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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
MELLON BANK CORPORATION
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1233834
________________________________________ _______________
(State of incorporation or organization) (IRS Employer
Identification No.)
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258-0001
________________________________________ _______________
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the
Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
Stock Purchase Rights New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the
Act:
None
_______________________________________________________________________________
(Title of Class)
Exhibit Index is on Page 10
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Item 1. Description of Registrant's Securities to be Registered.
On October 15, 1996, the Board of Directors of Mellon Bank
Corporation, a Pennsylvania corporation (the "Company"), declared a dividend
payable October 31, 1996 of one right (a "Right") for each outstanding share
of common stock, par value $.50 per share ("Common Stock"), of the Company held
of record at the close of business on October 31, 1996 (the "Record Time"), or
issued thereafter and prior to the Separation Time (as hereinafter defined) and
thereafter pursuant to options and convertible securities outstanding at the
Separation Time. The Rights will be issued pursuant to a Shareholder
Protection Rights Agreement, dated as of October 15, 1996 (the "Rights
Agreement"), between the Company and Mellon Bank, N.A., as Rights Agent (the
"Rights Agent"). Each Right entitles its registered holder to purchase from
the Company, after the Separation Time, one one-hundredth of a share of
Participating Preferred Stock, par value $1.00 per share ("Participating
Preferred Stock"), for $225 (the "Exercise Price"), subject to adjustment.
The Rights will be evidenced by the Common Stock certificates
until the close of business on the earlier of (either, the "Separation Time")
(i) the tenth Business Day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in
such Person's becoming an Acquiring Person and (ii) the first date (the
"Flip-in Date") of public announcement by the Company that a Person (as defined
in the Rights Agreement) has become an Acquiring Person, other than as the
result of a Flip-over Transaction or Event (as defined below); provided that,
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that, if any
tender or exchange offer referred to in clause (i) of this definition is
cancelled, terminated or otherwise withdrawn prior to the Separation Time
without the purchase of any shares of Common Stock pursuant thereto, such offer
shall be deemed, for purposes of this definition, never to have been made. An
Acquiring Person is any Person who is a Beneficial Owner (as defined in the
Rights Agreement) of 15% or more of the outstanding shares of Common Stock, par
value $.50 per share, of the Company (the "Common Stock"), but such term does
not include (i) any Person who is the Beneficial Owner of
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15% or more of the outstanding shares of Common Stock on October 15, 1996 or
who shall become the Beneficial Owner of 15% or more of the outstanding shares
of Common Stock solely as a result of an acquisition by the Company of shares
of Common Stock, until such time hereafter or thereafter as such Person shall
become the Beneficial Owner (other than by means of a stock dividend or stock
split or by purchase from the Company) of any additional shares of Common
Stock; (ii) any Person who becomes the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock but who acquired Beneficial Ownership of
shares of Common Stock without any plan or intention to seek or affect control
of the Company, if such Person promptly enters into an irrevocable commitment
to divest, and thereafter promptly divests (without exercising or retaining any
power, including voting, with respect to such shares), sufficient shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) so that such Person ceases to be the Beneficial Owner of 15%
or more of the outstanding shares of Common Stock; (iii) any Person who
Beneficially Owns shares of Common Stock consisting solely of one or more of
(A) shares of Common Stock Beneficially Owned pursuant to the grant or exercise
of an option granted to such Person (an "Option Holder") by the Company in
connection with an agreement to merge with, or acquire, the Company entered
into prior to a Flip-in Date, (B) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock),
Beneficially Owned by such Option Holder or its Affiliates or Associates at the
time of grant of such option, (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired
by Affiliates or Associates of such Option Holder after the time of such grant
which, in the aggregate, amount to less than 1% of the outstanding shares of
Common Stock, and (D) shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) which are held by such
Option Holder in trust accounts, managed accounts and the like or otherwise
held in a fiduciary capacity, that are beneficially owned by third Persons who
are not Affiliates or Associates of such Option Holder or acting together with
such Option Holder to hold such shares, or which are held by such Person in
respect of a debt previously contracted; and (iv) the Company, any wholly-owned
Subsidiary of the Company or an employee stock ownership plan or other employee
benefit plan of the Company or a wholly-owned subsidiary of the Company or any
employee stock benefit trust established by the Company. The
Rights Agreement provides that, until the Separation Time, the Rights will be
transferred with and only with the Common Stock. Common Stock certificates
issued after the Record Time but prior to the Separation Time shall evidence
one Right for each share of Common Stock represented thereby and shall contain
a legend incorporating by reference the terms of the Rights Agreement (as such
may
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be amended from time to time). Notwithstanding the absence of the
aforementioned legend, certificates evidencing shares of Common Stock
outstanding at the Record Time shall also evidence one Right for each share of
Common Stock evidenced thereby. Promptly following the Separation Time,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of Common Stock at the Separation Time.
The Rights will not be exercisable until after the Separation
Time. The Rights will expire on the earliest of (i) the Exchange Time, (ii)
the Redemption Time, (iii) the close of business on the tenth anniversary of
the Record Time and (iv) immediately prior to the effective time of a
consolidation, merger or share exchange of the Company (A) into another
corporation or (B) with another corporation in which the Company is the
surviving corporation but Common Stock is converted into cash and/or securities
of another corporation, in either case pursuant to an agreement entered into by
the Company prior to a Stock Acquisition Date (any such time, the "Expiration
Time"), and no Person shall thereafter have any rights pursuant to the Rights
Agreement or any Right.
The Exercise Price and the number of Rights outstanding, or in
certain circumstances the securities purchasable upon exercise of the Rights,
are subject to adjustment from time to time to prevent dilution in the event of
a Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date
shall occur, the Company shall take such action as shall be necessary to ensure
and provide that each Right (other than Rights Beneficially Owned by the
Acquiring Person or any affiliate or associate thereof, which Rights shall
become void) shall constitute the right to purchase from the Company, upon the
exercise thereof in accordance with the terms of the Rights Agreement, that
number of shares of Common Stock or Participating Preferred Stock of the
Company having an aggregate Market Price (as defined in the Rights Agreement),
on the date of the public announcement of an Acquiring Person's becoming such
(the "Stock Acquisition Date") that gave rise to the Flip-in Date, equal to
twice the Exercise Price for an amount in cash equal to the then current
Exercise Price. In addition, the Board of Directors of the Company may, at its
option, at any time after a Flip-in Date, to the fullest extent that
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applicable law would not prohibit Rights owned by Acquiring Persons or
Affiliates or Associates thereof becoming void pursuant to the provisions
thereof, elect to exchange all (but not less than all) the then outstanding
Rights for shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted in order to protect the interests of
holders of Rights generally in the event that after the Separation Time an
event such as a stock dividend, stock split, reclassification or
recapitalization shall have occurred with respect to the Common Stock (such
exchange ratio, as adjusted from time to time, being hereinafter referred to as
the "Exchange Ratio"). Immediately upon the action of the Board of Directors
of the Company electing to exchange the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate (the
"Termination Time") and each Right will thereafter represent only the right to
receive a number of shares of Common Stock equal to the Exchange Ratio.
