AMENDMENT AND RESTATEMENT AGREEMENT, dated as of January 29, 2003 (this
"Amendment Agreement"), between Central Bancorp, Inc., a Massachusetts
corporation (the "Company"), and Registrar and Transfer Company, a New Jersey
corporation, as Rights Agent, under the Rights Agreement referred to below (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, the Company has appointed the Rights Agent as Rights Agent under
that certain Shareholder Rights Agreement, dated as of October 11, 2001 by and
between the Company and EquiServe Trust Company, N.A. (the "Rights Agreement")
and the Rights Agent has accepted such appointment;
WHEREAS, the Company has requested that the Rights Agent duly execute and
deliver this Amendment Agreement;
WHEREAS, Section 5.4 of the Rights Agreement provides that the Company and
the Rights Agent may from time to time amend the Rights Agreement in any respect
prior to the Distribution Date (as defined in the Rights Agreement) and that the
Rights Agent will, at the request of the Company, execute and deliver any
amendment to the Rights Agreement satisfying the terms of Section 5.4; and
WHEREAS, no Distribution Date has occurred as of the date hereof;
NOW, THEREFORE, in consideration of the premises, the parties hereby agree
as follows:
1. Amendment and Restatement. The Rights Agreement is hereby amended and
--------------------------
restated to read as set forth in the attached Amended and Restated Shareholder
Rights Agreement.
2. Counterparts. This Amendment 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.
3. GOVERNING LAW. THIS AMENDMENT AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
-------------
MADE UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND FOR ALL PURPOSES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE
APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to
be executed as of the date first above written.
CENTRAL BANCORP, INC.
By: /s/ John D. Doherty
-------------------------------------------
John D. Doherty
President and Chief Executive Officer
REGISTRAR AND TRANSFER COMPANY
By: William P. Tatler
-------------------------------------------
William P. Tatler
Vice President
================================================================================
SHAREHOLDER RIGHTS AGREEMENT
DATED AS OF
OCTOBER 11, 2001
BY AND BETWEEN
CENTRAL BANCORP, INC.
AND
REGISTRAR AND TRANSFER COMPANY
AS RIGHTS AGENT
---------------------------------------
AMENDED AND RESTATED
AS OF
JANUARY 29, 2003
---------------------------------------
================================================================================
SHAREHOLDER RIGHTS AGREEMENT
Table of Contents
Page
----
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions....................................... 1
ARTICLE II
THE RIGHTS
Section 2.1 Summary of Rights ........................................ 6
Section 2.2 Legend on Common Stock Certificates....................... 6
Section 2.3 Exercise of Rights; Separation of Rights.................. 6
Section 2.4 Adjustments to Exercise Price; Number of Rights........... 8
Section 2.5 Date on Which Exercise is Effective....................... 8
Section 2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates..................................... 8
Section 2.7 Registration, Registration of Transfer and Exchange....... 9
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. 9
Section 2.9 Persons Deemed Owners..................................... 10
Section 2.10 Delivery and Cancellation of Certificates................. 10
Section 2.11 Agreement of Rights Holders............................... 10
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Distribution Date......................................... 10
Section 3.2 Flip-over................................................. 12
ARTICLE IV
THE RIGHTS AGENT
Section 4.1 General................................................... 12
Section 4.2 Merger or Consolidation or Change of Name of Rights Agent. 13
Section 4.3 Duties of Rights Agent.................................... 13
Section 4.4 Change of Rights Agent.................................... 14
ARTICLE V
MISCELLANEOUS
Page
----
Section 5.1 Redemption ............................................... 15
Section 5.2 Expiration................................................ 15
Section 5.3 Issuance of New Rights Certificates....................... 15
Section 5.4 Supplements and Amendments................................ 15
Section 5.5 Fractional Shares......................................... 15
Section 5.6 Rights of Action.......................................... 15
Section 5.7 Holder of Rights Not Deemed a Shareholder................. 15
Section 5.8 Notice of Proposed Actions................................ 16
Section 5.9 Notices................................................... 16
Section 5.10 Suspension of Exercisability or Exchangeability........... 16
Section 5.11 Costs of Enforcement...................................... 17
Section 5.12 Successors................................................ 17
Section 5.13 Benefits of this Agreement................................ 17
Section 5.14 Determination and Actions by the Board of Directors, etc.. 17
Section 5.15 Descriptive Headings...................................... 17
Section 5.16 Governing Law............................................. 17
Section 5.17 Counterparts.............................................. 17
Section 5.18 Severability.............................................. 17
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
SHAREHOLDER RIGHTS AGREEMENT
This Shareholder Rights Agreement ("Agreement") is made and entered into as
of the 11th day of October, 2001 and amended and restated as of January 29, 2003
by and between Central Bancorp, Inc., a Massachusetts corporation (the
"Company"), and Registrar and Transfer Company, a New Jersey corporation, as
successor rights agent to EquiServe Trust Company, N.A., a national banking
association (the "Rights Agent").
