meeting of stockholders of BlackRock of such nominees
reasonably acceptable to the Board such that there are no more than 17
Directors; there are not more than four Directors who are Management
Designees; there are two Directors, each in a different class, who are PNC
Designees; there are two Directors, each in a different class, who are
individuals
15
designated
in writing to BlackRock by a Person who is a Significant Stockholder and who
obtained such status in connection with the Closing, and the remaining Directors
are Independent Directors.
(b) Following
the Closing, upon the resignation, retirement or other removal from office of
any Management Designee or PNC Designee, (i) BlackRock or PNC, as the case may
be, shall be entitled promptly to designate a replacement Management Designee or
PNC Designee, as the case may be, who meets the qualifications of a Director and
is reasonably acceptable to the Board and (ii) BlackRock and PNC shall each use
its best efforts to cause the appointment or election of such replacement
designee as a Director by the other Directors or by the stockholders of
BlackRock.
Section
4.2 Vote Required for Board Action; Board
Quorum.
(a) Except
as provided in this Section 4.2 and in Section 4.7, any determination or other
action of or by the Board (other than action by unanimous written consent in
lieu of a meeting) shall require the affirmative vote or consent, at a meeting
at which a quorum is present, of a majority of Directors present at such
meeting.
(b) In
addition to the requirements of Section 4.2(a), BlackRock shall not enter into
or effectuate any of the following transactions without the prior approval of
either all of the Independent Directors then in office, or at least two-thirds
of the Directors then in office, at a meeting with respect to which such
transaction was specifically described in a written notice of meeting called at
least two Business Days in advance; provided, however, that if a Director is not
present (for the avoidance of doubt, a Director may attend, and be counted as
present, at a meeting telephonically) at either of two meetings called and
noticed in the foregoing manner to consider such transactions, such
Director shall be deemed, solely for purposes of this Section 4.2(b), not to be
a Director then in office if such Director is not present at the third meeting
called and noticed in the foregoing manner to consider such
transactions:
(i) appointment
of a new Chief Executive Officer of BlackRock;
(ii) any
merger, consolidation, exchange of shares, issuance of shares or similar
transaction as a result of which a majority of the Total Voting Power of
BlackRock Capital Stock or the Person surviving such transaction issued and
outstanding immediately after giving effect to such transaction would be
Beneficially Owned by one or more Persons other than the Persons holding a
majority of the Total Voting Power of BlackRock Capital Stock issued and
outstanding prior to the occurrence of such transaction, or any sale of all or
substantially all of the assets of BlackRock to any Person;
(iii) any
acquisition, whether by merger, consolidation, exchange of equity interests,
purchase of equity interests or assets or similar transaction, of any Person or
business the consolidated net income after taxes of which for its preceding
fiscal year equals or exceeds 20% of BlackRock's consolidated net income after
taxes for it preceding fiscal year if such acquisition involves the current or
potential issuance of BlackRock Capital Stock constituting more than 10% of the
Total Voting Power of BlackRock Capital Stock issued and outstanding immediately
after completion of such acquisition;
16
(iv) any acquisition,
whether by merger, consolidation, exchange of equity interests, purchase of
equity interests or assets or similar transaction, of any Person or business
constituting a line of business that is materially different from the lines of
business BlackRock and its Controlled Affiliates are engaged in immediately
prior to such acquisition if such acquisition involves consideration in excess
of 10% of the total assets of BlackRock on a consolidated basis;
(v) except for
repurchases pursuant to the terms of this Agreement, any repurchase by BlackRock
or any Subsidiary of BlackRock of shares of BlackRock Capital Stock such that
after giving effect to such repurchase BlackRock and its Subsidiaries shall have
repurchased more than 10% of the Total Voting Power of BlackRock Capital Stock
within the 12-month period ending on the date of such repurchase;
(vi) any amendment,
modification or waiver of BlackRock's Certificate of Incorporation or
By-Laws;
(vii) any matter requiring
stockholder approval pursuant to the requirements of the New York Stock Exchange
listed Company manual; or
(viii) any amendment,
modification or waiver (as distinct from a consent or approval provided for
herein) of any restriction or prohibition on PNC or its Affiliates or any
amendment, modification or waiver (as distinct from a consent or approval
provided for therein) of any restriction or prohibition on a Significant
Stockholder or its Affiliates provided for in a stockholder agreement between
BlackRock and such Significant Stockholder.