Whenever the Company shall become obligated under the provisions described in
this paragraph to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Participating Preferred Stock, at a ratio of one one-hundredth of a share of
Participating Preferred Stock for each share of Common Stock so issuable.
The Rights Agreement provides that prior to the Expiration
Time, the Company shall not enter into any agreement with an Acquiring Person
with respect to, consummate or permit to occur any Flip-over Transaction or
Event (as defined below) unless and until it shall have entered into a
supplemental agreement with the Flip-over Entity (i.e., the Person issuing any
securities into which shares of Common Stock are being converted or exchanged
and, if no such securities are being issued, the other party to such Flip-over
Transaction or Event, or the Person receiving the greatest portion of the
assets or operating income or cash flow being transferred in a Flip-over
Transaction or Event), for the benefit of the holders of the Rights, providing
that, upon consummation or occurrence of the Flip-over Transaction or Event (i)
each Right shall thereafter constitute the right to purchase from the Flip-over
Entity, upon exercise thereof in accordance with the Rights Agreement, that
number of shares of Flip-over Stock (i.e., the capital stock with the greatest
voting power in respect of the election of directors of the Flip-over Entity)
of the Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to
twice the Exercise Price for an amount in cash equal to the Exercise Price and
(ii) the Flip-over Entity shall thereafter be liable for, and shall
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assume, by virtue of such Flip-over Transaction or Event and such supplemental
agreement, all the obligations and duties of the Company pursuant to the Rights
Agreement. For purposes of the foregoing description, the term "Acquiring
Person" shall include any Acquiring Person and its Affiliates and Associates
(as such terms are defined in the Rights Agreement) counted together as a
single Person.
A "Flip-over Transaction or Event" is a transaction or series
of transactions on or after a Flip-in Date in which, directly or indirectly,
(A) the Company shall consolidate or merge with, or participate in a share
exchange with any other Person if, at the time of the consolidation, merger or
share exchange or at the time the Company enters into any agreement with
respect to any such consolidation, merger or share exchange, the Acquiring
Person controls the Board of Directors of the Company and either (i) any terms
of or arrangement concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring Person is not
identical to the terms and arrangements relating to other holders of the Common
Stock or (ii) the Person with whom the transaction or series of transactions
occurs is the Acquiring Person or an Affiliate or Associate of the Acquiring
Person, or (B) the Company shall sell or otherwise transfer (or one or more of
its subsidiaries shall sell or otherwise transfer) assets of the Company and
its Subsidiaries (taken as a whole) to any Person (other than the Company or
one or more of its wholly-owned subsidiaries) or to two or more such Persons
which are Affiliates or Associates or otherwise acting in concert, if, at the
time of the entry by the Company (or any such Subsidiary) into an agreement
with respect to such sale or transfer of assets, the Acquiring Person controls
the Board of Directors of the Company. For purposes of the foregoing
description, (x) the term "Acquiring Person" includes any Acquiring Person and
its Affiliates and Associates (other than the Company), and (y) an Acquiring
Person shall be deemed to control the Company's Board of Directors when,
following a Flip-in Date, the persons who were directors of the Company (or
persons nominated and/or appointed as directors by vote of a majority of such
persons) before the Stock Acquisition Date shall cease to constitute a majority
of the Company's Board of Directors.
The Rights Agreement provides that prior to the Expiration
Time, unless the Rights have been redeemed, the Company shall not enter into
any agreement with respect to, consummate or permit to occur any Flip-over
Transaction or Event if at the time thereof there are any rights, warrants or
securities outstanding or any other arrangements,
<PAGE> 7
agreements or instruments which would eliminate or otherwise diminish in any
material respect the benefits intended to be afforded by the Rights Agreement
to the holders of Rights upon consummation of such transaction.
The Board of Directors of the Company may, at its option, at
any time prior to the close of business on the Flip-In Date, elect to redeem
all (but not less than all) the then outstanding Rights at the Redemption Price
and the Company, at its option, may pay the Redemption Price either in cash or
shares of Common Stock or other securities of the Company deemed by the Board
of Directors, in the exercise of its sole discretion, to be at least equivalent
in value to the Redemption Price. Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights (or, if the resolution
of the Board of Directors electing to redeem the Rights states that the
redemption will not be effective until the occurrence of a specified future
time or event, upon the occurrence of such future time or event), without any
further action and without any notice, the right to exercise the Rights will
terminate and each Right will thereafter represent only the right to receive
the Redemption Price in cash or securities, as determined by the Board of
Directors. Promptly after the Rights are redeemed, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights.
The holders of Rights will, solely by reason of their
ownership of Rights, have no rights as shareholders of the Company, including,
without limitation, the right to vote or to receive dividends.
The Rights will not prevent a takeover of the Company.
However, the Rights may cause substantial dilution to a person or group that
acquires 15% or more of the Common Stock unless the Rights are first redeemed
by the Board of Directors of the Company. Nevertheless, the Rights should not
interfere with a transaction that is in the best interests of the Company and
its shareholders because the Rights can be redeemed on or prior to the close of
business on the Flip-in Date, before the consummation of such transaction.
As of October 15, 1996 there were 147,165,480 shares of Common
Stock issued (of which 129,538,059 shares were outstanding and 17,627,421
shares were held in treasury). As long as the Rights are attached to the
Common Stock, the Company will issue one Right with each new share of Common
Stock so that all such shares will have Rights attached.
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The Rights Agreement (which includes as Exhibit A the forms of
Rights Certificate and Election to Exercise and as Exhibit B the form of
resolution of the Company's Board of Directors establishing and designating the
Participating Preferred Stock) is attached hereto as an exhibit and is
incorporated herein by reference. The foregoing description of the Rights is
qualified in its entirety by reference to the Rights Agreement and such
exhibits thereto.