WHEREAS, the Board of Directors of the Company desires to provide
stockholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that stockholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and
WHEREAS, the Board of Directors of the Company previously authorized a
Rights Agreement, dated as of January 8, 1999, between the Company and State
Street Bank and Trust Company, as Rights Agent (the "1999 Rights Agreement"),
declared a dividend of one Right (as such term is defined in the 1999 Rights
Agreement) for each outstanding share of the Company's common stock, par value
$1.00 per share (the "Common Stock"), outstanding as of the date of the
completion of the holding company reorganization of Central Co-operative Bank
(the "1999 Record Date"), and authorized the issuance of one Right for each
share of Common Stock issued between the 1999 Record Date and the Separation
Time (as such term is defined in the 1999 Rights Agreement), each Right
initially representing the right to purchase one share of Common Stock upon the
terms and subject to the conditions set forth in the 1999 Rights Agreement; and
WHEREAS, on October 11, 2001 the Board of Directors of the Company
determined that it is desirable and in the best interest of the Company and its
stockholders for the Company to extend the benefits afforded by the 1999 Rights
Agreement and to implement such extension by executing this Agreement; and
WHEREAS, the Board of Directors of the Company has authorized and declared
a dividend of one right (the "Right") in respect of each share of Common Stock
held of record as of the close of business on October 24, 2001 (the "Record
Time") and authorized the issuance of one Right in respect of each share of
Common Stock issued after the Record Time and prior to earlier of the Separation
Time or the Expiration Time (as hereinafter defined);
WHEREAS, subject to the terms and conditions hereof, each Right entitles
the holder thereof, after the Separation Time, to purchase securities of the
Company (or, in certain cases, of certain other entities) pursuant to the terms
and subject to the conditions set forth herein; and
WHEREAS, the Board of Directors desires that this Agreement be effective as
of the close of business on October 24, 2001 which is the Expiration Date of the
1999 Rights Agreement; and
WHEREAS, in connection with the matters referred to herein, the Company
desires to appoint the Rights Agent to act on behalf of the Company for the
benefit of the holders of Rights, and the Rights Agent is willing so to act;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
agreements set forth herein and intending to be legally bound hereby, and for
the benefit of the holders of the Rights, the parties hereto hereby agree as
follows:
ARTICLE I - CERTAIN DEFINITIONS
--------- -------------------
1.1 Certain Definitions. For purposes of this Agreement, the following
--------------------
terms have the meaning indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of 10%
or more of the outstanding shares of Common Stock; provided, however, that the
------------------
term "Acquiring Person" shall not include:
(i) any Person who shall become the Beneficial Owner of 10% or more
of the outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time
thereafter as such Person shall become the Beneficial Owner (other than by
means of a stock dividend or stock split) of any additional shares of
Common Stock; or
(ii) any Person who shall become the Beneficial Owner of 10% or
more of the outstanding shares of the Common Stock solely as a result of
purchasing the Common Stock directly from the Company pursuant to a written
agreement with the Company; or
(iii) the Company, a wholly owned Subsidiary of the Company, or
any employee stock ownership or other employee benefit plan of the Company
or a wholly owned Subsidiary of the Company, or any employee stock benefit
trust established by the Company or a wholly owned subsidiary of the
Company (an "Employee Plan Trust"); or
(iv) John D. Doherty and his Affiliates and Associates provided
that he does not become the Beneficial Owner of 20% or more of the
outstanding shares of the Common Stock.
"Adverse Person" shall mean a Person declared as such by the Board of
Directors of the Company, upon (i) a determination that such Person, alone or
together with its Affiliates and Associates, has become the Beneficial Owner of
10% or more of the outstanding shares of Common Stock and (ii) a determination
by the Board of Directors, including at least a majority of the Disinterested
Directors, after reasonable inquiry and investigation, including such
consultation with such persons as such directors shall deem appropriate, that
(A) such Beneficial Ownership by such Person is intended to cause, is reasonably
likely to cause or will cause the Company to repurchase the Common Stock
beneficially owned by such Person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions which would provide
such Person with short-term financial gain under circumstances where the Board
of Directors determines that the best long-term interests of the Company and its
stockholders, but for the actions and possible actions of such Person, would not
be served by taking such action or entering into such transactions or series of
transactions at that time or (B) such Beneficial Ownership is having or is
reasonably likely to have a material adverse impact (including, but not limited
to, impairment of relationships with customers or impairment of the Company's
ability to maintain its competitive position) on the business or prospects of
the Company; provided, however, that the Board of Directors of the Company may
determine not to declare a Person to be an Adverse Person if, prior to the time
that such Person acquired 10% or more of the shares of Common Stock then
outstanding (or, in the case of a Person who is the Beneficial Owner of 10% or
more of the outstanding Common Stock as of the date of this Agreement, within 90
days following adoption of this Agreement), such Person provided to the Board of
Directors in writing a statement of such Person's purpose and intentions in
connection with the proposed acquisition of Common Stock, together with any
other information reasonably requested of such Person by the Board of Directors,
and the Board of Directors, based on such statement and reasonable inquiry and
investigation, including consultation with such persons as the directors shall
deem appropriate, determines to notify and notifies such Person in writing that
it will not declare such Person to be an Adverse Person; provided further, that
the Board of Directors, with the concurrence of a least a majority of the
Disinterested Directors, may expressly condition in any manner a determination
not to declare a Person an Adverse Person on such conditions as the Board of
Directors may select, including without limitation, such Person's not acquiring
more than a specified amount of stock and/or on such Person's not taking actions
inconsistent with the purposes and intentions disclosed by such Person in the
statement provided to the Board of Directors. In the event that the Board of
Directors should at any time determine, upon reasonable inquiry and
investigation, including consultation with such Persons as the directors shall
deem appropriate, that such Person has not met or complied with any condition
specified by the Board of Directors, the Board of Directors, with the
concurrence of at least a majority of the Disinterested Directors, may at any
time thereafter declare such Person to be an Adverse Person pursuant to the
provisions hereof. Notwithstanding the foregoing, the Board may not declare John
D. Doherty to be an Adverse Person until such time as he, either alone or
together with his Affiliates and Associates, has become the Beneficial Owner of
20% or more of the outstanding shares of the Common Stock.
"Affiliate" is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
-2-
"Associate" means (i) any corporation or organization (other than the
Company or a majority-owned subsidiary of the Company) of which such Person is
an officer or partner or is, directly or indirectly, the Beneficial Owner of 10%
or more of any class of equity securities, (ii) any trust (other than an
Employee Plan Trust) or other estate in which such Person has a substantial
Beneficial interest or as to which such Person serves as trustee or in a similar
fiduciary capacity, and (iii) any relative or spouse of such Person who has the
same home as such Person.
A Person shall be deemed the "Beneficial Owner," and to have "Beneficial
Ownership," of and to "Beneficially Own":
(i) any securities which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act or Rules 13d-3 and 13d-5
promulgated thereunder (or any comparable or successor law or regulation),
in each case as in effect on the date hereof;
(ii) any securities which such Person or any of such Person's
Affiliates or Associates has the right to acquire (whether such right is
exercisable immediately, or only after the passage of time, compliance with
regulatory requirements, the fulfillment of a condition, or otherwise)
pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise, provided that a Person shall
not under this clause (ii) be deemed the Beneficial Owner of, or to
Beneficially Own, securities tendered pursuant to a tender offer 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;
(iii) any securities which such Person or any such Person's
Affiliates or Associates has the right to vote, alone or in concert with
others, pursuant to any agreement, arrangement or understanding, provided
that a Person shall not under this clause (iii) be deemed the Beneficial
Owner of, or to Beneficially Own, any security if the agreement,
arrangement or understanding to vote such security (A) arises solely from a
revocable proxy given to such Person or any of such Person's Affiliates or
Associates in response to a public proxy solicitation made pursuant to and
in accordance with the applicable rules and regulations of the Exchange
Act, and (B) is not also then reportable on Schedule 13D or under the
Exchange Act (or any comparable or successor report);
(iv) any securities which are 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 for the
purpose of acquiring, holding, voting (other than voting pursuant to a
revocable proxy as described in the proviso to clause (iii) hereof) or
disposing of any securities of the Company; and
(v) on any day on or after a Distribution Date, all Rights that
prior to such date were represented by certificates for Common Stock that
such Person owns on such day.