(c) In
addition to the requirements of Section 4.2(a) and (b), BlackRock shall not
enter into any agreement providing for or effectuate any of the following
transactions without the prior written approval of PNC:
(i) until the
fifth anniversary of the Closing, (A) any merger, consolidation, exchange of
shares, issuance of shares or similar transaction as a result of which a
majority of the Total Voting Power of the Capital Stock of BlackRock or the
Person surviving such transaction issued and outstanding immediately after
giving effect to such transactions would be Beneficially Owned by one or more
Persons other than the Persons holding a majority of the Total Voting Power of
BlackRock Capital Stock issued and outstanding prior to the occurrence of such
transaction or (B) in the case of a merger, consolidation, exchange of shares,
issuance of shares or similar transaction that is not covered by clause (A)
above, more than 20% of the Total Voting Power of the Capital Stock of BlackRock
or the other Person surviving such transaction issued and outstanding
immediately after giving effect to such transaction would be Beneficially Owned
by any Person who Beneficially Owned less than 20% of the Total Voting Power of
the BlackRock Capital Stock or of the Capital Stock of such other Person
immediately prior to such transaction;
(ii) for so
long as BlackRock shall be deemed to be a subsidiary of PNC for purposes of the
U.S. Bank Holding Company Act, entering into any business or engaging in any
activity that is prohibited for any such Subsidiary;
17
(iii) any sale,
whether by merger, consolidation, exchange of equity interests, sale of equity
interests in or assets or similar transaction of any Subsidiary if the
annualized revenues of such Subsidiary or assets, together with the annualized
revenues of all other Subsidiaries or assets so disposed of within the 12-month
period ending on the date of such sales exceeds more than 20% of the annualized
revenues of BlackRock for the preceding fiscal year on a consolidated
basis;
(iv) any
amendment, modification, repeal or waiver of Section 3.2 of BlackRock's By-Laws
or of BlackRock's Certificate of Incorporation or By-Laws that would be viewed
by a reasonable Person as being adverse to the rights of PNC or more favorable
to the rights of a Significant Stockholder than to the rights of
PNC;
(v) any
settlement or consent in a regulatory matter that would be reasonably likely, in
the opinion of counsel for PNC, to cause PNC or any of its Affiliates to suffer
(A) any regulatory disqualification, (B) suspension of registration or license
or (C) other material adverse regulatory consequence (which approval may not be
unreasonably withheld in the case of this clause (C));
(vi) any amendment,
modification or waiver (as distinct from a consent or approval provided for
therein) of any provision of a stockholder agreement between BlackRock and a
Significant Stockholder that would be viewed by a reasonable Person as being
adverse to PNC or materially more favorable to the rights of such Significant
Stockholder thereunder than to the rights of PNC hereunder; or
(vii) any voluntary
bankruptcy or similar filing or declaration by BlackRock;
provided,
however, that if a Change of Control of PNC occurs prior to the fifth
anniversary of the Closing, the provisions of Section 4.2(c)(i) and (iii) shall
immediately cease.
(d) A
quorum for any meeting of the Board shall require the presence of a majority of
the total number of Directors then in office.
Section
4.3 Committees. To
the extent permitted by applicable laws, rules and regulations (including any
requirements under the Exchange Act or the rules of the New York Stock Exchange
or any other applicable securities exchange on which the Common Stock is then
listed) each committee of the Board shall consist of a majority of Independent
Directors, the Audit Committee, the Compensation Committee and, to the extent
required by applicable laws, rules and regulations and self-regulatory
organization requirements, the Nominating Committee shall consist entirely of
Independent Directors and the Executive Committee shall consist of not less than
five members of which one shall be a PNC Designee. Subject to
Sections 4.2 and 4.7 all decisions of such committees shall require the
affirmative vote of a majority of the Directors then serving on such
committee.