Item 2. Exhibits.
Exhibit No. Description
(1) Rights Agreement, which includes as Exhibit A the forms of
Rights Certificate and Election to Exercise and as Exhibit B
the form of resolution of the Board of Directors of Mellon
Bank Corporation establishing and designating the
Participating Preferred Stock.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
MELLON BANK CORPORATION
By /s/ Carl Krasik
---------------
Carl Krasik
Secretary
Date: October 29, 1996
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EXHIBIT INDEX
Exhibit No. Description
(1) Rights Agreement, which includes as Exhibit A the forms of
Rights Certificate and Election to Exercise and as Exhibit B
the form of resolution of the Board of Directors of Mellon
Bank Corporation establishing and designating the
Participating Preferred Stock.
<PAGE> 1
Exhibit (1)
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
October 15, 1996
between
MELLON BANK CORPORATION
and
MELLON BANK, N.A.,
as Rights Agent
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE I
DEFINITIONS......................................................... 1
1.1 Certain Definitions.................................................................. 1
ARTICLE II
THE RIGHTS.......................................................... 8
2.1 Summary of Rights.................................................................... 8
2.2 Legend on Common Stock Certificates.................................................. 9
2.3 Exercise of Rights; Separation of Rights............................................. 9
2.4 Adjustments to Exercise Price; Number of
Rights............................................................................... 12
2.5 Date on Which Exercise is Effective.................................................. 13
2.6 Execution, Authentication, Delivery and
Dating of Rights Certificates........................................................ 13
2.7 Registration, Registration of Transfer and
Exchange............................................................................. 14
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates......................................................................... 15
2.9 Persons Deemed Owners................................................................ 16
2.10 Delivery and Cancellation of Certificates............................................ 16
2.11 Agreement of Rights Holders.......................................................... 16
ARTICLE III
ADJUSTMENTS TO THE RIGHTS
IN THE EVENT OF CERTAIN TRANSACTIONS............................................. 17
3.1 Flip-in.............................................................................. 17
3.2 Flip-over............................................................................ 20
ARTICLE IV
THE RIGHTS AGENT....................................................... 20
4.1 General.............................................................................. 20
4.2 Merger or Consolidation or Change of Name of
Rights Agent......................................................................... 21
4.3 Duties of Rights Agent............................................................... 22
4.4 Change of Rights Agent............................................................... 24
</TABLE>
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<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE V
MISCELLANEOUS........................................................ 25
5.1 Redemption........................................................................... 25
5.2 Expiration........................................................................... 25
5.3 Issuance of New Rights Certificates.................................................. 26
5.4 Supplements and Amendments........................................................... 26
5.5 Fractional Shares.................................................................... 26
5.6 Rights of Action..................................................................... 27
5.7 Holder of Rights Not Deemed a Shareholder............................................ 27
5.8 Notice of Proposed Actions........................................................... 27
5.9 Notices.............................................................................. 28
5.10 Suspension of Exercisability......................................................... 28
5.11 Costs of Enforcement................................................................. 29
5.12 Successors........................................................................... 29
5.13 Benefits of this Agreement........................................................... 29
5.14 Determination and Actions by the
Board of Directors, etc.............................................................. 29
5.15 Descriptive Headings................................................................. 30
5.16 Governing Law........................................................................ 30
5.17 Counterparts......................................................................... 30
5.18 Severability......................................................................... 30
</TABLE>
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
Exhibit B Form of Resolution of Board of
Directors of Mellon Bank
Corporation Establishing and
Designating Participating
Preferred Stock
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SHAREHOLDER PROTECTION RIGHTS AGREEMENT, dated as of October
15, 1996 (as amended from time to time, this "Agreement"), between Mellon Bank
Corporation, a Pennsylvania corporation (the "Company"), and Mellon Bank, N.A.,
a national banking association, as Rights Agent (the "Rights Agent", which term
shall include any successor Rights Agent hereunder).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (a)
authorized and declared a dividend of one right ("Right") in respect of each
share of Common Stock (as hereinafter defined) held of record as of the close of
business on October 31, 1996 (the "Record Time") and (b) as provided in Section
2.4, authorized the issuance of one Right in respect of each share of Common
Stock issued or sold by the Company after the Record Time and prior to the
Separation Time (as hereinafter defined) and, to the extent provided in Section
5.3, each share of Common Stock issued or sold by the Company after the
Separation Time;
WHEREAS, subject to the terms and conditions hereof, each
Right entitles the holder thereof, after the Separation Time, to purchase
securities or assets of the Company (or, in certain cases, securities of certain
other entities) pursuant to the terms and subject to the conditions set forth
herein; and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;
NOW, THEREFORE, in consideration of the premises and the
respective agreements set forth herein and intending to be legally bound hereby,
the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include
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(i) any Person who is the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock on October 15, 1996 or who shall
become the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock solely as a result of an acquisition by the Company of
shares of Common Stock, until such time hereafter or thereafter as such
Person shall become the Beneficial Owner (other than by means of a
stock dividend or stock split or by purchase from the Company) of any
additional shares of Common Stock;
(ii) any Person who becomes the Beneficial Owner of 15% or more of
the outstanding shares of Common Stock but who acquired Beneficial
Ownership of shares of Common Stock without any plan or intention to
seek or affect control of the Company, if such Person promptly enters
into an irrevocable commitment to divest, and thereafter promptly
divests (without exercising or retaining any power, including voting,
with respect to such shares), sufficient shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of
15% or more of the outstanding shares of Common Stock;
(iii) any Person who Beneficially Owns shares of Common Stock
consisting solely of one or more of (A) shares of Common Stock
Beneficially Owned pursuant to the grant or exercise of an option
granted to such Person (an "Option Holder") by the Company in
connection with an agreement to merge with, or acquire, the Company
entered into prior to the Flip-in Date, (B) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for
Common Stock), Beneficially Owned by such Option Holder or its
Affiliates or Associates at the time of grant of such option, (C)
shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) acquired by Affiliates or
Associates of such Option Holder after the time of such grant which, in
the aggregate, amount to less than 1% of the outstanding shares of
Common Stock, and (D) shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common Stock) which are held
by such Option Holder in trust accounts, managed accounts and the like
or otherwise held in a fiduciary capacity, that are beneficially owned
by third Persons who are not Affiliates or Associates of such Option
Holder or acting together with such Option Holder to hold such shares,
or which are held by such Person in respect of a debt previously
contracted; and
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(iv) the Company, any wholly-owned Subsidiary of the Company,
any employee stock ownership plan or other employee benefit plan of the
Company or a wholly-owned subsidiary of the Company, or any employee
stock benefit trust established by the Company.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of 1934,
as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership", of, and to "Beneficially Own", any securities as to
which such Person or any of such Person's Affiliates or Associates is or may be
deemed to be the beneficial owner pursuant to Rules 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, to have "Beneficial Ownership" of, or to
"Beneficially Own", any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange, (ii) solely because such Person or any of such Person's
Affiliates or Associates has or shares the power to vote or direct the voting of
such security pursuant to a revocable proxy given in response to a public proxy
or consent solicitation made to more than ten holders of shares of a class of
stock of the Company registered under Section 12 of the Exchange Act and
pursuant to, and in accordance with, the applicable rules and regulations under
the Exchange Act, except if such power (or the arrangements relating thereto) is
then reportable under Item 6 of Schedule 13D under the Exchange Act (or any
similar provision of a comparable or successor report), or (iii) solely because
of the grant by the Company to such Person, in connection with the execution of
an agreement to acquire the Company, of options to acquire such security;
provided, further, that the Warburg Entities shall not be deemed to Beneficially
Own shares of Common Stock owned by their Associates (other than their
Affiliates, general partners, officers and directors), and such Associates
(other than such Affiliates, general partners, officers and directors) shall not
be deemed to Beneficially Own shares of Common Stock owned by the Warburg
Entities. Notwithstanding
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<PAGE> 7
the foregoing, no officer or director of the Company shall be deemed to
Beneficially Own any securities of any other Person by virtue of any actions
such officer or director takes in such capacity. For purposes of this Agreement,
in determining the percentage of the outstanding shares of Common Stock with
respect to which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in The City of New York or the
Commonwealth of Pennsylvania are generally authorized or obligated by law or
executive order to close.