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m., eastern
standard time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 p.m., eastern standard time, on the next
succeeding Business Day.
"Common Stock" shall mean the common stock, par value $1.00 per share, of
the Company.
"Disinterested Director" shall mean (i) any member of the Company's Board
of Directors who is not an officer or employee of the Company or any of its
Subsidiaries and is not an Acquiring Person, an Adverse Person or an Affiliate
or Associate of any such Person or a representative or nominee of an Acquiring
Person, an Adverse Person or any such Affiliate or Associate and was a member of
the Company's Board of Directors prior to the date of this Agreement, and (ii)
any Person who subsequently becomes a member of the Company's Board of Directors
who is not an Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such Person or a
-3-
representative or nominee of an Acquiring Person, an Adverse Person or of any
such Affiliate or Associate, if such Person's nomination is recommended or
approved by a majority of the Disinterested Directors.
"Distribution Date" shall mean (i) the first date of public announcement by
the Company (by any means) or by an Acquiring Person (by means of filing a
Schedule 13D under the Exchange Act or any comparable or successor report or
schedule or an amendment thereto) that an Acquiring Person has become such or
(ii) the first date of public announcement by the Company (by any means) that an
Adverse Person has become such.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Exercise Price" shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $60.
"Expiration Time" shall mean the earlier of (i) the Redemption Time or (ii)
the close of business on October 24, 2011.
"Expansion Factor" shall have the meaning set forth in Section 2.4 (a)
hereof.
"Flip-over Stock" of any Person shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other Persons similarly responsible for the direction of the
business and affairs) of such Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately controls such
first-mentioned Person.
"Flip-over Transaction or Event" shall mean a transaction or series of
transactions in which, directly or indirectly, (i) the Company shall consolidate
with or merge with or into an Acquiring Person, an Adverse Person, or any other
Person acting together in any respect with such Person, or an Acquiring Person
or Adverse Person or any other Person acting together in any respect with such
Person shall merge with or into the Company, (ii) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer) assets (A) aggregating more than 50% of the assets (measured by either
book value or fair market value) or (B) generating more than 50% of the
operating income or cash flow, of the Company and its Subsidiaries (taken as a
whole) to an Acquiring Person or Adverse Person or any other Person acting
together in any respect with such Person (provided that for purposes of clauses
(i) and (ii), but without limitation, a Person shall be deemed to be acting
together in any respect with an Acquiring Person or Adverse Person if such
Person enters into any transaction of the type described in clause (i) or (ii)
within one year after the time the Acquiring Person or Adverse Person has become
such, unless (x) such transaction was initiated by the Company and (y) the
Acquiring Person or Adverse Person or any Person acting together in any respect
with such Person has not acquired control of the Board of Directors of the
Company), (iii) any Acquiring Person or Adverse Person shall (A) sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of,
to, from, or with, as the case may be, the Company or any of its Subsidiaries,
over any period of 12 consecutive calendar months, assets or liabilities (x)
having an aggregate fair market value of more than $15,000,000 or (y) on terms
and conditions less favorable to the Company than the Company would be able to
obtain through arm's-length negotiations with an unaffiliated third party, (B)
receive any compensation for services from the Company or any of its
Subsidiaries, other than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its Subsidiaries') past
practices, or (C) receive the benefit, directly or indirectly (except
proportionately as a shareholder), over any period of 12 consecutive calendar
months, of any loans, advances, guarantees, pledges, insurance, reinsurance or
other financial assistance or any tax credits or other tax advantage provided by
the Company or any of its Subsidiaries involving an aggregate principal amount
in excess of $5,000,000 or an aggregate cost or transfer of benefits from the
Company or any of its Subsidiaries in excess of $5,000,000 or, in any case, on
terms and conditions less favorable to the Company than the Company would be
able to obtain through arm's length negotiations with a third party, or (iv) as
a result of any reclassification of securities (including any reverse stock
split), or recapitalization, of the Company, or any merger or consolidation of
the Company with any of its Subsidiaries or any other transaction or series of
transactions (whether or not with or into or otherwise involving an Acquiring
Person or Adverse Person), the proportionate share of the outstanding shares of
any class of equity or convertible securities of the Company or any of its
Subsidiaries which is directly or indirectly owned by any Acquiring Person or
Adverse Person is increased by more than 1%. The terms "Acquiring Person" and
"Adverse Person" shall include any Acquiring Person and/or any Adverse Person
and its Affiliates and
-4-
Associates (other than the Company, a wholly owned Subsidiary of the Company or
any employee stock ownership or other employee benefit plan of the Company or a
wholly owned Subsidiary of the Company), counted together as a single Person.
"Market Price" per share of any security on any date (the "Determination
Date") shall mean the arithmetic average of the daily closing prices per share
of such security (determined as described below) on each of the 20 consecutive
Trading Days through and including the Trading Day immediately preceding the
Determination Date; provided, however, that if an event of a type analogous to
-------- -------
any of the events described in Section 2.4 hereof shall have caused the closing
price on one or more Trading Days during such period of 20 Trading Days not to
be fully comparable with the closing price on the Determination Date, each such
closing price so used shall be appropriately adjusted in order to make it fully
comparable with the closing price on the Determination Date. The closing price
per share of any security on any date shall be the last reported sale price,
regular way, or, in case no such sale takes place or is reported on such date,
the average of the closing bid and asked prices, regular way, for such security,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange, Inc. or, if such security is not listed or admitted to trading
on the New York Stock Exchange, Inc., as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such security is listed or admitted to
trading or, if such security is not listed or admitted to trading on any
national securities exchange, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
self-regulatory organization or registered securities information processor (as
such terms are used under the Exchange Act) as then reports trading information
concerning such security, or, if on any such date such security is not listed or
admitted to trading on any national securities exchange or quoted by any such
organization, the average of the closing bid and asked prices as furnished by
any registered securities dealer that is a market maker (as such term is used
under the Exchange Act) in such security and which is selected by the Board of
Directors of the Company; provided, however, that if on any such date such
-------- -------
security is not listed or admitted to trading on a national securities exchange
or traded in the over-the-counter market, the closing price of such security on
such date shall mean the fair value of such security on such date as determined
in good faith by the Board of Directors of the Company, after consultation with
a nationally recognized investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, association, group
(as such term is used in Rule 13d-5 under the Exchange Act, as such Rule is in
effect on the date of this Agreement), corporation or other entity.