Section
4.4 Certificate of Incorporation
and Bylaws to be Consistent. Each of BlackRock and PNC shall
use its best efforts to take or cause to be taken all lawful action necessary or
appropriate to ensure that at all times the Certificate of Incorporation and the
Bylaws of BlackRock contain provisions consistent with the terms of this
Agreement (including
18
without
limitation this Article IV) and none of the Certificate of Incorporation or the
Bylaws of BlackRock or any of the corresponding constituent documents of
BlackRock's Subsidiaries contain any provisions inconsistent therewith or which
would in any way nullify or impair the terms of this Agreement or the rights of
BlackRock or PNC hereunder. Neither BlackRock nor PNC shall take or
cause to be taken any action inconsistent with the terms of this Agreement
(including without limitation this Article IV) or the rights of BlackRock or PNC
hereunder.
Section
4.5 Information
Rights.
(a) BlackRock
acknowledges that the investments PNC in BlackRock are material and strategic to
it. Accordingly, BlackRock shall provide to PNC, on an ongoing and
current basis, such access to and information with respect to BlackRock's
business, operations, plans and prospects as either of them may from time to
time reasonably determine it requires in order to appropriately manage and
evaluate its investment in BlackRock.
(b) Without
limiting the generality of the foregoing, for so long as PNC is required
(the “Equity Accounting Period”) to account for its investment in BlackRock
under the equity method of accounting (determined in accordance with GAAP as
applicable to PNC), BlackRock agrees that:
(i) BlackRock
shall provide PNC with (A) consolidated financial results for the latest
available period of the BlackRock consolidated group (the “BlackRock Group”) in
order to allow PNC to prepare its US regulatory filings under the Securities
Exchange Act of 1934 (“PNC Public Filings”), including PNC’s quarterly financial
statements and annual audited financial statements and (B) such financial
information or documents in the possession of BlackRock and any of its
Subsidiaries as PNC may reasonably request; and
(ii) BlackRock
shall cooperate, and use its best reasonable efforts to cause BlackRock’s
independent certified public accounts (“BlackRock’s Auditors”) to cooperate,
with PNC to the extent reasonably requested by PNC in the preparation of
PNC’s public earnings releases or other press releases, Current Reports on Form
8-K, Annual Reports to Shareholders, Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and any other proxy, information and registration
statements, reports, notices, prospectuses and any other filings made by PNC
with the Commission, or any other Governmental Authority or otherwise made
publicly available (collectively, the “PNC Public
Filings”). BlackRock agrees to provide to PNC all information that
PNC reasonably requests in connection with any PNC Public Filings or that, in
the reasonable judgment of PNC or its legal counsel, is required to be disclosed
or incorporated by reference therein under any applicable
law. BlackRock shall provide such information to enable PNC to
prepare, print and release all PNC Public Filings on a timely
basis. BlackRock shall use its best reasonable efforts to cause
BlackRock’s Auditors to consent to any reference to them as experts in any PNC
Public Filings required under applicable law.
(c) BlackRock
will negotiate in good faith with PNC to develop appropriate protocols for each
to share with the other aggregate security position information for use in their
respective compliance programs and to coordinate share ownership reporting with
PNC and any Significant Stockholder for such purpose.
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(d) With
respect to any information provided by BlackRock:
(i) Subject to
the requirements of law, PNC shall keep confidential, and shall cause its
representatives to keep confidential, all information and documents obtained
pursuant to this Section 4.5 unless such information (A) is or becomes publicly
available other than as a result of a breach of this Section 4.5(d) by it or its
representatives; (B) was within its possession prior to being furnished to it by
or on behalf of BlackRock, provided that the source of such information was not
known by it to be bound by a confidentiality agreement with, or other
contractual or legal obligation of confidentiality to, BlackRock with respect to
such information; (C) is or becomes available to such Person or any of its
representatives on a non-confidential basis from a source other than BlackRock
or any of its representatives; provided that such source was not known to it to
be bound by a confidentiality agreement with, or other contractual or legal
obligation of confidentiality to, BlackRock with respect to such information; or
(D) is independently developed by or on its behalf without violating any of its
obligations under this Section 4.5(d).
(ii) In the
event PNC believes that it is legally required to disclose any information or
documents contemplated by this Section 4.5(d), it shall to the extent possible
under the circumstances provide reasonable prior notice to BlackRock so that
BlackRock may, at its own expense, seek a protective order or otherwise take
reasonable steps to protect the confidentiality of such
information.
