Exhibit 99.2
AMENDMENT NO. 2 TO THE RIGHTS AGREEMENT
Amendment No. 2 to the Rights Agreement, dated as of February 16,
1999 (this "Amendment"), by and between Northern Trust Corporation, a
Delaware corporation (the "Company"), and Norwest Bank Minnesota, N.A., a
national banking association (the "Rights Agent").
WHEREAS, the Company and the Rights Agent have entered into a
Rights Agreement, dated as of July 21, 1998, as amended by Amendment No. 1
to the Rights Agreement, dated as of November 18, 1998 (as so amended, the
"Agreement");
WHEREAS, pursuant to Section 27 of the Agreement, the Company has
determined to modify the terms of the Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises and mutual
agreements herein set forth, and intending to be legally bound hereby, the
parties hereto agree that the Agreement shall be and hereby is amended in
the following manner:
Section 1. Amendment of "Certain Definitions" Section.
(a) Section 1(a) of the Agreement is hereby amended in its
entirety to read as follows:
"Acquiring Person" shall mean (x) any Person who or which,
together with all Affiliates and Associates of such Person, shall
be the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company;
(ii) any Subsidiary of the Company; (iii) any employee benefit
plan of the Company, or of any Subsidiary of the Company, or any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan; (iv) any
Person who becomes the Beneficial Owner of fifteen percent (15%)
or more of the shares of Common Stock then outstanding (or, in
the case of a Person described in subclauses (A) through (F) of
the following clause (vi), 23% or more of the shares of Common
Stock then outstanding) as a result of a reduction in the number
of shares of Common Stock outstanding due to the repurchase of
shares of Common Stock by the Company other than during the
Special Period (as defined in Section 23(c) hereof) or at a time
when the rights are not redeemable, unless and until such Person,
after becoming aware that such Person has become the Beneficial
Owner of fifteen percent (15%) or more of the then outstanding
shares of Common Stock (or, in the case of a Person described in
subclauses (A) through (F) of the following clause (vi), 23% or
more of the then outstanding shares of Common Stock), acquires
beneficial ownership of additional shares of Common Stock
representing one percent (1%) or more of the shares of Common
Stock then outstanding; (v) any such Person who has reported or
is required to report such ownership (but less than 20%) on
Schedule 13G under the Securities Exchange Act of 1934, as
amended and in effect on the date of this Agreement (the
"Exchange Act") (or any comparable or successor report) or on
Schedule 13D under the Exchange Act (or any comparable or
successor report) which Schedule 13D does not state any intention
to or reserve the right to control or influence the management or
policies of the Company or engage in any of the actions specified
in Item 4 of such schedule (other than the disposition of the
Common Stock) and, within 10 Business Days of being requested by
the Company to advise it regarding the same, certifies to the
Company that such Person acquired shares of Common Stock in
excess of 14.9% inadvertently or without knowledge of the terms
of the Rights and who or which, together with all Affiliates and
Associates, thereafter does not acquire additional shares of
Common Stock while the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding; provided, however, that
if the Person requested to so certify fails to do so within 10
Business Days, then such Person shall become an Acquiring Person
immediately after such 10-Business-Day period; or (vi) any of the
Persons described in the following subclauses (A) through (F) (or
any group comprised solely of such Persons) who or which would be
an Acquiring Person but for this proviso if but only if all
securities of the Company beneficially owned by all such Persons
in the aggregate shall constitute less than 23% of the then
outstanding shares of Common Stock: (A) Xxxxx X. Xxxxx
(deceased), any descendant of Xxxxx X. Xxxxx (including
descendants by adoption and their descendants), or any spouse,
former spouse or surviving spouse of Xxxxx X. Xxxxx or any such
descendants (collectively defined as the "Family Members"); (B)
any trust which is in existence on the date of this Agreement and
which has been established by one or more Family Members and any
estate of a Family Member who died on or before the date of this
Agreement (collectively defined as the "Family Entities"); (C)
any estate of a Family Member who dies after the date of this
Agreement, or any trust established after the date of this
Agreement by one or more Family Members or Family Entities,