"close of business" on any given date shall mean the time on
such date (or, if such date is not a Business Day, the time on the next
succeeding Business Day) at which the offices of the transfer agent for the
Common Stock (or, after the Separation Time, the offices of the Rights Agent)
are closed to the public.
"Common Stock" shall mean the shares of Common Stock, par
value $.50 per share, of the Company.
"Company" shall have the meaning set forth in the preamble.
"Election to Exercise" shall have the meaning set forth in
Section 2.3(d) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section
3.1(c) hereof.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $225.00.
"Expansion Factor" shall have the meaning set forth in Section
2.4(a) hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the
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<PAGE> 8
close of business on the tenth anniversary of the Record Time and (iv)
immediately prior to the effective time of a consolidation, merger or share
exchange of the Company (A) into another corporation or (B) with another
corporation in which the Company is the surviving corporation but Common Stock
is converted into cash and/or securities of another corporation, in either case
pursuant to an agreement entered into by the Company prior to a Stock
Acquisition Date.
"Flip-in Date" shall mean any Stock Acquisition Date which is
not the result of a Flip-over Transaction or Event.
"Flip-over Entity", for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause (A) of
the definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii)
in the case of a Flip-over Transaction or Event referred to in clause (B) of
the definition thereof, the Person receiving the greatest portion of the (i)
assets or (ii) operating income or cash flow being transferred in such Flip-over
Transaction or Event, provided in all cases if such Person is a subsidiary of a
corporation, the parent corporation shall be the Flip-Over Entity.
"Flip-over Stock" of any Person shall mean the capital stock
(or similar equity interest) with the greatest voting power in respect of the
election of directors (or other persons similarly responsible for direction of
the business and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions on or after a Flip-in Date in which, directly or
indirectly, (A) the Company shall consolidate or merge with, or participate in a
share exchange with any other Person if, at the time of the consolidation,
merger or share exchange or at the time the Company enters into any agreement
with respect to any such consolidation, merger or share exchange, the Acquiring
Person Controls the Board of Directors of the Company and either (i) any terms
of or arrangement concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring Person is not
identical to the terms and arrangements relating to other holders of the Common
Stock or (ii) the Person with whom the transaction or series of transactions
occurs is the Acquiring Person or an Affiliate or Associate of the Acquiring
Person, or (B) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or
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<PAGE> 9
otherwise transfer) assets of the Company and its Subsidiaries (taken as a
whole) to any Person (other than the Company or one or more of its wholly owned
Subsidiaries) or to two or more such Persons which are Affiliates or Associates
or otherwise acting in concert, if, at the time of the entry by the Company (or
any such Subsidiary) into an agreement with respect to such sale or transfer of
assets, the Acquiring Person Controls the Board of Directors of the Company. For
purposes of the foregoing description, (x) the term "Acquiring Person" shall
include any Acquiring Person and its Affiliates and Associates (other than the
Company) and (y) an Acquiring Person shall be deemed to Control the Company's
Board of Directors when, following a Flip-in Date, the persons who were
directors of the Company (or persons nominated and/or appointed as directors by
vote of a majority of such persons) before the Stock Acquisition Date shall
cease to constitute a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date; provided,
however, that if an event of a type analogous to any of the events described in
Section 2.4 hereof shall have caused the closing prices used to determine the
Market Price on any Trading Days during such period of 20 Trading Days not to be
fully comparable with the closing price on such date, each such closing price so
used shall be appropriately adjusted in order to make it fully comparable with
the closing price on such date. The closing price per share of any securities on
any date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or such other system then in use, or,
if on any such date the securities are not listed or admitted to trading on any
national securities exchange or quoted by any such organization, the average of
the closing bid and asked prices as furnished by
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<PAGE> 10
a professional market maker making a market in the securities selected by the
Board of Directors of the Company; provided, however, that if on any such date
the securities are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the closing price per share
of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.
"Participating Preferred Stock" shall mean the series of
Participating Preferred Stock, par value $1.00 per share, of the Company created
by a Statement Affecting Class or Series of Shares in substantially the form set
forth in Exhibit B hereto appropriately completed.
"Option Holder" shall have the meaning set forth in the
definition of Acquiring Person.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the Securities
Exchange Act of 1934, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
"Record Time" shall have the meaning set forth in the
Recitals.
"Redemption Price" shall mean an amount (calculated to the
nearest one one-hundredth of a cent) equal to the Exercise Price, as in effect
at the Redemption Time, divided by 22,500 (i.e., initially $0.01).
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the
Preamble.
