SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) July 21, 1998
NORTHERN TRUST CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-05965 36-2723087
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(State or other (Commission (I.R.S Employer
jurisdiction of File Number) Identification No.)
incorporation)
50 South LaSalle Street
Chicago, Illinois 60675
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(Address of principal executive offices) (Zip Code)
(312) 630-6000
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
AMENDMENT OF EXISTING RIGHTS AGREEMENT. On July 21, 1998, the Board
of Directors (the "Board") of Northern Trust Corporation (the
"Corporation") approved a third amendment (the "Third Amendment") to the
Rights Agreement, dated as of October 17, 1989, between the Corporation and
Norwest Bank Minnesota, N.A., as successor rights agent, as amended by that
certain First Amendment, dated September 17, 1997, and that certain Second
Amendment, dated November 18, 1997 (as so amended, the "1989 Rights
Agreement"). The Third Amendment provides for an automatic redemption of
the rights issued under the 1989 Rights Agreement (the "1989 Rights") upon
the earliest to occur of the following (each, an "Automatic Redemption
Event"): (i) any person becomes the beneficial owner of securities of the
Corporation which in the aggregate represent 14% or more of the voting
power of all voting securities of the Corporation, (ii) any person
commences, or publicly announces its intent to commence, a tender or
exchange offer if upon consummation thereof such person, together with all
affiliates and associates of such person, would be the beneficial owner of
securities of the Corporation which in the aggregate represent 15% or more
of the voting power of all voting securities of the Corporation, (iii) any
person makes by public announcement or by written communication that is or
becomes the subject of a public announcement, or publicly announces its
intent to make, a proposal to the Corporation or its stockholders for (1) a
merger, consolidation or similar transaction involving the Corporation or
any of its subsidiaries, (2) a purchase or other acquisition of all or a
substantial portion of the assets or deposits of the Corporation and its
subsidiaries or (3) a purchase or other acquisition of securities
representing 15% or more of the voting power of all voting securities of
the Corporation (any transaction of the type described in clauses (1), (2)
and (3) above, an "Acquisition Transaction"), or (iv) any person files an
application or notice with the Board of Governors of the Federal Reserve
System, or any other federal or state banking regulatory authority, which
application or notice seeks approval to engage in any transaction
constituting an Acquisition Transaction. Effective immediately upon the
occurrence of an Automatic Redemption Event, by action of the Board taken
to approve the Third Amendment and without any further action on the part
of or notice from the Board, the 1989 Rights will be redeemed and will
terminate, and thereafter, the only right of holders of the 1989 Rights
will be to receive the redemption price set forth in the 1989 Rights
Agreement.
The Third Amendment is filed herewith as Exhibit 99.1 and is
incorporated herein by reference. The foregoing description of the Third
Amendment does not purport to be complete and is qualified in its entirety
by reference to the full text of the Third Amendment.
ADOPTION OF NEW RIGHTS AGREEMENT. On July 21, 1998, the Board also
declared a dividend distribution of one right (each a "New Right") for each
outstanding share of the common stock, par value $1.66 - 2/3 per share, of
the Corporation ("Common Stock") to stockholders of record at the close of
business on the earlier of October 31, 1999, the date on which the 1989
Rights Agreement expires, or the date on which the 1989 Rights are
exchanged or redeemed in accordance with the provisions of the 1989 Rights
Agreement (such date being referred to as the "Record Date"). Each New
Right will entitle the registered holder to purchase from the Corporation
one one-hundredth of a share of Series A Junior Participating Preferred
Stock, no par value (the "Preferred Stock"), of the Corporation at an
exercise price of $330.00, subject to adjustment (as adjusted from time to
time, the "Purchase Price"). The description and terms of the New Rights
are set forth in a Rights Agreement, dated as of July 21, 1998 (the "New
Rights Agreement"), between the Corporation and Norwest Bank Minnesota,
N.A., as Rights Agent.
The New Rights Agreement was adopted by the Board to replace the 1989
Rights Agreement upon the expiration or redemption of the 1989 Rights,
which will occur no later than October 31, 1999. In no event will both the
1989 Rights and the New Rights be exercisable.
Initially following the Record Date, the New Rights will be attached
to all certificates representing shares of Common Stock then outstanding,
and no separate Rights Certificates will be distributed. Unless previously
redeemed by the Board in accordance with the New Rights Agreement, the New
Rights will separate from the Common Stock and a "Distribution Date" will
occur upon the earlier of (i) 20 days following the Stock Acquisition Date
(as defined below) or (ii) 20 days (or such later date as the Board shall
determine, provided that under certain circumstances any decision to defer
such date will require the concurrence of a majority of the Continuing
Directors (as defined below)) after the date a tender or exchange offer
that would result in a person or group beneficially owning 15% or more of
the outstanding shares of Common Stock is first published, sent or given to
the Corporation's stockholders.
The "Stock Acquisition Date" is defined as the twentieth day following
the earlier of (x) the first date of public announcement by the Corporation
that any person or group (other than certain exempt persons or groups) has
acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the shares of Common Stock then outstanding or (y) the date on
which any Offering Person (as defined below) or any affiliate or associate
thereof enters into an agreement with the Corporation providing for an
Acquisition Transaction (as defined below) (any person described in clause
(x) or clause (y) above is referred to as an "Acquiring Person").
Descendants of Corporation founder Byron L. Smith and certain related
trusts and other entities (or a group comprised solely of such persons)
will not be deemed to be an Acquiring Person as long as all such persons
beneficially own less than 23% of the outstanding shares of Common Stock.
An "Offering Person" is defined as any person (other than the Corporation
or any of its subsidiaries) who, at the time that a majority of the Board
is elected by stockholder action by written consent or is comprised of
persons who were not nominated by the Board in office immediately prior to
their election, (i) has commenced, or has publicly announced its intent to
commence, a tender or exchange offer if upon consummation thereof such
person, together with its affiliates and associates, would beneficially own
15% or more of the shares of Common Stock then outstanding, (ii) has made
by public announcement or by written communication that is or becomes the
subject of a public announcement, or has publicly announced its intent to
make, a proposal to the Corporation or its stockholders for (x) a merger,
consolidation or similar transaction involving the Corporation or any of
its subsidiaries, (y) a purchase or other acquisition of all or a
substantial portion of the assets or deposits of the Corporation and its
subsidiaries, or (z) a purchase or other acquisition of securities
representing 15% or more of the shares of Common Stock then outstanding
(any transaction of the type described in clauses (x), (y) or (z) above, an
"Acquisition Transaction"), or (iii) has filed an application or notice
with the Board of Governors of the Federal Reserve System, or any other
federal or state banking regulatory authority, which application or notice
seeks approval to engage in any transaction constituting an Acquisition
Transaction.
"Continuing Director" means a director of the Corporation who (i)
either (a) was a member of the Board prior to the date of the New Rights
Agreement, or (b) subsequently became a director of the Corporation and
whose election or nomination for election subsequent to such date was
approved by a vote of a majority of the Continuing Directors then on the
Board and (ii) is not an Acquiring Person or an affiliate or associate of
an Acquiring Person or a representative of an Acquiring Person or any such
affiliate or associate.
Following the Record Date and until the Distribution Date, (i) the New
Rights will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii) new
Common Stock certificates issued after the Record Date will contain a
notation incorporating the New Rights Agreement by reference and (iii) the
surrender for transfer of any certificate for Common Stock outstanding will
also constitute the transfer of the New Rights associated with the Common
Stock represented by such certificate.
The New Rights will not be exercisable until the Distribution Date and
will expire at the close of business on October 31, 2009, unless earlier
redeemed by the Corporation as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock as of
the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the New Rights. Except
as otherwise determined by the Board, only shares of Common Stock issued
prior to the Distribution Date will be issued with New Rights.
In the event (a "Flip-in Event") that any person, at any time after
the date of the New Rights Agreement, becomes an Acquiring Person (except
as a result of an acquisition of shares of Common Stock made pursuant to an
offer for all outstanding shares of Common Stock which a majority of the
members of the Board who are not officers of the Corporation and who are
Continuing Directors determine, after receiving advice from the Board's
financial advisor, to be fair to and otherwise in the best interests of the
Corporation and its stockholders (a "Qualifying Offer")), each holder of a
New Right thereafter will have the right to receive, upon exercise thereof,
Common Stock (or, in certain circumstances, cash, property or other
securities of the Corporation) having a value equal to two times the
Purchase Price. Notwithstanding any of the foregoing, following the
occurrence of a Flip-in Event, all New Rights that are, or (under certain
circumstances specified in the New Rights Agreement) were, beneficially
owned by an Acquiring Person, any of its associates or affiliates, and
certain of its transferees, will be null and void. Moreover, the New
Rights will not be exercisable following the first occurrence of a Flip-in
Event until such time as the New Rights are no longer redeemable by the
Corporation as described below.
In the event that, at any time following the Stock Acquisition Date,
(i) the Corporation is acquired in a merger or other business combination
transaction in which the Corporation is not the surviving corporation or in
which the Corporation is the surviving entity but the Common Stock is
changed or exchanged, or (ii) 50% or more of the Corporation's assets or
earning power is sold or transferred (each, a "Flip-over Event"), each
holder of a New Right (except New Rights which previously have been voided
as described above) shall thereafter have the right to receive, upon
exercise thereof, common stock or other securities of the acquiring company
having a value equal to two times the Purchase Price, provided that holders
of New Rights will not be entitled to such right to receive acquiring
company common stock in connection with any transaction described in this
paragraph if such transaction is consummated with a person who acquired
shares of Common Stock pursuant to a Qualifying Offer.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the New
Rights are subject to adjustment from time to time in accordance with
customary antidilution provisions. Following the occurrence of a Flip-in
Event or a Flip-over Event, the antidilution provisions will apply to the
Common Stock or other securities for which the New Rights are then
exercisable.
With certain exceptions, no adjustment to the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares will be issued, other than fractional shares
of Preferred Stock that are integral multiples of one one-hundredth of a
share, and a cash payment will be made in lieu thereof based on the market
price of the Preferred or Common Stock on the last trading day prior to the
date of exercise.
At any time after the New Rights become exercisable for Common Stock,
the Board may exchange the unexercised New Rights (other then New Rights
owned by any Acquiring Person which have become void), in whole or in part,
at an exchange ratio of one share of Common Stock, or one one-hundredth of
a share of Preferred Stock (or of a share of a class or series of the
Corporation's preferred stock having equivalent rights, preferences and
privileges), per New Right (subject to adjustment). Under certain
circumstances, authorization of any such exchange must be by a majority of
the Continuing Directors then in office.
The Board is empowered to redeem the New Rights in whole, but not in
part, at a price of $.01 per New Right (the "Redemption Price") at any time
before the earlier of (i) the expiration of twenty days following the Stock
Acquisition Date or (ii) the final expiration date of the New Rights.
Notwithstanding the foregoing, in the event that a majority of the Board is
elected by stockholder action by written consent, or is comprised of
persons who were not nominated by the Board in office immediately prior to
their election, then (i) for a period of 180 days following the
effectiveness of such election the New Rights may not be redeemed, and (ii)
thereafter redemption may only be authorized with the concurrence of a
majority of the Continuing Directors. Immediately upon the action of the
Board ordering redemption of the New Rights, the New Rights will terminate
and the only right of the holders of New Rights will be to receive the
Redemption Price.
Until a New Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Corporation, including, without
limitation, the right to vote or to receive dividends. While the
distribution of the New Rights will not be taxable to stockholders or to
the Corporation, stockholders may, depending upon the circumstances,
recognize taxable income in the event that the New Rights become
exercisable for Common Stock (or other consideration) or for common stock
of an acquiring company as set forth above.
The Rights Agreement may be amended by the Board (a) prior to the
Distribution Date, in any manner (other than an amendment to the Redemption
Price or the number of one one-hundredths of a share of Preferred Stock
purchasable upon exercise of a New Right) and (b) after the Distribution
Date, in order to (i) cure any ambiguity, (ii) correct or supplement
provisions which may be defective or inconsistent, (iii) make changes which
do not adversely affect the interests of holders of New Rights (other than
those held by an Acquiring Person or certain related persons) or (iv)
shorten or lengthen any time period under the New Rights Agreement
(including the time period governing redemption), provided that no
extension or amendment to adjust the time period for redemption may be made
at such time as the New Rights are nonredeemable. Notwithstanding the
foregoing, in the event that a majority of the Board is elected by
stockholder action by written consent, or is comprised of persons who were
not nominated by the Board in office immediately prior to their election,
then (i) for a period of 180 days following the effectiveness of such
election, the New Rights Agreement may not be amended, and (ii) thereafter
the New Rights Agreement may only be amended with the concurrence of a
majority of the Continuing Directors.
The New Rights Agreement is filed herewith as Exhibit 99.2 and is
incorporated herein by reference. The foregoing summary description of the
New Rights does not purport to be complete and is qualified in its entirety
by reference to the full text of the New Rights Agreement.
AMENDMENT OF BY-LAWS. On July 21, 1998, the Board also approved
amendments to the Corporation's By-Laws which, among other things, (i)
provide that the annual meeting of stockholders be held on such date as the
Board shall determine, (ii) eliminate the right of stockholders of the
Corporation to call a special meeting, (iii) require advance notice of
stockholder proposals for director nominations and items of business at an
annual meeting, (iv) require that a record date be set by the Board in
connection with any stockholder action by written consent, (v) grant the
presiding officer of a stockholders meeting the power to adjourn the
meeting in the absence of a quorum, and (vi) amend the provisions relating
to special meetings of the Board.
The By-Law amendments adopted by the Corporation on July 21, 1998 are
attached hereto as Exhibit 3(ii) and are incorporated herein by reference.
The foregoing summary description of the amendments to the By-Laws does not
purport to be complete and is qualified in its entirety by reference to the
full text of such amendments to the By-Laws.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
3(ii) Amendments to the By-Laws of Northern Trust
Corporation adopted on July 21, 1998, together with
complete By-Laws of Northern Trust Corporation as
amended through July 21, 1998
99.1 Third Amendment to the Rights Agreement, dated as of
October 17, 1989, as amended, between Northern Trust
Corporation and Norwest Bank Minnesota, N.A., as
successor rights agent
99.2 Rights Agreement, dated as of July 21, 1998, between
Northern Trust Corporation and Norwest Bank Minnesota,
N.A., as Rights Agent
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
NORTHERN TRUST CORPORATION
By: /s/ Perry R. Pero
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Name: Perry R. Pero
Title: Senior Executive Vice
President
Dated: July 24, 1998
Exhibit Index
Exhibit No. Description
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3(ii) Amendments to the By-Laws of Northern Trust
Corporation adopted on July 21, 1998, together with
complete By-Laws of Northern Trust Corporation as
amended through July 21, 1998
99.1 Third Amendment to the Rights Agreement, dated as of
October 17, 1989, as amended, between Northern Trust
Corporation and Norwest Bank Minnesota, N.A., as
successor rights agent
99.2 Rights Agreement, dated as of July 21, 1998, between
Northern Trust Corporation and Norwest Bank Minnesota,
N.A., as Rights Agent
Exhibit 3 (ii)
Section 1.1 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 1.1 Annual Meeting. The annual meeting of stockholders
shall be held on such date and at such time as shall be designated from
time to time by the Board of Directors and stated in the notice of the
meeting, at which meeting the stockholders shall elect directors, and
transact such other business as may properly be brought before the
meeting.