(iii) Notwithstanding
the foregoing, PNC may disclose any information or documents contemplated by
this Section 4.5(d) in a filing with a governmental authority to the extent
required by applicable law, provided that it shall to the extent practicable
under the circumstances provide prior notice to BlackRock.
(iv) The rights of
PNC and the obligations of BlackRock hereunder shall be subject to applicable
laws relating to the exchange of information and other applicable
laws. The provisions of this Section 4.5(d) shall survive any
termination of this Agreement.
Section
4.6 Voting
Agreements.
(a) PNC
shall, and shall cause any of its Affiliates, to vote or act by written consent
all of the shares of BlackRock Capital Stock Beneficially Owned by it (i) in
favor of each matter required to effectuate any provision of this Agreement and
against any matter the approval of which would be inconsistent with any
provision of this Agreement and (ii) to the extent consistent with clause (i)
above, in accordance with the recommendation of the Board on all matters
approved by the Board in accordance with the provisions of Article IV, including
elections of Directors; provided, however, that if the
Board shall fail to nominate for election as a Director either or both of the
two individuals designated by PNC who are reasonably acceptable to the Board, or
shall unreasonably reject one or more PNC designees who is otherwise eligible to
serve, then, so long as such individuals otherwise meet the requirements for
serving as a Director of BlackRock, PNC and its Affiliates shall have the right
to nominate such individuals at the applicable meeting of stockholders and to
solicit proxies for the election of such individuals and, if such individuals
are nominated at such meeting, may vote all of their shares of
20
BlackRock
Capital Stock entitled to vote on such matter in favor of the election of such
individuals.
(b) PNC
shall, and shall cause each of its Affiliates who hold BlackRock Capital Stock
entitled to vote on any matter, be present in person or represented by proxy at
all meetings of securityholders of BlackRock to the extent necessary so that all
Voting Securities Beneficially Owned by PNC and its Affiliates shall be
counted as present for the purpose of determining the presence of a quorum at
such meeting and to vote such shares in accordance with this Section
4.6.
Section
4.7 Related Party
Transactions. Neither BlackRock nor any of its Controlled
Affiliates shall enter into or effectuate any transaction or agreement with PNC
or any Affiliate of PNC or any director, officer or employee of PNC or any
such Affiliate (each a "Related Person"), unless such transaction or agreement
is in effect at the time of the Closing, relates to transactions by or on behalf
of clients of BlackRock and its Controlled Affiliates in the ordinary course of
business or has been approved by or is consistent with or pursuant to the terms
of a policy, transaction or agreement (or form of agreement) approved by, the
affirmative vote or consent of a majority of the Directors, excluding
the PNC Designees, present at a meeting at which a quorum is
present.
Section
4.8 Bank Holding
Company.
(a) For
so long as BlackRock shall be deemed to be a subsidiary of PNC for purposes of
the U.S. Bank Holding Company Act, PNC shall have appropriate access and input
regarding regulatory compliance and risk management practices at BlackRock as
needed to satisfy bank holding company regulatory safety and soundness
requirements.
(b) From
and after the first date on which PNC and its Affiliates Beneficially Own
BlackRock Capital Stock representing less than PNC's Ownership Threshold, PNC
shall cooperate with BlackRock in seeking to prevent BlackRock from continuing
to be classified as the subsidiary of PNC for purposes of the U.S. Bank Holding
Company Act.
Section
4.9 Dividend Payout
Ratio. In connection with its approval of the transactions
contemplated by the Transaction Agreement and related matters, the Board of
Directors of BlackRock has adopted a dividend policy establishing a 40% targeted
payout ratio, with all subsequent quarterly dividend declarations under such
policy remaining subject to the relevant board's fiduciary
discretion. In the resolutions adopting such policy, the Board of
BlackRock has committed not to revise the dividend payout ratio downward, except
in furtherance of the Board of Directors' fiduciary duties or other prudential
financial considerations.
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ARTICLE
V
[INTENTIONALLY
OMITTED]
ARTICLE
VI
MISCELLANEOUS
Section
6.1 Conflicting
Agreements. Each party represents and warrants that it has not
granted and is not a party to any proxy, voting trust or other agreement that is
inconsistent with or conflicts with any provision of this
Agreement.