"Redemption Price" shall mean an amount (calculated to the nearest one
one-hundredth of a cent) equal to the Exercise Price, as in effect at the
Redemption Time, divided by 6000 (i.e., initially $0.01).
"Redemption Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1 hereof.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the Preamble.
"Rights Certificate" shall have the meaning set forth in Section 2.3(c)
hereof.
"Rights Register" shall have the meaning set forth in Section 2.7(a)
hereof.
"Rights Registrar" shall have the meaning set forth in Section 2.7(a)
"Separation Time" shall mean the close of business on the earlier of (i)
the later of (A) the tenth day, after the date on which any Person (other than
the Company, a majority-owned Subsidiary of the Company or an employee stock
ownership or other employee benefit plan of the Company or a majority-owned
Subsidiary of the Company) commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an Acquiring Person and (B)
such later date as the Board of Directors of the Company may from time to time
fix by resolution adopted prior to the Separation Time and (ii) the tenth day
after a Distribution Date; provided that, if the
--------
-5-
foregoing results in the Separation Time being prior to the Record Time, the
Separation Time shall be the Record Time and provided further that, if any
-------- -------
tender or exchange offer referred to in clause (i) of this definition is
cancelled, terminated or otherwise withdrawn prior to the Separation Time, such
offer shall be deemed, for purposes of this definition, never to have been made.
"Subsidiary" of any Person shall mean any corporation or other entity of
which equity securities or equity interests representing a majority of the
voting power are Beneficially Owned, directly or indirectly, or which is
effectively controlled, by such Person.
"Trading Day" shall mean, as to any stock or other security, a day on which
the principal national securities exchange or NASDAQ on which such stock or
other security is listed, quoted or admitted to trading is open for the
transaction of business or, if such stock or other security is not listed,
quoted or admitted to trading on any national securities exchange or NASDAQ, a
Business Day.
ARTICLE II - THE RIGHTS
---------- ----------
2.1 Summary of Rights. As soon as practicable after the Record Time, the
-----------------
Company will mail a copy of a letter to shareholders summarizing the terms of
the Rights to each holder of record of the Common Stock as of the Record Time,
at such holder's address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for shares of the
-------------------------------------
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Shareholder Rights
Agreement, dated as of October 11, 2001 (as such may be amended from
time to time, the "Rights Agreement"), between Central Bancorp, Inc.
(the "Company") and Registrar and Transfer Company, 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 may be redeemed, may be exchanged for shares of
Common Stock or other securities or assets of the Company, may expire,
may become void (if they are "Beneficially Owned" by an "Acquiring
Person" or "Adverse Person" or an Affiliate or Associate thereof, as
such terms are defined in the Rights Agreement, or by any transferee
of any of the foregoing) or may be evidenced by separate certificates
and may no longer be evidenced by this certificate. The Company will
mail or arrange for the mailing of a copy of the Rights Agreement to
the holder of this certificate without charge within five days after
the receipt of a written request therefor.
Until the Separation Time, certificates representing shares of Common Stock that
are issued and outstanding at the Record Time shall evidence one Right for each
share of Common Stock evidenced thereby notwithstanding the absence of the
foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to adjustment as
-----------------------------------------
herein set forth, each Right will entitle the holder thereof, after the
Separation Time and prior to the Expiration Time, to purchase, for the Exercise
Price, one share of the Common Stock at the Exercise Price.
(b) Until the Separation Time, (i) no Right may be exercised and (ii)
each Right will be evidenced by the certificate for the associated share of
Common Stock and will be transferable only together with, and will be
transferred by a transfer of, such associated share. Notwithstanding any other
provision of this Agreement, any Rights held by the Company or any of its
Subsidiaries other than in fiduciary capacity shall not be exercisable. Nothing
in the preceding sentence shall be construed as limiting the right of the
Company and its Subsidiaries to acquire or transfer Rights.
-6-
(c) Subject to the terms and conditions herein set forth, after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised, and (ii) may be transferred independently of the shares of Common
Stock in respect of which they were originally issued. Promptly following the
Separation Time, the Rights Agent will mail to each holder of record of Common
Stock as of the Separation Time, at such holder's address as shown by the
records of the Company (the Company hereby agreeing to furnish copies of such
records to the Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit A hereto appropriately
completed, representing the number of rights held by such holder at the
Separation Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national securities
exchange or other self-regulatory organization (as such terms are used under the
Exchange Act) on which the Rights may from time to time be listed or through
which the Rights may from time to time be traded, or to conform to usage, and
(y) a disclosure statement describing the Rights.
(d) Subject to Sections 2.3(b) and 5.10, Rights may be exercised on
any Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an election to exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the
order of the Company, of a sum equal to the Exercise Price multiplied by the
number of Rights being exercised together with a sum sufficient to cover any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares or depositary receipts (or both) in a name other than
that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d) above, and subject to the
conditions set forth in this Agreement, the Rights Agent will thereupon promptly
(i)(A) requisition from a transfer agent for the stock or other securities
purchasable upon exercise of the Rights certificates evidencing such number of
shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 hereof not to issue certificates
representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 hereof and (ii) after receipt
of such certificates, depositary receipts and/or cash, deliver the same to or
upon the order of the registered holder of such Rights Certificate, registered
(in the case of certificates or depositary receipts) in such name or names as
may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights which remain unexercised will be issued by the Rights
Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) cause to be kept
available until the Expiration Time out of its authorized and unissued shares of
capital stock a number of shares of Common Stock that will be sufficient to
permit the exercise in full of all outstanding Rights; (ii) immediately upon the
occurrence of the Separation Time, take all such action as may be necessary to
obtain the approval of such regulatory agency or agencies as may be required by
law for the issuance of shares of the Common Stock upon the exercise of Rights
hereunder, if required by law; (iii) take all such action as may be necessary to
ensure that all shares delivered upon exercise of Rights shall, at the time of
delivery thereof (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(iv) take all such action as may be necessary to ensure that all securities
other than shares delivered upon exercise of Rights shall, at the time of
delivery thereof (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and valid and binding obligations of
the issuer thereof; (v) take all such action as may be necessary to comply with
any applicable requirements of the General Laws of Massachusetts, the Securities
Act of 1933 or the Exchange Act, and the rules and regulations thereunder, and
any other applicable law, rule or regulation, in connection with the issuance of
any shares upon exercise of Rights; (vi) use its best efforts to cause all
shares and other securities issued upon exercise of Rights to be listed on a
national securities exchange or traded in the over-the-counter market, as
reported by NASDAQ or another self-regulatory organization or registered
securities
-7-
information processor (as such terms are used under the Exchange Act), upon
issuance; and (vii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event the
------------------------------------------------
Company shall at any time after the Record Time and prior to the Separation Time
(i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, then (x) the Exercise
Price in effect after such adjustment will be equal to the Exercise Price in
effect immediately prior to such adjustment divided by the number of shares of
Common Stock (the "Expansion Factor") that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment
will become that number of Rights equal to the Expansion Factor, and (z) the
adjusted number of Rights will be deemed to be distributed among the shares of
Common Stock with respect to which the original Rights were associated (if they
remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and prior
to the Separation Time issue any shares of Common Stock otherwise than in a
transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share.
