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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
THE SAFETY FUND CORPORATION
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(Exact name of registrant as specified in its charter)
Massachusetts 04-2532311
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(State of incorporation or organization) (IRS Employer Identification No.)
470 Main Street, Fitchburg, Massachusetts 01420
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on
to be so registered which each class is to be registered
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None.
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Series A
Participating Cumulative Preferred Stock
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(Title of Class)
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Item 1. Description of Securities to be Registered.
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On January 5, 1996, the Board of Directors of The Safety Fund
Corporation (the "Company") distributed one Right for each outstanding share of
the Company's Common Stock, par value $5.00 per share (the "Common Stock"). The
Rights will be issued to the holders of record of Common Stock outstanding on
January 5, 1996, and with respect to Common Stock issued thereafter until the
Distribution Date (as defined below) and, in certain circumstances, with respect
to Common Stock issued after the Distribution Date. Each Right, when it becomes
exercisable as described below, will entitle the registered holder to purchase
from the Company one one-thousandth (1/1000th) of a share of Series A
Participating Cumulative Preferred Stock, par value $10.00 per share, of the
Company (the "Preferred Shares") at a price of $65 (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement dated as
of January 5, 1996 (the "Rights Agreement"), between the Company and Fleet
National Bank of Massachusetts, as Rights Agent (the "Rights Agent").
Until the earlier of (i) such time as the Company learns that a person
or group (including any affiliate or associate of such person or group) has
acquired, or has obtained the right to acquire, Beneficial Ownership (as defined
below) of an amount equal to or greater than such person's or group's Ownership
Threshold (as defined below) of the outstanding Capital Shares (as defined
below) (such person or group being an "Acquiring Person"), and (ii) such date,
if any, as may be designated by the Board of Directors of the Company following
the commencement of, or first public disclosure of an intent to commence, a
tender or exchange offer for outstanding Capital Shares which could result in
such person or group becoming the Beneficial Owner of an amount equal to or
greater than such person's or group's Ownership Threshold of the outstanding
Capital Shares (the earlier of such dates being called the "Distribution Date"),
the Rights will be evidenced by the certificates for Capital Shares registered
in the names of the holders thereof (which certificates shall also be deemed to
be Right Certificates, as defined below) and not by separate Right Certificates.
Therefore, until the Distribution Date, the Rights will be transferred with and
only with the Capital Shares.
"Beneficial Ownership", when used with reference to the ownership of
securities, means (i) securities which a person, or any of such person's
associates and affiliates, is deemed to "beneficially own" under Securities and
Exchange Commission Rule 13d-3, (ii) securities which a person, or any of such
person's associates and affiliates, has the right to acquire or the right to
vote pursuant to any agreement, arrangement or understanding (whether written or
oral) and (iii) securities Beneficially Owned by any person with which such
person, or any of such person's associates and affiliates, has any agreement,
arrangement or understanding (whether written or oral), or is acting in concert
or with conscious parallel behavior, for the purpose of acquiring, holding,
voting or disposing of any
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securities of the company. In the case of clause (iii), the Safety Fund Board
of Directors may attribute Beneficial Ownership of securities to any person if
the Safety Fund Board determines in good faith that such an agreement,
arrangement or understanding exists or that such actions in concert or with
conscious parallel behavior have occurred. A person will not be deemed to
Beneficially Own any Capital Shares solely by virtue of the receipt by such
person of a revocable proxy or consent given to such person pursuant to a
definitive proxy statement filed with the Securities and Exchange Commission and
otherwise in accordance with the rules and regulations under the Securities
Exchange Act of 1934.
"Capital Shares", when used with reference to the Company prior to a
business combination, shall mean the shares of Common Stock or any other shares
of capital stock of the Company into which the Common Stock shall be
reclassified or changed.
"Ownership Threshold" means, with respect to any person, the
Beneficial Ownership of the greater of (i) 15% of the Capital Shares at any time
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outstanding or (ii) the percentage of the aggregate of the outstanding Capital
Shares Beneficially Owned by such person on the date the Rights Plan is
implemented, plus in the case of this clause (ii) 1% of the Capital Shares
outstanding on such date.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Capital Shares as of the close of business on the
Distribution Date (and to each initial record holder of certain Common Stock
originally issued after the Distribution Date), and such separate Right
Certificates alone will thereafter evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire on January 5, 2006 (the "Expiration Date") unless earlier redeemed by the
Company as described below.
The number of Preferred Shares or other securities issuable upon
exercise of a Right, the Purchase Price, the Redemption Price (as defined below)
and the number of Rights associated with each outstanding Capital Share are all
subject to adjustment by the Board of Directors of the Company in the event of
any change in the Capital Shares or the Preferred Shares, whether by reason of
stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Capital Shares or Preferred Shares, as the
case may be (other than distribution of the Rights or regular quarterly cash
dividends) or otherwise.
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The Preferred Shares are authorized to be issued in fractions which
are an integral multiple of one one-thousandth (1/1000th) of a Preferred Share.
The Company may, but is not required to, issue fractions of shares upon the
exercise of Rights, and, in lieu of fractional shares, the Company may issue
certificates or utilize a depository arrangement as provided by the terms of the
Preferred Shares and, in the case of fractions other than one one-thousandth
(1/1000th) of a Preferred Share or integral multiples thereof, may make a cash
payment based on the market price of such shares.
At such time as there is an Acquiring Person, the Rights will entitle
each holder (other than such Acquiring Person (or any affiliate or associate of
such Acquiring Person)) of a Right to purchase, for the Purchase Price, that
number of one one-thousandths (1/1000ths) of a Preferred Share equivalent to the
number of Capital Shares which at the time of such event would have a market
value of twice the Purchase Price.
In the event the Company is acquired in a merger or other business
combination by an Acquiring Person or an associate or affiliate of an Acquiring
Person that is a publicly traded corporation or 50% or more of the Company's
assets or assets representing 50% or more of the Company's revenues or cash flow
are sold, leased, exchanged or otherwise transferred (in one or more
transactions) to an Acquiring Person or an associate or affiliate of an
Acquiring Person that is a publicly traded corporation, each Right will entitle
its holder (subject to the next paragraph) to purchase, for the Purchase Price,
that number of common shares of such corporation which at the time of the
transaction would have a market value of twice the Purchase Price. In the event
the Company is acquired in a merger or other business combination by an
Acquiring Person or an associate or affiliate of an Acquiring Person that is not
a publicly traded entity or 50% or more of the Company's assets or assets
representing 50% or more of the Company's revenues or cash flow are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to an
Acquiring Person or an associate or affiliate of an Acquiring Person that is not
a publicly traded entity, each Right will entitle its holder (subject to the
next paragraph) to purchase, for the Purchase Price, at such holder's option,
(i) that number of shares of the surviving corporation in the transaction with
such entity (which surviving corporation could be the Company) which at the time
of the transaction would have a book value of twice the Purchase Price, (ii)
that number of shares of such entity which at the time of the transaction would
have a book value of twice the Purchase Price or (iii) if such entity has an
affiliate which has publicly traded common shares, that number of common shares
of such affiliate which at the time of the transaction would have a market value
of twice the Purchase Price.
Any Rights that are at any time Beneficially Owned by an Acquiring
Person (or any affiliate or associate of an Acquiring Person) will be null and
void and nontransferable and any holder of any such Right (including any
purported transferee or subsequent holder) will be unable to exercise or
transfer any such Right.
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At any time after a person or a group becomes an Acquiring Person, the
Board of Directors of the Company may exchange all or part of the then
outstanding Rights (other than Rights that have become null and void and
nontransferable as described above) for consideration per Right consisting of
one-half of the securities that otherwise would have been issuable to the holder
of each Right upon exercise thereof. The Board of Directors of the Company may
also issue, in substitution for Preferred Shares, Common Stock having an
equivalent market value to the Preferred Shares if, at such time, the Company
has a sufficient number of Common Stock issued but not outstanding or authorized
but unissued.
At any time prior to the earlier of (i) such time as a person becomes
an Acquiring Person and (ii) the Expiration Date, the Board of Directors of the
Company may redeem the Rights in whole, but not in part, at a price (in cash or
Common Stock or other securities of the Company deemed by the Board of Directors
to be at least equivalent in value) of $.01 per Right, subject to adjustment as
provided in the Rights Agreement (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
At any time prior to the Distribution Date, the Company may, without
the approval of any holder of the Rights, supplement or amend any provision of
the Rights Agreement (including the date on which the Distribution Date shall
occur, the time during which the Rights may be redeemed or the terms of the
Preferred Shares), except that no supplement or amendment shall be made which
reduces the Redemption Price (other than pursuant to certain adjustments
therein) or provides for an earlier Expiration Date.
