FLUSHING FINANCIAL CORPORATION and COMPUTERSHARE TRUST COMPANY N.A. Rights Agent Rights Agreement Dated as of September 8, 2006
FLUSHING
FINANCIAL CORPORATION
and
COMPUTERSHARE
TRUST COMPANY N.A.
Rights
Agent
_____________________
Dated
as
of September 8, 2006
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Table
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(continued)
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Exhibit
A -- Form of Certificate of
Increase
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A-1
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Exhibit
B -- Form of Right Certificate
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B-1
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Exhibit
C -- Form of Summary of Rights
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C-1
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RIGHTS
AGREEMENT, dated as of September 8, 2006 (the “Agreement”),
between Flushing Financial Corporation, a Delaware corporation (the
“Company”),
and
Computershare Trust Company N.A., a national banking association (the
“Rights
Agent”).
WHEREAS,
on September 17, 1996, the Board of Directors of the Company (the “Board
of Directors”)
adopted a stockholder rights plan (the “1996
Plan”)
and,
in connection therewith, the Company entered into a Rights Agreement, dated
as
of September 17, 1996, with a predecessor-in-interest of the Rights Agent (the
“1996
Agreement”);
and
WHEREAS,
the 1996 Agreement is scheduled to expire on September 30, 2006;
and
WHEREAS,
on September 5, 2006, the Board of Directors determined that it is desirable
and
in the best interests of the Company and its stockholders for the Company to
renew the 1996 Plan and to implement such renewal by executing this
Agreement;
and
WHEREAS,
the Board of Directors has authorized and declared a dividend of one Right
(as
such term is hereinafter defined) for each share of Common Stock, par value
$.01
per share, of the Company (the “Common
Shares”)
outstanding as of the Close of Business on September 30, 2006 (the “Record
Date”),
and
has authorized the issuance of one Right with respect to each Common Share
that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date, the Exchange Date and the Final
Expiration Date (as such terms are hereinafter defined), each Right representing
the right to purchase one one-hundredth of a share of Series A Junior
Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the Certificate of Designations filed with the
Secretary of State of the State of Delaware on September 30. 1996, as amended
by
the form of Certificate of Increase attached hereto as Exhibit A, upon the
terms
and subject to the conditions hereinafter set forth (the “Rights”).
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set
forth, the parties hereby agree as follows:
Section
1. Certain
Definitions.
For
purposes of this Agreement, the following terms have the meanings
indicated:
(a) “Acquiring
Person”
shall
mean any Person (as such term is hereinafter defined) who or which, together
with all Affiliates and Associates (as such terms are hereinafter defined)
of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 15% or more of the Common Shares then outstanding, but shall not include
(i)
the Company, (ii) any Subsidiary (as such term is hereinafter defined) of the
Company, or (iii) any employee benefit plan of the Company or of any Subsidiary
of the Company, any entity
organized,
appointed or established by the Company for or pursuant to the terms of any
such
plan, or the Company’s Employee Benefit Trust. Notwithstanding the foregoing,
(i) no Person shall become an “Acquiring Person” solely as the result of an
acquisition of Common Shares by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person to 15% or more of the Common Shares then outstanding;
provided,
however,
that if
a Person becomes the Beneficial Owner of 15% or more of the Common Shares then
outstanding by reason of share acquisitions by the Company and shall, after
such
share acquisitions, become the Beneficial Owner of any additional Common Shares
(other than pursuant to a stock split or stock dividend by the Company to all
holders of Common Shares), then such Person shall be deemed to be an
“Acquiring
Person”;
and
(ii) if the Board of Directors determines in good faith that a Person who
would otherwise be an “Acquiring
Person,”
as
defined pursuant to the foregoing provisions of this paragraph, has become
such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an “Acquiring
Person,” as defined pursuant to the foregoing provisions of this paragraph, then
such Person shall not be deemed to have become an “Acquiring
Person”
for
any
purposes of this Agreement.
(b) “Affiliate”,
“Associate”
and
“control”
shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended
(the
“Exchange
Act”),
as in
effect on the date of this Agreement.