Section 1.2 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 1.2 Special Meetings. A special meeting of the
stockholders may be called at any time by the Board of Directors, the
Chairman of the Board, the President, or a Vice Chairman. At a special
meeting of the stockholders, only such business shall be conducted as shall
be specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors.
Section 1.4(b) of the By-laws of Northern Trust Corporation was
amended to read in its entirety as follows:
Section 1.4 Fixing Date of Record.
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the
Board of Directors may fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted
by the Board of Directors, and which date shall not be more than 10 days
after the date upon which the resolution fixing the record date is adopted
by the Board of Directors. Any stockholder of record seeking to have the
stockholders authorize or take corporate action by written consent shall,
by written notice to the Secretary, request the Board of Directors to fix a
record date. The Board of Directors shall promptly, but in all events
within 10 days after the date on which such a request is received, adopt a
resolution fixing the record date. If no record date has been fixed by the
Board of Directors within 10 days of the date on which such a request is
received, the record date for determining stockholders entitled to consent
to corporate action in writing without a meeting, when no prior action by
the Board of Directors is required by the Restated Certificate of
Incorporation of the Corporation or by statute, shall be the first date on
which a signed written consent setting forth the action taken or proposed
to be taken is delivered in the manner required by law to the Corporation
at its registered office in the State of Delaware or at its principal place
of business or to an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of the Corporation's stockholders
are recorded. Delivery made to the Corporation's registered office shall
be by hand delivery or by certified or registered mail, return receipt
requested. If no record date has been fixed by the Board of Directors and
prior action by the Board of Directors is required by the Restated
Certificate of Incorporation or by statute, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
Section 1.6 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 1.6 Quorum. The holders of a majority of the outstanding
shares of capital stock entitled to vote at the meeting, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders.
A quorum, once established, shall not be broken by the withdrawal of enough
votes to leave less than a quorum. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the presiding
officer at the meeting or the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may
be transacted which might have been transacted at the meeting as originally
noticed.
Section 1.13 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 1.13 Nature of Business at Annual Meetings of
Stockholders. No business may be transacted at an annual meeting of
stockholders, other than business that is either (a) specified in the
notice of meeting (or any supplement thereto) given by or at the direction
of the Board of Directors (or any duly authorized committee thereof), (b)
otherwise properly brought before the annual meeting by or at the direction
of the Board of Directors (or any duly authorized committee thereof) or (c)
otherwise properly brought before the annual meeting by any stockholder of
the Corporation (i) who is a stockholder of record on the date of the
giving of the notice provided for in this Section 1.13 and on the record
date for the determination of stockholders entitled to vote at such annual
meeting and (ii) who complies with the notice procedures set forth in this
Section 1.13.
In addition to any other applicable requirements, for business to
be properly brought before an annual meeting by a stockholder, such
stockholder must have given timely notice thereof in proper written form to
the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than ninety (90) days nor more than one-hundred
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first
occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder proposes to
bring before the annual meeting (i) a brief description of the business
desired to be brought before the annual meeting and the reasons for
conducting such business at the annual meeting, (ii) the name and record
address of such stockholder, (iii) the class or series and number of shares
of capital stock of the Corporation which are owned beneficially or of
record by such stockholder, (iv) a description of all arrangements or
understandings between such stockholder and any other person or persons
(including their names) in connection with the proposal of such business by
such stockholder and any material interest of such stockholder in such
business and (v) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before
the meeting.
No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting in
accordance with the procedures set forth in this Section 1.13, provided,
however, that, once business has been properly brought before the annual
meeting in accordance with such procedures, nothing in this Section 1.13
shall be deemed to preclude discussion by any stockholder of any such
business. If the Chairman of an annual meeting determines that business
was not properly brought before the annual meeting in accordance with the
foregoing procedures, the Chairman shall declare to the meeting that the
business was not properly brought before the meeting and such business
shall not be transacted.
Section 2.4 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 2.4 Special Meetings; Notice. A special meeting of the
Board of Directors may be called by or at the request of the Chairman of
the Board, the President, a Vice Chairman, or a majority of the Directors
then in office. The person or persons calling or requesting such meeting
may fix the place, date and hour thereof.
Notice of the place, date, and hour of each special meeting,
unless waived, shall be given to each Director either by mail not less than
forty-eight (48) hours before the date of the meeting, by telephone,
facsimile or telegram on twenty-four (24) hours' notice, or on such shorter
notice as the person or persons calling such meeting may deem necessary or
appropriate in the circumstances. Such notice may be given by the
Secretary or by the officer or Directors calling the meeting.
Section 2.5 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 2.5 Time of Notice. If notice to a Director is given:
(a) in person, such notice shall be deemed to have been given
when delivered;
(b) by mail, such notice shall be deemed to have been given when
deposited in the United States mail, postage prepaid, addressed to the
Director at such address as appears on the records of the Corporation for
such Director;
(c) by telegram, cable or other similar means (not including
mail) that provide written notice, such notice shall be deemed to have been
given when delivered to any transmission company, with charges prepaid,
addressed to the Director at such address as appears on the records of the
Corporation for such Director; or
(d) by facsimile or by telephone, wireless or other means of
voice transmission, such notice shall be deemed to have been given when
transmitted to such number or call designation as appears on the records of
the Corporation for such Director.
Any meeting of the Board of Directors shall be a legal meeting
without any notice having been given if all the Directors are present at
the meeting, and no notice of a meeting shall be required to be given to
any Director who attends such meetings.
Section 2.11 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 2.11 Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors of the Corporation, except as may be otherwise
provided in the Restated Certificate of Incorporation with respect to the
right of holders of preferred stock of the Corporation to nominate and
elect a specified number of directors in certain circumstances.
Nominations of persons for election to the Board of Directors may be made
at any annual meeting of stockholders (a) by or at the direction of the
Board of Directors (or any duly authorized committee thereof) or (b) by any
stockholder of the Corporation (i) who is a stockholder of record on the
date of the giving of the notice provided for in this Section 2.11 and on
the record date for the determination of stockholders entitled to vote at
such meeting and (ii) who complies with the notice procedures set forth in
this Section 2.11.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must have given
timely notice thereof in proper written form to the Secretary of the
Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than ninety (90) days nor more than one-hundred
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first
occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth (a) as to each person whom the stockholder
proposes to nominate for election as a director (i) the name, age, business
address and residence address of the person, (ii) the principal occupation
or employment of the person, (iii) the class or series and number of shares
of capital stock of the Corporation which are owned beneficially or of
record by the person and (iv) any other information relating to the person
that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice (i)
the name and record address of such stockholder, (ii) the class or series
and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iii) a description of all
arrangements or understandings between such stockholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to appear in person or by
proxy at the meeting to nominate the persons named in its notice and (v)
any other information relating to such stockholder that would be required
to be disclosed in a proxy statement or other filings required to be made
in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written
consent of each proposed nominee to being named as a nominee and to serve
as a director if elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 2.11. If the Chairman of the meeting determines that a
nomination was not made in accordance with the foregoing procedures, the
Chairman shall declare to the meeting that the nomination was defective and
such defective nomination shall be disregarded.
Section 7.1 of the By-laws of Northern Trust Corporation was amended
to read in its entirety as follows:
Section 7.1 The Business Risk Committee. A Business Risk
Committee and it Chairman shall be appointed to review with management
risks inherent in the businesses of the Corporation and its subsidiaries
involving the extension of credit, the management of assets and
liabilities, the provision of fiduciary services and the control processes
with respect to these risks, including matters related to credit risk,
market and liquidity risk and fiduciary risk and such other related matters
as may from time to time be deemed appropriate by the Committee. The
Committee shall consist of no less than four Directors, a majority of whom
shall not be active officers of the Corporation. The Committee shall meet
upon the call of the Chairman or any member of the Committee, and a
majority of the Committee's members shall constitute a quorum. In the
absence or disqualification of a member of the Committee, the members
thereof present at any meeting and not disqualified from voting, whether or
not they constitute a quarum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
By laws
of
Northern Trust Corporation
Chicago, Illinois
As Effective July 21, 1998
TABLE OF CONTENTS
ARTICLE I - THE STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. Annual Meeting . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. Special Meetings . . . . . . . . . . . . . . . . . . . 1
SECTION 1.3. Notice of Meetings . . . . . . . . . . . . . . . . . . 1
SECTION 1.4. Fixing Date of Record . . . . . . . . . . . . . . . . 1
SECTION 1.5. Inspectors of Election . . . . . . . . . . . . . . . . 3
SECTION 1.6. Quorum . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.7. Cumulative Voting Rights . . . . . . . . . . . . . . . 3
SECTION 1.8. Proxies . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.9. Voting by Ballot . . . . . . . . . . . . . . . . . . . 3
SECTION 1.10. Voting Lists . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.11. Place of Meeting . . . . . . . . . . . . . . . . . . 4
SECTION 1.12. Voting of Shares of Certain Holders . . . . . . . . . 4
SECTION 1.13 Nature of Business at Annual Meeting of Stockholders . 5
ARTICLE II - THE BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . 6
SECTION 2.1. General Powers . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.2. Number, Tenure and Qualifications . . . . . . . . . . 6
SECTION 2.3. Regular Meetings . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4. Special Meetings; Notice . . . . . . . . . . . . . . . 6
SECTION 2.5. Time of Notice . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.6. Quorum . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.7. Manner of Acting . . . . . . . . . . . . . . . . . . . 7
SECTION 2.8. Directors' Compensation . . . . . . . . . . . . . . . 7
SECTION 2.9. Vacancies . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.10. Consent in Lieu of Meeting . . . . . . . . . . . . . 7
SECTION 2.11. Nomination of Directors . . . . . . . . . . . . . . . 7
ARTICLE III - THE EXECUTIVE COMMITTEE . . . . . . . . . . . . . . . . . . 9
SECTION 3.1. Number, Tenure and Quorum . . . . . . . . . . . . . . 9
SECTION 3.2. Powers . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Meetings . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.4. Records and Reports . . . . . . . . . . . . . . . . . 9
ARTICLE IV - THE AUDIT COMMITTEE . . . . . . . . . . . . . . . . . . . 10
SECTION 4.1. Functions . . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.2. Composition . . . . . . . . . . . . . . . . . . . . 10
SECTION 4.3. Procedures . . . . . . . . . . . . . . . . . . . . . 11
SECTION 4.4. Counsel . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE V - THE CORPORATE GOVERNANCE COMMITTEE . . . . . . . . . . . . 11
SECTION 5.1. The Corporate Governance Committee . . . . . . . . . 11
ARTICLE VI - THE COMPENSATION AND BENEFITS COMMITTEE . . . . . . . . . 11
SECTION 6.1. The Compensation and Benefits Committee . . . . . . 11
ARTICLE VII - THE BUSINESS RISK COMMITTEE . . . . . . . . . . . . . . . 12
SECTION 7.1. The Business Risk Committee . . . . . . . . . . . . 12
ARTICLE VIII - THE BUSINESS STRATEGY COMMITTEE . . . . . . . . . . . . 12
SECTION 8.1. The Business Strategy Committee . . . . . . . . . . 12
ARTICLE IX - THE OFFICERS . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 9.1. Number and Term of Office . . . . . . . . . . . . . 12
SECTION 9.2. Removal . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 9.3. The Chairman of the Board . . . . . . . . . . . . . 13
SECTION 9.4. The President . . . . . . . . . . . . . . . . . . . 13
SECTION 9.5. The Chief Executive Officer . . . . . . . . . . . . 13
SECTION 9.6. The Vice Chairmen . . . . . . . . . . . . . . . . . 13
SECTION 9.7. The Executive Vice Presidents . . . . . . . . . . . 14
SECTION 9.8. The Vice Presidents . . . . . . . . . . . . . . . . 14
SECTION 9.9. The Treasurer . . . . . . . . . . . . . . . . . . . 14
SECTION 9.10. The Secretary . . . . . . . . . . . . . . . . . . . 14
SECTION 9.11. Assistant Treasurers and Assistant Secretaries . . 14
SECTION 9.12. Salaries . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE X - CONTRACTS, LOANS, CHECKS AND DEPOSITS . . . . . . . . . . . 15
SECTION 10.1. Contracts . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.2. Loans . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.3. Checks, Drafts, etc . . . . . . . . . . . . . . . . 15
SECTION 10.4. Deposits . . . . . . . . . . . . . . . . . . . . . 15
SECTION 10.5. Power to Execute Proxies . . . . . . . . . . . . . 15
ARTICLE XI - CERTIFICATES FOR SHARES AND THEIR TRANSFER . . . . . . . . 15
SECTION 11.1. Certificates for Shares. . . . . . . . . . . . . . 15
SECTION 11.2. Transfers of Shares . . . . . . . . . . . . . . . . 16
ARTICLE XII - FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 12.1. Fiscal Year . . . . . . . . . . . . . . . . . . . . 16
ARTICLE XIII - SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 13.1. Seal . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE XIV - WAIVER OF NOTICE . . . . . . . . . . . . . . . . . . . . 16
SECTION 14.1. Waiver of Notice . . . . . . . . . . . . . . . . . 16
ARTICLE XV - INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 17
SECTION 15.1. Indemnification Request . . . . . . . . . . . . . . 17
SECTION 15.2. Determination of Indemnification Request . . . . . 17
SECTION 15.3. Presumption of Entitlement; Conclusive Effect of
Findings of Fact and Law; Other Procedures. . . . 17
SECTION 15.4. Cooperation and Expenses . . . . . . . . . . . . . 18
SECTION 15.5. Selection of Independent Counsel . . . . . . . . . 18
SECTION 15.6. Time for Determination . . . . . . . . . . . . . . 18
SECTION 15.7. Failure To Make Determination; Remedies For
Enforcement . . . . . . . . . . . . . . . . . . . 19
SECTION 15.8. Appeal of Adverse Determination . . . . . . . . . . 19
SECTION 15.9. Burden of Proof . . . . . . . . . . . . . . . . . . 19
SECTION 15.10. Definition of "Disinterested Director." . . . . . . 19
SECTION 15.11. Definition of "Change of Control." . . . . . . . . 19
SECTION 15.12. Advancement of Expenses . . . . . . . . . . . . . . 20
SECTION 15.13. Personal Liability of Directors . . . . . . . . . . 20
ARTICLE XVI - AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 16.1. Amendments . . . . . . . . . . . . . . . . . . . . 21
BY LAWS
OF
NORTHERN TRUST CORPORATION
CHICAGO, ILLINOIS
ARTICLE I
THE STOCKHOLDERS
SECTION 1.1. Annual Meeting. The annual meeting of stockholders
shall be held on such date and at such time as shall be designated from
time to time by the Board of Directors and stated in the notice of the
meeting, at which meeting the stockholders shall elect directors, and
transact such other business as may properly be brought before the meeting.
SECTION 1.2. Special Meetings. A special meeting of the stockholders
may be called at any time by the Board of Directors, the Chairman of the
Board, the President, or a Vice Chairman. At a special meeting of the
stockholders, only such business shall be conducted as shall be specified
in the notice of meeting (or any supplement thereto) given by or at the
direction of the Board of Directors.
SECTION 1.3. Notice of Meetings. Unless a different manner of giving
notice is prescribed by statute, written or printed notice stating the
place, day, and hour of the meeting, and in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not
more than 50 days nor less than 10 days (or less than 20 days if a merger
or consolidation of the Corporation, or a sale, lease or exchange of all or
substantially all of the Corporation's property or assets, is to be acted
upon at the meeting) before the date of the meeting either personally or by
mail, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail with postage thereon prepaid addressed to the
stockholder at the stockholder's address as it appears on the records of
the Corporation.