The Rights have certain antitakeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on substantially all the Rights being acquired.
The Rights will not interfere with any merger or other business combination
pursuant to certain all-cash tender offers for all outstanding Capital Shares or
with a third party approved by the Board of Directors of the Company since the
Board of Directors of the Company may, at its option, at any time prior to any
person becoming an Acquiring Person, redeem all but not less than all of the
then outstanding Rights at the Redemption Price.
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The Rights Agreement specifying the terms of the Rights, the
Certificate of Vote of Directors Establishing a Series of Class of Stock of the
Preferred Shares specifying the terms of the Preferred Shares (Exhibit A to the
Rights Agreement) and the form of Right Certificate (Exhibit B to the Rights
Agreement) are filed herewith as exhibits. The foregoing description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to such exhibits, which are incorporated herein by reference.
Item 2. Exhibits.
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1. Rights Agreement dated as of January 5, 1996, between The Safety Fund
Corporation and Fleet National Bank of Massachusetts, as Rights Agent.
2. Form of Certificate of the Vote of Directors Establishing a Series of
a Class of Shares (which is attached as Exhibit A to the Rights
Agreement filed as Exhibit 1 hereto).
3. Form of Right Certificate (which is attached as Exhibit B to the
Rights Agreement filed as Exhibit 1 hereto).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
THE SAFETY FUND CORPORATION
Dated: January 12, 1996 By:/s/ Christopher W.Bramley
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Christopher W. Bramley
President and Chief Executive Officer
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EXHIBIT 1
RIGHTS AGREEMENT
Dated as of January 5, 1996
between
THE SAFETY FUND CORPORATION
and
FLEET NATIONAL BANK OF MASSACHUSETTS
as Rights Agent
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TABLE OF CONTENTS
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SECTION PAGE
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Section 1. CERTAIN DEFINITIONS........................................................... 1
Section 2. APPOINTMENT OF RIGHTS AGENT.................................................. 7
Section 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES....................................... 7
Section 4. FORM OF RIGHT CERTIFICATES................................................... 8
Section 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION................................. 9
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES; UNCERTIFICATED
RIGHTS........................................................................... 9
Section 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS................................. 10
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES............................ 12
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.............................. 12
Section 10. PREFERRED SHARES RECORD DATE................................................ 13
Section 11. ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING PERSON; EXCHANGE
OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS...................................... 14
Section 12. CERTAIN ADJUSTMENTS......................................................... 18
Section 13. CERTIFICATE OF ADJUSTMENT................................................... 19
Section 14. ADDITIONAL COVENANTS........................................................ 19
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES..................................... 19
Section 16. RIGHTS OF ACTION............................................................ 20
Section 17. TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT CERTIFICATES..................... 21
Section 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER........................... 21
Section 19. CONCERNING THE RIGHTS AGENT................................................. 21
Section 20. MERGER OR CONSOLIDATION OR CHANGE OF RIGHTS AGENT........................... 21
</TABLE>
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Section 21. DUTIES OF RIGHTS AGENT...................................................... 22
Section 22. CHANGE OF RIGHTS AGENT...................................................... 24
Section 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES........................ 25
Section 24. REDEMPTION AND TERMINATION.................................................. 25
Section 25. NOTICES..................................................................... 26
Section 26. SUPPLEMENTS AND AMENDMENTS.................................................. 26
Section 27. SUCCESSORS.................................................................. 27
Section 28. BENEFITS OF RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS BY THE
BOARD OF DIRECTORS, ETC.......................................................... 27
Section 29. SEVERABILITY................................................................ 28
Section 30. GOVERNING LAW............................................................... 28
Section 31. COUNTERPARTS; EFFECTIVENESS................................................. 28
Section 32. DESCRIPTIVE HEADINGS........................................................ 28
</TABLE>
EXHIBITS
A Certificate of Designation
B Form of Right Certificate
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This RIGHTS AGREEMENT, dated as of January 5, 1996, is made between
THE SAFETY FUND CORPORATION, a Massachusetts corporation (the "Company"), and
Fleet National Bank of Massachusetts, a national banking association, as Rights
Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
distribution of one Right (as hereinafter defined) for each share of Common
Stock, $5.00 par value, of the Company (the "Common Stock") outstanding at the
Close of Business (as hereinafter defined) on January 5, 1996 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of this Rights Agreement) with
respect to each share of Common Stock that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date or
the Expiration Date (as such terms are hereinafter defined); PROVIDED, HOWEVER,
that Rights may be issued with respect to shares of Common Stock that shall
become outstanding after the Distribution Date and prior to the earlier of the
Redemption Date or the Expiration Date in accordance with the provisions of
Section 23. Each Right shall initially represent the right to purchase one one-
thousandth (1/1000th) of a share of Series A Participating Cumulative Preferred
Stock, par value $10.00 per share, of the Company (the "Preferred Shares"),
having the powers, rights and preferences set forth in the Certificate of
Designation attached as Exhibit A.
Accordingly, 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 Rights
Agreement, the following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of the Capital Shares then outstanding that equals or exceeds
such Person's Ownership Threshold, but shall not include (a) the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any of
its Subsidiaries, or any Person holding Capital Shares for or pursuant to the
terms of any such employee benefit plan or (b) any such Person who has become
such a Beneficial Owner solely because (i) of a change in the aggregate number
of Capital Shares outstanding since the last date on which such Person acquired
Beneficial Ownership of any Capital Shares or (ii) it acquired such Beneficial
Ownership in the good faith belief that such acquisition would not cause such
Beneficial Ownership to exceed such Person's Ownership Threshold and such Person
relied in good faith in computing the percentage of its Beneficial Ownership on
publicly filed reports or documents of the Company which are inaccurate or out-
of-date. Notwithstanding clause (b) of the prior sentence, if any Person that
is not an Acquiring Person due to such clause (b) does not reduce its percentage
of Beneficial Ownership of Capital Shares to an amount less than such Person's
Ownership Threshold by the Close of Business on the fifth Business Day after
notice from the Company (the date of notice being the first day) that such
Person's Beneficial Ownership of Capital Shares so exceeds such Person's
Ownership Threshold, such Person shall, at the end of such five Business Day
period, become an Acquiring Person (and such
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clause (b) shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company.
"AFFILIATE" and "ASSOCIATE", when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
of this Rights Agreement.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be
deemed to "BENEFICIALLY OWN", and shall be deemed to have "BENEFICIAL OWNERSHIP"
of, any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule 13d-3
of the General Rules and Regulations under the Exchange Act, as in effect
on the date of this Rights Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time or the occurrence of events)
pursuant to any agreement, arrangement or understanding (written or oral),
or upon the exercise of conversion rights, exchange rights, rights (other
than the Rights), warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, or to have Beneficial Ownership of, 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 thereunder, or (B) the
right to vote pursuant to any agreement, arrangement or understanding
(written or oral); PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if (1) the
agreement, arrangement or understanding (written or oral) to vote such
security arises solely from a revocable proxy or consent given to such
Person pursuant to a definitive proxy statement filed with the Securities
and Exchange Commission and otherwise in accordance with, the applicable
rules and regulations under the Exchange Act and (2) the beneficial
ownership of such security is not also then reportable 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 with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (written or
oral), or is acting in concert or with conscious parallel behavior, for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy
as described in clause (ii)(B) of this definition) or disposing of any
securities of the Company. Attribution of a Person's Beneficial Ownership
of securities to any other Person pursuant to this clause (iii) shall be
deemed to occur (i) automatically if the existence of an agreement,
arrangement or understanding (written or oral), or actions in concert or
with conscious parallel behavior, of the type described in this clause
(iii) has been disclosed to the Securities and Exchange Commission on a
Schedule 13D or Schedule 13G under the Exchange
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Act (or any successor schedule thereto) or (ii) if the Board of Directors
of the Company determines in good faith that such an agreement, arrangement
or understanding exists or that such actions in concert or with conscious
parallel behavior have occurred.
Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own", any securities acquired in
a bona fide firm commitment underwriting pursuant to an underwriting agreement
with the Company.
"BOOK VALUE", when used with reference to Capital Shares issued by any
Person, shall mean the amount of equity of such Person applicable to each
Capital Share, determined (i) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (ii) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (iii) after giving
effect to (A) the exercise of all rights, options and warrants to purchase such
Capital Shares (other than the Rights), and the conversion of all securities
convertible into such Capital Shares, at an exercise or conversion price, per
Capital Share, which is less than such Book Value before giving effect to such
exercise or conversion (whether or not exercisability or convertibility is
conditioned upon occurrence of a future event), (B) all dividends and other
distributions on the capital stock of such Person declared prior to the date as
of which such Book Value is to be determined and to be paid or made after such
date, and (C) any other agreement, arrangement or understanding (written or
oral), or transaction or other action prior to the date as of which such Book
Value is to be determined which would have the effect of thereafter reducing
such Book Value.
