Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights; Calculation of Price. The Exercise Price and the number of securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (i) To preserve the actual or potential economic value of the Rights, if at any time after the date hereof there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, reverse stock splits, recapitalization, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock or Preferred Stock, as the case may be (other than distribution of the Rights or regular quarterly cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock (or the number and kind of other securities) issuable upon exercise of each Right (or in exchange for any Right pursuant to Section 24), the Exercise Price and Redemption Price in effect at such time and/or the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the effect of reducing or limiting the benefits the holders of the Rights would have had absent such event. If an event occurs which requires an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be made prior to, and in addition to, any adjustment required pursuant to Section 11(a)(ii).
Appears in 1 contract
Sources: Shareholder Rights Agreement (Univest Corp of Pennsylvania)
Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights; Calculation of Price. The Exercise Price and the number of securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) To preserve the actual or potential economic value of the Rights, if at any time after the date hereof there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, reverse stock splits, recapitalization, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock or Preferred Stock, as the case may be (other than distribution of the Rights or regular quarterly cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock (or the number and kind of other securities) issuable upon exercise of each Right (or in exchange for any Right pursuant to Section 24), the Exercise Price and Redemption Price in effect at such time and/or the number of Rights outstanding at such time (including the number of Rights or fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the effect of reducing or limiting the benefits the holders of the Rights would have had absent such event. If an event occurs which requires an adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be made prior to, and in addition to, any adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event that:
A. any Person shall at any time after the Record Date become an Acquiring Person, unless the event causing such Person to become an Acquiring Person (I) is a transaction set forth in Section 13(a) hereof, or (II) is an acquisition of shares of Common Stock and/or Voting Securities pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock and other Voting Securities, if any, at a price and on terms determined by at least a majority of the Continuing Directors who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (x) at a price which is fair to shareholders (taking into account all factors which the Board of Directors deems relevant including, without limitation, prices which could reasonably be achieved if the Corporation or its assets were sold on an orderly basis designed to realize maximum value) and (y) otherwise in the best interests of the Corporation and its shareholders; or
B. the Board of Directors of the Corporation shall declare any Person to be an Adverse Person, upon a determination that such Person, alone or together with its Affiliates and Associates, has, at any time after the Record Date, become the beneficial owner of Voting Securities representing at least 5.0% of the Total Voting Power (without regard to shares beneficially owned and covered by a Schedule 13D on file on the date of this Agreement) and a determination, after reasonable inquiry and investigation, including consultation with such persons as the Board of Directors shall deem appropriate, that such beneficial ownership by such Person is intended to cause the Corporation to repurchase the Voting Securities beneficially owned by such Person or to cause pressure on the Corporation to take action or enter into a transaction or series of transactions intended to provide such Person (and not shareholders generally) with short-term financial gain under circumstances where the Board of Directors determines that the best long-term interests of the Corporation and its shareholders would not be served by taking such action or entering into such transaction or series of transactions at that time; or
C. any Acquiring Person or any Associate or Affiliate of any Acquiring Person, at any time after the date of this Agreement, directly or indirectly, (1) shall merge into the Corporation or otherwise combine with the Corporation and the Corporation shall be the continuing or surviving corporation of such merger or combination and the Voting Securities of the Corporation shall remain outstanding and unchanged, (2) shall, in one transaction or a series of transactions, other than in connection with the exercise of the Rights or the exercise or conversion of securities exercisable or convertible into capital stock of the Corporation or any of its Subsidiaries, transfer any assets to the Corporation or to any of its Subsidiaries in exchange (in whole or in part) for shares of Voting Securities, for shares of other equity securities of the Corporation, or for securities exercisable for or convertible into shares of equity securities of the Corporation (Common Stock or otherwise) or otherwise obtain from the Corporation, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into shares of such equity securities (other than pursuant to a pro rata distribution to all holders of Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer, or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from, with, or of (as the case may be) the Corporation or any of its Subsidiaries, assets on terms and conditions less favorable to the Corporation than the Corporation would be able to obtain in arm’s-length negotiation with an unaffiliated third party, other than pursuant to a transaction set forth in Section 13(a) hereof, (4) shall receive any compensation from the Corporation or any of the Corporation’s Subsidiaries other than compensation for services as a director or for full-time employment as a regular employee at rates in accordance with the Corporation’s (or its Subsidiaries’) past practices, or (5) shall receive the benefit, directly or indirectly (except proportionately as a stockholder and except if resulting from a requirement of law or governmental regulation), of any loans, advances, guarantees, pledges, or other financial assistance or any tax credits or other tax advantage provided by the Corporation or any of its Subsidiaries; or
D. during such time as there is an Acquiring Person, there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction or series of transactions involving the Corporation or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of the outstanding shares of any class of equity securities of the Corporation or any of its Subsidiaries which is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person; then promptly following the occurrence of either (x) an event described in paragraphs A., C. or D. above (the first occurrence of such event, an “Acquiring Person Event”) or (y) an event described in paragraph B. above (the first occurrence of such event, an “Adverse Person Event”), as applicable, each holder of a Right, except as provided in Section 7(f) hereof, shall thereafter have the right to receive for each Right, upon exercise thereof in accordance with the terms of this Agreement and payment of the Exercise Price in effect immediately prior to the occurrence of the Triggering Event, a number of one one-thousandths (1/1000ths) of a Preferred Share as shall equal the quotient obtained by dividing (A) the product obtained by multiplying (1) the Exercise Price in effect immediately prior to the occurrence of the Acquiring Person Event or the Adverse Person Event, as applicable, by (2) the number of one one-thousandths (1/1000ths) of a Preferred Share for which a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of an Acquiring Person Event or an Adverse Person Event, as applicable, by (B) fifty percent (50%) of the Current Market Price for Common Shares on the date of occurrence of the Acquiring Person Event or the Adverse Person Event, as applicable; provided, however, that the Exercise Price and the number of Preferred Shares of the Corporation so receivable upon exercise of a Right shall be subject to further adjustment as appropriate in accordance with Section 11(f) hereof to reflect any events occurring in respect of the Common Shares of the Corporation after the occurrence of the Triggering Event.