SECTION 1.4. Fixing Date of Record.
(a) In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix a record date, which
record date shall not precede the date on which the resolution fixing the
record date is adopted by the Board of Directors, and which record date
shall not be more than 60 nor less than 10 days (or less than 20 days if a
merger or consolidation of the Corporation, or a sale, lease or exchange of
all or substantially all of the Corporation's property or assets, is to be
acted upon at the meeting) before the date of such meeting. If no record
date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the next day preceding the day on
which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to vote at
a meeting of stockholders shall apply to an adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date
for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the
Board of Directors may fix a record date, which record date shall not
precede the date on which the resolution fixing the record date is adopted
by the Board of Directors, and which date shall not be more than 10 days
after the date upon which the resolution fixing the record date is adopted
by the Board of Directors. Any stockholder of record seeking to have the
stockholders authorize or take corporate action by written consent shall,
by written notice to the Secretary, request the Board of Directors to fix a
record date. The Board of Directors shall promptly, but in all events
within 10 days after the date on which such a request is received, adopt a
resolution fixing the record date. If no record date has been fixed by the
Board of Directors within 10 days of the date on which such a request is
received, the record date for determining stockholders entitled to consent
to corporate action in writing without a meeting, when no prior action by
the Board of Directors is required by the Restated Certificate of
Incorporation of the Corporation or by statute, shall be the first date on
which a signed written consent setting forth the action taken or proposed
to be taken is delivered in the manner required by law to the Corporation
at its registered office in the State of Delaware or at its principal place
of business or to an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of the Corporation's stockholders
are recorded. Delivery made to the Corporation's registered office shall
be by hand delivery or by certified or registered mail, return receipt
requested. If no record date has been fixed by the Board of Directors and
prior action by the Board of Directors is required by the Restated
Certificate of Incorporation or by statute, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or
allotment of any rights or the stockholders entitled to exercise any rights
in respect of any change, conversion or exchange of stock, or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date shall
not be more than 60 days prior to such action. If no record date is fixed,
the record date for determining stockholders for any such purpose shall be
at the close of business on the day on which the Board of Directors adopts
the resolution relating thereto.
(d) Only those who shall be stockholders of record on the record date
so fixed as aforesaid shall be entitled to such notice of, and to vote at,
such meeting and any adjournment thereof, or to receive payment of such
dividend or other distribution, or to receive such allotment of rights, or
to exercise such rights, as the case may be, notwithstanding the transfer
of any stock on the books of the Corporation after the applicable record
date.
SECTION 1.5. Inspectors of Election. The Board of Directors or the
Executive Committee of the Board of Directors of the Corporation shall
appoint, in advance, one or more inspectors to act at each meeting of the
stockholders of the Corporation. If no inspector has been appointed or one
or more have been appointed but are unable or fail to act, the presiding
officer of any meeting of the stockholders shall appoint one or more
persons as inspectors for such meeting. Such inspectors shall ascertain the
number of shares of stock of the Corporation outstanding and entitled to
vote at the meeting and the voting power of each share; determine and
report the number of shares represented at the meeting, based upon their
determination of the validity and effect of proxies and ballots; count all
votes and ballots and report the results; and do such other acts as are
required by law or are proper to conduct the election and voting with
impartiality and fairness to all the stockholders. Each report of an
inspector shall be in writing and signed by him or her or a majority of
them if there is more than one inspector acting at such meeting. If there
is more than one inspector, the report of a majority shall be the report of
the inspectors. The report of the inspector or inspectors on the number of
shares represented at the meeting and the results of the voting shall be
prima facie evidence thereof. The inspector or inspectors may appoint or
retain other persons or entities to assist in performing their duties.
SECTION 1.6. Quorum. The holders of a majority of the outstanding
shares of capital stock entitled to vote at the meeting, represented in
person or by proxy, shall constitute a quorum at a meeting of stockholders.
A quorum, once established, shall not be broken by the withdrawal of enough
votes to leave less than a quorum. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the presiding
officer at the meeting or the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may
be transacted which might have been transacted at the meeting as originally
noticed.
SECTION 1.7. Cumulative Voting Rights. At all elections of Directors
of the Corporation, each stockholder entitled generally to vote for the
election of Directors shall be entitled to as many votes as shall equal the
number of votes which (except for this provision as to cumulative voting)
the stockholder would be entitled to cast for the election of Directors
with respect to the stockholder's shares of stock multiplied by the number
of Directors to be elected, and the stockholder may cast all of such votes
for a single Director or may distribute them among the number to be voted
for, or for any two or more of them as the stockholder may see fit.
SECTION 1.8. Proxies. At all meetings of stockholders, a stockholder
entitled to vote may vote either in person or by proxy executed in writing
by the stockholder or by the stockholder's duly authorized
attorney in fact. Such proxy shall be filed with the Secretary before or at
the time of the meeting. No proxy shall be valid after 11 months from the
date of its execution, unless otherwise provided in the proxy.
SECTION 1.9. Voting by Ballot. Voting in any election for Directors
shall be by ballot.
SECTION 1.10. Voting Lists. The officer who has charge of the stock
ledger of the Corporation shall prepare and make, at least 10 days before
every meeting of stockholders, a complete list of the stockholders entitled
to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name
of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least 10 days prior to the meeting,
either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
SECTION 1.11. Place of Meeting. The Board of Directors may designate
any place, either within or without the State of Delaware, as the place of
meeting for any annual meeting or any special meeting called by the Board
of Directors. If no designation is made, or if a special meeting is
otherwise called, the place of meeting shall be the principal office of the
Corporation in the City of Chicago.
SECTION 1.12. Voting of Shares of Certain Holders. Shares of capital
stock of the Corporation standing in the name of another corporation,
domestic or foreign, may be voted by such officer, agent, or proxy as the
by laws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such corporation may determine.
Shares of capital stock of the Corporation standing in the name of a
deceased person, a minor ward or an incompetent person, may be voted by his
or her administrator, executor, court appointed guardian or conservator,
either in person or by proxy without a transfer of such shares into the
name of such administrator, executor, court appointed guardian or
conservator. Shares of capital stock of the Corporation standing in the
name of a trustee may be voted by the trustee, either in person or by
proxy.
Shares of capital stock of the Corporation standing in the name of a
receiver may be voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the transfer
thereof into the receiver's name if authority so to do be contained in an
appropriate order of the court by which such receiver was appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Shares of its own capital stock belonging to this Corporation shall
not be voted, directly or indirectly, at any meeting and shall not be
counted in determining the total number of outstanding shares at any given
time, but shares of its own stock held by it in a fiduciary capacity may be
voted and shall be counted in determining the total number of outstanding
shares at any given time.
SECTION 1.13 Nature of Business at Annual Meeting of Stockholders.
No business may be transacted at an annual meeting of stockholders, other
than business that is either (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors
(or any duly authorized committee thereof), (b) otherwise properly brought
before the annual meeting by or at the direction of the Board of Directors
(or any duly authorized committee thereof) or (c) otherwise properly
brought before the annual meeting by any stockholder of the Corporation (i)
who is a stockholder of record on the date of the giving of the notice
provided for in this Section 1.13 and on the record date for the
determination of stockholders entitled to vote at such annual meeting and
(ii) who complies with the notice procedures set forth in this Section
1.13.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such
stockholder must have given timely notice thereof in proper written form to
the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than ninety (90) days nor more than one-hundred
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first
occurs.
To be in proper written form, a stockholder's notice to the Secretary
must set forth as to each matter such stockholder proposes to bring before
the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of capital
stock of the Corporation which are owned beneficially or of record by such
stockholder, (iv) a description of all arrangements or understandings
between such stockholder and any other person or persons (including their
names) in connection with the proposal of such business by such stockholder
and any material interest of such stockholder in such business and (v) a
representation that such stockholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 1.13, provided, however, that, once
business has been properly brought before the annual meeting in accordance
with such procedures, nothing in this Section 1.13 shall be deemed to
preclude discussion by any stockholder of any such business. If the
Chairman of an annual meeting determines that business was not properly
brought before the annual meeting in accordance with the foregoing
procedures, the Chairman shall declare to the meeting that the business was
not properly brought before the meeting and such business shall not be
transacted.
ARTICLE II
THE BOARD OF DIRECTORS
SECTION 2.1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of its Board of
Directors.
SECTION 2.2. Number, Tenure and Qualifications. The Board of
Directors of the Corporation shall consist of such number of Directors, not
less than five nor more than 25, as shall be fixed from time to time by the
Board of Directors. Each Director shall hold office until the next annual
meeting of stockholders or until a successor is elected.
SECTION 2.3. Regular Meetings. A regular meeting of the Board of
Directors shall be held at least once each quarter at such place, date and
hour as the Board may appoint. Notice of each regular meeting, unless
waived, shall be given in the same manner as is provided for notice of a
special meeting.
SECTION 2.4. Special Meetings; Notice. A special meeting of the
Board of Directors may be called by or at the request of the Chairman of
the Board, the President, a Vice Chairman, or a majority of the Directors
then in office. The person or persons calling or requesting such meeting
may fix the place, date and hour thereof.
Notice of the place, date, and hour of each special meeting, unless
waived, shall be given to each Director either by mail not less than forty-
eight (48) hours before the date of the meeting, by telephone, facsimile or
telegram on twenty-four (24) hours' notice, or on such shorter notice as
the person or persons calling such meeting may deem necessary or
appropriate in the circumstances. Such notice may be given by the
Secretary or by the officer or Directors calling the meeting.
SECTION 2.5. Time of Notice. If notice to a Director is given:
(a) in person, such notice shall be deemed to have been given when
delivered;
(b) by mail, such notice shall be deemed to have been given when
deposited in the United States mail, postage prepaid, addressed to the
Director at such address as appears on the records of the Corporation for
such Director;
(c) by telegram, cable or other similar means (not including mail)
that provide written notice, such notice shall be deemed to have been given
when delivered to any transmission company, with charges prepaid, addressed
to the Director at such address as appears on the records of the
Corporation for such Director; or
(d) by facsimile or by telephone, wireless or other means of voice
transmission, such notice shall be deemed to have been given when
transmitted to such number or call designation as appears on the records of
the Corporation for such Director.
Any meeting of the Board of Directors shall be a legal meeting without
any notice having been given if all the Directors are present at the
meeting, and no notice of a meeting shall be required to be given to any
Director who attends such meetings.
SECTION 2.6. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, provided that if less than a majority of the Directors
are present at said meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
SECTION 2.7. Manner of Acting. The act of the majority of the
Directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors, except on additions, amendments, repeal or
any changes whatsoever in the By laws or the adoption of new By laws, when
the affirmative votes of at least a majority of the members of the Board
shall be necessary for the adoption of such changes.
A director may participate in a meeting of the Board of Directors or
any committee thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute
presence in person at such meetings.
SECTION 2.8. Directors' Compensation. The Directors shall receive
such compensation as may be fixed by the Board for services to the
Corporation.
SECTION 2.9. Vacancies. If vacancies occur in the Board of Directors
caused by death, resignation, retirement, disqualification or removal from
office of any Director or Directors, or otherwise, or if any new
Directorship is created by any increase in the authorized number of
Directors, a majority of the surviving or remaining Directors then in
office, though less than a quorum, may choose a successor or successors, or
fill the newly created Directorship, and the Directors so chosen shall hold
office until the next annual meeting of stockholders or until their
successors are elected.
SECTION 2.10. Consent in Lieu of Meeting. Unless otherwise
restricted by the Restated Certificate of Incorporation or these By laws,
any action required or permitted to be taken at any meeting of the Board of
Directors or any committee thereof may be taken without a meeting if all
members of the Board or committee thereof, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes
of the proceedings of the Board or committee.
SECTION 2.11. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors of the Corporation, except as may be otherwise
provided in the Restated Certificate of Incorporation with respect to the
right of holders of preferred stock of the Corporation to nominate and
elect a specified number of directors in certain circumstances.
Nominations of persons for election to the Board of Directors may be made
at any annual meeting of stockholders (a) by or at the direction of the
Board of Directors (or any duly authorized committee thereof) or (b) by any
stockholder of the Corporation (i) who is a stockholder of record on the
date of the giving of the notice provided for in this Section 2.11 and on
the record date for the determination of stockholders entitled to vote at
such meeting and (ii) who complies with the notice procedures set forth in
this Section 2.11.
In addition to any other applicable requirements, for a nomination to
be made by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of
the Corporation not less than ninety (90) days nor more than one-hundred
twenty (120) days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within
thirty (30) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not later than the
close of business on the tenth (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public
disclosure of the date of the annual meeting was made, whichever first
occurs.
To be in proper written form, a stockholder's notice to the Secretary
must set forth (a) as to each person whom the stockholder proposes to
nominate for election as a director (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or
employment of the person, (iii) the class or series and number of shares of
capital stock of the Corporation which are owned beneficially or of record
by the person and (iv) any other information relating to the person that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice (i)
the name and record address of such stockholder, (ii) the class or series
and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iii) a description of all
arrangements or understandings between such stockholder and each proposed
nominee and any other person or persons (including their names) pursuant to
which the nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to appear in person or by
proxy at the meeting to nominate the persons named in its notice and (v)
any other information relating to such stockholder that would be required
to be disclosed in a proxy statement or other filings required to be made
in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written
consent of each proposed nominee to being named as a nominee and to serve
as a director if elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 2.11. If the Chairman of the meeting determines that a
nomination was not made in accordance with the foregoing procedures, the
Chairman shall declare to the meeting that the nomination was defective and
such defective nomination shall be disregarded.
ARTICLE III
THE EXECUTIVE COMMITTEE
SECTION 3.1. Number, Tenure and Quorum. The Directors shall each
year appoint no less than five Directors, one of whom shall be the Chairman
of the Board and one of whom shall be the President if the President is
designated the Chief Executive Officer, who shall constitute and be called
the Executive Committee. Each Director so appointed shall act as a member
of the Committee until another is appointed and acts in the Director's
place. The Chairman of the Board shall preside at meetings of the
Committee. In the absence or disqualification of a member of the Committee,
the members thereof present at any meeting and not disqualified from
voting, whether or not they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place
of any such absent or disqualified member. In the absence or inability to
act of the Chairman of the Board, or upon the request of the Chairman, the
President, if the President is a member of the Committee, or a member
elected by the Committee shall preside at meetings of the Committee.
A majority of the members of the Executive Committee shall constitute
a quorum for the transaction of business.
SECTION 3.2. Powers. The Executive Committee may, while the Board of
Directors is not in session, exercise all or any of the powers of the Board
of Directors; except that the Executive Committee shall not have the power
or authority of the Board of Directors in reference to amending the
Restated Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange
of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By laws of the Corporation, or
declaring a dividend or authorizing the issuance of stock.
SECTION 3.3. Meetings. Meetings of the Executive Committee shall be
held at the office of the Corporation, or elsewhere, and at such time as
they may appoint, but the Committee shall at all times be subject to the
call of the Chairman of the Board or any member of the Committee.
SECTION 3.4. Records and Reports. The Executive Committee, through
the Secretary or any Assistant Secretary, shall keep books of separate
minutes and report all its action at every regular meeting of the Board of
Directors, or as often as may be required by the Board.