provided that one or more Family Members, Family Entities or
charitable organizations which qualify as exempt organizations
under Section 501(c) of the Internal Revenue Code of 1986, as
amended ("Charitable Organizations"), collectively, are the
beneficiaries of at least 50% of the actuarially-determined
beneficial interests in such estate or trust; (D) any Charitable
Organization which is established by one or more Family Members
or Family Entities (a "Family Charitable Organization"); (E) any
corporation of which a majority of the voting power is held,
directly or indirectly, by or for the benefit of one or more
Family Members, Family Entities, estates or trusts described in
clause (C) above, or Family Charitable Organizations; and (F) any
partnership or other entity or arrangement of which a majority of
the voting interest is held, directly or indirectly, by or for
the benefit of one or more Family Members, Family Entities,
estates or trusts described in clause (B) or (C) above or Family
Charitable Organizations, or (y) any Person who or which has
entered into any agreement or arrangement with the Company or any
Subsidiary of the Company providing for an Acquisition
Transaction (as defined in Section 1(b) hereof).
(b) The following Section 1(b) is inserted into the Agreement
and all subsequent subsections of Section 1 hereby are renumbered
accordingly:
"Acquisition Transaction" shall mean (x) a merger,
consolidation or similar transaction involving the Company or any
of its Subsidiaries as a result of which stockholders of the
Company will own less than 60% of the outstanding shares of
Common Stock of the Company or a publicly traded entity which
controls the Company or, if appropriate, the entity into which
the Company may be merged, consolidated or otherwise combined
(based solely on the shares of Common Stock received or retained
by such stockholders, in their capacity as stockholders of the
Company, pursuant to such transaction), (y) a purchase or other
acquisition of all or a substantial portion of the assets of the
Company and its Subsidiaries, or (z) a purchase or other
acquisition of securities representing 15% or more of the shares
of Common Stock then outstanding.
(c) Section 1(q) of the Agreement, containing the definition of
"Offering Person," is hereby deleted in its entirety and all subsequent
subsections of Section 1 are hereby renumbered accordingly.
(d) Section 1(dd) of the Agreement is hereby amended in its
entirety to read as follows:
"Stock Acquisition Date" shall mean the earlier of (i) the
first date of public announcement by the Company that an
Acquiring Person has become such pursuant to clause (x) of the
definition of Acquiring Person, and (ii) the date that an
Acquiring Person has become such pursuant to clause (y) of the
definition of Acquiring Person.
Section 2. Amendment of "Issuance of Rights Certificates" Section.
(a) The first sentence of Section 3(a) of the Agreement is
hereby amended in its entirety to read as follows:
Until the earlier of (i) the close of business on the
twentieth day after the Stock Acquisition Date (or, if the
twentieth day after the Stock Acquisition Date occurs before the
Record Date, the close of business on the Record Date), or (ii)
the close of business on the twentieth day (or such specified or
unspecified later date as the Board shall determine, provided,
however, that no deferral of a Distribution Date by the Board
pursuant to this clause (ii) may be made at any time during the
Special Period) after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company for or pursuant to the
terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof,
such Person would become the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding (the earlier of (i)
and (ii) being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
paragraphs (b) and (c) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed
also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common
Stock (including a transfer to the Company).
Section 3. Amendment of "Redemption and Termination" Section.
(a) Section 23 of the Agreement is hereby amended in its
entirety to read as follows:
(a) The Board may, at its option, at any time prior to the
earlier of (i) the close of business on the twentieth day
following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date,
the close of business on the twentieth day following the Record
Date), or (ii) the Final Expiration Date, direct the Company to,
and if directed, the Company shall redeem all but not less than
all of the then outstanding Rights at a redemption price of $.01
per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the Current Market Price, as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate
by the Board.