"BUSINESS COMBINATION" shall have the meaning set forth in Section
11(c)(I).
"BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in Boston,
Massachusetts or the city in which the principal office of the Rights Agent is
located, are authorized or obligated by law or executive order to close.
"CAPITAL SHARES", when used with reference to the Company prior to a
Business Combination, shall mean the shares of Common Stock or any other shares
of capital stock of the Company into which the Common Stock shall be
reclassified or changed. "Capital Shares", when used with reference to any
Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such class or series is subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which
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the foregoing shall be reclassified or changed; PROVIDED, HOWEVER, that, if at
any time there shall be more than one such class or series of capital stock or
equity interests of such Person, "Capital Shares" of such Person shall include
all such classes and series substantially in the proportion of the total number
of shares or other units of each such class or series outstanding at such time.
"CERTIFICATE OF DESIGNATION" shall mean the Certificate of Vote of
Directors Establishing a Series of a Class of Stock setting forth the powers,
preferences, rights, qualifications, limitations and restrictions of such series
of Preferred Stock of the Company, a copy of which is attached as Exhibit A.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m., Boston
time, on such date; PROVIDED, HOWEVER, that, if such date is not a Business Day,
"Close of Business" shall mean 5:00 p.m., Boston, Massachusetts time, on the
next succeeding Business Day.
"COMMON STOCK" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"COMPANY" shall have the meaning set forth in the heading of this
Rights Agreement; PROVIDED, HOWEVER, that if there is a Business Combination,
"Company" shall have the meaning set forth in Section 11(c)(III).
The term "CONTROL" with respect to any Person shall mean the power to
direct the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"DISTRIBUTION DATE" shall have the meaning set forth in Section 3(b).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
"EXCHANGE CONSIDERATION" shall have the meaning set forth in Section
11(b)(I).
"EXPIRATION DATE" shall have the meaning set forth in Section 7(a).
"MAJOR PART", when used with reference to the assets of the Company
and its Subsidiaries as of any date, shall mean assets (i) having a fair market
value aggregating 50% or more of the total fair market value of all the assets
of the Company and its Subsidiaries (taken as a whole) as of the date in
question, (ii) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company and its
Subsidiaries (taken as a whole) as would be shown on a consolidated or combined
balance sheet of the Company and its Subsidiaries as of the date in question,
prepared in accordance with generally accepted accounting principles then in
effect, or (iii) accounting for 50% or
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more of the total amount of earnings before interest, taxes, depreciation and
amortization or revenues of the Company and its Subsidiaries (taken as a whole)
as would be shown on, or derived from, a consolidated or combined statement of
income of the Company and its Subsidiaries for the period of 12 months ending on
the last day of the Company's monthly accounting period next preceding the date
in question, prepared in accordance with generally accepted accounting
principles then in effect.
"MARKET VALUE", when used with reference to any class of Capital
Shares on any date, shall be deemed to be the average of the daily closing
prices, per share, of any such class for the period which is the shorter of (1)
30 consecutive Trading Days immediately prior to the date in question or (2) the
number of consecutive Trading Days beginning on the Trading Day immediately
after the date of the first public announcement of a Business Combination with
an Acquiring Person or Affiliate or Associate of an Acquiring Person requiring a
determination of the Market Value and ending on the Trading Day immediately
prior to the record date of such Business Combination; PROVIDED, HOWEVER, that,
in the event that the Market Value of such class of Capital Shares is to be
determined in whole or in part during a period following the announcement by the
issuer of such class of Capital Shares of any action of the type described in
Section 12(a) that would require an adjustment thereunder, then, and in each
such case, the Market Value of such class shall be appropriately adjusted to
reflect the effect of such action on the market price of such class. The
closing price for each Trading Day shall be the closing price quoted on the
composite tape for securities listed on the New York Stock Exchange, or, if such
securities are not quoted on such composite tape or if such securities are not
listed on such exchange, on the principal United States securities exchange
registered under the Exchange Act (or any recognized foreign stock exchange) on
which such securities are listed, or, if such securities are not listed on any
such exchange, 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 with respect to a
share of such securities as reported by the National Association of Securities
Dealers, Inc. Automated Quotations System ("NASDAQ") or such other system then
in use, or if no such quotations are available, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
such securities selected by the Board of Directors of the Company. If on any
such Trading Day no market maker is making a market in such securities for any
reason, the closing price of such securities on such Trading Day shall be deemed
to be the fair value of such securities as determined in good faith by the Board
of Directors of the Company (whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent,
the holders of Rights and all other Persons); PROVIDED, HOWEVER, that for the
purpose of determining the closing price of the Preferred Shares for any Trading
Day on which there is no such market maker for the Preferred Shares the closing
price on such Trading Day shall be deemed to be the Formula Number (as defined
in the Certificate of Designation) times the closing price of the Common Stock
of the Company on such Trading Day.
"OWNERSHIP THRESHOLD" shall mean, with respect to any Person,
Beneficial Ownership of the GREATER of (A) 15% of the Capital Shares at any time
outstanding or (B) the percentage of the outstanding Capital Shares Beneficially
Owned by such Person on the date of this Agreement, plus in the case of this
clause (B) 1% of the Capital Shares outstanding on such date.
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"PERSON" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
"PREFERRED SHARES" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
"PREFERRED STOCK" shall mean the Preferred Stock, par value $10.00 per
share, of the Company.
"PRINCIPAL PARTY" shall mean the Surviving Person in a Business
Combination; PROVIDED, HOWEVER, that, if such Surviving Person is a direct or
indirect Subsidiary of any other Person, "Principal Party" shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a
Subsidiary of another Person. In the event ultimate control of such Surviving
Person is shared by two or more Persons, "Principal Party" shall mean that
Person that is immediately controlled by such two or more Persons.
"PURCHASE PRICE" with respect to each Right shall mean $65, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references herein
to the Purchase Price shall mean the Purchase Price as in effect at the time in
question.
"RECORD DATE" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"REDEMPTION DATE" shall have the meaning set forth in Section 24(a).
"REDEMPTION PRICE" with respect to each Right shall mean $.01, as such
amount may from time to time be adjusted in accordance with Section 12. All
references herein to the Redemption Price shall mean the Redemption Price as in
effect at the time in question.
"REGISTERED CAPITAL SHARES" shall mean Capital Shares which are, as of
the date of consummation of a Business Combination, and have continuously been
for the 12 months immediately preceding such date, registered under Section 12
of the Exchange Act.
"RIGHT CERTIFICATE" shall mean a certificate evidencing a Right in
substantially the form attached as Exhibit B.
"RIGHTS" shall mean the rights to purchase Preferred Shares (or other
securities) as provided in this Rights Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as in effect
on the date in question, unless otherwise specifically provided.
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"SUBSIDIARY" shall mean a Person, at least a majority of the total
outstanding voting power (being the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in the election of directors
of such Person (if such Person is a corporation) or to participate in the
management and control of such Person (if such Person is not a corporation)) of
which is owned, directly or indirectly, by another Person or by one or more
other Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.
"SURVIVING PERSON" shall mean (1) the Person which is the continuing
or surviving Person in a consolidation or merger specified in Section
11(c)(I)(i) or 11(c)(I)(ii) or (2) the Person to which the Major Part of the
assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction specified in Section
11(c)(I)(iii); PROVIDED, HOWEVER, that, if the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in one or more related transactions specified in Section
11(c)(I)(iii) to more than one Person, the "Surviving Person" in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.
"TRADING DAY" when used with reference to the Market Value of a
security, shall mean a day on which the principal national securities exchange
(or principal recognized foreign stock exchange, as the case may be) on which
such securities are listed or admitted to trading is open for the transaction of
business or, if such securities in question are not listed or admitted to
trading on any national securities exchange (or recognized foreign stock
exchange, as the case may be), a Business Day.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights Agents). In
the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.
Section 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES. (a) One Right
shall be associated with each Capital Share outstanding on the Record Date, each
additional Capital Share that shall become outstanding between the Record Date
and the earliest of the Distribution Date, the Redemption Date or the Expiration
Date and each additional Capital Share with which Rights are issued after the
Distribution Date but prior to the earlier of the Redemption Date or the
Expiration Date as provided in Section 23, in each case subject to the
provisions of Section 12.