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Common Stock (other than pursuant to a
regular periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization (including any
such transaction involving a merger, consolidation or binding share exchange),
or otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (iii) mail a brief summary thereof to each holder of
Rights.
(d) Irrespective of any adjustment or change in the securities
purchasable upon exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the securities so purchasable which
were expressed in the initial Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective. Each person in whose name any
--------------------------------------
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the stock transfer books of the
Company are open.
-8-
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates.
----------------------------------------------------------------------
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time, the Company will
notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Company to the Rights Agent for countersignature,
and the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose until manually countersigned
by the Rights Agent.
(b) Rights Certificate shall be dated the date of countersignature
thereof by the Rights Agent.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
------------------------------------------------------
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and subject
to the provisions of Section 2.7(c) below, the Company will execute, and the
Rights Agent will countersign and deliver, in the name of the holder or the
designated transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same aggregate
number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b) hereof, all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after the Rights have been redeemed pursuant to Section
5.1 hereof or become void pursuant to Section 3.1(b) hereof.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If any
----------------------------------------------------------
mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, in the absence
-9-
of notice to the Company or the Rights Agent that such Rights Certificate has
been acquired by a bona fide purchaser, the Company shall execute and upon its
request the Rights Agent shall countersign and deliver, in lieu of any such
destroyed, lost or stolen Rights Certificate, a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so destroyed,
lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8
in lieu of any mutilated, destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the mutilated, destroyed, lost or stolen Rights Certificate shall be at
any time enforceable by anyone, and shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights Certificate
---------------------
(or, prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name such
Rights Certificate (or, prior to the Separation Time, such Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
-------------------------------------------
surrendered upon exercise or for redemption, registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent shall return all
cancelled Rights Certificates to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting the
----------------------------
same consents and agrees with the Company and the Rights Agent and with every
other holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will under the
circumstances set forth in Section 3.1(b) become void; and
(e) This Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof.
-10-
ARTICLE III - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
---------------------------------------------------------------------------
TRANSACTIONS
- ------------
3.1 Distribution Date. (a) In the event that prior to the Expiration Time a
-----------------
Distribution Date shall occur, then, if applicable law does not preclude Rights
owned by certain Persons referred to in Section 3.1(b) hereof to become void
pursuant to the provisions thereof, the Company shall take such action as shall
be necessary to ensure and provide that, except as provided below, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Sections 5.1 and 5.10
hereof), that number of shares of Common Stock having an aggregate Market Price
on the Distribution Date equal to twice the Exercise Price for an amount in cash
equal to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Distribution Date an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock).
(b) Notwithstanding the foregoing, to the extent permitted by
applicable law, any Rights that are or were Beneficially Owned on or after the
Distribution Date by an Acquiring Person, an Adverse Person, or an Affiliate or
Associate thereof or by a transferee, direct or indirect, of any of the
foregoing shall become void and any holder of such Rights (including
transferees) shall thereafter have no rights to exercise or transfer such
Rights. For purposes of the preceding sentence, a transferee of an Acquiring
Person, Adverse Person or Affiliate or Associate thereof shall include only a
Person who (i) becomes a transferee after the Acquiring Person or Adverse Person
becomes such or (ii) becomes a transferee prior to or concurrently with the
Acquiring Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person or Adverse Person to holders of equity interests in such
Acquiring Person or Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of this
Section 3.1(b). If any Rights Certificate is presented for assignment or
exercise and the Person presenting the same does not complete the certification
set forth at the end of the form of assignment or notice of election to exercise
and provide such additional evidence of the identity of the Beneficial Owner and
its Affiliates and Associates (or former Beneficial Owners and their Affiliates
and Associates) as the Company shall reasonably request, then the Company shall
be entitled to conclusively deem the Beneficial Owner thereof to be an Acquiring
Person or an Adverse Person, or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will, to the extent permitted
by applicable law, deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Distribution Date and prior to the time that an Acquiring Person or
an Adverse Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock, but only if applicable law does not preclude
Rights owned by certain Persons referred to in Section 3.1(b) hereof to become
void pursuant to the provisions thereof, elect to exchange all (but not less
than all) of the then outstanding Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 3.1(b)) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Separation Time an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock (such exchange ratio, as adjusted from
time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice in accordance with Section 5.9.
Each Person in whose name any shares are issued upon the exchange of
Rights pursuant to this Section 3.1(c) shall for all purposes be deemed to have
become the holder of record of the shares on, and any certificate or
confirmation or advice of issuance relating to such shares shall be dated, the
date upon which the Rights Certificates evidencing such Rights was duly
surrendered and payment of any applicable taxes and other
-11-
governmental charges payable by the holder was made; provided, however, that if
the date of such surrender and payment is a date upon which the stock transfer
books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares on, and any such certificate, advice or
confirmation shall be dated, the next succeeding Business Day on which the stock
transfer books of the Company are open.
(d) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock of the Company to permit the
exercise or exchange in full of the Rights in accordance with Section 3.1(a) or
(c), the Company shall take such action as shall be necessary to ensure and
provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Distribution Date to which it is a party, that each
Right shall thereafter constitute the right to receive, (x) at the Company's
option, either (A) in return for the Exercise Price, debt or equity securities
or other assets (or a combination thereof) having a fair value equal to twice
the Exercise Price, or (B) without payment of consideration (except as otherwise
required by applicable law), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise Price, or (y) if
the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Distribution Date times the Exchange
Ratio in effect on the Distribution Date, where in any case set forth in (x) or
(y) above the fair value of such debt or equity securities or other assets shall
be as determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not
---------
enter into any agreement with any Acquiring Person, any Adverse Person or any
Affiliate or Associate of an Acquiring Person or Adverse Person with respect to,
or consummate or permit to occur, any Flip-over Transaction or Event, unless and
until it shall have entered into a supplemental agreement with the Person
engaging in such Flip-over Transaction or Event (the "Flip-over Entity"), for
the benefit of the holders of the Rights, providing that, upon consummation or
occurrence of the Flip-over Transaction or Event (i) each Right shall thereafter
constitute the right to purchase from the Flip-over Entity, upon exercise
thereof in accordance with the terms hereof, that number of shares of Flip-over
Stock of the Flip-over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price (such right
to be appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that after such date of consummation or occurrence
an event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Flip-over Stock) and (ii) the
Flip-over Entity shall thereafter be liable for, and shall assume, by virtue of
such Flip-over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, or consummate or permit to occur, any
Flip-over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments which would eliminate or otherwise diminish in any respect the
benefits intended to be afforded by this Agreement to the holders of Rights upon
consummation or occurrence of such transaction or event.