(c) A
Person
shall be deemed the “Beneficial
Owner”
of
and
shall be deemed to “beneficially own” any securities:
(i)
which
such Person or any of such Person’s Affiliates or Associates beneficially owns,
directly or indirectly, within the meaning of Rule 13d-3 or Rule 13d-5 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement;
(ii)
which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or otherwise;
provided,
however,
that a
Person shall not be deemed the “Beneficial
Owner”
of,
or
to “beneficially own”, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person’s Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange;
(iii)
which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of pursuant to any agreement,
arrangement or understanding; provided,
however,
that a
Person shall not be deemed the “Beneficial
Owner”
of,
or
to “beneficially
own”,
any
security
under this subparagraph (iii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy given to such Person
in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iv)
which
are
beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except pursuant to a revocable proxy
as
described in the proviso to subparagraph (iii) of this paragraph (c)) or
disposing of any securities of the Company.
If
a
Person shall be deemed to be the Beneficial Owner of any securities which are
not outstanding, such securities shall be deemed to be outstanding for purposes
of determining the percentage of Common Shares beneficially owned by such
Person.
(d) “Board
of Directors”
has
the
meaning set forth in the recital of this Agreement.
(e) “Business
Day”
shall
mean any day other than a Saturday, Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
(f) “Close
of Business”
on
any
given date shall mean 5:00 P.M., New York City time, on such date; provided,
however,
that if
such date is not a Business Day it shall mean 5:00 P.M., New York City time,
on
the next succeeding Business Day.
(g) “Common
Shares”
when
used with reference to the Company (or without express reference to another
Person) shall mean the shares of Common Stock, par value $.01 per share, of
the
Company or any other shares of capital stock of the Company into which the
Common Shares are reclassified or changed. “Common
Shares”
when
used with reference to any Person other than the Company shall mean the capital
stock or other equity securities or equity or other beneficial interests of
such
Person with the greatest aggregate voting power.
(h) “Common
Stock Equivalent”
shall
mean a share, or fraction of a share, of Preferred Stock, par value $.01 per
share (or any other authorized class of preferred stock), of the Company having
dividend, voting, liquidation and other rights which result, in the judgment
of
the Board of Directors, in such share, or fraction of a share, being
approximately equivalent in value to one Common Share as of the Event Date
(as
such term is hereinafter defined); provided,
however,
that,
if in the judgment of the Board of Directors there are not sufficient authorized
but unissued shares of preferred stock available for the creation of Common
Stock
Equivalents, “Common Stock Equivalent” shall mean such cash, reduction in
Purchase Price (as such term is hereinafter defined), other equity securities,
debt securities, other assets or any combination of the foregoing, that the
Board of Directors shall determine to be approximately equivalent in value
to
one Common Share as of the Event Date. As used herein, “Event
Date”
shall
mean (i) for purposes of any determination made pursuant to Section
11(a)(iii) hereof, the date of occurrence of the event described in Section
11(a)(ii) hereof and (ii) for purposes of any determination made pursuant
to Section 25(c) hereof, the Exchange Date (as such term is hereinafter
defined).
(i) “Distribution
Date”
shall
have the meaning set forth in Section 3(a) hereof.
(j) “Exchange”
shall
have the meaning set forth in Section 25 hereof.
(k) “Exchange
Date”
shall
have the meaning set forth in Section 7(a) hereof.
(l) “Exchange
Ratio”
shall
have the meaning set forth in Section 25 hereof.
(m) “Final
Expiration Date”
shall
have the meaning set forth in Section 7(a) hereof.
(n) “Person”
shall
mean any individual, firm, corporation, partnership or other entity and shall
include any successor by merger or otherwise of such Person.
(o) “Preferred
Shares”
shall
mean shares of Series A Junior Participating Preferred Stock, par value $.01
per
share, of the Company.
(p) “Principal
Party”
shall
have the meaning set forth in Section 13(b) hereof.
(q) “Purchase
Price”
shall
have the meaning set forth in Section 4 hereof.
(r) “Record
Date”
shall
have the meaning set forth in the recital of this Agreement.
(s) “Redemption
Date”
shall
have the meaning set forth in Section 7(a) hereof.
(t) “Redemption
Price”
shall
have the meaning set forth in Section 24(a) hereof.
(u) “Registered
Common Shares”
shall
have the meaning set forth in Section 13(b) hereof.
(v) “Rights
Agent”
shall
have the meaning set forth in the recital of this Agreement.
(w) “Right
Certificates”
shall
have the meaning set forth in Section 3(a) hereof.
(x) “Rights”
shall
have the meaning set forth in the recital of this Agreement.
(y) “Securities
Act”
shall
mean the Securities Act of 1933, as amended.
(z) “Share
Acquisition Date”
shall
mean the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.