(b) Until the earlier of (i) such time as the Company learns that a
Person has become an Acquiring Person or (ii) the Close of Business on such
date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
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Company or of any of its Subsidiaries, or any Person holding Capital Shares for
or pursuant to the terms of any such employee benefit plan) for outstanding
Capital Shares, if upon consummation of such tender or exchange offer such
Person's Beneficial Ownership of Capital Shares then outstanding could equal or
exceed such Person's Ownership Threshold (the Close of Business on the earlier
of such dates being the "Distribution Date"), (x) the Rights will be evidenced
by the certificates for Capital Shares registered in the names of the holders
thereof and not by separate Right Certificates and (y) the Rights, including the
right to receive Right Certificates, will be transferable only in connection
with the transfer of Capital Shares. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, postage-prepaid
mail, to each record holder of Capital Shares as of the Distribution Date, at
the address of such holder shown on the records of the Company, a Right
Certificate evidencing the Rights to which such holder is entitled. As of and
after the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) With respect to any certificate for Capital Shares, until the
earliest of the Distribution Date, the Redemption Date or the Expiration Date,
the Rights associated with the Capital Shares represented by any such
certificate shall be evidenced by such certificate alone, the registered holders
of the Capital Shares shall also be the registered holders of the associated
Rights and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Capital Shares
represented thereby.
(d) Certificates issued for Capital Shares after the Record Date
(including, without limitation, upon transfer or exchange of outstanding Capital
Shares), but prior to the earliest of the Distribution Date, the Redemption Date
or the Expiration Date, may have printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of January 5,
1996, as it may be amended from time to time (the "Rights Agreement"),
between THE SAFETY FUND CORPORATION (the "Company") and FLEET NATIONAL BANK
OF MASSACHUSETTS, as Rights Agent (the "Rights Agent"), the terms of which
are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights 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 without charge after receipt of a written
request therefor. Rights beneficially owned by Acquiring Persons or their
Affiliates or Associates (as such terms are defined in the Rights
Agreement) and by any subsequent holder of such Rights are null and void
and nontransferable.
Notwithstanding this paragraph (d), the omission of a legend shall not affect
the enforceability of any part of this Rights Agreement or the rights of any
holder of Rights.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse side thereof)
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shall be in substantially the form set forth 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 Rights 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 Sections 7, 11 and 23, the Right Certificates, whenever issued,
shall be dated as of the Distribution Date, and on their face shall entitle the
holders thereof to purchase such number of Preferred Shares as shall be set
forth therein for the Purchase Price set forth therein, subject to adjustment
from time to time as herein provided.
Section 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION. (a) The
Right Certificates shall be executed on behalf of the Company by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer or a Vice President (whether
preceded by any additional title) of the Company, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary, an Assistant Secretary or a
Vice President (whether preceded by any additional title, provided that such
Vice President shall not have also executed the Right Certificates) of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by the Rights Agent and shall not be valid or
obligatory for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such an officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may nevertheless
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such an officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of execution of such Right Certificate, shall be a proper officer of
the Company to sign such Right Certificate, although at the date of execution of
this Rights Agreement any such person was not such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office in Hartford, Connecticut, books for registration
and transfer of the Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced by each of the Right Certificates, the certificate
number of each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES;
UNCERTIFICATED RIGHTS. (a) Subject to the provisions of Sections 7(e) and 15, at
any time after the Distribution Date, and at or prior to the Close of Business
on the earlier of the Redemption Date or the Expiration Date, any Right
Certificate or Right Certificates may be transferred, split-up, combined or
exchanged for another Right Certificate or Right Certificates representing, in
the aggregate, the same number of Rights as the Right Certificate or Right
Certificates surrendered then represented. Any registered holder desiring to
transfer, split-up, combine or exchange any Right Certificate shall make such
request in writing delivered
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to the Rights Agent and shall surrender the Right Certificate or Right
Certificates to be transferred, split-up, combined or exchanged at the office of
the Rights Agent; PROVIDED, HOWEVER, that neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any Right Certificate surrendered for transfer until the registered
holder shall have completed and signed the certification contained in the form
of assignment on the reverse side of such Right 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 Sections
7(e) and 15, countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment 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 Right 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 valid Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, 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 Right Certificate if mutilated, the Company will make a new
Right Certificate of like tenor and deliver such new Right Certificate to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
Section 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS. (a) Subject
to Section 7(e) and except as otherwise provided herein (including Section 11),
each Right shall entitle the registered holder thereof, upon exercise thereof as
provided herein, to purchase for the Purchase Price, at any time after the
Distribution Date and at or prior to the earlier of (i) the Close of Business on
the 10th anniversary of the date of this Rights Agreement (the Close of Business
on such date being the "Expiration Date") or (ii) the Redemption Date, one one-
thousandth (1/1000th) of a Preferred Share, subject to adjustment from time to
time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent in
Hartford, Connecticut, together with payment of the Purchase Price for each one-
thousandth (1/1000th) of a Preferred Share as to which the Rights are exercised,
at or prior to the earlier of (i) the Expiration Date or (ii) the Redemption
Date.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the
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Purchase Price for the Preferred Shares to be purchased together with an amount
equal to any applicable transfer tax, in lawful money of the United States of
America, in cash or by certified check or money order payable to the order of
the Company, the Rights Agent shall thereupon (i) either (A) promptly
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates for the number of
Preferred Shares 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 Preferred Shares with a depositary agent under a
depositary arrangement, promptly requisition from the depositary agent
depositary receipts representing the number of one-thousandths (1/1000ths) of a
Preferred Share to be purchased (in which case certificates for the Preferred
Shares to be 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 all such requests, (ii) when appropriate, promptly
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 15, (iii) promptly 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 Right Certificate, registered
in such name or names as may be designated by such holder and (iv) when
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by an Acquiring
Person or any Affiliate or Associate of an Acquiring Person shall be null and
void and nontransferable, and any holder of any such Right (including any
purported transferee or subsequent holder) shall not have any right to exercise
or transfer any such Right.
(f) Notwithstanding anything in this Rights 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 any Right
Certificates upon the occurrence of any purported 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 election to purchase set forth on the
reverse side of the Right Certificate surrendered for such 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.
(g) The Company may temporarily suspend, for a period of time not to
exceed 90 calendar days after the Distribution Date, the exercisability of the
Rights in order to prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration statement
to become effective; PROVIDED, HOWEVER, that no such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any
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other Person become exercisable immediately upon, the effectiveness of such
registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such time
as the suspension is no longer in effect. Notwithstanding any provision herein
to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification under the blue sky or securities laws of such
jurisdiction shall not have been obtained or the exercise of the Rights shall
not be permitted under applicable law.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered or presented to
the Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Rights Agreement.
The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any Right Certificate purchased
or acquired by the Company. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares or any authorized
and issued Preferred Shares held in its treasury, free from preemptive rights or
any right of first refusal, a number of Preferred Shares sufficient to permit
the exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient Preferred Shares
issued but not outstanding or authorized but unissued to permit the exercise or
exchange of Rights in accordance with Section 11, the Company covenants and
agrees that it will take all such action as may be necessary to authorize
additional Preferred Shares for issuance upon the exercise or exchange of Rights
pursuant to Section 11; PROVIDED, HOWEVER, that if the Company is unable to
cause the authorization of additional Preferred Shares, then the Company shall,
or in lieu of seeking any such authorization, the Company may, to the extent
necessary and permitted by applicable law and any agreements or instruments in
effect prior to the Distribution Date to which it is a party, (A) upon surrender
of a Right, pay cash equal to the Purchase Price in lieu of issuing Preferred
Shares and requiring payment therefor, (B) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to which such Right is
exercised, issue equity securities having a value equal to the value of the
Preferred Shares which otherwise would have been issuable pursuant to Section
11, which value shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors of the Company or (C) upon due
exercise of a Right and payment of the Purchase Price for each Preferred Share
as to which such Right is exercised, distribute a combination of Preferred
Shares, cash and/or other equity and/or debt securities having an aggregate
value equal to the value of the Preferred Shares which otherwise would have been
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issuable pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company. To the extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution Date to which it
is party) prevent the Company from paying the full amount payable in accordance
with the foregoing sentence, the Company shall pay to holders of the Rights as
to which such payments are being made all amounts which are not then restricted
on a pro rata basis as such payments become permissible under such legal or
contractual restrictions until such payments have been paid in full.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise or exchange of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any national securities exchange, the
Company covenants and agrees to use its best efforts to cause, from and after
such time as the Rights become exercisable or exchangeable, all Preferred Shares
reserved for such issuance to be listed on such securities exchange upon
official notice of issuance upon such exercise or exchange.