ARTICLE IV - THE RIGHTS AGENT
---------- ----------------
4.1 General. (a) The Company hereby appoints the Rights Agent to act as
-------
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation as shall be agreed to in writing from
time to time for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses (including expenses
incurred by the Rights Agent under Section 4.4) and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any claim of
liability.
-12-
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a) Any
------------------------------------------------------------
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4 hereof. In case, at the time
such successor Rights Agent succeeds to the agency created by this Agreement,
any of the Rights Certificates have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates have not been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates will have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in is
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
-----------------------
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel will be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems it necessary or desirable that any fact or matter be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by a person believed by the Rights Agent to be the
Chairman of the Board, the President or any Vice President and by the Treasurer
or any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due authorization, execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any certificate for securities
purchasable upon exercise of
-13-
Rights or Rights Certificate (except its countersignature thereof); nor will it
be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
required under the provisions of Section 2.4, 3.1 or 3.2 hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate contemplated
by Section 2.4 describing any such adjustment); nor will it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any Rights
or as to whether any securities purchasable upon exercise of Rights will, when
issued, be duly and validly authorized, executed, issued and delivered and fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistance Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. Until the Rights Agent has
received written instructions in response to such application specifying the
action to be taken or omitted, the Rights Agent shall not be liable for any
inaction or omission related to the subject of the proposal included in any such
application.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign and be discharged
-----------------------
from its duties under this Agreement upon 60 days' notice (or such lesser notice
as is acceptable to the Company) in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The Company may remove the
Rights Agent upon 60 days' notice in writing, mailed to the Rights Agent and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Rights in accordance with Section 5.9. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the Company
will appoint a successor to the Rights Agent. If the Company fails to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of any Rights (which holder shall,
with such notice, submit such holder's Rights Certificate for inspection by the
Company), then the holder of any Rights or the Rights Agent 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 any other state of the United States which is authorized under such
laws to exercise the powers of the Rights Agent contemplated by this Agreement
and is subject to supervision or examination by federal or state authority.
After appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights
-14-
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a
notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
ARTICLE V - MISCELLANEOUS
--------- -------------
5.1 Redemption. (a) The Board of Directors of the Company may, at its
----------
option, at any time prior to the Distribution Date, or ten days thereafter,
subject to extension by a vote of two-thirds of the Board of Directors, elect to
redeem all (but not less than all) the then outstanding Rights at the Redemption
Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash.
Promptly after the action of the Board of Directors electing to redeem, and
thereby redeeming, 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 in accordance with Section 5.9.
5.2 Expiration. No Person shall have any rights pursuant to this Agreement
----------
or any Right after the Expiration Time, except, if the Rights are redeemed, as
provided in Section 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
---------------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement.
5.4 Supplements and Amendments. The Company and the Rights Agent may from
---------------------------
time to time supplement or amend this Agreement without the approval of any
holder of Rights (i) in any respect prior to the Separation Time, (ii) to make
any changes following the close of business on the Separation Time which the
Company may deem necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights generally or (iii) in order to
cure any ambiguity or to correct or supplement any provision contained herein
which may be inconsistent with any other provisions herein or otherwise
defective. The Rights Agent will duly execute and deliver any supplement or
amendment hereto requested by the Company which satisfies the terms of the
preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue certificates
------------------
representing fractional shares upon exercise of Rights, the Company shall, in
lieu thereof, (a) evidence such fractional shares by depositary receipts issued
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that each holder of a
depositary receipt shall have all of the rights, privileges and preferences to
which such holder would be entitled as a beneficial owner of such fractional
share, or (b) pay to the registered holder of such Rights the same fraction of
the Market Price (determined as of the date of exercise) of one share of the
stock issuable upon such exercise.
5.6 Rights of Action. Subject to the terms of this Agreement, rights of
----------------
action in respect of this Agreement, other than rights of action vested solely
in the Rights Agent, are vested in the respective holders of the Rights; and any
holder of any Rights, without the consent of the Rights Agent or of the holder
of any other Rights, may on such holder's own behalf and for such holder's own
benefit and the benefit of other holders of Rights, enforce, and may institute
and maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder's right to exercise such holder's
Rights in the manner provided in such holder's Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights,
-15-
it is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled to
specific performance of the obligations of, and injunctive relief against actual
or threatened violations of the obligations of, any Person subject to this
Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such, of any
-----------------------------------------
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised in accordance with the
provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after the
--------------------------
Separation Time and prior to the Expiration Time (i) to effect or permit (in
cases where the Company's permission is required) occurrence of any Distribution
Date or Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 5.9 hereof, a
notice of such proposed action, which shall specify the Distribution Date or the
date on which such Flip-over Transaction or Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be so given at least 20
Business Days prior to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Rights to or on the
Company shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Central Bancorp, Inc.
399 Highland Avenue
Somerville, Massachusetts 02144
Attention: John D. Doherty, President and Chief Executive Officer
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
Registrar and Transfer Company
10 Commerce Drive
Cranford, New Jersey 07016
Attention: Account Executive
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
5.10 Suspension of Exercisability or Exchangeability. To the extent that
-------------------------------------------------
the Company determines in good faith that some action need be taken pursuant to
Section 3.1(c) or (d) or to comply with federal or state securities laws, the
General Laws of Massachusetts or any conditions imposed by the Board of
Governors of the Federal Reserve System in connection with its approval of the
issuance of Common Stock upon the exercise of the Rights hereunder, the Company
may suspend the exercisability of the Rights following the date of the
occurrence of the Separation Time or the Distribution Date in order to take such
action or comply with such laws. In the event of any such suspension, the
Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Failure to give notice pursuant to this Agreement shall not affect
the validity of any action taken hereunder.
-16-
5.11 Costs of Enforcement. The Company agrees that if the Company or any
---------------------
other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by or
----------
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
----------------------------
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The Board of
--------------------------------------------------------
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the rights
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and (y) not subject the Board of Directors of
the Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
----------------------
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER SHALL BE
-------------
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY
WITHIN SUCH STATE.