(aa) “Subsidiary”
shall
mean, with reference to any Person, any corporation or other entity of which
a
majority of the voting power of the voting equity securities or equity or other
beneficial interests is owned, directly or indirectly, by such Person, or which
is otherwise controlled by such Person.
(bb) “Summary
of Rights”
shall
have the meaning set forth in Section 3(b) hereof.
(cc) “Trading
Day”
shall
have the meaning set forth in Section 11(d) hereof.
(dd) “1996
Agreement”
shall
have the meaning set forth in the recital of this Agreement.
(ee) “1996
Plan”
shall
have the meaning set forth in the recital of this Agreement.
Section
2. Appointment
of Rights Agent.
The
Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable upon ten (10) days’ prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such Co-Rights Agent.
Section
3. Issue
of Right Certificates.
(a)
Until the earlier of (i) the Close of Business on the tenth day after the Share
Acquisition Date or (ii) the Close of Business on the tenth business day (or
such later day as may be determined by action of the Board of Directors prior
to
such time as any Person becomes an Acquiring Person) after the date that a
tender or exchange offer by any Person is first published, sent or given within
the meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act if, upon consummation thereof, such Person would be an Acquiring
Person (the earlier of such dates, including any such
date
which is after the date of this Agreement and prior to the issuance of the
Rights, being herein referred to as the “Distribution
Date”),
(x)
the Rights will be evidenced (subject to the provisions of paragraph (b) of
this
Section 3) by the certificates for Common Shares registered in the names of
the
holders thereof (which certificates shall also be deemed to be certificates
for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying Common
Shares. As soon as practicable after the Distribution Date, the Rights Agent
will send, by first-class, insured, postage prepaid mail, to each record holder
of Common Shares as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more Right
certificates, in substantially the form of Exhibit B hereto (the “Right
Certificates”),
evidencing one Right for each Common Share so held, subject to adjustment as
provided herein. As of the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) As
promptly as practicable after the Record Date, the Company will send a copy
of a
Summary of Rights in substantially the form attached hereto as Exhibit C (the
“Summary
of Rights”),
by
first-class, postage prepaid mail, to each record holder of Common Shares as
of
the Close of Business on the Record Date, at the address of such holder shown
on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights
will
be evidenced by such certificates for Common Shares together with a copy of
the
Summary of Rights, and the registered holders of Common Shares shall also be
the
registered holders of the associated Rights. Until the Distribution Date (or
the
earliest of the Redemption Date, Exchange Date or Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on
the
Record Date, with or without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
(c) Rights
shall be issued in respect of all Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the
last
sentence of this paragraph (c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date, the Exchange Date or the Final
Expiration Date. Certificates representing such Common Shares shall also be
deemed to be certificates for Rights, and shall bear the following
legend:
This
certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in the Rights Agreement between Flushing Financial Corporation (the
“Company”)
and
Computershare Trust Company N.A., dated as of September 8, 2006 (the
“Rights
Agreement”),
the
terms of which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy
of
the Rights Agreement without charge promptly after receipt of a written request
therefor. As described in the Rights Agreement, Rights beneficially owned by
(i)
an Acquiring Person or any Associate or Affiliate thereof (as such terms are
defined in the Rights Agreement), (ii) a transferee of an
Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such or (iii) under certain circumstances, a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee before or concurrently with the Acquiring Person becoming
such, shall become null and void.
With
respect to such certificates containing the foregoing legend, until the earliest
of the Distribution Date, the Redemption Date, the Exchange Date or the Final
Expiration Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone and the
registered holders of Common Shares shall also be the holders of the associated
Rights, and the surrender for transfer of any such certificates shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed cancelled and retired
so that the Company shall not be entitled to exercise any Rights associated
with
the Common Shares which are no longer outstanding.
Section
4. Form
of Right Certificates.
The
Right Certificates (and the forms of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially in
the
form set forth in Exhibit B hereto and may have such marks of identification
or
designation and such legends, summaries or endorsements printed thereon as
the
Company may deem appropriate and as are not inconsistent with the provisions
of
this Agreement, or as may be required to comply with any applicable law or
with
any rule or regulation made pursuant thereto or with any rule or regulation
of
any stock exchange on which the Rights may from time to time be listed, or
to
conform to usage. Subject to the provisions of Section 11 and Section 23 hereof,
the Right Certificates shall entitle the holders thereof to purchase such number
of one one-hundredths of a Preferred Share as shall be set forth therein at
the
price per one one-hundredth of a share set forth therein (the “Purchase Price”),
but the number of such shares and the Purchase Price shall be subject to
adjustment as provided herein.