(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 Right Certificates or
of any Preferred Shares or Capital Shares or other securities upon the exercise
or exchange of the 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
Right Certificates to a Person other than, or in respect of the issuance or
delivery of certificates for the Preferred Shares or Capital Shares or other
securities, as the case may be, in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or
exchange or to issue or deliver any certificates for Preferred Shares or Capital
Shares or other securities, as the case may be, upon the exercise or exchange of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right 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 SHARES RECORD DATE. Each Person in whose name
any certificate for Preferred Shares or Capital Shares or other securities is
issued upon the exercise or exchange of Rights shall for all purposes be deemed
to have become the holder of record of the Preferred Shares or Capital Shares or
other securities, as the case may be, represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of any Purchase Price (and any
applicable transfer taxes) was made; PROVIDED, HOWEVER, that, if the date of
such surrender and payment is a date upon which the transfer books of the
Company for the Preferred Shares or Capital Shares or other securities, as the
case may be, are closed, such Person shall be deemed to have become the record
holder of such Preferred Shares or Capital Shares or other securities, as the
case may be, on, and such certificate shall be dated, the
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next succeeding Business Day on which the transfer books of the Company for the
Preferred Shares or Capital Shares or other securities, as the case may be, are
open.
Section 11. ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING PERSON;
EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS. (a) Upon a Person
becoming an Acquiring Person, proper provision shall be made so that each holder
of a Right, except as provided in Section 7(e), shall thereafter have a right to
receive, upon exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, such number of one-thousandths (1/1000ths) of a
Preferred Share as shall equal the result obtained by multiplying the Purchase
Price by a fraction, the numerator of which is the number of one-thousandths
(1/1000ths) of a Preferred Share for which a Right is then exercisable and the
denominator of which is 50% of the Market Value of the Common Stock on the date
on which a Person becomes an Acquiring Person. As soon as practicable after a
Person becomes an Acquiring Person (provided the Company shall not have elected
to make the exchange permitted by Section 11(b)(I) for all outstanding Rights),
the Company covenants and agrees to use its best efforts to:
(I) prepare and file a registration statement under the Securities
Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights;
(II) cause such registration statement to become effective as soon
as practicable after such filing;
(III) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date; and
(IV) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(I) The Board of Directors of the Company may, at its option, at
any time after a Person becomes an Acquiring Person, mandatorily exchange all or
part of the then outstanding and exercisable Rights (which shall not include
Rights that shall have become null and void and nontransferable pursuant to the
provisions of Section 7(e)) for consideration per Right consisting of one-half
of the securities that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(a) or, if applicable, Section 9(b) (the
consideration issuable per Right pursuant to this Section 11(b)(I) being the
"Exchange Consideration"). The Board of Directors of the Company may, at its
option, issue, in substitution for Preferred Shares, shares of Common Stock in
an amount per Preferred Share equal to the Formula Number if there are
sufficient shares of Common Stock issued but not outstanding or authorized but
unissued. If the Board of Directors of the Company elects to exchange all the
Rights for Exchange Consideration pursuant to this Section 11(b)(I) prior to the
physical distribution of the Rights Certificates, the Corporation may distribute
the Exchange Consideration in lieu of distributing Right Certificates, in which
case for purposes
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of this Rights Agreement holders of Rights shall be deemed to have
simultaneously received and surrendered for exchange Right Certificates on the
date of such distribution.
(II) Any action of the Board of Directors of the Company ordering
the exchange of any Rights pursuant to Section 11(b)(I) shall be irrevocable
and, immediately upon the taking of such action and without any further action
and without any notice, the right to exercise any such Right pursuant to Section
11(a) shall terminate and the only right thereafter of a holder of such Right
shall be to receive the Exchange Consideration in exchange for each such Right
held by such holder or, if the Exchange Consideration shall not have been paid
or issued, to exercise any such Right pursuant to Section 11(c)(I). 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 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 Rights for the Exchange Consideration 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 shall have become null and void and nontransferable pursuant
to the provisions of Section 7(e)) held by each holder of Rights.
(c)(I) In the event that, following a Distribution Date, directly or
indirectly, any transactions specified in the following clause (i), (ii) or
(iii) of this Section 11(c) (each such transaction being a "Business
Combination") shall be consummated:
(i) the Company shall consolidate with, or merge with and into, any
Acquiring Person or any Affiliate or Associate of an Acquiring Person;
(ii) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall merge with and into the Company and, in connection
with such merger, all or part of the Capital Shares shall be changed into
or exchanged for capital stock or other securities of the Company or of any
Acquiring Person or Affiliate or Associate of an Acquiring Person or cash
or any other property; or
(iii) the Company shall sell, lease, exchange or otherwise transfer
or dispose of (or one or more of its Subsidiaries shall sell, lease,
exchange or otherwise transfer or dispose of), in one or more transactions,
the Major Part of the assets of the Company and its Subsidiaries (taken as
a whole) to any Acquiring Person or any Affiliate or Associate of an
Acquiring Person,
then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, the securities specified in Section 11(a)):
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(A) If the Principal Party in such Business Combination has
Registered Capital Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, such number of
Registered Capital Shares of such Principal Party, free and clear of all
liens, encumbrances or other adverse claims, as shall have an aggregate
Market Value equal to the result obtained by multiplying the Purchase Price
by two;
(B) If the Principal Party involved in such Business Combination
does not have Registered Capital Shares outstanding, each Right shall
thereafter represent the right to receive, upon the exercise thereof for
the Purchase Price in accordance with the terms of this Rights Agreement,
at the election of the holder of such Right at the time of the exercise
thereof, any of:
(1) such number of Capital Shares of the Surviving Person in
such Business Combination as shall have an aggregate Book Value
immediately after giving effect to such Business Combination equal to
the result obtained by multiplying the Purchase Price by two;
(2) such number of Capital Shares of the Principal Party in
such Business Combination (if the Principal Party is not also the
Surviving Person in such Business Combination) as shall have an
aggregate Book Value immediately after giving effect to such Business
Combination equal to the result obtained by multiplying the Purchase
Price by two; or
(3) if the Principal Party in such Business Combination is an
Affiliate of one or more Persons which has Registered Capital Shares
outstanding, such number of Registered Capital Shares of whichever of
such Affiliates of the Principal Party has Registered Capital Shares
with the greatest aggregate Market Value on the date of consummation
of such Business Combination as shall have an aggregate Market Value
on the date of such Business Combination equal to the result obtained
by multiplying the Purchase Price by two.
(II) The Company shall not consummate any Business Combination
unless each issuer of Capital Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Capital Shares
that have not been issued or reserved for issuance (and which shall, when issued
upon exercise thereof in accordance with this Rights Agreement, be validly
issued, fully paid and nonassessable and free of preemptive rights, rights of
first refusal or any other restrictions or limitations on the transfer or
ownership thereof) to permit the exercise in full of the Rights in accordance
with this Section 11(c) and unless prior thereto:
(i) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Capital Shares of such
issuer purchasable upon exercise of the Rights, shall be effective under
the Securities Act; and
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(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights Agent a
supplemental agreement providing for the assumption by such issuer of
the obligations set forth in this Section 11(c) (including the
obligation of such issuer to issue Capital Shares upon the exercise of
Rights in accordance with the terms set forth in Sections 11(c)(I) and
11(c)(III)) and further providing that such issuer, at its own
expense, will use its best efforts to:
(1) cause a registration statement under the
Securities Act on an appropriate form, with respect to the
Rights and the Capital Shares of such issuer purchasable upon
exercise of the Rights, to remain effective (with a prospectus
at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(2) qualify or register the Rights and the Capital
Shares of such issuer purchasable upon exercise of the Rights
under the blue sky or securities laws of such jurisdictions as
may be necessary or appropriate; and
(3) list the Rights and the Capital Shares of such
issuer purchasable upon exercise of the Rights on each
national securities exchange on which the Capital Shares were
listed prior to the consummation of the Business Combination
or, if the Capital Shares were not listed on a national
securities exchange prior to the consummation of the Business
Combination, on a national securities exchange;
(B) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is a
valid, binding and enforceable agreement of such issuer; and
(C) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting forth
the number of Capital Shares of such issuer which may be purchased
upon the exercise of each Right after the consummation of such
Business Combination.