"Rights Certificate" shall have the meaning set forth in
Section 2.3(c) hereof.
"Rights Register" shall have the meaning set forth in Section
2.7(a) hereof.
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<PAGE> 11
"Rights Registrar" shall have the meaning set forth in Section
2.7(a) hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth Business Day (or such later date as the Board of
Directors of the Company may from time to time fix by resolution adopted prior
to the Separation Time that would otherwise have occurred) after the date on
which any Person commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person and (ii) the Flip-in
Date; provided that, if the foregoing results in the Separation Time being prior
to the Record Time, the Separation Time shall be the Record Time and provided
further, that, if any tender or exchange offer referred to in clause (i) of this
definition is cancelled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this definition, never to
have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that a Person has become an Acquiring
Person.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity interest is Beneficially Owned,
directly or indirectly, by such Person.
"Trading Day", when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
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<PAGE> 12
2.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Shareholder Protection
Rights Agreement, dated as of October 15, 1996 (as such may be amended
from time to time, the "Rights Agreement"), between Mellon Bank
Corporation (the "Company") and Mellon Bank, N.A., as Rights Agent, the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may become exercisable for securities or
assets of the Company or securities of another entity, may be exchanged
for shares of Common Stock or other securities or assets of the
Company, may expire, may become void (if they are "Beneficially Owned"
by an "Acquiring Person" or an Affiliate or Associate thereof, as such
terms are defined in the Rights Agreement, or by any transferee of any
of the foregoing) or may be evidenced by separate certificates and may
no longer be evidenced by this certificate. The Company will mail or
arrange for the mailing of a copy of the Rights Agreement to the holder
of this certificate without charge after the receipt of a written
request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to
Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each
Right will entitle the holder thereof, after the Separation Time and prior to
the Expiration Time, to purchase, for the Exercise Price, one one-hundredth of a
share of Participating Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued prior to the
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<PAGE> 13
Record Time, with the letter mailed to the record holder thereof pursuant to
Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share. Notwithstanding any other provision of this Agreement, any
Rights held by the Company or any of its Subsidiaries (other than Rights held in
a fiduciary capacity or pursuant to any Employee Plans) shall not be exercisable
by the Company or any such Subsidiary.
(c) Subject to the terms and conditions hereof, after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Rights Agent will mail to each
holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform to usage, and
(y) a disclosure statement describing the Rights.
(d) Subject to the terms and conditions hereof, Rights may be
exercised on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares or depositary receipts (or both) in a name
other than that of the holder of the Rights being exercised.
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<PAGE> 14
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
the terms and conditions hereof, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such number of
shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 hereof not to issue certificates
representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 and (ii) after receipt of such
certificates, depositary receipts and/or cash, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered (in the
case of certificates or depositary receipts) in such name or names as may be
designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) cause to
be kept available until the Expiration Time out of its authorized and unissued
shares of capital stock a number of shares of Participating Preferred Stock that
will be sufficient to permit the exercise in full of all outstanding Rights;
(ii) take all such action as may be necessary to ensure that all shares
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price), be duly
and validly authorized, executed, issued and delivered and fully paid and
nonassessable; (iii) take all such action as may be necessary to comply with any
applicable requirements of the Securities Act of 1933 or the Exchange Act, and
the rules and regulations thereunder, and any other applicable law, rule or
regulation, in connection with the issuance of any shares upon exercise of
Rights; and (iv) pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the original issuance or
delivery of the Rights Certificates or of any shares issued upon the exercise of
Rights, provided that the Company shall not be required to pay any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for
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<PAGE> 15
shares in a name other than that of the holder of the Rights being transferred
or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In
the event the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one share of
Common Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be distributed among the shares
of Common Stock with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue or sell any shares of Common Stock
otherwise than in a transaction referred to in the preceding paragraph, each
such share of Common Stock so issued or sold shall automatically have one new
Right associated with it, which Right shall be evidenced by the certificate
representing such share. To the extent provided in Section 5.3, Rights shall be
issued by the Company in respect of shares of Common Stock that are issued or
sold by the Company after the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization
(including any such transaction involving a merger, consolidation or share
exchange), or otherwise, the Company shall make such adjustments, if any, in the
Exercise Price, number of Rights and/or securities or other property purchasable
upon exercise of Rights as the Board of Directors of the Company, in its sole
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<PAGE> 16
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price is made pursuant to this Section 2.4, the Company shall
(i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate.
(d) Rights certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable at the time
of issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose
name any certificate for shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Exercise Price for such
Rights (and any applicable taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the
date of such surrender and payment is a date upon which the stock transfer
books of the Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the stock transfer books of the
Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President, Chief Executive Officer or one
of its Vice Chairmen, under its corporate seal reproduced thereon attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company,
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<PAGE> 17
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the countersignature and delivery of such Rights Certificates.
Promptly after the Company learns of the Separation Time, the
Company will notify the Rights Agent of such Separation Time and will deliver
Rights Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders of the
Rights pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid
for any purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange. (a)
After the Separation Time, the Company will cause to be kept a register (the
"Rights Register") in which, subject to such reasonable regulations as it may
prescribe, the Company will provide for the registration and transfer of Rights.