ARTICLE IV
THE AUDIT COMMITTEE
SECTION 4.1. Functions. An Audit Committee shall be appointed each
year by the Board of Directors. The Committee shall perform the following
functions for the Corporation and its subsidiaries on a consolidated basis
and for such individual banking subsidiaries as the Board shall direct:
(a) Reviewing with management and the independent public accountant
the reports issued with respect to the annual financial statements, the
internal control structure and procedures for financial reporting and
compliance with laws and regulations and the basis for such reports.
(b) Reviewing with management and the independent public accountant
the scope of services required by the annual audit, significant accounting
policies, and audit conclusions regarding significant accounting estimates.
(c) Reviewing with management and the independent public accountant
their assessments of the adequacy of internal controls, and the resolution
of identified material weaknesses and reportable conditions in internal
controls over financial reporting, including the prevention or detection of
management override or compromise of the internal control system.
(d) Reviewing with management and the independent public accountant
compliance with those laws and regulations with respect to which management
and the independent public accountant are required to report.
(e) Discussing with management the selection and termination of the
independent public accountant and any significant disagreements between the
independent public accountant and management.
(f) Reviewing the internal audit program and results of examinations.
(g) Reviewing the program of the Chief Compliance Officer and the
compliance function generally.
(h) Reviewing the results of regulatory examinations.
(i) Reviewing such other matters as the Committee deems appropriate.
SECTION 4.2. Composition. The Committee shall consist of no less
than four Directors. All of the members of the Committee shall, in the
judgment of the Board of Directors, be independent of management of the
Corporation and its subsidiaries and shall meet other applicable regulatory
requirements.
SECTION 4.3. Procedures. The Committee shall be appointed annually
at the organization meeting of the Board of Directors and at the same time
a Chairman shall be appointed. The Committee shall meet upon the call of
the Chairman or any member of the Committee, and a majority of the
Committee's members shall constitute a quorum. In the absence or
disqualification of a member of the Committee, the members thereof present
at any meeting and not disqualified from voting, whether or not they
constitute a quorum, may unanimously appoint another qualified member of
the Board of Directors to act at the meeting in the place of any such
absent or disqualified member.
SECTION 4.4. Counsel. The Committee may, in order to assist it in
the performance of its functions, engage counsel of its choosing without
the approval of the engagement by the Board of Directors or management and
may direct the proper officers of the Corporation to pay the reasonable
fees and expenses of any such counsel.
ARTICLE V
THE CORPORATE GOVERNANCE COMMITTEE
SECTION 5.1. The Corporate Governance Committee. A Corporate
Governance Committee and its Chairman shall be appointed each year by the
Board of Directors to review and advise the Board of Directors with respect
to the structure and functioning of the Board and its interaction with the
Corporation's management and stockholders; review and advise the Board of
Directors with respect to the structure and membership of its Committees;
and to receive recommendations for, and to review, study and evaluate the
qualifications of all candidates for senior management succession and for
nomination to the Board of Directors. The Committee shall report to the
Board its conclusions with respect to such candidates and its
recommendations for nominees for election or reelection or appointment to
fill vacancies in the Board and as officers of the Corporation. The
Committee shall consist of no less than four Directors, a majority of whom
shall constitute a quorum, and shall meet upon the call of its Chairman or
any member of the Committee. In the absence or disqualification of a member
of the Committee, the members thereof present at any meeting and not
disqualified from voting, whether or not they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
ARTICLE VI
THE COMPENSATION AND BENEFITS COMMITTEE
SECTION 6.1. The Compensation and Benefits Committee. A Compensation
and Benefits Committee and its Chairman shall be appointed each year by the
Board of Directors to study, review and make recommendations to the Board
with respect to the salary policy for the Corporation, the compensation of
senior officers and the development of and amendment to incentive and
benefit plans. The Committee shall consist of no less than three Directors,
none of whom shall be an active officer of the Corporation. The Committee
shall meet upon the call of the Chairman or any member of the Committee,
and a majority of the Committee's members shall constitute a quorum. In the
absence or disqualification of a member of the Committee, the members
thereof present at any meeting and not disqualified from voting, whether or
not they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
ARTICLE VII
THE BUSINESS RISK COMMITTEE
SECTION 7.1. The Business Risk Committee. A Business Risk Committee
and its Chairman shall be appointed to review with management risks
inherent in the businesses of the Corporation and its subsidiaries
involving the extension of credit, the management of assets and
liabilities, the provision of fiduciary services and the control processes
with respect to these risks, including matters related to credit risk,
market and liquidity risk and fiduciary risk and such other related matters
as may from time to time be deemed appropriate by the Committee. The
Committee shall consist of no less than four Directors, a majority of whom
shall not be active officers of the Corporation. The Committee shall meet
upon the call of the Chairman or any member of the Committee, and a
majority of the Committee's members shall constitute a quorum. In the
absence or disqualification of a member of the Committee, the members
thereof present at any meeting and not disqualified from voting, whether or
not they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
ARTICLE VIII
THE BUSINESS STRATEGY COMMITTEE
SECTION 8.1. The Business Strategy Committee. A Business Strategy
Committee and its Chairman shall be appointed each year by the Board of
Directors to review the policies, strategies and performance of the various
business units of the Corporation and such other related matters as may
from time to time be deemed appropriate by the Committee. The Committee
shall consist of no less than four Directors, a majority of whom shall not
be active officers of the Corporation. The Committee shall meet upon the
call of the Chairman or any member of the Committee, and a majority of the
Committee's members shall constitute a quorum. In the absence or
disqualification of a member of the Committee, the members thereof present
at any meeting and not disqualified from voting, whether or not they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or
disqualified member.
ARTICLE IX
THE OFFICERS
SECTION 9.1. Number and Term of Office. The officers of the
Corporation shall be a Chairman of the Board and a President, one of whom
shall be designated Chief Executive Officer by the Board of Directors, and
may also include one or more Vice Chairmen, one or more Executive Vice
Presidents (any of whom may be designated a Senior Executive Vice
President), such additional Vice Presidents with such designations, if any,
as may be determined by the Board of Directors, a Secretary, and a
Treasurer and one or more Assistant Secretaries and Assistant Treasurers as
may be determined by the Board of Directors, and such other officers as may
from time to time be appointed by the Board of Directors. Any two or more
offices may be held by the same person. The Chairman of the Board, the
President, and the Vice Chairmen shall be elected from among the Directors;
the other officers may be appointed by the Board of Directors.
The officers of the Corporation shall be elected or appointed annually
by the Board of Directors at the first meeting of the Board of Directors
held after each annual meeting of stockholders. Vacancies or new offices
may be filled at any time. Each officer shall hold office until a successor
shall have been duly elected or appointed or until his or her death or
until he or she shall resign or shall have been removed by the Board of
Directors.
SECTION 9.2. Removal. An officer may be removed by the Board of
Directors whenever in its judgment the best interests of the Corporation
would be served thereby.
SECTION 9.3. The Chairman of the Board. The Chairman of the Board
shall have such powers as are vested in him or her by the Board of
Directors, by law or by these By laws. The Chairman shall preside at the
meetings of the stockholders, of the Board of Directors, and of the
Executive Committee.
SECTION 9.4. The President. The President shall have the powers and
duties vested in him or her by the Board of Directors, by law or by these
By laws. In the absence or inability to act of the Chairman of the Board,
or upon the request of the Chairman of the Board, the President shall
preside at meetings of the stockholders and of the Board of Directors and
shall have and exercise all of the powers and duties of the Chairman of the
Board.
SECTION 9.5. The Chief Executive Officer. The Chief Executive
Officer of the Corporation shall have, subject to the supervision and
direction of the Board of Directors or of the Executive Committee, general
supervision of the business, property and affairs of the Corporation and
the powers vested in him or her by the Board of Directors, by law or by
these By laws or which usually attach or pertain to such office. Except in
those instances in which the authority to execute is expressly delegated to
another officer or agent of the Corporation or a different mode of
execution is expressly prescribed by the Board of Directors, the Chief
Executive Officer may execute for the Corporation any contracts, deeds,
mortgages, bonds, or other instruments which the Board of Directors has
authorized, and the Chief Executive Officer may (without previous
authorization by the Board of Directors) execute such contracts and other
instruments as the conduct of the Corporation's business in its ordinary
course requires.
SECTION 9.6. The Vice Chairmen. A Vice Chairman shall have such
powers as are vested in him or her by the Board of Directors, by law or by
these By laws. In the absence or inability to act of the Chairman of the
Board and the President, or upon request of the Chairman of the Board, or
in his or her absence upon request of the President, a Vice Chairman (or in
the event there be more than one Vice Chairman, the Vice Chairmen in the
order designated, or in the absence of any designation, then in the order
of their election) shall preside at the meetings of stockholders and of the
Board of Directors and shall have and exercise all their powers and duties.
SECTION 9.7. The Executive Vice Presidents. In the absence of the
Chairman of the Board, the President and the Vice Chairmen or in the event
of their inability or refusal to act, the Executive Vice President (or in
the event there be more than one Executive Vice President, the Executive
Vice Presidents in the order designated, or in the absence of any
designation, then in the order of their election) shall perform the duties
of the Chairman of the Board, of the President, and of the Vice Chairmen
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the Chairman of the Board, the President and the Vice
Chairmen. Any Executive Vice President may sign, with the Secretary or any
Assistant Secretary, certificates for shares of the Corporation; and shall
perform such other duties as from time to time may be assigned to him or
her by the Chairman of the Board, the President, a Vice Chairman, the Board
of Directors, or these By laws.
SECTION 9.8. The Vice Presidents. The Vice Presidents shall perform
such duties as may be assigned to them from time to time by the Chairman of
the Board, the President, the Vice Chairmen, or the Board of Directors, or
these By laws. Any Vice President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of the Corporation.
SECTION 9.9. The Treasurer. If required by the Board of Directors,
the Treasurer shall give a bond for the faithful discharge of his or her
duties in such sum and with such surety or sureties as the Board of
Directors shall determine. The Treasurer shall: (a) have charge and custody
of and be responsible for all funds and securities of the Corporation;
receive and give receipts for moneys due and payable to the Corporation
from any source whatsoever, and deposit all such moneys in the name of the
Corporation in such banks, trust companies or other depositaries as shall
be selected in accordance with the provisions of Article X of these
By laws; (b) in general perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him
or her by the Chairman of the Board, the President, a Vice Chairman, the
Board of Directors, or these By laws.
SECTION 9.10. The Secretary. The Secretary shall have the custody of
the corporate seal and the Secretary or any Assistant Secretary shall affix
the same to all instruments or papers requiring the seal of the
Corporation. The Secretary, or in his or her absence, any Assistant
Secretary, shall see that proper notices are sent of the meetings of the
stockholders, the Board of Directors and the Executive Committee, and shall
see that all proper notices are given, as required by these By laws. The
Secretary or any Assistant Secretary shall keep the minutes of all meetings
of stockholders and Directors and all committees which may request their
services.
SECTION 9.11. Assistant Treasurers and Assistant Secretaries. The
Assistant Treasurers shall respectively, if required by the Board of
Directors, give bonds for the faithful discharge of their duties in such
sums and with such sureties as the Board of Directors shall determine. The
Assistant Secretaries as thereunto authorized by the Board of Directors may
sign with the Chairman of the Board, the President, a Vice Chairman, or an
Executive Vice President certificates for shares of the Corporation, the
issue of which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers and Assistant Secretaries, in general,
shall perform such duties as shall be assigned to them by the Treasurer or
the Secretary, respectively, or by the Chairman of the Board, the
President, a Vice Chairman, the Board of Directors, or these By laws.
SECTION 9.12. Salaries. The salaries of the officers shall be fixed
from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that the officer
is also a director of the Corporation.
ARTICLE X
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 10.1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Corporation,
and such authority may be general or confined to specific instances.
SECTION 10.2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
SECTION 10.3. Checks, Drafts, etc. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the Corporation, shall be signed by such officer or
officers, agent or agents of the Corporation and in such manner as shall
from time to time be determined by resolution of the Board of Directors.
SECTION 10.4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositaries as the
Board of Directors may select.
SECTION 10.5. Power to Execute Proxies. The Chairman of the Board,
the President, a Vice Chairman, or any Executive Vice President may execute
proxies on behalf of the Corporation with respect to the voting of any
shares of stock owned by the Corporation.
ARTICLE XI
CERTIFICATES FOR SHARES
AND THEIR TRANSFER
SECTION 11.1. Certificates for Shares. Certificates representing
shares of the Corporation shall be in such form as may be determined by the
Board of Directors. Such certificates shall be signed by the Chairman of
the Board, the President, a Vice Chairman, an Executive Vice President or a
Vice President and by the Secretary or an Assistant Secretary and shall be
sealed with the seal of the Corporation. The seal may be a facsimile. If a
stock certificate is countersigned (i) by a transfer agent other than the
Corporation or its employee, or (ii) by a registrar other than the
Corporation or its employee, any other signature on the certificate may be
a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent, or registrar before
such certificate is issued, it may be issued by the Corporation with the
same effect as if he or she were such officer, transfer agent or registrar
at the date of issue. All certificates for shares shall be consecutively
numbered or otherwise identified. The name of the person to whom the shares
represented thereby are issued, with the number of shares and date of
issue, shall be entered on the books of the Corporation.
All certificates surrendered to the Corporation for transfer shall be
cancelled and no new certificates shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled, except that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and indemnity
to the Corporation as the Board of Directors may prescribe.
SECTION 11.2. Transfers of Shares. Transfers of shares of the
Corporation shall be made only on the books of the Corporation by the
holder of record thereof or by the holder's legal representative, who shall
furnish proper evidence of authority to transfer, or by the holder's
attorney thereunto authorized by power of attorney duly executed and filed
with the Secretary of the Corporation, and on surrender for cancellation of
the certificate for such shares. The person in whose name shares stand on
the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation.
ARTICLE XII
FISCAL YEAR
SECTION 12.1. Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of January in each year and end on the last day of
December in each year.
ARTICLE XIII
SEAL
SECTION 13.1. Seal. The Board of Directors shall provide a corporate
seal which shall be in the form of a circle and shall have inscribed
thereon the name of the Corporation.
ARTICLE XIV
WAIVER OF NOTICE
SECTION 14.1. Waiver of Notice. Whenever any notice whatever is
required to be given under the provisions of these By laws or under the
provisions of the Restated Certificate of Incorporation or under the
provisions of the General Corporation Law of Delaware, waiver thereof in
writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Attendance of any person at a meeting for which any
notice whatever is required to be given under the provisions of these
By laws, the Restated Certificate of Incorporation or the General
Corporation Law of Delaware shall constitute a waiver of notice of such
meeting, except when the person attends for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any
business because the meeting is not lawfully called or convened.
ARTICLE XV
INDEMNIFICATION
SECTION 15.1. Indemnification Request. A director, officer or other
person (the "Indemnitee") who seeks indemnification (other than advancement
of expenses pursuant to Section 15.12 hereof), in respect of amounts paid
or owing as expenses, judgments, fines, or in settlement, shall submit a
written request for indemnification (the "Indemnification Request") to the
Board of Directors of the Corporation by delivering or mailing the same,
registered or certified mail, to the Board of Directors c/o the Secretary
of the Corporation at the Corporation's principal executive offices. If
mailed, the Indemnification Request shall be deemed made 48 hours after
depositing the same in the United States mail addressed as aforesaid.