(iii) In lieu of issuing Preferred Shares in accordance with Section 11(a)(ii) hereof, the Corporation may, if the Board determines that such action is necessary or appropriate and not contrary to the interest of holders of Rights, or if any necessary regulatory approval for such issuance has not been obtained by the Corporation, the Corporation shall: (A) determine the excess of (1) the value of the Preferred Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the Exercise Price (such excess, the “Spread”) and (B) with respect to each Right, make adequate provision to substitute for such Preferred Shares, upon exercise of the Rights, (1) cash, (2) Common Shares, (3) a reduction in the Exercise Price, (4) other equity securities of the Corporation (including, without limitation, shares or units of shares of any Series of preferred stock which the Board has deemed to have the same value as Common Shares (such shares or units of shares of referred stock are herein called “Common Stock Equivalents”), except to the extent that the Corporation has not obtained any necessary shareholder or regulatory approval for such issuance, (5) debt securities of the Corporation, except to the extent that the Corporation has not obtained any necessary shareholder or regulatory approval for such issuance, (6) other assets or (7) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board based upon the advice of a reputable investment banking firm selected by the Board; provided, however, that if the Corporation shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) days following the later of (v) the first occurrence of an Acquiring Person Event or an Adverse Person Event, as applicable, and (w) the date on which the Corporation’s right of redemption pursuant to Section 23(a) expires (the later of (v) and (w) being referred to herein as the “Acquiring Person Trigger Date” with respect to an Acquiring Person Event and as the “Adverse Person Triggering Date” with respect to an Adverse Person Event, then the Corporation shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Exercise Price, Preferred Shares (to the extent available), except to the extent that the Corporation has not obtained any necessary stockholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board shall determine in good faith that it is likely that sufficient additional Preferred Shares could be authorized for issuance upon exercise in full of the Rights or that any necessary regulatory approval for such issuance will be obtained, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than ninety (90) days after the Acquiring Person Trigger Date or the Adverse Person Triggering Date, as applicable, in order that the Corporation may seek shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the “Substitution Period”). To the extent that the Corporation determines that some action need be taken pursuant to the first and/or second sentences of this Section 11(a)(iii) the Corporation (x) shall provide, subject to Section 7(f) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares, to take any action to obtain any required regulatory approval and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Corporation shall issue a public announcement or disclosure stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement or disclosure at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of the Common Shares shall be the Current Market Price of the Common Shares on the Acquiring Person Trigger Date or the Adverse Person Triggering Date, as applicable, and the value of any Common Stock Equivalent shall be deemed to have the same value as the Common Shares on such date.
(b) In case the Corporation shall fix a record date for the issuance of rights (other than the Rights), options or warrants to all holders of Common Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Common Shares, or Common Stock Equivalents or other shares having the same rights, privileges and preferences as the Common Shares (“Equivalent Common Shares”), or securities convertible into Common Shares or Equivalent Common Shares at a price per Common Share or Equivalent Common Share (or having a conversion price per share, if a security convertible into Common Shares and Equivalent Common Shares) less than the Current Market Price of the Common Shares on such record date except as otherwise provided in Section 11(a), the Exercise Price to be in effect after such record date shall be determined by multiplying the Exercise Price in effect immediately prior to such record date by a fraction, the numerator of which equals the sum of (i) the number of Common Shares and Equivalent Common Shares outstanding on such record date, (ii) the number of Common Shares and Equivalent Common Shares underlying securities outstanding on such record date which are convertible into Common Shares or Equivalent Common Shares, plus (iii) the number of Common Shares which the aggregate subscription or Exercise Price of the total number of Common Shares and Equivalent Common Shares so to be offered (or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price, and the denominator of which shall equal the sum of (x) the number of Common Shares and Equivalent Common Shares outstanding on such record date, (y) the number of Common Shares and Equivalent Common Shares underlying securities outstanding on such record date which are convertible into Common Shares or Equivalent Common Shares, plus (z) the number of additional Common Shares and Equivalent Common Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Corporation issuable upon exercise of one Right. In case such subscription price may be paid by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. Common Shares owned by or held for the account of the Corporation shall not be deeme
Appears in 1 contract
Sources: Shareholder Rights Agreement (Community Partners Bancorp)