The Rights Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Company and registering Rights and
transfers of Rights after the Separation Time as herein provided, provided that
the Rights Agent is hereby authorized to appoint ChaseMellon Shareholder
Services, L.L.C. as Rights Registrar (in which capacity such Rights Registrar
shall be entitled to the benefits of Article IV hereof as if it were Rights
Agent). In the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the Rights Register
at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the
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<PAGE> 18
Rights surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not be required to register the transfer
or exchange of any Rights after such Rights have become void under Section
3.1(b), been exchanged under Section 3.1(c) or been redeemed or terminated under
Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent prior
to the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the
Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
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<PAGE> 19
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and subject to Section 3.1(b), shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the person
in whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, including the payment of
the Redemption Price, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any Rights shall mean the
registered holder of such Rights (or, prior to the Separation Time, the
associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for redemption, registration of
transfer or exchange shall, if surrendered to any person other than the Rights
Agent, be delivered to the Rights Agent and, in any case, shall be promptly
cancelled by the Rights Agent. The Company may at any time deliver to the Rights
Agent for cancellation any Rights Certificates previously countersigned and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Rights Certificates so delivered shall be promptly cancelled
by the Rights Agent. No Rights Certificates shall be countersigned in lieu of or
in exchange for any Rights Certificates cancelled as provided in this Section
2.10, except as expressly permitted by this Agreement. The Rights Agent shall
destroy all cancelled Rights Certificates and deliver a certificate of
destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be trans-
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<PAGE> 20
ferred by a transfer of, the associated share of Common
Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate)
for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person
in whose name the Rights Certificate (or, prior to the Separation Time,
the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS
IN THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration
Time a Flip-in Date shall occur, except as provided in this Section 3.1, each
Right shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Section 5.10), that
number of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect to
the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned, on or after the Stock Acquisition Date on which an Acquiring
Person became such, by such Acquiring Person or by an Affiliate or Associate
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thereof or by any transferee, direct or indirect, of any of the foregoing shall
become void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights under any provision
of this Agreement. If any Rights Certificate is presented for assignment or
exercise and the Person presenting the same will not complete the certification
set forth at the end of the form of assignment or notice of election to exercise
and provide such additional evidence of the identity of the Beneficial Owner and
its Affiliates and Associates (or former Beneficial Owners and their Affiliates
and Associates) as the Company shall reasonably request, then the Company shall
be entitled conclusively to deem the Beneficial Owner thereof to be an Acquiring
Person or an Affiliate or Associate thereof or a transferee of any of the
foregoing and accordingly will deem the Rights evidenced thereby to be void and
not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option,
at any time after a Flip-in Date, to the fullest extent that applicable law
would not prohibit Rights owned by certain Persons referred to in Section 3.1(b)
becoming void pursuant to the provisions thereof, elect to exchange all (but not
less than all) the then outstanding Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 3.1(b)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Separation Time an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock (such exchange ratio, as adjusted from
time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void pursuant to Section 3.1(b)) will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights (other than Rights
that have become void pursuant to Section 3.1(b)) outstanding immediately prior
thereto by mailing such notice in accordance with Section 5.9.
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<PAGE> 22
Each Person in whose name any certificate for shares is issued
upon the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d)
shall for all purposes be deemed to have become the holder of record of the
shares represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of any applicable taxes and other governmental charges payable by
the holder was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Participating Preferred Stock, at a ratio of one one-hundredth of a share of
Participating Preferred Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Participating
Preferred Stock of the Company to permit the exercise or exchange in full of the
Rights in accordance with Section 3.1(a) or (c), and the Company elects not to,
or is otherwise unable to, make the exchange referred to in Section 3.1(c), the
Company shall take such action as shall be necessary to ensure and provide, to
the extent permitted by applicable law and any agreements or instruments in
effect on the Stock Acquisition Date to which it is a party, that each Right
shall thereafter constitute the right to receive, (x) at the Company's option,
either (A) in return for the Exercise Price, debt or equity securities or other
assets (or a combination thereof) having a fair value equal to twice the
Exercise Price, or (B) without payment of consideration (except as otherwise
required by applicable law), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise Price, or (y) if
the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-in Date times the Exchange Ratio in
effect on the Flip-in Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
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consultation with a nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company
shall not enter into any agreement with an Acquiring Person with respect to,
consummate or permit to occur any Flip-over Transaction or Event unless and
until it shall have entered into a supplemental agreement with the Flip-over
Entity, for the benefit of the holders of the Rights, providing that, upon
consummation or occurrence of the Flip-over Transaction or Event (i) each Right
shall thereafter constitute the right to purchase from the Flip-over Entity,
upon exercise thereof in accordance with the terms hereof, that number of shares
of Flip-over Stock of the Flip-over Entity having an aggregate Market Price on
the date of consummation or occurrence of such Flip-over Transaction or Event
equal to twice the Exercise Price for an amount in cash equal to the Exercise
Price (such right to be appropriately adjusted in order to protect the interests
of the holders of Rights generally in the event that after such date of
consummation or occurrence an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Flip-over Stock) and (ii) the Flip-over Entity shall thereafter be liable for,
and shall assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the Company pursuant
to this Agreement. The provisions of this Section 3.2 shall apply to successive
Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments which would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and
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counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent is a party, or any corporation succeeding to the shareholder
services business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
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(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel will
be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate
signed by a person believed by the Rights Agent to be the Chairman of
the Board, the President, the Chief Executive Officer or any Vice
Chairman and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to
the Rights Agent; and such certificate will be full authorization to
the Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the certificates for securities purchasable upon exercise of
Rights or the Rights Certificates (except its countersignature
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thereof) or be required to verify the same, but all such statements and
recitals are and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any
certificate for securities purchasable upon exercise of Rights or
Rights Certificates (except its countersignature thereof); nor will it
be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor
will it be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Section 3.1(b)
hereof) or any adjustment required under the provisions of Section 2.4,
3.1 or 3.2 hereof or responsible for the manner, method or amount of
any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights after receipt of the certificate contemplated by Section 2.4
describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization
or reservation of any securities purchasable upon exercise of Rights or
any Rights or as to whether any securities purchasable upon exercise of
Rights will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of
this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person believed by the Rights Agent to be the
Chairman of the Board, the President, Chief Executive Officer or any
Vice Chairman or the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer of the Company, and to apply to
such persons for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by
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it in good faith in accordance with instructions of any such person.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock,
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested,
or contract with or lend money to the Company or otherwise act as fully
and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss
to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the Commonwealth of Pennsylvania, in good standing, having its
principal office in the Commonwealth of
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Pennsylvania, which is authorized under such laws to exercise the powers of the
Rights Agent contemplated by this Agreement and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000. After appointment, the successor Rights Agent will be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may,
at its option, at any time prior to the close of business on the Flip-In Date,
elect to redeem all (but not less than all) the then outstanding Rights at the
Redemption Price and the Company, at its option, may pay the Redemption Price
either in cash or shares of Common Stock or other securities of the Company
deemed by the Board of Directors, in the exercise of its sole discretion, to be
at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights
are redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice in
accordance with Section 5.9.
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5.2 Expiration. The Rights and this Agreement shall expire at
the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1(c), 3.1(d), 3.1(e) or 5.1.
5.3 Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock by
the Company following the Separation Time and prior to the Expiration Time
pursuant to the terms of securities convertible or redeemable into shares of
Common Stock or to options, in each case issued or granted prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders of
such shares of Common Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of such shares of
Common Stock; provided, however, in each case, (i) no such Rights Certificates
shall be issued, if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued
if, and to the extent that, appropriate adjustment shall have otherwise been
made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) in any respect prior to the Flip-in Date,
(ii) to make any changes on or after the Flip-in Date that the Company may deem
necessary or desirable and which shall not materially adversely affect the
interests of the holders of Rights generally or (iii) in order to cure any
ambiguity or to correct or supplement any provision contained herein which may
be inconsistent with any other provisions herein or otherwise defective. The
Rights Agent will duly execute and deliver any supplement or amendment hereto
requested by the Company which satisfies the terms of the preceding sentence.