SECTION 15.2. Determination of Indemnification Request. The
determination of the Indemnitee's entitlement to indemnification as set
forth in the Indemnification Request shall be made in the specific case, at
the expense of the Corporation, as set forth in paragraph 5 of Article
Eighth of the Restated Certificate of Incorporation. However, in the event
a Change of Control (as hereinafter defined) shall have occurred, such
determination shall be made by Independent Counsel in a written opinion to
the Board of Directors, a copy of which shall be delivered to the
Indemnitee.
SECTION 15.3. Presumption of Entitlement; Conclusive Effect of
Findings of Fact and Law; Other Procedures. The termination with respect
to the Indemnitee of any action, suit or proceeding or of any claim, issue
or matter therein, by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not of itself adversely
affect the right of the Indemnitee to indemnification or create a
presumption that the Indemnitee did not meet the standard of conduct
required by Article Eighth of the Restated Certificate of Incorporation for
indemnification. If the Indemnitee is a person referred to in paragraphs 1,
2 or 3 Article Eighth of the Restated Certificate of Incorporation, the
Indemnitee shall be presumed to have met the required standard of conduct
but only to the extent not contrary to any final findings of fact or law
made in any action, suit or proceeding to which the Indemnitee is or was a
party and for which indemnification is requested. The person, persons or
entity making the determination of the Indemnitee's entitlement to
indemnification shall be entitled to rely upon all such findings of fact
and law made known to such person, persons or entity. Such person, persons
or entity may consider such other matters as they or it deem appropriate,
shall not be required to receive or hear evidence, oral presentations,
briefs or other submission, shall not be required to hold hearings, and
shall not otherwise be subject to any rules of evidence or procedure
applicable to judicial or other proceedings.
SECTION 15.4. Cooperation and Expenses. The Indemnitee shall
cooperate with the person, persons or entity making the determination with
respect to the Indemnitee's entitlement to indemnification, including
providing to such person, persons or entity upon reasonable advance
request, any documentation or information which is not privileged or
otherwise protected from disclosure and which is reasonably available to
the Indemnitee and reasonably necessary to such determination. Any costs or
expenses (including attorneys' fees and disbursements) reasonably incurred
by the Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Corporation irrespective of
the determination as to the Indemnitee's entitlement to indemnification.
SECTION 15.5. Selection of Independent Counsel. If a determination
of the Indemnitee's entitlement to indemnification is to be made by
Independent Counsel, the Independent Counsel shall be selected as provided
in this Section 15.5. If a Change of Control shall not have occurred,
Independent Counsel shall be selected by a majority vote of a quorum of the
Board of Directors consisting of Disinterested Directors. If a Change of
Control shall have occurred, or if a quorum shall decline or fail to select
Independent Counsel within five business days after having directed,
pursuant to paragraph 5(b) of Article Eighth of the Restated Certificate of
Incorporation, the determination of the Indemnitee's entitlement to
indemnification to be submitted to Independent Counsel, then Independent
Counsel shall be selected by the law firm regularly or most frequently
engaged by the Corporation during the preceding three years for
representation or counseling in connection with general corporate matters.
In any event, Independent Counsel shall be selected from among those
Chicago, Illinois, or Delaware law firms having a significant and
continuous practice in the field of corporate law but excluding any firm
that: (i) has, within the preceding three years represented the
Corporation, the Indemnitee or affiliates of either in any significant
matter; (ii) has, within the preceding three years, represented any other
party in any significant judicial or other proceeding against or in
opposition to the Corporation, the Indemnitee or any affiliate of either;
(iii) had any involvement of any significant nature in or with respect to
the claim for which indemnification is requested; or (iv) has any other
material conflict of interest in being engaged as Independent Counsel.
SECTION 15.6. Time for Determination. The determination of the
Indemnitee's entitlement to indemnification shall be made within 60 days
after such Indemnitee shall have submitted all such additional information,
if any, as shall have been reasonably requested during the 30 day period
following the initial submission of the Indemnification Request to the
Board of Directors pursuant to Section 15.1 hereof. The foregoing
notwithstanding, in the event that the claim with respect to which
indemnification is requested is the subject of a judicial, government or
other proceeding, the Board of Directors, stockholders or Independent
Counsel, as the case may be, may defer their determination until 60 days
after any such proceeding shall have been finally adjudicated or terminated
(by settlement or otherwise) and all periods for appeal, rehearing or
reinstitution of such proceeding (whether in a different forum or
otherwise) have expired.
SECTION 15.7. Failure To Make Determination; Remedies For
Enforcement. If a determination of the Indemnitee's entitlement to
indemnification shall not be made within the period specified in these
By laws, unless due to a material failure of the Indemnitee to comply with
his or her obligations under Section 15.4 hereof, then the Indemnitee shall
be entitled to indemnification to the extent and in the manner set forth in
the Indemnification Request. The Indemnitee may only enforce his or her
rights to indemnification, whether pursuant to a determination that the
Indemnitee is entitled to indemnification or pursuant to this Section 15.7,
in any judicial proceeding brought, at the election of the Indemnitee, in
any court having jurisdiction within the State of Delaware, the State of
Illinois, or the state in which the Corporation shall then have its
principal executive offices. The Indemnitee shall be entitled to all
expenses actually and reasonably incurred by him or her in connection with
the successful enforcement of the Indemnitee's right to indemnification.
SECTION 15.8. Appeal of Adverse Determination. In the event that a
determination shall be made that the Indemnitee is not entitled to
indemnification, in whole or in part, the Indemnitee may only institute an
action in any court having jurisdiction within the State of Delaware, the
State of Illinois, or the state in which the Corporation shall have its
principal executive offices to establish the Indemnitee's right to
indemnification. Any such proceeding shall be conducted in all respects as
a de novo determination on the merits and any such prior determination made
pursuant to these By laws that the Indemnitee is not entitled to
indemnification shall not constitute a presumption that the Indemnitee is
not entitled to indemnification.
SECTION 15.9. Burden of Proof. In any judicial proceeding regarding
the Indemnitee's right or entitlement to indemnification or advancement of
expenses, the Corporation shall have the burden of proving that any
Indemnitee who is a person referred to in paragraphs 1, 2 or 3 of Article
Eighth of the Restated Certificate of Incorporation is not entitled to
indemnification or advancement of expenses as the case may be, subject,
however, to principles of res judicata and collateral estoppel relating to
prior judicial proceedings to which the Indemnitee is or was a party. In
cases in which the Indemnitee is not a person referred to in paragraphs 1,
2 or 3 of Article Eighth of the Restated Certificate of Incorporation, the
Indemnitee shall have the burden of proving he or she is entitled to
indemnification or the advancement of expenses.
SECTION 15.10. Definition of "Disinterested Director." A
Disinterested Director shall mean any director who: (i) was not a party to
the claim or proceeding with respect to which indemnification is requested;
(ii) has not submitted an Indemnification Request or a request for
advancement of expenses on his or her own behalf that has not been finally
resolved; or (iii) does not have any direct and material financial or other
personal interest in the determination of the Indemnification Request.
SECTION 15.11. Definition of "Change of Control." A Change of
Control shall be deemed to have occurred on the earliest of:
(a) The receipt by the Corporation of a Schedule 13D or other
statement filed under Section 13(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), indicating that any entity, person, or
group has acquired beneficial ownership, as that term is defined in Rule
13d 3 under the Exchange Act, of more than 30% of the outstanding capital
stock of the Corporation entitled to vote for the election of directors
("voting stock");
(b) The commencement by an entity, person, or group (other than the
Corporation or a subsidiary of the Corporation) of a tender offer or an
exchange offer for more than 20% of the outstanding voting stock of the
Corporation;
(c) The effective time of (i) a merger or consolidation of the
Corporation with one or more other corporations as a result of which the
holders of the outstanding voting stock of the Corporation immediately
prior to such merger or consolidation hold less than 80% of the voting
stock of the surviving or resulting corporation, or (ii) a transfer of
substantially all of the property of the Corporation other than to an
entity of which the Corporation owns at least 80% of the voting stock; or
(d) The election to the Board of Directors of the Corporation,
without the recommendation or approval of the incumbent Board of Directors
of the Corporation, of the lesser of (i) three directors or (ii) directors
constituting a majority of the number of directors of the Corporation then
in office.
SECTION 15.12. Advancement of Expenses. Expenses as may be incurred
by a person referred to in paragraphs 1, 2 or 3 of Article Eighth of the
Restated Certificate of Incorporation in defending a civil or criminal
action, suit or proceeding shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that he or she is not entitled to be indemnified
by the Corporation as authorized in such Article Eighth. Such expenses as
may be incurred by other employees and agents may be so paid on such terms
and conditions, if any, as the Board of Directors deems appropriate. For
purposes of the foregoing, a determination that a person referred to in
paragraphs 1, 2 or 3 of Article Eighth of the Restated Certificate of
Incorporation is not entitled to be indemnified by the Corporation shall be
made in the manner hereinbefore provided for the determination of an
Indemnification Request; provided, however, that the Board of Directors may
initiate such determination whenever it shall deem the same to be
appropriate. In connection with such determination, such person shall be
subject to all requirements of these By laws imposed on an "Indemnitee" in
respect of a determination made pursuant to Section 15.2 hereof.
SECTION 15.13. Personal Liability of Directors. No director of the
Corporation shall be personally liable to any person seeking
indemnification or advancement of expenses for any determination, act or
omission in connection therewith.
ARTICLE XVI
AMENDMENTS
SECTION 16.1. Amendments. These By laws may be altered, amended or
repealed and new By laws may be adopted at any meeting of the Board of
Directors of the Corporation by the affirmative vote of a majority of the
members of the Board. These By laws may also be amended or repealed, or new
By laws may be adopted, by action taken by the stockholders of the
Corporation.
THIRD AMENDMENT TO RIGHTS AGREEMENT
Third Amendment to Rights Agreement (this "Amendment") entered
into as of this 21st day of July, 1998, by and between Northern Trust
Corporation, a Delaware corporation (the "Company"), and Norwest Bank
Minnesota, N.A., a national banking association, as Rights Agent (the
"Rights Agent").
The Company entered into a Rights Agreement with Harris Trust and
Savings Bank (the "Original Rights Agent") dated as of October 17, 1989, as
amended by a First Amendment thereto, dated as of September 17, 1997, and a
Second Amendment thereto, dated as of November 18, 1997 (as so amended, the
"Rights Agreement"). Capitalized terms used and not defined in this
Amendment have the meanings set forth in the Rights Agreement.
Effective November 10, 1997, the Rights Agent was appointed as
successor to the Original Rights Agent in accordance with Section 21 of the
Rights Agreement.
The parties desire to amend the Rights Agreement in accordance
with Section 27 of the Rights Agreement to provide for automatic redemption
of the Rights under certain limited circumstances as authorized by the
Board of Directors of the Company on the date hereof.
In consideration of the foregoing and for other good and valuable
consideration (the receipt and sufficiency of which are hereby
acknowledged), the Company and the Rights Agent hereby agree as follows.
1. Section 23 of the Rights Agreement is hereby amended in its entirety
to read as follows:
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earliest to occur of (i) the date on which an
Automatic Redemption Event (as defined below) occurs pursuant to
paragraph (c) of this Section 23, (ii) the close of business on the
twentieth day after the Stock Acquisition Date or (iii) the Final
Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereafter referred to as the "Redemption Price");
provided, however, that if the Board of Directors of the Company
authorizes redemption of the Rights pursuant to this paragraph (a) in
either of the circumstances set forth in clauses (A) and (B) below,
there must be at least one Continuing Director and such authorization
shall require the approval of a majority of the Continuing Directors
then holding office: (A) such authorization occurs on or after the
Stock Acquisition Date; or (B) such authorization occurs on or after
the date of a change (resulting from a proxy or consent solicitation)
in a majority of the directors in office at the commencement of such
solicitation if any Person who is a participant in such solicitation
has stated that such Person (or any of its Affiliates or Associates)
intends to take or may consider taking, or if a majority of the Board
of Directors of the Company has determined in good faith that such
Person (or any of its Affiliates or Associates) intends or is likely
to take, any action which would result in such Person becoming an
Acquiring Person or which would cause the occurrence of any
transaction set forth in Section 11(a) (ii) or Section 13(a) hereof,
unless concurrent with such solicitation such Person (or one or more
of its Affiliates or Associates) is making a cash tender offer
pursuant to a Tender Offer Statement on Schedule 14D-1 (or any
successor form) filed with the Securities and Exchange Commission for
all outstanding shares of Common Stock of the type excepted from the
provisions of Section 11(a) (ii) (B) hereof; provided further, that
if, following the occurrence of a Stock Acquisition Date and following
the expiration of the right of redemption hereunder but prior to the
occurrence of any transaction set forth in Section 11(a) (ii) or
Section 13(a) hereof, (x) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of Common
Stock in one transaction or series of transactions, not directly or
indirectly involving the Company or any of its subsidiaries, which did
not result in the occurrence of a transaction set forth in Section
11(a)(ii) or Section 13(a) hereof such that such Person is thereafter
a Beneficial Owner of shares of Common Stock and/or other securities
representing 10% or less of the Voting Power and (y) there are no
other Persons immediately following the occurrence of the event
described in clause (x) who are Acquiring Persons, then the right of
redemption shall be reinstated and thereafter be subject to the
provisions of this Section 23.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 23, and without any further action and without any
notice, the Rights will terminate, and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price.
Within ten business days after the action of the Board of Directors
ordering the redemption of the Rights pursuant to paragraph (a) of
this Section 23, the Company shall give notice of such redemption to
the holders of the then outstanding Rights by mailing such notice to
all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Stock
(c) Notwithstanding anything contained in this Agreement to the
contrary, in the event that an Automatic Redemption Event occurs at
any time prior to the earliest to occur of (i) the date on which the
Board of Directors of the Company authorizes redemption of the Rights
pursuant to paragraph (a) of this Section 23, (ii) the close of
business on the twentieth day after the Stock Acquisition Date or
(iii) the Final Expiration Date, then effective immediately upon the
occurrence of such Automatic Redemption Event, by action of the Board
of Directors of the Company taken to approve the inclusion of this
paragraph (c) in Section 23 of the Agreement and without any further
action on the part of or notice from the Board of Directors of the
Company, the Rights shall be redeemed and shall terminate, and
thereafter, the only right of the holders of Rights shall be to
receive the Redemption Price. Each of the following shall be an
"Automatic Redemption Event":
(A) any Person (other than the Company or any of its
subsidiaries or any employee benefit plan of the Company or of any
subsidiary of the Company or any Person appointed as trustee by the
Company or such subsidiary pursuant to the terms of any such plan in
such Person's capacity as trustee) becomes the Beneficial Owner of
securities of the Company which in the aggregate represent 14% or more
of the Voting Power;
(B) any Person (other than the Company or any of its
subsidiaries or any employee benefit plan of the Company or of any
subsidiary of the Company or any Person appointed as trustee by the
Company or such subsidiary pursuant to the terms of any such plan in
such Person's capacity as trustee) commences, or publicly announces
its intent to commence, a tender or exchange offer if upon
consummation thereof such Person, together with all Affiliates and
Associates of such Person, would be the Beneficial Owner of securities
of the Company which in the aggregate represent 15% or more of the
Voting Power;
(C) any Person makes by public announcement or by written
communication that is or becomes the subject of a public announcement,
or publicly announces its intent to make, a bona fide proposal to the
Company or its stockholders for (1) a merger, consolidation or similar
transaction involving the Company or any of its subsidiaries, (2) a
purchase or other acquisition of all or a substantial portion of the
assets or deposits of the Company and its Subsidiaries or (3) a
purchase or other acquisition of securities representing 15% or more
of the Voting Power (any transaction of the type described in clauses
(1), (2) or (3) of this paragraph (C), an "Acquisition Transaction");
or
(D) any Person files an application or notice with the Board
of Governors of the Federal Reserve System, or any other federal or
state banking regulatory authority, which application or notice seeks
approval to engage in any transaction constituting an Acquisition
Transaction.