(III) After consummation of any Business Combination and subject to
the provisions of Section 11(c)(II), (i) each issuer of Capital Shares for which
Rights may be exercised as set forth in this Section 11(c) shall be liable for,
and shall assume, by virtue of such Business Combination, all the obligations
and duties of the Company pursuant to this Rights Agreement, (ii) the term
"Company" shall thereafter be deemed to refer to such issuer, (iii) each such
issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof (including the provisions of
Sections 11(a) and 11(c)) shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Capital Shares thereafter deliverable upon
the exercise of the Rights, and (iv) the number of Capital Shares of each such
issuer thereafter receivable upon exercise of any Right shall
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be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions of Sections 11 and 12, and the
provisions of Section 7, 9 and 10 with respect to the Preferred Shares shall
apply, as nearly as reasonably may be, on like terms to any such Capital Shares.
Section 12. CERTAIN ADJUSTMENTS. (a) To preserve the actual or
potential economic value of the Rights, if at any time after the date of this
Rights Agreement there shall be any change in the Capital Shares or the
Preferred Shares, whether by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to holders
of Capital Shares or Preferred Shares, as the case may be (other than
distribution of the Rights or regular quarterly cash dividends) or otherwise,
then, in each such event the Board of Directors of the Company shall make such
appropriate adjustments in the number of Preferred Shares (or the number and
kind of other securities) issuable upon exercise of each Right, the Purchase
Price and Redemption Price in effect at such time and the number of Rights
outstanding at such time (including the number of Rights or fractional Rights
associated with each Capital Share) such that following such adjustment such
event shall not have had the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to receive
any securities other than Preferred Shares, thereafter the number of such
securities so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions of Sections 11 and 12, and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like term, to any such other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities relating
to a Right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(d) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares or number or kind of other securities issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms which were expressed in the
initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment 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 issuing to the holder of any Right exercised after such record date
the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's
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right to receive such additional securities upon the occurrence of the event
requiring such adjustment.
Section 13. CERTIFICATE OF ADJUSTMENT. Whenever an adjustment is
made as provided in Section 11 or 12, 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 Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of the Capital Shares) in accordance with Section 25.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
Section 14. ADDITIONAL COVENANTS. (a) Notwithstanding any other
provision of this Rights Agreement, no adjustment to the number of Preferred
Shares (or fractions of a share) or other securities for which a Right is
exercisable or the number of Rights outstanding or associated with each Capital
Share or any similar or other adjustment shall be made or be effective if such
adjustment would have the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such adjustment, including, without
limitation, the benefits under Sections 11 and 12, unless the terms of this
Rights Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it will not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce or
otherwise limit the benefits the holders of the Rights would have had absent
such action, including, without limitation, the benefits under Sections 11 and
12. Any action taken by the Company during any period after any Person becomes
an Acquiring Person but prior to the Distribution Date shall be null and void
unless such action could be taken under this Section 14(b) from and after the
Distribution Date. The Company shall not consummate any Business Combination if
any issuer of Capital Shares for which Rights may be exercised after such
Business Combination in accordance with Section 11(c) shall have taken any
action that reduces or otherwise limits the benefits the holders of the Rights
would have had absent such action, including, without limitation, the benefits
under Sections 11 and 12.
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
may, but shall not be required to, issue fractions of Rights or distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company may pay to the registered holders of the Right 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 15(a), the current market value of a whole
Right shall be the closing price of the Rights (as determined in a manner
similar to that of Common Stock pursuant to the second and third sentences of
the definition of Market Value contained in Section 1) for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable.
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(b) The Company may, but shall not be required to, issue fractions of
Preferred Shares upon exercise of the Rights or distribute certificates which
evidence fractional Preferred Shares. In lieu of fractional Preferred Shares,
the Company may elect to (i) utilize a depository arrangement as provided by the
terms of the Preferred Shares or (ii) in the case of a fraction of a Preferred
Share (other than one one-thousandth (1/1000th) of a Preferred Share or any
integral multiple thereof), pay to the registered holders of Right 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 Preferred Share, if any
are outstanding and publicly traded (or the Formula Number times the current
market value of one share of Common Stock if the Preferred Shares are not
outstanding and publicly traded). If, as a result of an adjustment made
pursuant to Section 12(a), the holder of any Right thereafter exercised shall
become entitled to receive any securities other than Preferred Shares, the
provisions of this Section 15(b) shall apply, as nearly as reasonably may be, on
like terms to such other securities.
(c) The Company may, but shall not be required to, issue fractions of
shares of Common Stock upon exchange of Rights pursuant to Section 11(b), or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of such fractional shares of Common Stock, the Company may pay to the
registered holders of the Right 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 one share of Common
Stock as of the date on which a Person became an Acquiring Person.
(d) The holder of Rights by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as provided in this Section 15.
Section 16. RIGHTS OF ACTION. (a) All rights of action in respect of
this Rights Agreement are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Capital Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Capital Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Capital Shares) may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Rights 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 Rights Agreement and shall be entitled to
specific performance of the obligations of any Person under, and injunctive
relief against actual or threatened violations of the obligations of any Person
subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred in such action.
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Section 17. TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT CERTIFICATES.
(a) Prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Capital Shares.
(b) After the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e), only on the registry books of the Rights
Agent if surrendered at the office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the Person in
whose name a Right Certificate (or, prior to the Distribution Date, the
associated Capital Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate for
Capital Shares made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote or receive
dividends or be deemed, for any purpose, the holder of the Preferred Shares or
of any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company,
including, without limitation, 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, or to receive dividends or other
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 19. 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, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Rights Agreement and the exercise and performance of its
duties hereunder.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Rights Agreement in reliance upon any Right
Certificate or certificate for the Capital Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons.
Section 20. MERGER OR CONSOLIDATION OR CHANGE 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
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any corporation succeeding to the stock transfer or corporate trust business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto; PROVIDED that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 22. In case, at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and, in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and, in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Rights Agreement.
Section 21. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates (or, prior to the Distribution Date, of the Capital Shares), 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 advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person) be
proved or established by the Company prior to taking, refraining from 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 any one of the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer, a Vice President
(whether preceded by any additional title) or the 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 Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or wilful misconduct.
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(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to
verify the same, 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 Rights 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 Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 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 Right Certificates after actual notice of 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 Preferred Shares or Capital Shares
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Capital Shares 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Chief Financial Officer, the Treasurer, a Vice
President (whether preceded by any additional title) or the Secretary of the
Company, 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 the Rights
Agent under this Rights 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
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resulting from any such act, default, neglect or misconduct provided reasonable
care was exercised in the selection and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including reasonable
fees and expenses of legal counsel) which the Rights Agent may incur resulting
from its actions as Rights Agent pursuant to this Rights Agreement; PROVIDED,
HOWEVER, that the Rights Agent shall not be indemnified or held harmless with
respect to any such loss, liability, damage or expense incurred by the Rights
Agent as a result of, or arising out of, its own gross negligence, bad faith or
wilful misconduct. In no case shall the Company be liable with respect to any
action, proceeding, suit or claim against the Rights Agent unless the Rights
Agent shall have notified the Company, by letter or by facsimile confirmed by
letter, of the assertion of any action, proceeding, suit or claim against the
Rights Agent, promptly after the Rights Agent shall have notice of any such
assertion of an action, proceeding, suit or claim or have been served with the
summons or other first legal process giving information as to the nature and
basis of the action, proceeding, suit or claim. The Company shall be entitled
to participate at its own expense in the defense of any such action, proceeding,
suit or claim, and, if the Company so elects, the Company shall assume the
defense of any such action, proceeding, suit or claim. In the event that the
Company assumes such defense, the Company shall not thereafter be liable for the
fees and expenses of any additional counsel retained by the Rights Agent, so
long as the Company shall retain counsel satisfactory to the Rights Agent, in
the exercise of its reasonable judgment, to defend such action, proceeding, suit
or claim. The Rights Agent agrees not to settle any litigation in connection
with any action, proceeding, suit or claim with respect to which it may seek
indemnification from the Company without the prior written consent of the
Company.
