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Bank of New York Announces Agreement with Irving Preferred Shareholders

May 4, 1988

NEW YORK (AP) _ Bank of New York Co. said Wednesday it reached an agreement with a majority of holders of a class of Irving Bank Corp. preferred stock to modify anti- takeover provisions contained in the issue.

Irving charged that the agreement had no effect because two-thirds of the 15 shareholders would have to agree to change the provisions.

Bank of New York, which has made a hostile $1.08 billion offer for Irving, said in a statement that an unspecified a majority of the shareholders agreed to waive a provision that would prohibit Irving from merging for three years with any company if the merged corporation did not meet certain requirements. The agreement would become effective upon the election of Bank of New York’s nominees to the Irving board, the statement said. Irving shareholders will meet Friday to vote on rival slates of nominees for the board proposed separately by Irving and Bank of New York.

Irving issued the $100.1 million of cumulative convertible preferred stock in an effort to bolster its takeover defenses and place stock in friendly hands.

The owners of the new shares were given more voting rights than common stockholders, with each of the preferred shares carrying 1.471 votes. The new shares also contain convenants, which, Irving said at the time of the issue, ″could adversely affect the ability to acomplish any acquisition″ should they be breached.

Among other things, the covenants would require the merged bank to maintain relatively high levels of capital, according to Irving, and they would restrict the company’s ability to issue new stock.

Robert Falise, Irving’s executive vice president for legal affairs, called the Bank of New York agreement ″a non-event″ because under the terms of the stock issue, two-thirds of the shareholders must agree before its terms can be modified.

″They’re (Bank of New York) attempting to influence the proxy vote which will be taken on Friday,″ Falise said, referring to the shareholders meeting.

Bank of New York is offering $15 in cash and 1.575 shares of its stock for each of Irving’s 18.5 million outstanding shares.

Irving supports a rival bid by Banca Commerciale Italiana SpA, which is offering $75 a share bid for 9.5 million of the bank company’s outstanding common shares.

Falise said Irving also was negotiating with the holders of the preferred issue.

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