(b) Immediately upon the action of the Board directing
the Company to make the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent, and without
any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board
directing the Company to make the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such
notice to each such holder at such holder's last address as it
appears upon the registry books of the Rights Agent, or, prior to
the Distribution Date, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price
will be made.
(c) Notwithstanding the provisions of Section 23(a) hereof,
if, within 270 days of a public announcement by a third party of
an intent or proposal to engage (without the current and
continuing concurrence of the Board) in a transaction involving
an acquisition of or business combination with the Company or
otherwise to become an Acquiring Person, there is an election of
Directors (whether at one or more stockholder meetings and/or
pursuant to written stockholder consent) resulting in a majority
of the Board being comprised of persons who were not nominated
by the Board in office immediately prior to such election, then
following the effectiveness of such election for a period of 180
days (the "Special Period") the Rights, if otherwise then
redeemable absent the provisions of this paragraph (c), shall be
redeemable upon either of the following conditions being
satisfied, but not otherwise:
(A) by a vote of a majority of the Directors then in office,
provided that
(I) before such vote, the Board shall have implemented the Value
Enhancement Procedures (as defined below) and
(II) promptly after such vote, the Company publicly announces
such vote and
(a) the manner in which the Value Enhancement Procedures
were implemented,
(b) any material financial, business, personal or other
benefit or relationship (an "Interest") which each Director
and each Affiliate of such Director (identifying each
Director and Affiliate separately in relation to each such
Interest) has in connection with any suggested, proposed or
pending transaction with or involving the Company (a
"Transaction"), or with any other party or Affiliate of any
other party to a Transaction, where such Transaction would
or might, or is intended to, be permitted or facilitated by
redemption of the Rights (an "Affected Transaction"), other
than treatment as a stockholder on a pro rata basis with
other stockholders or pursuant to compensation arrangements
as a director or employee of the Company or a subsidiary
which have been previously disclosed by the Company,
(c) the individual vote of each Director on the motion to
redeem the Rights, and
(d) the statement of any Director who voted for or against
the motion to redeem the Rights and desires to have a
statement included in such announcement, or
(B) if clause (A) is not applicable, by a vote of a majority of
the Directors then in office, provided that (I) if there is a
challenge to the Directors' action approving redemption and/or
any related Affected Transaction as a breach of the fiduciary
duty of care or loyalty, the Directors, solely for purposes of
determining the effectiveness of such redemption pursuant to this
clause (B), are able to establish the entire fairness of such
redemption and, if applicable, such related Affected Transaction,
and (II) the Company shall have publicly announced the vote of
the Board approving such redemption and, if applicable, such
related Affected Transaction, which announcement shall set forth
the information prescribed by clauses (A) (II) (b), (c) and (d)
above.
"Value Enhancement Procedures" shall mean:
(1) the selection by the Board of an independent financial advisor
(the "Independent Advisor") from among financial advisors which have
national standing, have established expertise in advising on mergers,
acquisitions and related matters and have no Interest relating to an
Affected Transaction, and have not during the preceding year provided
services to, been engaged by or been a financing source for any other
party to an Affected Transaction or any Affiliate of any such party or
of any Director (other than the Company and its subsidiaries);
(2) whether or not there is a then-pending Affected Transaction, the
receipt by the Board from its Independent Advisor of (a) such
advisor's view (expressed in such form and subject to such
qualifications and limitations as the Independent Advisor deems
appropriate) regarding whether redemption of the Rights will serve the
best interests of the Company and its stockholders or (b) such
advisor's statement that it is unable to express such a view, setting
forth the reasons therefor;
(3) if there is a then-pending Affected Transaction,
(A) the establishment and implementation by the Board, with the
advice of its Independent Advisor, of a process and procedures
which the Board and such advisor conclude would be most likely to
result in the best value reasonably available to stockholders
(regardless of whether such Affected Transaction involves a "sale
of control" or "break-up" of the Company for Delaware law
purposes),
(B) the Board (I) receiving the opinion of its Independent
Advisor, in customary form and content for transactions of the
type involved, that the Affected Transaction is fair to the
Company's stockholders from a financial point of view and (II)
determining, and the Independent Advisor confirming, that it has
no reason to believe that a superior transaction is reasonably
available for the benefit of the Company's stockholders, and
(C) the execution of a definitive transaction agreement and other
definitive documentation necessary to effect the Affected
Transaction.