Section 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Capital Shares and the Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates (or, prior to
the Distribution Date, of the Capital Shares) by first-class mail, postage
prepaid. The Company may remove the Rights Agent or any successor Rights Agent
upon 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 Capital Shares and
the Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates (or, prior to the Distribution Date, of the Capital Shares)
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 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 Right Certificate (or, prior to
the Distribution Date, of the Capital Shares) (who shall, with such notice,
submit his Right Certificate or, prior to the Distribution Date, the certificate
representing his Capital Shares, for inspection by the Company), then the
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Capital Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of
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any state of the United States, in good standing, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by Federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000; PROVIDED that the principal transfer agent for the Capital
Shares shall in any event be qualified to be the Rights Agent. 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 execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Capital Shares and the
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates (or, prior to the Distribution Date, of the Capital
Shares). Failure to give any notice provided for in this Section 22, 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 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of
Capital Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date, the Company (a) shall, with respect to
Capital Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by its Board of Directors,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; PROVIDED, HOWEVER, that (i) no such Right
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
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 24. REDEMPTION AND TERMINATION. (a) The Board of Directors
of the Company may, at its option, at any time prior to the earlier of (i) such
time as a Person becomes an Acquiring Person and (ii) the Expiration Date, order
the redemption of all, but not fewer than all, the then outstanding Rights at
the Redemption Price (the date of such redemption being the "Redemption Date"),
and the Company, at its option, may pay the Redemption Price either in cash or
Capital Shares or other securities of the Company deemed by the Board of
Directors of the Company, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice,
25
<PAGE>
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. Within 10
Business Days after the action of the Board of Directors of the Company ordering
the redemption of the Rights, 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 Capital Shares. Each such notice of redemption will
state the method by which payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively presumed
to have been duly given, whether or not the holder of Rights receives such
notice. In any case, failure to give such notice by mail, or any defect in the
notice, to any particular holder of Rights shall not affect the sufficiency of
the notice to other holders of Rights.
Section 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of a Right Certificate
(or, prior to the Distribution Date, of the Capital Shares) 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) as follows:
The Safety Fund Corporation
470 Main Street
Fitchburg, Massachusetts 01420
Attention of Chief Executive Officer
Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Capital Shares) 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 with
the Company) as follows:
Fleet National Bank of Massachusetts
One Federal Street
OF-3101
Boston, Massachusetts 02211
Attention of Corporate Trust Administration
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or, prior
to the Distribution Date, of the Capital Shares) 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 Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Capital Shares.
Section 26. SUPPLEMENTS AND AMENDMENTS. At any time prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company may, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Rights Agreement (including, without limitation, the
date on which the Distribution Date
26
<PAGE>
shall occur, the time during which the Rights may be redeemed pursuant to
Section 24 or any provision of the Certificate of Designation) without the
approval of any holder of the Rights. From and after the Distribution Date and
subject to applicable law, the Company may, and the Rights Agent shall if the
Company so directs, amend this Rights Agreement without the approval of any
holders of Right Certificates (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision of this Rights Agreement or (ii) to make any other
provisions in regard to matters or questions arising hereunder which the Company
may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person). Any supplement or
amendment adopted during any period after any Person has become an Acquiring
Person but prior to the Distribution Date shall be null and void unless such
supplement or amendment could have been adopted under the prior sentence from
and after the Distribution Date. Any supplement or amendment to this Rights
Agreement duly approved by the Company that does not amend Sections 19, 20, 21
or 22 in a manner adverse to the Rights Agent shall become effective immediately
upon execution by the Company, whether or not also executed by the Rights Agent.
In addition, notwithstanding anything to the contrary contained in this Rights
Agreement, no supplement or amendment to this Rights Agreement shall be made
which (a) reduces the Redemption Price (except as required by Section 12(a)) or
(b) provides for an earlier Expiration Date.
Section 27. SUCCESSORS. All the covenants and provisions of this
Rights 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 28. BENEFITS OF RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS
BY THE BOARD OF DIRECTORS, ETC. (a) Nothing in this Rights Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, of the Capital Shares) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, of the Capital
Shares).
(b) Except as explicitly otherwise provided in this Rights Agreement,
the Board of Directors of the Company shall have the exclusive power and
authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including, without limitation, a determination to redeem or
not redeem the Rights or to amend this Rights Agreement and a determination of
whether there is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company to
exercise its
27
<PAGE>
fiduciary duty. Without limiting the foregoing, nothing contained herein shall
be construed to suggest or imply that the Board of Directors shall not be
entitled to reject any tender offer, or to recommend that holders of Capital
Shares reject any tender offer, or to take any other action (including, without
limitation, the commencement, prosecution, defense or settlement of any
litigation and the submission of additional or alternative offers or other
proposals) with respect to any tender offer that the Board of Directors believes
is necessary or appropriate in the exercise of such fiduciary duty.
Section 29. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section 30. GOVERNING LAW. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the law
of the Commonwealth of Massachusetts and for all purposes shall be governed by
and construed in accordance with the law of such State applicable to contracts
to be made and performed entirely within such State.
Section 31. COUNTERPARTS; EFFECTIVENESS. This Rights 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. This Rights Agreement
shall be effective as of the Close of Business on the date hereof.
Section 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
* * * * *
28
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
THE SAFETY FUND CORPORATION
By:/s/ Christopher W. Bramley
--------------------------------
Name: Christopher W. Bramley
Title: Chief Executive Officer
FLEET NATIONAL BANK OF MASSACHUSETTS
as Rights Agent,
By:/s/ Robert L. Bice, II
---------------------------------
Name: Robert L. Bice, II
Title: Vice President
29
<PAGE>
EXHIBIT A
[LETTERHEAD OF THE COMMONWEALTH OF MASSACHUSETTS]
FEDERAL IDENTIFICATION
NO. 04-2532311
-------------------
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A SERIES OF A CLASS OF STOCK
General Laws, Chapter 156B, Section 26
We, Christopher W. Bramley ,President and
John E. Howard ,Clerk/
The Safety Fund Corporation
................................................................................
(Name of Corporation)
located at 470 Main Street, Fitchburg, Massachusetts
......................................................................
do hereby certify that at a meeting of the directors of the corporation held on
January 5 1996, the following vote establishing and designating a series of a
.........
class of stock and determining the relative rights and preference thereof was
duly adopted:-
VOTED, that, pursuant to the authority vested in the Board of Directors of
the Safety Fund Corporation (the "Corporation") in accordance with the
provisions of the Articles of Organization of the Corporation, a series of
Preferred Stock of the Corporation is hereby created and that the designation
and number of shares thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as set forth in
the "Terms of Series A Participating Cumulative Preferred Stock of The Safety
Fund Corporation" attached hereto and hereby incorporated in this vote by
reference. A copy of the Terms of Series A Participating Cumulative Preferred
Stock of The Safety Fund Corporation referred to in said vote is attached hereto
as Rider A.
Note: Votes for which the space provided above is not sufficient should be set
out an continuation sheets to be numbered 2A, 2B, etc.
Continuation sheets must have a left-hand margin 1 inch wide for binding
and shall be 81/2"
=======
x 11"'. Only one side should be used.
=====
<PAGE>
RIDER A
-------
TERMS OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
THE SAFETY FUND CORPORATION
Section 1. DESIGNATION AND NUMBER OF SHARES. The shares of such
series shall be designated as "Series A Participating Cumulative Preferred
Stock" (the "Series A Preferred Stock"), par value $10.00 per share. The number
of shares initially constituting the Series A Preferred Stock shall be 3,200;
PROVIDED, HOWEVER, that, if more than a total of 3,200 shares of Series A
Preferred Stock shall be issuable upon the exercise of Rights (the "Rights")
issued pursuant to the Rights Agreement dated as of January 5, 1996, between the
Corporation and Fleet National Bank of Massachusetts, a national banking
association, as Rights Agent (the "Rights Agreement"), the Board of Directors of
the Corporation, pursuant to Section 26 of the Business Corporation Law of the
Commonwealth of Massachusetts, shall direct by resolution or resolutions that a
certificate be properly executed, acknowledged, filed and recorded, in
accordance with the provisions of said Section 26 thereof, providing for the
total number of shares of Series A Preferred Stock authorized to be issued to be
increased (to the extent that the Articles of Organization then permits) to the
largest number of whole shares (rounded up to the nearest whole number) issuable
upon exercise of such Rights.