(a) The
Right
Certificates shall be executed on behalf of the Company by its Chairman or
Vice
Chairman of the Board, its President or any Vice President, either manually
or
by facsimile signature, and shall have affixed thereto the Company’s seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
so countersigned. In case any officer of the Company who shall have signed
any
of the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such
Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
person was not such an officer.
(b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at one
of
its offices designated for such purpose, books for registration and transfer
of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, the Certificate
Number of each such Right Certificate and the date of each of the Right
Certificates.
(a) Subject
to the provisions of Section 7(e) and Section 15 hereof, at any time after
the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earliest of the Redemption Date, the Exchange Date or the Final
Expiration Date, any Right Certificate or Certificates may be transferred,
split
up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of Preferred Shares
as
the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate or Right Certificates until the registered holder shall have
properly completed and signed the certificate contained in the form of
assignment set forth on the reverse side of each such Right Certificate and
shall have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights Agent shall, subject
to
Section 7(e) and Section 15 hereof, countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may
be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company’s request, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto,
and
upon surrender to the Rights Agent and cancellation of the Right Certificate
if
mutilated, the Company will execute and deliver a new Right Certificate of
like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
(a) The
Rights shall not be exercisable prior to the Distribution Date. The registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after
the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent designated for
such
purpose, together with payment of the Purchase Price for each one one-hundredth
of a Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on September 30, 2016 (the “Final
Expiration Date”),
(ii)
the time at which the Rights are redeemed as provided in Section 24 hereof
(the “Redemption Date”) or (iii) the time at which the Rights are exchanged as
provided in Section 25 hereof (the “Exchange
Date”).
(b) The
Purchase Price for each one one-hundredth of a Preferred Share pursuant to
the
exercise of a Right shall initially be $65, shall be subject to adjustment
from
time to time as provided in Sections 11 and 13 hereof and shall be payable
in lawful money of the United States of America in accordance with paragraph
(c)
below.
(c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form
of
election to purchase duly executed, accompanied by payment of the Purchase
Price
for the shares to be purchased as set forth below and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall,
subject to Section 21(j) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent for such shares)
certificates for the number of Preferred Shares to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the Preferred
Shares issuable upon exercise of the Rights hereunder into a depositary,
requisition from the depositary agent depositary receipts representing such
number of one one-hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu
of
issuance of fractional shares in accordance with Section 15 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to
be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Right Certificate. The payment of
the
Purchase Price shall be made in cash or by certified or bank official check
or
money order payable to the order of the Company. In the event that the Company
is obligated to issue other securities of the Company pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities are available for distribution by the Rights Agent, if and when
necessary to comply with this Agreement.
(d) In
case
the registered holder of any Right Certificate shall exercise less than all
the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to
the
Rights remaining unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Sections 6 and 15
hereof.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the occurrence of
the
event described in Section 11(a)(ii) hereof, any Rights beneficially owned
by
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such, or (iii)
a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or
not
for consideration) from the Acquiring Person to holders of equity interests
in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Board of Directors has
determined is part of a plan, agreement, arrangement or understanding which
has
as a primary purpose or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of such Rights shall
have
any rights whatsoever with respect to such Rights, whether under any provision
of this Agreement or otherwise. No Right Certificate shall be issued pursuant
to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person whose Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof and no Right Certificate shall be issued at
any
time upon the transfer of any Rights to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate. Any Right
Certificate delivered to the Rights Agent for transfer to any of the foregoing
Persons, or which represents void Rights, shall be cancelled. The Company shall
use reasonable efforts to effect compliance with the provisions of this Section
7(e), but shall have no liability to any holder of Right Certificates or other
Person as a result of its failure to make any determinations with respect to
an
Acquiring Person or its Affiliates, Associates or transferees
hereunder.
(f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported transfer as set forth in Section
6
hereof or exercise as set forth in this Section 7 unless such registered holder
shall have (i) properly completed and signed the certificate contained in the
form of assignment or election to purchase set forth on the reverse side of
the
Right Certificate surrendered for such assignment or exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section
8. Cancellation
and Destruction of Right Certificates.
All
Right Certificates surrendered for the purpose of exercise, transfer, split
up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for
cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
(a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares and/or any
authorized and issued Preferred Shares held in its treasury, the number of
Preferred Shares that will be sufficient to permit the exercise in full of
all
outstanding Rights.