Section
6.2 Termination. Except
as otherwise provided in this Agreement, this Agreement shall terminate upon the
first date on which PNC and its Affiliates Beneficially Own BlackRock Capital
Stock representing less than PNC's Ownership Threshold (unless PNC has,
within ten Business Days of notice that it has fallen below such Ownership
Threshold, indicated its intent to increase its Beneficial Ownership above such
Ownership Threshold, and PNC in fact so increases such ownership in excess of
its Ownership Threshold within twenty Business Days after such notice);
provided, however, that in the case of a termination pursuant to this Section
6.2, the obligations of the parties pursuant to Article III, 4.2(c)(ii)
and 4.8 hereof shall not terminate until the first date on which PNC
and its Affiliates Beneficially Own BlackRock Capital Stock representing less
than five percent of the Total Voting Power of the BlackRock Capital Stock
issued and outstanding at such time. Nothing in this Section 6.2
shall be deemed to release any party from any liability for any willful and
material breach of this Agreement occurring prior to the termination hereof or
to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement.
Section
6.3 Ownership
Information.
(a) For
purposes of this Agreement, all determinations of the amount of outstanding
BlackRock Capital Stock shall be based on information set forth in the most
recent quarterly or annual report, and any current report subsequent thereto,
filed by BlackRock with the Commission, unless BlackRock shall have updated such
information by delivery of written notice to PNC.
(b) If
at any time or from time to time BlackRock becomes aware of any event that has
caused, or which could reasonably be expected to cause, the Beneficial Ownership
by PNC and its Affiliates of BlackRock Capital Stock to increase above its
Ownership Cap, BlackRock shall promptly (but in no event more than five Business
Days thereafter) notify PNC thereof.
Section
6.4 Savings
Clause. No provision of this Agreement shall be construed to require
any party or its Controlled Affiliates to take any action that would violate any
applicable law (whether statutory or common), rule or regulation.
Section
6.5 Amendment and
Waiver. Except as otherwise provided herein, this Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto. Except as otherwise provided herein, no
modification, amendment or
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waiver
of any provision of this Agreement, and no giving of any consent provided for
hereunder, shall be effective unless such modification, amendment, waiver or
consent is approved by a majority of the Independent Directors. The
failure of any party to enforce any of the provisions of this Agreement shall in
no way be construed as a waiver of such provisions and shall not affect the
right of such party thereafter to enforce each and every provision of this
Agreement in accordance with its terms.
Section
6.6 Severability. If
any provision of this Agreement shall be declared by any court of competent
jurisdiction to be illegal, void or unenforceable, all other provisions of this
Agreement shall not be affected and shall remain in full force and
effect.
Section
6.7 Entire
Agreement. Except as otherwise expressly set forth herein,
this Agreement embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, that may have related to the subject matter hereof in
any way. Without limiting the generality of the foregoing, to the
extent that any of the terms hereof are inconsistent with the rights or
obligations of PNC under any other agreement with BlackRock, the terms of this
Agreement shall govern.
Section
6.8 Successors and
Assigns. Neither this Agreement nor any of the rights or
obligations of any party under this Agreement shall be assigned, in whole or in
part (except by operation of law pursuant to a merger or similar business
combination transaction), by any party without the prior written consent of the
other parties (approved, in the case of BlackRock, by a majority of the
Independent Directors), provided, that PNC may assign its rights and obligations
hereunder (in whole or in part) to an Affiliate that agrees in writing with
BlackRock to be bound by this Agreement as fully as if it were an initial
signatory hereto, and any such transferee may thereafter make corresponding
assignments in accordance with this proviso; and provided, further, that
BlackRock may assign all or a portion of its rights under Section 3.3 in
connection with any particular transaction subject thereto so long as BlackRock
remains obligated in respect of any purchase obligation arising
thereunder. Subject to the foregoing, this Agreement shall bind and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
Section
6.9 Counterparts. This
Agreement may be executed in separate counterparts each of which shall be an
original and all of which taken together shall constitute one and the same
agreement.