(d) Within ten business days after the Company becomes aware of
the occurrence of an Automatic Redemption Event, the Company shall
give notice of the redemption of the Rights to the holders of the then
outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock.
(e) Any notice of redemption which is mailed in the manner
provided in this Section 23 shall be deemed given, whether or not the
holder receives the notice. Such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23 and
other than in connection with the purchase or repurchase by any of
them of Common Stock prior to the Distribution Date. Moreover,
notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a
transaction set forth in Section 11(a) (ii) hereof until such time as
the Company's right of redemption hereunder has expired.
2. The term "Agreement" as used in the Rights Agreement shall be deemed
to refer to the Rights Agreement as amended hereby, and all references
to the Rights Agreement shall be deemed to include this Amendment.
3. This Amendment shall be effective as of the date first written above,
and except as set forth herein, the Rights Agreement shall remain in
full force and effect and otherwise shall be unaffected hereby.
4. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
The parties hereto have caused this Amendment to be duly executed
as of the date first written above.
Attest: NORTHERN TRUST CORPORATION
/s/ Rose A. Ellis By /s/ Perry R. Pero
---------------------------- -------------------------------
Name: Rose A. Ellis Name: Perry R. Pero
Title: Secretary Title: Senior Executive Vice
President
Attest: NORWEST BANK MINNESOTA, N.A.
/s/ Barbara M. Novak By /s/ Susan J. Roeder
--------------------------- -------------------------------
Name: Barbara M. Novak Name: Susan J. Roeder
Title: Assistant Secretary Title: Assistant Vice President
NORTHERN TRUST CORPORATION
AND
NORWEST BANK MINNESOTA, N.A.
RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF JULY 21, 1998
TABLE OF CONTENTS
Section Page
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . 2
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . 10
3. Issuance of Rights Certificates . . . . . . . . . . . . . . . . . 10
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . . . 13
5. Countersignature and Registration . . . . . . . . . . . . . . . . 14
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . 16
8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9. Reservation and Availability of Capital Stock . . . . . . . . . . 20
10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . 22
11. Adjustment of Purchase Price, Number and Kind of Shares or Number
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12. Certificate of Adjusted Purchase Price or Number of Shares . . . 36
13. Consolidation, Merger or Sale or Transfer of Assets, Cash Flow or
Earning Power . . . . . . . . . . . . . . . . . . . . . . . . . 36
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . 40
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . 42
16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . 43
17. Rights Certificate Holder Not Deemed a Stockholder . . . . . . . 44
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . 44
19. Merger or Consolidation or Change of Name of Rights Agent . . . 45
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . 46
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . 49
22. Issuance of New Rights Certificates . . . . . . . . . . . . . . 50
23. Redemption and Termination . . . . . . . . . . . . . . . . . . . 50
24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . 54
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . 56
28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
29. Determinations and Action by the Board, etc. . . . . . . . . . . . 58
30. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . 58
31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 59
33. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . 60
EXHIBITS
Exhibit A -- Form of Amended and Restated Certificate of Designations
Exhibit B -- Form of Rights Certificates
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 21, 1998 (the "Agreement"),
between Northern Trust Corporation, a Delaware corporation (the "Company"),
and Norwest Bank Minnesota, N.A., a national banking association (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, on October 17, 1989, the Board of Directors of the
Company (the "Board") (i) approved, adopted and executed a Rights
Agreement, dated as of October 17, 1989 (which Rights Agreement, as
subsequently amended, is referred to herein as the "1989 Rights
Agreement"), between the Company and the rights agent thereunder, (ii)
authorized and declared a dividend distribution of one right (a "1989
Right") for each share of common stock, par value $1.66-2/3 per share, of
the Company (the "Common Stock") outstanding at the close of business on
October 31, 1989 (the "1989 Record Date"), and (iii) authorized the
issuance of one 1989 Right (as such number may have been adjusted pursuant
to the provisions of the 1989 Rights Agreement) for each share of Common
Stock issued after the 1989 Record Date (whether originally issued or
delivered from the Company's treasury) and prior to the "Distribution Date"
(as such term is defined in the 1989 Rights Agreement);
WHEREAS, pursuant to Section 7(a) of the 1989 Rights Agreement,
the 1989 Rights will expire not later than October 31, 1999;
WHEREAS, on July 21, 1998, the Board determined it desirable and
in the best interests of the Company and its stockholders for the Company
to extend the benefits afforded by the 1989 Rights Agreement and to
implement such extension by executing this Agreement and declaring the
distribution referred to in the following recital clause;
WHEREAS, on July 21, 1998 (the "Rights Dividend Declaration
Date"), the Board authorized and declared a dividend distribution of one
Right (as hereinafter defined) for each share of Common Stock outstanding
at the close of business on the earliest date upon which all of the 1989
Rights shall have expired or shall have been redeemed or exchanged or are
otherwise no longer outstanding in accordance with the terms of the 1989
Rights Agreement (such date, the "Record Date"), and has authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to
the provisions of Section 11(i) or Section 11(p) hereof) for each share of
Common Stock issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and the Distribution Date (as
hereinafter defined), and under certain circumstances thereafter, each
Right initially representing the right to purchase one one-hundredth of a
share of Series A Junior Participating Preferred Stock, no par value, of
the Company having the rights, powers and preferences set forth in the form
of Certificate of Designations attached hereto as Exhibit A, upon the terms
and subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean (x) any Person who or
which, together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company; (ii) any Subsidiary of
the Company; (iii) any employee benefit plan of the Company, or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan;
(iv) any Person who becomes the Beneficial Owner of fifteen percent (15%)
or more of the shares of Common Stock then outstanding (or, in the case of
a Person described in subclauses (A) through (F) of the following clause
(vi), 23% or more of the shares of Common Stock then outstanding) as a
result of a reduction in the number of shares of Common Stock outstanding
due to the repurchase of shares of Common Stock by the Company unless and
until such Person, after becoming aware that such Person has become the
Beneficial Owner of fifteen percent (15%) or more of the then outstanding
shares of Common Stock (or, in the case of a Person described in subclauses
(A) through (F) of the following clause (vi), 23% or more of the then
outstanding shares of Common Stock), acquires beneficial ownership of
additional shares of Common Stock constituting one percent (1%) or more of
the shares of Common Stock then outstanding; (v) any such Person who has
reported or is required to report such ownership (but less than 20%) on
Schedule 13G under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and in effect on the date of this Agreement (or any
comparable or successor report) or on Schedule 13D under the Exchange Act
(or any comparable or successor report) which Schedule 13D does not state
any intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 of such schedule (other than the disposition of the
Common Stock) and, within ten Business Days of being requested by the
Company to advise it regarding the same, certifies to the Company that such
Person acquired shares of Common Stock in excess of 14.9% inadvertently or
without knowledge of the terms of the Rights and who, together with all
Affiliates and Associates, thereafter does not acquire additional shares of
Common Stock while the Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding; provided, however, that if the Person
requested to so certify fails to do so within ten Business Days, then such
Person shall become an Acquiring Person immediately after such ten-
Business-Day period; or (vi) any of the Persons described in the following
subclauses (A) through (F) (or any group comprised solely of such Persons)
who or which would be an Acquiring Person but for this proviso if but only
if all securities of the Company beneficially owned by all such Persons in
the aggregate shall constitute less than 23% of the then outstanding shares
of Common Stock: (A) Byron L. Smith (deceased), any descendant of Byron L.
Smith (including descendants by adoption and their descendants), or any
spouse, former spouse or surviving spouse of Byron L. Smith or any such
descendants (collectively defined as the "Family Members"); (B) any trust
which is in existence on the date of this Agreement and which has been
established by one or more Family Members and any estate of a Family Member
who died on or before the date of this Agreement (collectively defined as
the "Family Entities"); (C) any estate of a Family Member who dies after
the date of this Agreement, or any trust established after the date of this
Agreement by one or more Family Members or Family Entities, provided that
one or more Family Members, Family Entities or charitable organizations
which qualify as exempt organizations under Section 501(c) of the Internal
Revenue Code of 1986, as amended ("Charitable Organizations"),
collectively, are the beneficiaries of at least 50% of the actuarially-
determined beneficial interests in such estate or trust; (D) any Charitable
Organization which is established by one or more Family Members or Family
Entities (a "Family Charitable Organization"); (E) any corporation of which
a majority of the voting power is held, directly or indirectly, by or for
the benefit of one or more Family Members, Family Entities, estates or
trusts described in clause (C) above, or Family Charitable Organizations;
and (F) any partnership or other entity or arrangement of which a majority
of the voting interest is held, directly or indirectly, by or for the
benefit of one or more Family Members, Family Entities, estates or trusts
described in clause (B) or (C) above or Family Charitable Organizations, or
(y) any Offering Person and any Affiliate or Associate of such Offering
Person, if such Offering Person or any Affiliate or Associate thereof has
entered into any agreement or arrangement providing for an Acquisition
Transaction (as defined in Section 1(r) hereof).
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, owns or has the
right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon
the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event (as hereinafter defined), or
(C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date (as hereinafter defined) or
pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) or Section 11(p) hereof in
connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding (whether or not in writing) to vote
such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy or consent given in
response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is
not also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this
paragraph (d)) or disposing of any voting securities of the
Company; provided, however, that nothing in this paragraph (d)
shall cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired or which such Person has the right
to acquire through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days
after the date of such acquisition.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
Illinois are authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00
P.M., Chicago, Illinois time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., Chicago, Illinois
time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the common stock, par value
$1.66-2/3 per share, of the Company, except that "Common Stock" when used
with reference to any Person other than the Company shall mean the capital
stock of such Person with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the
management, of such Person.
(h) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(i) "Continuing Director" shall mean (i) any member of the
Board, while such Person is a member of the Board, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or
Associate, and who was a member of the Board prior to the date of this
Agreement, or (ii) any Person who subsequently becomes a member of the
Board, while such Person is a member of the Board, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or election to the
Board is recommended or approved by a vote of a majority of the Continuing
Directors.
(j) "Current Market Price" shall have the meaning set forth
in Section 11(d)(i) hereof.
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(n) "Exchange Act" shall have the meaning set forth in
Section 1(a) hereof.
(o) "Exchange Ratio" shall have the meaning set forth in
Section 24 hereof.
(p) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(r) "Offering Person" shall mean any Person (other than the
Company or any of its Subsidiaries or any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person appointed as
trustee by the Company or such Subsidiary pursuant to the terms of any such
plan in such Person's capacity as trustee) who, at the time of the first
occurrence of either of the circumstances described in clauses (i) and (ii)
of Section 23(c) hereof, (i) has commenced, or has publicly announced its
intent to commence, a tender or exchange offer if upon consummation thereof
such Person, together with all Affiliates and Associates of such Person,
would be the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding, (ii) has made by public announcement or by written
communication that is or becomes the subject of a public announcement, or
has publicly announced its intent to make, a proposal to the Company or its
stockholders for (x) a merger, consolidation or similar transaction
involving the Company or any of its Subsidiaries, (y) a purchase or other
acquisition of all or a substantial portion of the assets or deposits of
the Company and its Subsidiaries, or (z) a purchase or other acquisition of
securities representing 15% or more of the shares of Common Stock then
outstanding (any transaction of the type described in clauses (x), (y) or
(z) of this paragraph (ii), an "Acquisition Transaction"), or (iii) has
filed an application or notice with the Board of Governors of the Federal
Reserve System, or any other federal or state banking regulatory authority,
which application or notice seeks approval to engage in any transaction
constituting an Acquisition Transaction.
(s) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, limited liability partnership,
trust, syndicate or other entity and includes, without limitation, an
unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose
or act.
(t) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, no par value, of the Company, and, to the
extent that there is not a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of preferred stock of the Company designated for
such purpose containing terms substantially similar to the terms of the
Series A Junior Participating Preferred Stock.
(u) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(v) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(w) "Qualifying Offer" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(x) "Record Date" shall have the meaning set forth in the
fourth WHEREAS clause at the beginning of this Agreement.
(y) "Rights" shall have the meaning set forth in the fourth
WHEREAS clause at the beginning of this Agreement.
(z) "Rights Agent" shall have the meaning set forth in the
parties clause at the beginning of this Agreement.
(aa) "Rights Certificate" shall have the meaning set forth
in Section 3(a) hereof.
(bb) "Rights Dividend Declaration Date" shall have the
meaning set forth in the fourth WHEREAS clause at the beginning of this
Agreement.
(cc) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) hereof.
(dd) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(ee) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ff) "Stock Acquisition Date" shall mean the earlier of (i)
the first date of public announcement by the Company that any Person has
become an Acquiring Person pursuant to clause (x) of the definition of
Acquiring Person, and (ii) the date on which an Offering Person and/or any
Affiliate or Associate thereof has entered into an agreement or arrangement
with the Company or any Subsidiary of the Company providing for an
Acquisition Transaction.
(gg) "Subsidiary" shall mean, with reference to any Person,
any corporation or other entity of which an amount of voting securities (or
other ownership interests having ordinary voting power) sufficient to elect
at least a majority of the directors (or other persons performing similar
functions) of such corporation or other entity is directly or indirectly
beneficially owned or otherwise controlled by such Person.