Section 2. DIVIDENDS OR DISTRIBUTIONS. (a) Subject to the prior and
superior rights of the holders of shares of any other series of Preferred Stock
or other class of capital stock of the Corporation ranking prior and superior to
the shares of Series A Preferred Stock with respect to dividends, the holders of
shares of the Series A Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of the assets of the Corporation
legally available therefor, (1) quarterly dividends payable in cash on the last
day of each fiscal quarter in each year, or such other dates as the Board of
Directors of the Corporation shall approve (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 a
fraction of a share of Series A Preferred Stock, in the amount of $10.00 per
whole share (rounded to the nearest cent) less the amount of all cash dividends
declared on the Series A Preferred Stock pursuant to the following clause (2)
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 (the total of which
shall not, in any event, be less than zero) and (2) dividends payable in cash on
the payment date for each cash dividend declared on the Common Stock in an
amount per whole share (rounded to the nearest cent) equal to the Formula Number
(as hereinafter defined) then in effect times the cash dividends then to be paid
on each share of Common Stock. In addition, if the Corporation shall pay any
dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or
distributions solely in shares of Common Stock), then, in each such case, the
Corporation shall simultaneously pay or make on each outstanding whole share of
Series A Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each share
A-1
<PAGE>
of the Common Stock. As used herein, the "Formula Number" shall be 1,000;
PROVIDED, HOWEVER, that if at any time after January 5, 1996, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares of
Common Stock or make any distribution on the Common Stock in shares of Common
Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii) combine (by
a reverse stock split or otherwise) the outstanding shares of Common Stock into
a smaller number of shares of Common Stock, then in each such event the Formula
Number shall be adjusted to a number determined by multiplying the Formula
Number in effect immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event (and rounding the
result to the nearest whole number); and PROVIDED FURTHER, that, if at any time
after January 5, 1996, the Corporation shall issue any shares of its capital
stock in a merger, reclassification, or change of the outstanding shares of
Common Stock, then in each such event the Formula Number shall be appropriately
adjusted to reflect such merger, reclassification or change so that each share
of Series A Preferred Stock continues to be the economic equivalent of a Formula
Number of shares of Common Stock prior to such merger, reclassification or
change.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately prior to or at
the same time it declares a dividend or distribution on the Common Stock(other
than a dividend or distribution solely in shares of Common Stock); PROVIDED,
HOWEVER, that, in the event no dividend or distribution (other than a dividend
or distribution in shares of Common Stock) 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 $10.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for any corresponding dividend
or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of original issue of such shares
of Series A Preferred Stock; PROVIDED, HOWEVER, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such Quarterly Dividend
Payment Date. Notwithstanding the foregoing, dividends on shares of Series A
Preferred Stock which are originally issued prior to the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend on the first Quarterly Dividend Payment Date shall
be calculated as if cumulative from and after the last day of the fiscal quarter
next preceding the date of original issuance of such shares. 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
A-2
<PAGE>
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared on
the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock shall not
be entitled to receive any dividends or other distributions except as provided
herein.
Section 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share of
Series A Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote, multiplied by the
maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of stockholders of
the Corporation.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Preferred Stock are in
default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series A Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of stockholders (and at each subsequent annual meeting of stockholders),
unless all dividends in arrears have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Preferred Stock being entitled to cast
a number of votes per share of Series A Preferred Stock equal to the Formula
Number. Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of the shares of Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Preferred Stock shall
be divested of the foregoing special voting rights, subject to revesting in the
event of each and every subsequent like default in payments
A-3
<PAGE>
of dividends. Upon the termination of the foregoing special voting rights, the
terms of office of all persons who may have been elected directors pursuant to
said special voting rights shall forthwith terminate, and the number of
directors constituting the Board of Directors shall be reduced by two. The
voting rights granted by this Section 3(c) shall be in addition to any other
voting rights granted to the holders of the Series A Preferred Stock in this
Section 3.
(d) Except as provided herein, in Section 11 or by applicable 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 authorizing or taking
any corporate action.
Section 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 on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration 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 on 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 on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock;
PROVIDED that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity 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) 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.
A-4
<PAGE>
(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.
Section 5. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) 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 the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $100.00 per whole share
or (y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up.
Section 6. 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 or any other property, then in any such case the then
outstanding shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both
this Section 6 and Section 2 appear to apply to a transaction, this Section 6
will control.
Section 7. NO REDEMPTION; NO SINKING FUND. (a) The shares of Series A
Preferred Stock shall not be subject to redemption by the Corporation or at the
option of any holder of Series A Preferred Stock; PROVIDED, HOWEVER, that the
Corporation may purchase or otherwise acquire outstanding shares of Series A
Preferred Stock in the open market or by offer to any holder or holders of
shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to
or entitled to the operation of a retirement or sinking fund.
Section 8. RANKING. The Series A Preferred Stock shall rank junior to
all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations and restrictions
thereof.
Section 9. FRACTIONAL SHARES. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-thousandth (1/1000th)
of a share or any integral
A-5
<PAGE>
multiple of such fraction which shall entitle the holder, in proportion to such
holder's fractional shares, to receive dividends, exercise voting rights,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock. In lieu of fractional shares, the
Corporation, prior to the first issuance of a share or a fraction of a share of
Series A Preferred Stock, may elect (1) to make a cash payment as provided in
the Rights Agreement for fractions of a share other than one one-thousandth
(1/1000th) of a share or any integral multiple thereof or (2) to issue
depository receipts evidencing such authorized fraction of a share of Series A
Preferred Stock pursuant to an appropriate agreement between the Corporation and
a depository selected by the Corporation; PROVIDED that such agreement shall
provide that the holders of such depository receipts shall have all the rights,
privileges and preferences to which they are entitled as holders of the Series A
Preferred Stock.
Section 10. 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, without designation as to series until such shares
are once more designated as part of a particular series by the Board of
Directors pursuant to the provisions of Section 2 of Article IV of the Articles
of Organization.
Section 11. AMENDMENT. None of the powers, preferences and
relative, participating, optional and other special rights of the Series A
Preferred Stock as provided herein or in the Certificate of Incorporation shall
be amended in any manner which would alter or change the powers, preferences,
rights or privileges of the holders of Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least 66-2/3%
of the outstanding shares of Series A Preferred Stock, voting as a separate
class; PROVIDED, HOWEVER, that no such amendment approved by the holders of at
least 66-2/3% of the outstanding shares of Series A Preferred Stock shall be
deemed to apply to the powers, preferences, rights or privileges of any holder
of shares of Series A Preferred Stock originally issued upon exercise of the
Rights after the time of such approval without the approval of such holder.
* * * * *
A-6
<PAGE>
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our
names this 5th day of January in the year
1996.
/s/ Christopher W. Bramley , President
................................................................
/s/ John E. Howard , Clerk
...................................................................
A-7
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A Series of a Class of Stock
(General Laws, Chapter 156B, Section 26)
I hereby approve the within certificate and, the
filing fee in the amount of $
having been paid, said certificate is hereby filed this
day of ,
19 .
WILLIAM FRANCIS GLAVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTO COPY OF CERTIFICATE TO BE SENT
TO: Peter W. Coogan, Esquire
Foley, Hoag & Eliot
................................................
One Post Office Square
................................................
Boston, Massachusetts 02109
................................................
(617) 832-1196
Telephone.......................................
A-8
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. [R]-
Rights
NOT EXERCISABLE AFTER JANUARY 5, 2006, OR EARLIER IF REDEEMED BY THE
COMPANY. 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. RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS ARE NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
SAFETY FUND 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 January 5, 1996, (the "Rights Agreement"),
between Safety Fund Corporation, a Massachusetts corporation (the "Company"),
and Fleet National Bank of Massachusetts, a national banking association, as
Rights Agent (the "Rights Agent"), unless the Rights evidenced hereby shall have
been previously redeemed by the Company, to purchase from the Company at any
time after the Distribution Date (as defined in the Rights Agreement) and prior
to 5:00 p.m., Boston, Massachusetts time, on the 10th anniversary of the date of
the Rights Agreement (the "Expiration Date"), at the office of the Rights Agent,
or its successors as Rights Agent, in Hartford, Connecticut one one-thousandth
(1/1000th) of a fully paid, nonassessable share of Series A Participating
Cumulative Preferred Stock, par value $10.00 per share, of the Company (the
"Preferred Shares"), at a purchase price per one one-thousandth (1/1000th) of a
share equal to $65 (the "Purchase Price") payable in cash, upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of January 5, 1996. As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares which may be purchased upon
the exercise of each Right
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evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all 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
reference to the Rights Agreement 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 Right Certificates.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right Certificates, upon
surrender at the stock transfer or corporate trust office of the Rights Agent,
may be exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number and kind of shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall entitle such holder to
purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price (in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors to be at least equivalent in value)
of $.01 per Right (which amount shall be subject to adjustment as provided in
the Rights Agreement) at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date.
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one one-
thousandth (1/1000th) of a share or any integral multiple thereof or to issue
certificates or utilize a depository arrangement as provided in the terms of the
Rights Agreement and the Preferred Shares.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company, including, without limitation,
any right to vote for the election of directors or upon any matter submitted to
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stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been exercised as
provided in accordance with the provisions of the Rights Agreement.
This Right 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:
The Safety Fund Corporation
By:_____________________________
Authorized Signatory
Attest:
______________________________
Authorized Signatory
Countersigned:
Fleet National Bank of Massachusetts
as Rights Agent,
By:_____________________
Authorized Signatory
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<PAGE>
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise the
Rights represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other shares) issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: , 19__
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to Purchase must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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