Section
6.10 Remedies.
(a) Each
party hereto acknowledges that monetary damages would not be an adequate remedy
in the event that each and every one of the covenants or agreements in this
Agreement are not performed in accordance with their terms, and it is therefore
agreed that, in addition to and without limiting any other remedy or right it
may have, the non-breaching party will have the right to an injunction,
temporary restraining order or other equitable relief in any court of competent
jurisdiction enjoining any such breach and enforcing specifically each and every
one of the terms and provisions hereof. Each party hereto agrees not
to oppose the
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granting
of such relief in the event a court determines that such a breach has occurred,
and to waive any requirement for the securing or posting of any bond in
connection with such remedy.
(b) All
rights, powers and remedies provided under this Agreement or otherwise available
in respect hereof at law or in equity shall be cumulative and not alternative,
and the exercise or beginning of the exercise of any thereof by any party shall
not preclude the simultaneous or later exercise of any other such right, power
or remedy by such party.
Section
6.11 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally, telecopied (upon telephonic confirmation
of receipt), on the first Business Day following the date of dispatch if
delivered by a recognized next day courier service, or on the third Business Day
following the date of mailing if delivered by registered or certified mail,
return receipt requested, postage prepaid. All notices hereunder
shall be delivered as set forth below, or pursuant to such other instructions as
may be designated in writing by the party to receive such notice.
If
to BlackRock:
c/o BlackRock, Inc.
00 Xxxx 00xx
Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attn: Xxxxxxxx X.
Xxxx
with
a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxxx
X. Xxxxx, Esq.
If
to PNC:
The PNC Financial Services Group, Inc.
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: 000-000-0000
Attention: General Counsel
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with
a copy (which shall not constitute notice) to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: 212-403-2000
Attention: Xxxxxxxx X. Xxxxx, Esq.
Section
6.12 Governing Law; Consent to
Jurisdiction.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of
Delaware without giving effect to the principles of conflicts of
law. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction in the Court of
Chancery of the State of
Delaware or any court of the United States located in
the State of
Delaware, for any action, proceeding or investigation in any court
or before any governmental authority ("Litigation") arising out of or relating
to this Agreement and the transactions contemplated hereby. Each of
the parties hereto hereby irrevocably and unconditionally waives, and agrees not
to assert, by way of motion, as a defense, counterclaim or otherwise, in
any such Litigation, the defense of sovereign immunity, any claim that it is not
personally subject to the jurisdiction of the aforesaid courts for any reason
other than the failure to serve process in accordance with this Section 6.12,
that it or its property is exempt or immune from jurisdiction of any such court
or from any legal process commenced in such courts (whether through service of
notice, attachment prior to judgment, attachment in aid of execution of
judgment, execution of judgment or otherwise), and to the fullest extent
permitted by applicable law, that the Litigation in any such court is brought in
an inconvenient forum, that the venue of such Litigation is improper, or that
this Agreement, or the subject matter hereof, may not be enforced in or by such
courts and further irrevocably waives, to the fullest extent permitted by
applicable law, the benefit of any defense that would hinder, xxxxxx or delay
the levy, execution or collection of any amount to which the party is entitled
pursuant to the final judgment of any court having jurisdiction. Each
of the parties irrevocably and unconditionally waives, to the fullest extent
permitted by applicable law, any and all rights to trial by jury in connection
with any Litigation arising out of or relating to this Agreement or the
transactions contemplated hereby.
(b) Each
of the parties expressly acknowledges that the foregoing waiver is intended to
be irrevocable under the laws of the State of
Delaware and of the United States
of America; provided that consent
by PNC and BlackRock to jurisdiction and service contained in this Section 6.12
is solely for the purpose referred to in this Section 6.12 and shall not be
deemed to be a general submission to said courts or in the State of
Delaware
other than for such purpose.
Section
6.13 Interpretation. The
table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation".
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IN
WITNESS WHEREOF, the parties hereto have executed this AMENDED AND RESTATED
IMPLEMENTATION AND STOCKHOLDER Agreement as of the date first written
above.
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BLACKROCK,
INC.
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By:
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Xxxxxx X. Xxxxxxxx |
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Name:
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X. Xxxxxxxx
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Title:
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Managing
Director and
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Deputy
General Counsel
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THE
PNC FINANCIAL SERVICES GROUP, INC.
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By:
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Xxxxxx X. Xxxxxxxxx |
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Name:
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Title:
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