(hh) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ii) "Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
(jj) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-rights
agents as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the close of business on the
twentieth day after the Stock Acquisition Date (or, if the twentieth day
after the Stock Acquisition Date occurs before the Record Date, the close
of business on the Record Date), or (ii) the close of business on the
twentieth day (or such specified or unspecified later date as the Board
shall determine (provided, however, that if any deferral of a Distribution
Date by the Board pursuant to this clause (ii) is authorized at any time on
or after the earliest of (x) the time that any Person becomes an Acquiring
Person or (y) the first occurrence of either of the circumstances described
in clauses (i) and (ii) of Section 23(c) hereof, such authorization shall
be effective only if there is at least one Continuing Director then in
office and only if a majority of Continuing Directors then in office
concurs with such authorization)) after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published
or sent or given within the meaning of Rule 14d-2(a) of the General Rules
and Regulations under the Exchange Act, if upon consummation thereof, such
Person would be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, in either instance other than pursuant to a
Qualifying Offer (the earlier of (i) and (ii) being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraphs (b) and (c)of this Section 3) by the certificates
for the Common Stock registered in the names of the holders thereof (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares
of Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage-prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
right certificates, substantially in the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11(i) or Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall not be required
to issue Rights Certificates evidencing fractional rights, but may, in lieu
thereof, make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid
in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
(b) The Company delivered a copy of a Summary of Rights,
substantially in the form attached as Exhibit C to the 1989 Rights
Agreement (the "Summary of Rights"), by first-class, postage prepaid mail,
to each record holder of Common Stock as of the close of business on
October 31, 1989, at the address of such holder then shown on the records
of the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, as set forth in paragraph (a) above,
until the earlier of the Distribution Date or the Expiration Date, the
Rights will be evidenced by (i) such certificates for the Common Stock with
or without a copy of the Summary of Rights attached or (ii) certificates
for the Common Stock as legended pursuant to the terms of the 1989 Rights
Agreement, and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been
issued shall also constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date, and to the extent provided in
Section 22 hereof, in respect of shares of Common Stock issued after the
Distribution Date and prior to the Expiration Date. Certificates
representing such shares of Common Stock shall also be deemed to be
certificates for Rights, and shall, as promptly as practicable following
the Record Date, bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Northern Trust Corporation (the "Company") and the Rights
Agent thereunder, dated as of July 21, 1998, as the same may be
amended, restated, renewed or extended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal offices of the Company. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge, promptly after
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued
to, or beneficially owned by, any Person who is, was or becomes
an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of
Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each
be substantially in the form attached hereto as Exhibit B and may have 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 applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such
number of one one-hundredths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price per one
one-hundredth of a share, as adjusted from time to time hereunder, the
"Purchase Price"), but the amount and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a),
Section 11(i) or Section 22 hereof that represents Rights beneficially
owned by: (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board, in its sole
discretion, has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of the provisions of
Section 7(e) hereof, and any Rights Certificate issued pursuant to Section
6 or Section 11 hereof upon transfer, exchange, replacement or adjustment
of any other Rights Certificate referred to in this sentence, shall contain
(to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by an authorized signatory of the Rights Agent, either
manually or by facsimile signature, and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by an authorized signatory of the Rights
Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by an authorized signatory of the Rights
Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificates may
be signed on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep, or cause to be kept, at its principal office or offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates (other than Rights
Certificates representing Rights that may have been exchanged pursuant to
Section 24 hereof) may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of one one-hundredths of a share of Preferred
Stock (or, following the occurrence of a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged, with the
forms of assignment and certificate contained therein duly executed, at the
principal office or offices of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e), Section 14 hereof and Section 24 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment from the holder of a Rights Certificate of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section 11(a)(iii) and Section
23(a) hereof) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate contained therein duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price with
respect to the total number of one one-hundredths of a share of Preferred
Stock (or, following the occurrence of a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior to the earliest
of (i) 5:00 P.M., Chicago, Illinois time, on October 31, 2009 (such date,
the "Final Expiration Date"), (ii) the time at which all of the Rights are
redeemed or exchanged as provided in Section 23 or Section 24 hereof,
respectively, or (iii) the time at which the Rights expire pursuant to
Section 13(d) hereof (the earliest of (i), (ii) and (iii) being herein
referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right shall
initially be $330.00, and shall be subject to adjustment from time to time
as provided in Section 11 and Section 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) per one one-hundredth of a share of
Preferred Stock (or Common Stock, other securities, cash or other assets,
as the case may be) to be purchased as set forth below and an amount equal
to any applicable transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the shares of Preferred Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for the total
number of one one-hundredths of a share of Preferred Stock to be purchased,
and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall have elected to deposit
the total number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of
a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent), and
the Company will direct the depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be paid in
lieu of fractional shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or, upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank check
or bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate. The Company reserves the
right to require prior to the occurrence of a Triggering Event that, upon
any exercise of Rights, a number of Rights be exercised so that only whole
shares of Preferred Stock would be issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event,
any Rights beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Affiliate or Associate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Affiliate or Associate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or any other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of a Rights
Certificate upon the occurrence of any purported assignment or exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of assignment or
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such assignment or exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination or exchange shall, if surrendered to the Company or
any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled
by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities, as
the case may be) that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities, as the case may be) issuable and deliverable upon the exercise
of the Rights may be listed on any national securities exchange, the
Company shall use all reasonable efforts to cause, from and after such time
as the Rights become exercisable, all shares reserved for such issuance to
be listed on such exchange upon official notice of issuance upon such
exercise.
(c) The Company shall use its reasonable best efforts to
(i) file, as soon as practicable following the earliest date after the
first occurrence of a Section 11(a)(ii) Event on which the consideration to
be delivered by the Company upon exercise of the Rights has been determined
in accordance with Section 11(a)(iii) hereof, or as soon as is required by
law following the Distribution Date, as the case may be, a registration
statement on an appropriate form under the Act, with respect to the Common
Stock or other securities purchasable upon exercise of the Rights, (ii)
cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the date of
the expiration of the Rights. The Company will also take such action as
may be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability
of the Rights. The Company may temporarily suspend, for a period of time
not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required in other circumstances
following the Distribution Date, the Company similarly may temporarily
suspend the exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not
have been obtained, or the exercise thereof shall not be permitted under
applicable law, or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-hundredths of a
share of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities, as the case may be) delivered
upon exercise of Rights shall, at the time of delivery of the certificates
for such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one one-
hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of one one-
hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for a number of one one-
hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid
(any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in whose
name any certificate for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of such fractional shares of Preferred
Stock (or Common Stock and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment is
a date upon which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate, as such, shall not be entitled to any
rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of
shares, or fractions thereof, purchasable upon exercise of each Right and
the number of Rights outstanding are subject to adjustment from time to
time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide or split the outstanding Preferred Stock, (C) combine
or consolidate the outstanding Preferred Stock into a smaller
number of shares, or (D) issue any shares of its capital stock in
a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of Preferred
Stock (or other capital stock, as the case may be,) issuable on
such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been
exercised immediately prior to such date (whether or not such
Right was then exercisable) and at a time when the transfer books
for the Preferred Stock (or other capital stock, as the case may
be) of the Company were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, subdivision, split, combination, consolidation or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person shall, at any time
after the Rights Dividend Declaration Date, become an Acquiring
Person, unless the event causing such Person to become an
Acquiring Person is a transaction set forth in Section 13(a)
hereof, or is an acquisition of shares of Common Stock pursuant
to a tender offer or an exchange offer for all outstanding shares
of Common Stock at a price and on terms determined by at least a
majority of the members of the Board who are not officers of the
Company or any of its Subsidiaries and who are Continuing
Directors, after receiving advice from one or more investment
banking firms, to be (a) at a price which is fair to the
Company's stockholders and not inadequate (taking into account
all factors which such members of the Board deem relevant,
including, without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b) otherwise in the
best interests of the Company and its stockholders (a "Qualifying
Offer"), then, promptly following the occurrence of such event,
proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Common Stock
of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of
one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event (whether or not such Right was then
issued or exercisable), and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d) hereof) per share of Common Stock on
the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's Restated
Certificate of Incorporation, but which are not outstanding or
reserved for issuance for purposes other than upon exercise of
the Rights, is not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company, acting by resolution of the
Board, shall (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"), and
(B) with respect to each Right (subject to Section 7(e) hereof),
make adequate provision to substitute for the Adjustment Shares,
upon the exercise of such Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of the Company
(including, without limitation, shares or units of shares of
preferred stock, such as the Preferred Stock, which the Board has
deemed to have essentially the same value or economic rights as
shares of Common Stock (such shares of preferred stock being
referred to as "Common Stock Equivalents")), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board based
upon the advice of a nationally recognized investment banking
firm selected by the Board; provided, however, that if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) hereof expires (the later of (x) and
(y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment
of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. For purposes of the
preceding sentence, the term "Spread" shall mean the excess of
(i) the Current Value over (ii) the Purchase Price. If the Board
determines in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such
thirty (30) day period, as it may be extended, is herein called
the "Substitution Period"). To the extent that action is to be
taken pursuant to the first and/or third sentences of this
Section 11(a)(iii), the Company (1) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights, and (2) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in
order to seek such stockholder approval for such authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of each Adjustment Share shall be the
Current Market Price (as defined in Section 11(d) hereof) per
share of the Common Stock on the Section 11(a)(ii) Trigger Date,
and the per share or per unit value of any Common Stock
Equivalent shall be deemed to equal the Current Market Price per
share of the Common Stock on such date. Notwithstanding the
foregoing provisions of this subparagraph (iii), in the event
that, pursuant to this subparagraph (iii), upon the exercise of
the Rights the Company shall be required to deliver value in any
form other than shares of Common Stock, such value shall be
delivered only to the extent and at the time that, if required,
the approval by appropriate financial regulatory authorities with
supervisory jurisdiction over the Company or its financial
institution Subsidiaries of such delivery of such value shall
have been obtained.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible
into Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock
or Equivalent Preferred Stock) less than the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate
subscription or offering price of the total number of shares of Preferred
Stock and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Preferred Stock outstanding on
such record date, plus the number of additional shares of Preferred Stock
and/or Equivalent Preferred Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by
delivery of consideration, part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith
by the Board, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
(other than a regular periodic cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such
record date, less the fair market value (as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes) of the portion of
the cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of Preferred
Stock, and the denominator of which shall be such Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock.
Such adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
Current Market Price per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof,
the "Current Market Price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event
that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of
such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination, consolidation, reverse stock split or
reclassification of such Common Stock, and the ex-dividend date for
such dividend or distribution, or the record date for such
subdivision, combination, consolidation, reverse stock split or
reclassification shall not have occurred prior to the commencement of
the requisite thirty (30) Trading Day or ten (10) Trading Day period,
as set forth above, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, 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 or, if the shares of Common Stock are not
listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system or
as quoted by the Nasdaq National Market with respect to securities
listed or admitted to trading on another national securities exchange
or quoted by the Nasdaq National Market, respectively, or if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange or quoted by the Nasdaq National Market,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported
by The Nasdaq Stock Market or such other quotation system then in use,
or, if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the
Common Stock selected by the Board. If on any such date the Common
Stock is not publicly held and is not so listed, admitted to trading
or quoted, and no market maker is making a market in the Common Stock,
Current Market Price shall mean the fair value of such shares on such
date as determined in good faith by the Board, which determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the
penultimate sentence thereof). If the Current Market Price
per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or
listed or admitted to trading or quoted in a manner described in
clause (i) of this Section 11(d), the Current Market Price per share
of Preferred Stock shall be conclusively deemed to be an amount equal
to 100 (as such number may be appropriately adjusted for such events
as stock splits, stock dividends and recapitalizations with respect to
the Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common Stock.
If neither the Common Stock nor the Preferred Stock is publicly held
or so listed or admitted to trading or quoted, the Current Market
Price per share of the Preferred Stock shall mean the fair value per
share as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this
Agreement, the Current Market Price of one one-hundredth of a share of
Preferred Stock shall be equal to the Current Market Price of one
share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease in the Purchase Price of at least one
percent (1%); provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest ten-
thousandth of a share of Common Stock or other share or one-millionth of a
share of Preferred Stock, as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three (3) years from the
date of the transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock other than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the Purchase Price
thereof (or the number of Rights) shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
(b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one one-
hundredths of a share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a share of Preferred
Stock (calculated to the nearest one-millionth) obtained by (i) multiplying
(x) the number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of
any adjustment in the number of one one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-ten-thousandth of a Right) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Rights Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a share of Preferred
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per one one-hundredth of a share and the number of one one-hundredths
of a share which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the
number of one one-hundredths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall use all reasonable efforts to
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue, fully
paid and nonassessable, such number of one one-hundredths of a share of
Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence
of such event the issuance to the holder of any Right exercised after such
record date of the number of one one-hundredths of a share of Preferred
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of one one-hundredths
of a share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments in
the Purchase Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that in its good faith judgment the
Board shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price, (iii)
issuance wholly for cash of shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale or transfer, the
stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received
a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i)
declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common
Stock, or (iii) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date (or issued or delivered on or
after the Distribution Date pursuant to Section 22), shall be
proportionately adjusted so that the number of Rights thereafter associated
with each share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) if a Distribution Date has occurred, mail or cause the
Rights Agent to mail a brief summary thereof to each holder of a Rights
Certificate in accordance with Section 26 hereof. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, on or after the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person or Persons (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof),
and the Company shall not be the continuing or surviving corporation of
such consolidation or merger, (y) any Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other Person
or Persons or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole and
calculated on the basis of the Company's most recent regularly prepared
financial statements) to any Person or Persons (other than the Company or
any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case (except as
may be contemplated by Section 13(d) hereof), proper provision shall be
made so that: (i) each holder of a Right, except as provided in Section
7(e) hereof, shall, from and after the later of (A) the date of the first
occurrence of any such Section 13 Event or (B) the date of the expiration
of the period within which the Rights may be redeemed pursuant to Section
23 hereof (as the same may be amended), have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and issued,
fully paid, nonassessable and freely tradeable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims,
as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-hundredths of a share for which a
Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and (2) dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by
50% of the Current Market Price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (iv) such Principal Party shall
take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights; and (v) the provisions of Section
11(a)(ii) hereof shall be of no effect following the first occurrence of
any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted, changed or exchanged
in such merger or consolidation, or if no securities are so
issued, the Person that is the other party to such merger or
consolidation, or if the other party to the merger does not
survive the merger, the Person that does survive the merger
(including the Company, if it survives); and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal Party"
shall refer to such other Person; and (2) if the Common Stock of such
Person is not and has not been so registered and such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such Section 13
Event unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement confirming that the requirements of Section 13(a)
and Section 13(b) hereof shall promptly be performed in accordance with
their terms and further providing that, as soon as practicable after the
date of any such Section 13 Event, the Principal Party will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Expiration
Date; and
(ii) take all such other action as may be
necessary to enable the Principal Party to issue the securities
purchasable upon exercise of the Rights, including but not
limited to the registration or qualification of such securities
under all requisite securities laws of jurisdictions of the
various states and the listing of such securities on such
exchanges and trading markets as may be necessary or appropriate;
and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the
Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraph (x) or (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons, or a wholly owned subsidiary of any
such Person or Persons, who acquired shares of Common Stock pursuant to a
Qualifying Offer (as such term is defined in Section 11(a)(ii) hereof),
(ii) the price per share of Common Stock offered in such transaction is not
less than the price per share of Common Stock paid to all holders of shares
of Common Stock whose shares were purchased pursuant to such Qualifying
Offer and (iii) the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such transaction is the same
as the form of consideration paid pursuant to such Qualifying Offer. Upon
consummation of any such transaction contemplated by this Section 13(d),
all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(i)
and Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of any such fractional Rights, there
shall be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole Right. For purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price of the Rights for any
Trading Day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked
prices, regular way, 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 or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system or the
Nasdaq National Market with respect to securities listed on another
national securities exchange or quoted by the Nasdaq National Market,
respectively, or if the Rights are not listed or admitted to trading on any
national securities exchange or quoted by the Nasdaq National Market, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by The Nasdaq
Stock Market or such other quotation system then in use or, if on any such
date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Rights, selected by the Board. If on any such date
no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board shall be
used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may, at
the option of the Company, be evidenced by depositary receipts) upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share of Preferred Stock). In
lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-hundredth of a share of Preferred Stock, the Company
may pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market
value of one one-hundredth of a share of Preferred Stock shall be one one-
hundredth of the closing price of a share of Preferred Stock, or if
unavailable, the appropriate alternative price (in each case, as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one (1) share of
Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock shall be the closing price of one share of
Common Stock, or if unavailable, the appropriate alternative price (in each
case, as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of that Right
expressly waives such holder's right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, other than rights of action vested in the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date,
the registered holders of the Common Stock); and any registered holder of
any Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in such holder's own behalf and for such holder's own
benefit, 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 the Rights evidenced by such Rights
Certificate in the manner provided in such 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 shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common
Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required to
be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company must use its reasonable best efforts to
have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number of
one one-hundredths of a share of Preferred Stock or any other securities of
the Company which may at any time be issuable upon the exercise of the
Rights represented thereby, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) 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, reimbursement for its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
(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 good faith in connection with its administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, or any instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
reasonably believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.