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5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, (a) evidence such fractional shares
by depositary receipts issued pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such agreement shall
provide that each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which he would be entitled as a beneficial owner
of such fractional share, or (b) pay to the registered holder of such Rights the
appropriate fraction of the Market Price per share in cash.
5.6 Rights of Action. Subject to the terms of this Agreement,
rights of action in respect of this Agreement, other than rights of action
vested solely in the Rights Agent, are vested in the respective holders of the
Rights; and any holder of any Rights, without the consent of the Rights Agent or
of the holder of any other Rights, may, on such holder's own behalf and for such
holder's own benefit and the benefit of other holders of Rights, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise such
holder's Rights in the manner provided in such holder's Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.8 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
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5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Time and prior to the Expiration Time (i) to effect
or permit (in cases where the Company's permission is required) occurrence of
any Flip-in Date or Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the Flip-in Date
or the date on which such Flip-over Transaction or Event, liquidation,
dissolution, or winding up is to take place, and such notice shall be so given
at least 20 Business Days prior to the date of the taking of such proposed
action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Mellon Bank Corporation
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Attention: General Counsel
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Mellon Bank, N.A.
Two Mellon Bank Center
Room 325
Pittsburgh, Pennsylvania 15259-0001
Attention: Manager, Corporate Trust
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock, as the case may
be. Any notice which is mailed in the manner
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herein provided shall be deemed given, whether or not the holder receives the
notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or need be taken pursuant
to Section 3.1(c) or (e) or to comply with federal or state securities laws, the
Company may suspend the exercisability of the Rights for a reasonable period of
up to ninety (90) days following the date of the occurrence of the Separation
Time or the Flip-in Date in order to take such action or comply with such laws.
In the event of any such suspension, the Company shall issue as promptly as
practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors, etc.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
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administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO
BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE.
5.17 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
MELLON BANK CORPORATION
By Frank V. Cahouet
-----------------------------------
President and Chief Executive
Officer
MELLON BANK, N.A.
By Daryl J. Zupan
-----------------------------------
Senior Vice President
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EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
Certificate No. W- ________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
MELLON BANK CORPORATION
This certifies that ______________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Shareholder Protection Rights Agreement, dated
as of October 15, 1996 (as such may be amended from time to time, the "Rights
Agreement"), between Mellon Bank Corporation, a Pennsylvania corporation (the
"Company"), and Mellon Bank, N.A., a national banking association, as Rights
Agent (the "Rights Agent", which term shall include any successor Rights Agent
under the Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on October 31, 2006, one one-hundredth of a fully paid
share of Participating Preferred Stock, par value $1.00 per share (the
"Participating Preferred Stock"), of the Company (subject to adjustment as
provided in the Rights Agreement) at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Exercise duly executed at the designated office of the Rights Agent. The
Exercise Price shall initially be $225.00 per Right and shall be subject to
adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities or assets
of the Company other than Participating Preferred Stock, all as provided in the
Rights Agreement.
<PAGE> 36
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor evidencing an aggregate number of Rights equal to the
aggregate number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be exercised in part,
the registered holder shall be entitled to receive, upon surrender hereof,
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances at its option at a redemption price of $.01 per Right, or (b)
exchanged by the Company under certain circumstances at its option for one share
of Common Stock or one one-hundredth of a share of Participating Preferred Stock
per Right (or, in certain cases, other securities or assets of the Company),
subject in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
any securities which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised or exchanged as
provided in the Rights Agreement.
-2-
<PAGE> 37
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned as provided in the Rights
Agreement.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: _______________________
ATTEST: MELLON BANK CORPORATION
________________________________ By_______________________
Secretary
Countersigned:
[NAME OF RIGHTS AGENT
OR RIGHTS REGISTRAR]
By____________________________
Authorized Signature
-3-
<PAGE> 38
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificates.)
FOR VALUE RECEIVED __________________________ hereby sells, assigns and
transfers unto _______________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does irrevocably constitute and appoint ________________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________________
Signature Guaranteed: _____________________________
Signature
(Signature must correspond to
name as written upon the face
of this Rights Certificate in
every particular, without
alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
<PAGE> 39
- -------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-----------------------------------
Signature
- -------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
<PAGE> 40
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: MELLON BANK CORPORATION
The undersigned hereby irrevocably elects to exercise
_________________ whole Rights represented by the attached Rights Certificate to
purchase the shares of Participating Preferred Stock issuable upon the exercise
of such Rights and requests that certificates for such shares be issued in the
name of:
------------------------------------------------------------
Address:
----------------------------------------------------
------------------------------------------------------------
Social Security or Other Taxpayer
Identification Number:
--------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
------------------------------------------------------------
Address:
----------------------------------------------------
------------------------------------------------------------
Social Security or Other Taxpayer
Identification Number:
--------------------------------------
Dated:
--------------------------
Signature Guaranteed: --------------------------------
Signature
(Signature must
correspond to name as
written upon the face of
this Rights Certificate
in every particular,
without alteration or
enlargement or any change
whatsoever)
<PAGE> 41
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
- -------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced by the
enclosed Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
-----------------------------------
Signature
- -------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
<PAGE> 42
EXHIBIT B
FORM OF RESOLUTION OF BOARD OF DIRECTORS OF
MELLON BANK CORPORATION ESTABLISHING AND DESIGNATING
PARTICIPATING PREFERRED STOCK
STATEMENT AFFECTING CLASS OR
SERIES OF SHARES OF
MELLON BANK CORPORATION
In compliance with the requirements of Section 1522 of the
Pennsylvania Business Corporation Law, the undersigned corporation, desiring to
state the voting rights, designations, preferences, qualifications, privileges,
limitations, conversion rights and other special rights of a series of shares of
its Preferred Stock, hereby certifies that:
1. The name of the Corporation is Mellon Bank Corporation.
2. The resolution establishing and designating the series of
shares of Preferred Stock and fixing and determining the relative rights and
preferences of such series, as adopted at a meeting duly convened and held on
October 15, 1996, set forth in full, is as follows:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation by the Restated Articles of Incorporation, as
amended, there is hereby created and the Corporation be, and it hereby is,
authorized to issue up to 2,000,000 shares of a new series of Preferred Stock
and hereby fixes the designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions as follows:
(i) The distinctive serial designation of this
series shall be "Participating Preferred Stock" (hereinafter
called "this Series"). Each share of this Series shall be
identical in all respects with the other shares of this Series
except as to the dates from and after which dividends thereon
shall be cumulative.