5.17 Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 Severability. If any term or provision hereof or the application
------------
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
-17-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CENTRAL BANCORP, INC.
By /s/ John D. Doherty
---------------------------------------------
John D. Doherty
Title: President and Chief Executive Officer
REGISTRAR AND TRANSFER COMPANY
By /s/ William P. Tatler
---------------------------------------------
Name: William P. Tatler
Title: Vice President
-18-
Exhibit A
---------
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER OCTOBER 24, 2011 OR EARLIER IF REDEEMED.
THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS,
ADVERSE PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS THOSE
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY
OF THE FOREGOING MAY BECOME NULL AND VOID.
Rights Certificate
CENTRAL BANCORP, INC.
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 Shareholder Rights Agreement, dated as of October 11, 2001
(the "Rights Agreement"), by and between Central Bancorp, Inc., a Massachusetts
corporation (the "Company"), and Registrar and Transfer Company (the "Rights
Agent"), to purchase from the Company at any time after the Separation Time and
prior to the earlier of the Redemption Time (as such terms are defined or
referred to in the Rights Agreement) or 5:00 p.m., eastern standard time, on
October 24, 2011 at the office of the Rights Agent designated for such purpose
or at the office of its successors as Rights Agent, one fully paid and
nonassessable share of Common Stock, $1.00 par value per share, of the Company
(the "Common Stock"), at a purchase price of $____ per share of Common Stock
(the "Exercise Price"), subject to adjustment as provided in the Rights
Agreement upon presentation and surrender of this Right Certificate with the
Form of Election to Exercise duly executed. The number of Rights represented by
this Rights Certificate (and the number of shares of Common Stock which may be
purchased upon exercise thereof) set forth above, and the Exercise Price per
share set forth above, are the number of Rights and the Exercise Price as of the
Separation Time, based upon the Common Stock as constituted at such date.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Common Stock, which may be purchased upon the exercise of the Rights
represented by this Rights Certificate are subject to modification and
adjustment upon the occurrence of certain events. In certain circumstances
described in the Rights Agreement, the Rights evidenced hereby may entitle the
registered holder thereof to purchase securities of an entity other than the
Company or securities or assets of the Company other than Common Stock, all as
provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof, and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date representing Rights entitling the holder thereof to purchase a like
aggregate number of Common Shares, as the Rights represented by the Rights
Certificate or the Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not
-19-
exercised. Subject to the provisions of the Rights Agreement, the Rights
represented by this Rights Certificate may be redeemed by the Company, at its
option, at a redemption price of $.01 per Right.
No fractional shares will be issued upon the exercise of any Right or
Rights represented hereby (at the option of the Company, be represented by
depositary receipts), but in lieu thereof, a cash payment shall be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give 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 subscription rights, or otherwise, until
the Right or Rights represented by the Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ____________________.
Attest: CENTRAL BANCORP, INC.
By:_____________________________ By:_______________________________
Secretary Title:
Countersigned:
REGISTRAR AND TRANSFER COMPANY
By______________________________
Authorized Signatory
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificate.)
FOR VALUE RECEIVED ___________________________________________ hereby
sells, assigns and transfer unto _______________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint_________________________
attorney, to transfer this Rights Certificate on the books of Central Bancorp,
Inc. with full power of substitution.
Dated:______________________ ______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended.
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this Rights
Certificate are not Beneficially Owned by an Acquiring Person, Adverse Person or
an Affiliate or Associate of an Acquiring Person or Adverse Person (as such
capitalized terms are defined in the Rights Agreement).
Dated:______________________ ______________________________________
Signature
Signature Guaranteed:
Form of Reverse Side of Rights Certificate --
continued
NOTICE
The signature to the foregoing Assignment and the foregoing Certificate, if
applicable, must correspond to the name as written upon the face of the Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever, and must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company shall deem the Rights represented by this
Rights Certificate to be Beneficially Owned by an Acquiring Person, Adverse
Person or an Affiliate or Associate of an Acquiring Person or Adverse Person (as
such capitalized terms are defined in the Rights Agreement), and shall affix a
legend to that effect on any Rights Certificate issued in exchange for this
Rights Certificate.
Form of Reverse Side of Rights Certificate --
continued
FORM OF ELECTION TO EXERCISE
----------------------------
(To be executed by the registered holder if such holder desires to exercise
the Rights Certificate.)
TO CENTRAL BANCORP, INC.
The undersigned hereby irrevocably elects to exercise __________ whole
Rights represented by this Rights Certificate to purchase shares of the Common
Stock issuable upon the exercise of such Rights and requests a certificate for
such Common Stock 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 represented by this
Rights Certificate, a new Rights 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:______________________ ______________________________________
Signature
Signature Guaranteed:
Form of Reverse Side of Rights Certificate--
continued
Certificate
-----------
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this Rights
Certificate are not Beneficially Owned by an Acquiring Person, Adverse Person or
an Affiliate or Associate of an Acquiring Person or Adverse Person (as such
capitalized terms are defined in the Rights Agreement).
Dated:______________________ ______________________________________
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the foregoing Certificate,
if applicable, must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or any
change whatsoever, and must be guaranteed by an eligible guarantor institution
(a bank, stockbroker, savings and loan association or credit union with
membership in an approved signature guarantee medallion program) pursuant to
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company shall deem the Rights represented by this
Rights Certificate to be Beneficially Owned by an Acquiring Person, Adverse
Person or an Affiliate or Associate of an Acquiring Person or Adverse Person (as
such capitalized terms are defined in the Rights Agreement).
AMENDMENT NO. 1 TO
------------------
AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED RIGHTS AGREEMENT (this
"Amendment") is made as of February 11, 2003 by and between Central Bancorp,
Inc., a Massachusetts corporation (the "Company'), and Register and Transfer
Company, a New Jersey corporation (the "Rights Agent"). Capitalized terms used
and not otherwise defined herein shall have the meanings ascribed thereto in the
Rights Agreement referenced below.