Section 19. 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 shall be a party, or any
corporation succeeding to the corporate trust, stock transfer or other
shareholder services business of the Rights Agent or any successor Rights
Agent, shall 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, but only if such corporation would be
eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. If at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
(b) If at any time the name of the Rights Agent shall be
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.
Section 20. 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
shall 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 shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of Current Market Price) 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 the Chairman of the Board, the Vice
Chairman, the President, any Senior Executive, Executive or Senior Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate shall 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 shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or
in the Rights Certificates, nor shall it be required to verify the same
(except as to its countersignature on such Rights Certificates), but all
such statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11, Section 13 or Section 24
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
evidenced by Rights Certificates after receipt of a certificate describing
any such adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of
any shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock or Preferred Stock will, when so issued, be validly authorized and
issued, 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 the Chairman of the Board, the Vice Chairman, the President, any
Senior Executive, Executive or Senior Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions
of any such officer.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the 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 shall
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,
however, reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder (other than
internal costs incurred by the Rights Agent in providing services to the
Company in the ordinary course of its business as Rights Agent) or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock and Preferred
Stock, by registered or certified mail, and, if such resignation occurs
after the Distribution Date, to the registered holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon thirty (30) days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Stock and Preferred Stock, by
registered or certified mail, and, if such removal occurs after the
Distribution Date, to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of 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 a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate 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) a legal business
entity organized and doing business under the laws of the United States or
of any state of the United States, in good standing, which is authorized
under such laws to exercise corporate trust powers and is subject to
supervision or examination by a federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus
of at least $100,000,000 or (b) an Affiliate of a legal business entity
described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall 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 shall execute and deliver any further assurance, conveyance,
act or deed necessary for that purpose. Not later than the effective date
of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common
Stock and the Preferred Stock, and, if such appointment occurs after the
Distribution Date, mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided
for in this Section 21, 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.
Section 22. 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 the Board to reflect
any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date and prior to the redemption
or expiration of the Rights, the Company (a) shall, with respect to shares
of Common Stock so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, granted or awarded as of the
Distribution Date, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights Certificate
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 the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the close of business on the twentieth day following the
Stock Acquisition Date (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the close of business on the twentieth
day following the Record Date), or (ii) the Final Expiration Date, direct
the Company to, and if directed, the Company shall, redeem all but not less
than all of the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price, as defined in Section 11(d)(i) hereof, of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board.
(b) Immediately upon the action of the Board directing the
Company to make the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the
Board directing the Company to make the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to each such
holder at such holder's last address as it appears upon the registry books
of the Rights Agent, or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
(c) Notwithstanding the provisions of Section 23(a) hereof,
in the event that either (i) a majority of the Board is elected by
stockholder action by written consent (including where such election occurs
pursuant to more than one consent solicitation or stockholder action by
written consent), or (ii) a majority of the Board is comprised of persons
elected at a meeting or meetings of stockholders which persons were not
nominated by the Board in office immediately prior to such meeting or, if
more than one meeting, each of such meetings, then for a period of one
hundred and eighty (180) days following the effectiveness of such election
the Rights shall not be redeemable under any circumstances.
(d) Notwithstanding the provisions of Section 23(a) hereof,
if the Board authorizes a redemption of the Rights at any time following
the expiration of the one-hundred-and-eighty-day period under Section 23(c)
above, then there must be at least one Continuing Director in office at the
time of such authorization and such authorization shall require the
concurrence of a majority of the Continuing Directors then in office.
Section 24. Exchange.
(a) The Board may, at its option, at any time after the
first occurrence of a Section 11(a)(ii) Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof)
for Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio"); provided, however,
that if the Board authorizes such exchange of the Rights at any time on or
after the earliest of (x) the time that any Person becomes an Acquiring
Person or (y) the first occurrence of either of the circumstances described
in clauses (i) and (ii) of Section 23(c) hereof, there must be at least one
Continuing Director then in office and such authorization shall require the
approval of a majority of the Continuing Directors then in office.
Notwithstanding the foregoing, the Board shall not be empowered to effect
such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common
Stock then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent
Preferred Stock, as such term is defined in paragraph (b) of Section 11
hereof) for Common Stock exchangeable for Rights, at the initial rate of
one one-hundredth of a share of Preferred Stock (or Equivalent Preferred
Stock) for each share of Common Stock, as appropriately adjusted to reflect
stock splits, stock dividends and other similar transactions after the date
hereof.
(d) In the event that the number of shares of Common Stock
which are authorized by the Company's Restated Certificate of Incorporation
but which are not outstanding or reserved for issuance for purposes other
then upon exercise of the Rights is not sufficient to permit any exchange
of Rights as contemplated in accordance with this Section 24, the Board
shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole share of Common Stock. For the
purposes of this subsection (e), the current market value of a whole share
of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after
the Distribution Date, (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other distribution
to the holders of Preferred Stock (other than a regular periodic cash
dividend out of earnings or retained earnings of the Company), or (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe for
or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options, or (iii) to effect
any reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision or split of outstanding shares of Preferred
Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one transaction or a series of related transactions,
of 50% or more of the assets or earning power of the Company and/or its
Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o) hereof), or (v) 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 Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if
any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Preferred Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references
in the preceding paragraph to Preferred Stock shall be deemed thereafter to
refer to Common Stock and/or, if appropriate, other securities.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent by the Company) as
follows:
Northern Trust Corporation
50 South LaSalle Street
Chicago, Illinois 60675
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing by the Rights Agent with the Company) as
follows:
Norwest Bank Minnesota, N.A.
Shareowner Services
161 North Concord Exchange Street
South St. Paul, Minnesota 55075-1138
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights
Certificate (or, if prior to the Distribution Date, to the holder of any
certificate representing shares of Common Stock) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry books of
the Company.
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, and subject to the
penultimate sentence of this Section 27(a) and the provisions of Sections
27(b) and 27(c) hereof, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including, without limitation, any extension of the period in which the
Rights may be redeemed, any increase in the Purchase Price and any
extension of the Final Maturity Date) without the approval of any holders
of certificates representing shares of Common Stock. From and after the
Distribution Date, and subject to the penultimate sentence of this Section
27(a) and the provisions of Sections 27(b) and 27(c) hereof, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed, or to modify the
ability (or inability) of the Board (with, where required, the concurrence
of a majority of the Continuing Directors) to redeem the Rights, in either
case at such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders
of Rights (other than an Acquiring Person or any Affiliate or Associate of
an Acquiring Person). Notwithstanding anything contained in this Agreement
to the contrary, no supplement or amendment shall be made which changes the
Redemption Price or the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
(b) Notwithstanding anything contained in this Agreement to
the contrary, for a period of one hundred and eighty (180) days following
the first occurrence of either of the circumstances described in clause (i)
and clause (ii) of Section 23(c) hereof, no supplement or amendment shall
be made to this Agreement under any circumstances.
(c) Notwithstanding anything contained in this Agreement to
the contrary, at any time following the expiration of the one-hundred-and-
eighty-day period under Section 27(b) above, this Agreement may be amended
or supplemented only if there is at least one Continuing Director then in
office and only if a majority of the Continuing Directors then in office
concurs with such amendment or supplement.
(d) Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights
Agent shall execute such supplement or amendment.
Section 28. 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.
Section 29. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board (with,
where specifically provided for herein, the concurrence of the Continuing
Directors) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board (with, where specifically provided for herein, the concurrence of the
Continuing Directors) 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 administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend 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 (with, where specifically provided for
herein, the concurrence of the Continuing Directors) 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,
any of the directors on the Board or the Continuing Directors to any
liability to the holders of the Rights.
Section 30. 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 registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock) 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 registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth
in Section 23 hereof shall be reinstated and shall not expire until the
close of business on the fifteenth day following the date of such
determination by the Board. Without limiting the foregoing, if any
provision of this Agreement requiring that a determination be made by, or
with the concurrence of, less than the entire Board is held by any court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board in
accordance with applicable law and the Company's Restated Certificate of
Incorporation and By-laws.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such
State.
Section 33. 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.
Section 34. Descriptive Headings. Descriptive headings of the
several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and attested as of the day and year first above
written.
Attest: NORTHERN TRUST CORPORATION
By /s/ Rose A. Ellis By /s/ Perry R. Pero
--------------------------- -------------------------------
Name: Rose A. Ellis Name: Perry R. Pero
Title: Secretary Title: Senior Executive Vice
President
Attest: NORWEST BANK MINNESOTA, N.A.
By /s/ Barbara M. Novak By /s/ Susan J. Roeder
-------------------------- -------------------------------
Name: Barbara M. Novak Name: Susan J. Roeder
Title: Assistant Secretary Title: Assistant Vice President
Exhibit A
AMENDED AND RESTATED CERTIFICATE OF DESIGNATIONS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
NORTHERN TRUST CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, the undersigned officers of Northern Trust Corporation, a
corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
FIRST: That the Corporation filed a Certificate of Designations
on November 6, 1989 creating a series of 350,000 shares of preferred stock
designated as "Series A Junior Participating Preferred Stock."
SECOND: That pursuant to the authority conferred upon the Board
of Directors by the Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on July 21, 1998, adopted a
resolution amending and restating the Certificate of Designations of the
Series A Junior Participating Preferred Stock in its entirety as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series
A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 1,500,000. Such number of shares may be increased
or decreased by resolution of the Board; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior
to the Series A Preferred Stock with respect to dividends, the holders of
shares of Series A Preferred Stock, in preference to the holders of Common
Stock, par value $1.66-2/3 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of
(a) $21.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and
100 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time after July 21, 1998 (the "Rights Dividends
Declaration Date") declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$21.00 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the stockholders
of the Corporation. In the event the Corporation shall at any time after
the Rights Dividend Declaration Date (i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, in any Certificate of
Designations creating a series of Preferred Stock or any similar stock, or
by law, the holders of shares of Series A Preferred Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series A
Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A Preferred
Stock, except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set
forth in this Restated Certificate of Incorporation or in any Certificate
of Designations creating a series of Preferred Stock or any similar stock
or as otherwise required by law.
6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding
up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have
received an amount equal to $100 per share of Series A Preferred Stock,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series
A Liquidation Preference"). Following the payment of the full amount of
the Series A Liquidation Preference, no additional distributions shall be
made to the holders of shares of Series A Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an
amount per share (the "Common Adjustment") equal to the quotient obtained
by dividing (i) the Series A Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in subparagraph (C) below to reflect
such events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Preferred Stock and Common Stock,
respectively, holders of Series A Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to
1 with respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such remaining assets shall
be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Dividend Declaration Date declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the Adjustment Number in effect immediately prior to
such event shall be adjusted by multiplying such Adjustment Number by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination 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 Series A Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any time after
the Rights Dividend Declaration Date declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
9. Rank. The Series A Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock, unless the
terms of any such series shall provide otherwise.
10. Amendment. This Restated Certificate of Incorporation shall
not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred Stock so as
to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
11. Fractional Shares. Series A Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all
other rights of holders of Series A Preferred Stock.
THIRD: That none of the shares of the Corporation's Series A
Junior Participating Preferred Stock have been issued as of the date set
forth below.
FOURTH: That said Amended and Restated Certificate of
Designations has been duly adopted in accordance with the provisions of
Section 151 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the penalties of
perjury this day of , 199[ ].
_____________________________________
Chairman of the Board
Attest:
___________________________
Secretary
Exhibit B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER OCTOBER 31, 2009, SUBJECT TO EARLIER REDEMPTION OR
EXPIRATION PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
ANY SUCH PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A
PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE
OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]1
____________________________
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Rights Certificate
NORTHERN TRUST CORPORATION
This certifies that , or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of July 21, 1998_(as amended,
restated, renewed or extended from time to time, the "Rights Agreement"),
between Northern Trust Corporation, a Delaware corporation (the "Company"),
and Norwest Bank Minnesota, N.A., a national banking corporation (the
"Rights Agent"), to purchase from the Company at any time prior to 5:00
P.M. (Chicago, Illinois time) on October 31, 2009 at the office or offices
of the Rights Agent, or its successors as Rights Agent, designated for such
purpose, one one-hundredth of a fully paid, non-assessable share of Series
A Junior Participating Preferred Stock of the Company (the "Preferred
Stock"), at a purchase price of $330.00 per one one-hundredth of a share
(the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate
duly completed and executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of July 21, 1998, based on the Preferred Stock
as constituted at such date. The Company reserves the right to require
prior to the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement) that a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
As more fully set forth in the Rights Agreement, from and after
the first occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of such Acquiring Person
(or of any such Affiliate or Associate) who becomes a transferee prior to
or concurrently with such Acquiring Person becoming such, such Rights shall
become null and void without any further action, and no holder hereof shall
have any right with respect to such Rights from and after the occurrence of
such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Preferred Stock or other securities which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and
are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-
hundredths of a share of Preferred Stock as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.01 per Right at any time prior to the earlier of
(i) the close of business on the twentieth day following the Stock
Acquisition Date, and (ii) the Final Expiration Date. The foregoing
notwithstanding, the Rights generally may not be redeemed for one hundred
eighty (180) days following a change in a majority of the Board as a result
of a proxy contest, and thereafter, the decision to redeem shall require
the concurrence of a majority of the Continuing Directors. In addition,
under certain circumstances following the Stock Acquisition Date, the
Rights may be exchanged, in whole or in part, for shares of the Common
Stock, or shares of preferred stock of the Company having essentially the
same value or economic rights as such shares. Immediately upon the action
of the Board of Directors of the Company authorizing any such exchange, and
without any further action or any notice, the Rights (other than Rights
which are not subject to such exchange) will terminate and the Rights will
only enable holders to receive the shares issuable upon such exchange.
If the Company so determines, no fractional shares of Preferred
Stock will be issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof, a cash
payment will be made, as provided in the Rights Agreement. The Company, at
its election, may require that a number of Rights be exercised so that only
whole shares of Preferred Stock would be issued.
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
shares of Preferred Stock or of any other securities of the Company which
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give consent to or
withhold consent from any corporate action, or, to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of _________ __, ____
ATTEST: NORTHERN TRUST CORPORATION
________________________ By_________________________________
Secretary Title:
Countersigned:
NORWEST BANK MINNESOTA, N.A.
By______________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _________________________________________
hereby sells, assigns and transfers unto __________________________________
___________________________________________________________________________
(Please print name and address of transferee)
___________________________________________________________________________
this Rights Certificate, together with all right, title and interest
herein, and does hereby 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
Signature Medallion Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _______________, _____ _______________________________________
Signature
Signature Medallion Guaranteed:
NOTICE
The signature(s) to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To NORTHERN TRUST CORPORATION:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person which may be issuable or
such other assets which may be deliverable upon the exercise of the Rights)
and requests that certificates for any such shares or securities be issued
in the name of and delivered to:
____________________________________________________________________________
(Please print name and address)
____________________________________________________________________________
____________________________________________________________________________
Please insert social security
or other identifying 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:
____________________________________________________________________________
(Please print name and address)
____________________________________________________________________________
____________________________________________________________________________
Please insert social security
or other identifying number:
Dated: _______________, _____
_____________________________________________
Signature
Signature Medallion Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________, _____ ________________________________________
Signature
Signature Medallion Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.