(ii) The number of shares in this Series shall
initially be _______, which number may from time to time be
increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of this Series
purchased by the
<PAGE> 43
Corporation shall be cancelled and shall revert to authorized
but unissued shares of Preferred Stock undesignated as to
series. Shares of this Series may be issued in fractional
shares, which fractional shares shall entitle the holder, in
proportion to such holder's fractional share, to all rights of
a holder of a whole share of this Series.
(iii) The holders of full or fractional shares
of this Series shall be entitled to receive, when and as
declared by the Board of Directors, but only out of funds
legally available therefor, dividends, (A) on each date that
dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) are
payable on or in respect of Common Stock comprising part of
the Reference Package (as defined below), in an amount per
whole share of this Series equal to the aggregate amount of
dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) that
would be payable on such date to a holder of the Reference
Package and (B) on the last day of March, June, September and
December in each year, in an amount per whole share of this
Series equal to the excess (if any) of $________* over the
aggregate dividends paid per whole share of this Series during
the three month period ending on such last day. Each such
dividend shall be paid to the holders of record of shares of
this Series on the date, not exceeding fifty days preceding
such dividend or distribution payment date, fixed for the
purpose by the Board of Directors in advance of payment of
each particular dividend or distribution. Dividends on each
full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional
share originally issued after a dividend record date and on or
prior to the dividend payment date to which such record date
relates shall not be entitled to receive the dividend payable
on such dividend payment date or any amount in respect of the
period from such original issuance to such dividend payment
date.
--------
* Insert an amount equal to 1/4 of 1% of the Exercise Price divided by the
number of shares purchasable upon exercise of one Right (i.e., a guaranteed
1% dividend).
-2-
<PAGE> 44
The term "Reference Package" shall initially mean 100
shares of Common Stock, par value $.50 per share ("Common
Stock"), of the Corporation. In the event the Corporation
shall, at any time after the close of business on
_____________,* (A) declare or pay a dividend on any Common
Stock payable in Common Stock, (B) subdivide any Common Stock
or (C) combine any Common Stock into a smaller number of
shares, then and in each such case the Reference Package after
such event shall be the Common Stock that a holder of the
Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be
entitled to any dividends, whether payable in cash, property
or stock, in excess of full cumulative dividends, as herein
provided on this Series.
So long as any shares of this Series are outstanding,
no dividend (other than a dividend in Common Stock or in any
other stock ranking junior to this Series as to dividends and
upon liquidation) shall be declared or paid or set aside for
payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to this Series as
to dividends or upon liquidation, nor shall any Common Stock
nor any other stock of the Corporation ranking junior to or on
a parity with this Series as to dividends or upon liquidation
be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation), unless, in each
case, the full cumulative dividends (including the dividend to
be due upon payment of such dividend, distribution,
redemption, purchase or other acquisition) on all outstanding
shares of this Series shall have been, or shall
contemporaneously be, paid.
The preferences of each share of this Series with
respect to dividend payments or distributions upon the
voluntary or involuntary liquidation, dissolution or winding
up of the Corporation
- --------
* Insert date of Separation Time
-3-
<PAGE> 45
(herein referred to as "liquidation"), as the case may be,
will be in every respect on a parity with the preferences of
every other share of this Series as to dividend payments or
upon liquidation and of every other share of the Series I
Preferred Stock, Series J Preferred Stock, Series K Preferred
Stock, and of every other share of capital stock of the
Corporation which is not specifically made senior or junior to
the shares of this Series as to dividend payments or upon
liquidation. The rights of this Series will be senior to the
Common Stock of the Corporation with respect to dividend
payments and distribution upon liquidation of the Corporation.
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share
equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, that a holder of the Reference Package would be entitled
to receive as a result of such transaction.
(v) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of full and
fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of
the Common Stock or any other stock of the Corporation ranking
Junior to this Series upon liquidation, to be paid in full an
amount per whole share of this Series equal to the greater of
(A) $__________* or (B) the aggregate amount distributed or to
be distributed prior to such date in connection with such
liquidation, dissolution or winding up to a holder of the
Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with
accrued dividends to such distribution or payment date,
whether or not earned or declared. If such payment shall have
been made in full to all holders of shares of this Series, the
holders of
- --------
* Insert an amount equal to 100 times the Exercise Price in effect as of the
Separation Time.
-4-
<PAGE> 46
shares of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
In the event the assets of the Corporation
available for distribution to the holders of shares of this
Series upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders
are entitled pursuant to the first paragraph of this Section
(v), no such distribution shall be made on account of any
shares of any other class or series of Preferred Stock ranking
on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of
this Series, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or
winding up.
Upon the liquidation, dissolution or winding
up of the Corporation, the holders of shares of this Series
then outstanding shall be entitled to be paid out of assets of
the Corporation available for distribution to its shareholders
all amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall
be made to the holders of Common Stock or any other stock of
the Corporation ranking junior upon liquidation to this
Series.
For the purposes of this Section (v), the
consolidation, or merger or binding share exchange of the
Corporation with any other corporation or the sale, transfer,
division or lease by the Corporation of all or any part of its
property shall not be deemed to constitute a liquidation,
dissolution or winding up of the Corporation.
(vi) The shares of this Series shall not be
redeemable.
(vii) In addition to any other vote or consent
of shareholders required by law or by the Restated Articles of
Incorporation of the Corporation, each whole share of this
Series shall, on any matter, vote as a class with any other
capital stock comprising part of the Reference Package and
-5-
<PAGE> 47
voting on such matter and shall have the number of votes
thereon that a holder of the Reference Package would have.
IN WITNESS WHEREOF, MELLON BANK CORPORATION has caused this
Statement Affecting Class or Series of Shares to be signed by its duly
authorized officer, and its corporate seal duly attested by another such
officer, to be duly affixed this _____ day of _______________.
MELLON BANK CORPORATION
By ____________________
Name:
Title:
[Corporate Seal]
Attest:
By ______________________
Name:
Title:
-6-