BACKGROUND
----------
WHEREAS, the Company and the Rights Agent entered into a Rights Agreement
dated as of October 11, 2001, as amended and restated as of January 29, 2003 (as
amended and restated, the "Rights Agreement"), pursuant to which the Board of
Directors of the Company authorized and declared a dividend of one Right for
each share of Common Stock outstanding at the close of business on the Record
Date, and authorized the issuance of one Right with respect to each share of
Common Stock that has or will become outstanding between the Record Date and
prior to the Separation Time, upon the terms and subject to the conditions set
forth in the Rights Agreement;
WHEREAS, pursuant to Section 5.4 of the Rights Agreement, the Company and
the Rights Agent may from time to time supplement or amend the Rights Agreement
in any respect prior to the Separation Time without any approval of the holders
of the Rights; and
WHEREAS, the Separation Time has not occurred;
NOW, THEREFORE, the parties hereto, in consideration of the premises and
agreements contained herein, intending to be legally bound hereby, agree as
follows:
1. The following new definition is added to Section 1.1 of the Rights
Agreement to read as follows:
"PL Capital-Stilwell-Seidman-Reichenbach Group" shall mean,
collectively, PL Capital LLC, Richard Lashley, Richard Fates, Garrett
Goodbody, Financial Edge Fund, L.P., Financial Edge Strategic Fund,
L.P., Goodbody/PL Capital L.P., Goodbody/PL Capital LLC, John W.
Palmer, Joseph Stilwell, Stilwell Associates, L.P., Stilwell Value
Partners I, L.P., Stilwell Value Partners III, L.P., Stilwell Value
Partners IV, L.P., Lawrence B. Seidman, Seidman and Associates,
L.L.C., Seidman Investment Partnership, L.P., Seidman Investment
Partnership II, L.P., Kerrimatt, L.P., Federal Holdings L.L.C.,
Pollack Investment Partnership, L.P., Dennis Pollack, Robert
Williamson and Robert Reichenbach.
2. A new Section 5.19 shall be added to the Rights Agreement to read as
follows:
5.19 PL Capital-Stilwell-Seidman-Reichenbach Group Litigation.
--------------------------------------------------------
Notwithstanding any other provision hereof, no public
announcement or statement made by the Company (by any means) regarding
the determination of the Board of Directors made on January 28, 2003,
that the PL Capital-Stilwell-Seidman-Reichenbach Group constitutes an
Acquiring Person shall be deemed to constitute a Distribution Date or
in any other way trigger or attempt to trigger this Agreement prior to
such time as no court order precludes announcement of a Distribution
Date or other triggering of this Agreement.
3. Full Force and Effect. This Amendment shall be effective as of the date
---------------------
hereof. Except as expressly amended hereby, the Rights Agreement shall remain in
full force and effect and shall be otherwise unaffected hereby.
4. Governing Law. This Amendment shall be deemed to be a contract made
--------------
under the laws of the Commonwealth of Massachusetts and for all purposes shall
be governed by and construed in accordance with the laws of such Commonwealth
applicable to contracts to be made and performed entirely within such
Commonwealth.
5. Counterparts. This Amendment 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.
(signatures on following page)
2
IN WITNESS WHEREOF, the Company and the Rights Agent have caused this
Amendment to be duly executed as of the day and year first above written.
CENTRAL BANCORP, INC.
By:/s/ John D. Doherty
---------------------------------------------
Name: John D. Doherty
Title: President and Chief Executive Officer
REGISTRAR AND TRANSFER COMPANY
By:/s/ William P. Tatler
---------------------------------------------
Name: William P. Tatler
Title: Vice President
3
AMENDMENT NO. 2 TO
------------------
AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
THIS AMENDMENT NO. 2 TO AMENDED AND RESTATED RIGHTS AGREEMENT (this
"Amendment No. 2") dated May 22, 2003 by and between Central Bancorp, Inc., a
Massachusetts corporation (the "Company"), and Register and Transfer Company,
N.A., a New Jersey corporation (the "Rights Agent"). Capitalized terms used and
not otherwise defined herein shall have the meanings ascribed thereto in the
Rights Agreement referenced below.
BACKGROUND
----------
WHEREAS, the Company and the Rights Agent entered into an Amended and
Restated Rights Agreement, dated as of January 29, 2003 (as amended, the "Rights
Agreement"), as amended by Amendment No. 1, dated as of February 11, 2003;
WHEREAS, in connection with a settlement made pursuant to that certain
Settlement Agreement and Mutual Release, dated as of February 26, 2003, by and
among the Company, Nancy D. Neri, Gregory W. Boulos, Paul E. Bulman, John D.
Doherty, Joseph R. Doherty and Terrence D. Kenney and Robert Reichenbach, on
behalf of himself and his related entities (the "Settlement Parties"), the
Settlement Parties sold 37,951 shares of Common Stock (the "Settlement Shares")
and the associated Rights attached thereto;
WHEREAS, pursuant to Section 5.4 of the Rights Agreement, the Company and
the Rights Agent may from time to time supplement or amend the Rights Agreement
in any respect prior to the Separation Time without any approval of the holders
of the Rights; and
WHEREAS, the Separation Time has not occurred;
NOW, THEREFORE, the parties hereto, in consideration of the premises and
agreements contained herein, intending to be legally bound hereby, agree as
follows:
1. A new Section 5.20 shall be added to the Rights Agreement to read as
follows:
5.20 Rights of Settlement Agreement Shares.
-------------------------------------
Notwithstanding any other provision hereof, the Rights attached
to the shares of Common Stock sold in connection with that certain
settlement made pursuant to that certain Settlement Agreement and
Mutual Release, dated as of February 26, 2003, by and among the
Company, Nancy D. Neri, Gregory W. Boulos, Paul E. Bulman, John D.
Doherty, Joseph R. Doherty and Terrence D. Kenney and Robert
Reichenbach, on behalf of himself and his related entities
shall not be voidable or void and any holder of such Rights shall
hereafter have the right to exercise or transfer such Rights.
2. Full Force and Effect. This Amendment No. 2 shall be effective as of the
---------------------
date hereof. Except as expressly amended hereby, the Rights Agreement shall
remain in full force and effect and shall be otherwise unaffected hereby.
3. Governing Law. This Amendment No. 2 shall be deemed to be a contract
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made under the laws of the Commonwealth of Massachusetts and for all purposes
shall be governed by and construed in accordance with the laws of such
Commonwealth applicable to contracts to be made and performed entirely within
such Commonwealth.
4. Counterparts. This Amendment No. 2 may be executed in any number of
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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.
(signatures on following page)
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IN WITNESS WHEREOF, the Company and the Rights Agent have caused this
Amendment No. 2 to be duly executed as of the day and year first above written.
CENTRAL BANCORP, INC.
By:/s/ John D. Doherty
-----------------------------------------
Name: John D. Doherty
Title: President and Chief Executive Officer
REGISTRAR AND TRANSFER COMPANY
By:/s/ William P. Tatler
-----------------------------------------
Name: William P. Tatler
Title: Vice President
3