(d) Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth
in this Section 23 and other than in connection with the purchase
or repurchase by any of them of Common Stock prior to the
Distribution Date.
Section 4. Amendment of "Exchange" Section.
(a) The first sentence of Section 24(a) of the Agreement is
hereby amended in its entirety to read as follows:
The Board may, at its option, at any time after the first
occurrence of a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"); provided,
however, that no such exchange of the Rights may be authorized by
the Board during the Special Period or at any time when the
Rights are not redeemable.
Section 5. Amendment of "Supplements and Amendments" Section.
(a) Section 27 of the Agreement is hereby amended in its
entirety to read as follows:
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, and subject to the
provisions of Section 27(b) hereof, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement (including, without limitation, any
extension of the period in which the Rights may be redeemed, any
increase in the Purchase Price and any extension of the Final
Maturity Date) without the approval of any holders of
certificates representing shares of Common Stock. From and after
the Distribution Date, and subject to the provisions of Section
27(b) hereof, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement
or amendment is in compliance with the terms of this Section 27,
the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the
holders of Common Stock.
(b) Notwithstanding anything herein to the contrary, no
supplement or amendment shall be made to this Agreement during
the Special Period or at a time when the Rights are not
redeemable, except as contemplated by clause (i) or (ii) of
Section 27(a) hereof.
Section 6. Amendment of Form of Rights Certificate.
(a) Exhibit B to the Agreement is hereby amended to remove the
following sentence from the sixth paragraph thereof:
The foregoing notwithstanding, the Rights generally may not
be redeemed for one hundred eighty (180) days following a change
in a majority of the Board as a result of a proxy contest or
action taken by written consent of stockholders.
(b) The following sentence is hereby added to the sixth
paragraph of Exhibit B in place of the sentence removed pursuant to
subsection (a) of this section:
For 180 days following a change in control of the Board of
Directors of the Company, that has not been approved by the Board
of Directors, occurring within six months of announcement of an
unsolicited third party acquisition or business combination
proposal or of a third party's intent or proposal otherwise to
become an Acquiring Person, the new directors are entitled to
redeem the rights (assuming the rights would have otherwise been
redeemable), including to facilitate an acquisition or business
combination transaction involving the Company, but only (1) if
they have followed certain prescribed procedures or (2) if such
procedures are not followed, and if their decision regarding
redemption and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty, the
directors (solely for purposes of the effectiveness of the
redemption decision) are able to establish the entire fairness of
the redemption or transaction.
Section 7. Agreement as Amended. The term "Agreement" as used in the
Agreement shall be deemed to refer to the Agreement as amended hereby, and
all references to the Agreement shall be deemed to include this Amendment.
Section 8. Effectiveness. This Amendment shall be effective as of
the date first written above, and except as set forth herein, the Agreement
shall remain in full force and effect and otherwise shall be unaffected
hereby.
Section 9. Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be duly executed and attested as of the date first written above.
Attest: NORTHERN TRUST CORPORATION
/s/ Xxxx X. Xxxxx /s/ Xxxxx X. Xxxx
---------------------------- --------------------------------------
Name: Xxxx X. Xxxxx Name: Xxxxx X. Xxxx
Title: Secretary Title: Senior Executive Vice President
Attest: NORWEST BANK MINNESOTA, N.A.
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
---------------------------- --------------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