(b) The
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all Preferred Shares issued or reserved for issuance
to be listed, upon official notice of issuance, upon the principal national
securities exchange, if any, upon which the Common Shares are
listed.
(c) The
Company shall use its best efforts to (i) file, as soon as practicable following
the earliest date after the occurrence of the event described in
Section 11(a)(ii) hereof on which the consideration to be delivered by the
Company has been determined in accordance with Section 11(a)(ii) or 11(a)(iii)
hereof, as the case may be, a registration statement under the Securities Act
with respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective
as
soon as practicable after such filing, and (iii) subject to Section 25 hereof,
cause such registration statement to remain effective (with a prospectus at
all
times meeting the requirements of the Securities Act) until the earlier of
(A)
the date as of which the Rights are no longer exercisable for such securities
and (B) the Final Expiration Date. The Company will also take such action as
may
be appropriate under, or to ensure compliance with, the securities or “blue sky”
laws of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed ninety
(90) days after the date described in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file
such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is required
following the Distribution Date but prior to the occurrence of the event
described in Section 11(a)(ii) hereof, the Company may temporarily suspend
the
exercisability of the Rights until such time as a registration statement has
been declared effective. Notwithstanding any provision of this Agreement to
the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained,
the
exercise thereof shall not be permitted under applicable law or the requisite
registration statement shall not have been declared effective.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at
the
time
of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The
Company further covenants and agrees that it will pay when due and payable
any
and all federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates and of any
certificates or depositary receipts for Preferred Shares upon the exercise
of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts for Preferred Shares in a name other than that of, the
registered holder of the Right Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates or depositary receipts for
Preferred Shares in a name other than that of the registered holder upon the
exercise of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company’s satisfaction that no such tax
is due.
Section
10. Preferred
Shares Record Date.
Each
person in whose name any certificate for Preferred Shares is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of
record of the Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and all applicable
transfer taxes) was made; provided,
however,
that if
the date of such surrender and payment is a date upon which the transfer books
of the Company with respect to the Preferred Shares 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
transfer books of the Company for the Preferred Shares are open.
Section
11. Adjustment
of Purchase Price, Number and Kind of Shares or Number of
Rights.
The
Purchase Price, the number and kind of shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)
(i)
In
the
event the Company shall, at any time after the date of this Agreement, (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares into a greater number of shares,
(C)
combine the outstanding Preferred Shares into a smaller number of shares or
(D)
issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) and in Section 7(e) hereof,
the Purchase Price in effect at the time of the record date for such dividend
or
of the effective date of such subdivision, combination or reclassification,
and
the number and kind of Preferred Shares or shares of capital stock, as the
case
may be, issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive
the
aggregate number and kind of Preferred Shares or shares of capital
stock,
as
the case may be, which he would have owned immediately after such dividend,
subdivision, combination or reclassification if he had exercised such Right
immediately prior to such date and at a time when the transfer books of the
Company for the Preferred Shares were open.
(ii)
Subject
to Sections 11(a)(iii) and 25 hereof, in the event that any Person shall
become
an Acquiring Person, then proper provision shall be made so that each holder
of
a Right, except as provided in Section 7(e) hereof, shall thereafter have
a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms
of
this Agreement and in lieu of Preferred Shares, such number of Common Shares
as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths of a Preferred Share for which
a
Right is then exercisable and (y) dividing that product by 50% of the current
market price (determined pursuant to Section 11(d)(i) hereof) per Common
Share
on the date such Person became an Acquiring Person.
(iii)
Subject
to Section 25 hereof, in the event that the number of Common Shares which are
authorized by the Company’s Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Rights shall not be exercisable for Common
Shares, but proper provision shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have a right to
receive, upon exercise thereof in accordance with the terms of this Agreement
at
the price determined pursuant to the foregoing subparagraph (ii), such number
of
Common Stock Equivalents (or, in the judgment of the Board of Directors, such
combination of Common Stock Equivalents and Common Shares) as shall equal the
number of Common Shares determined pursuant to the foregoing subparagraph
(ii).
(b) In
case
the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling them to subscribe for
or
purchase (for a period expiring within 45 calendar days after such record date)
Preferred Shares (or shares having the same rights, privileges and preferences
as the Preferred Shares (“equivalent preferred shares”)) or securities
convertible into Preferred Shares or equivalent preferred shares at a price
per
Preferred Share or equivalent preferred share (or having a conversion price
per
share, if a security convertible into Preferred Shares or equivalent preferred
shares) less than the current market price (as determined pursuant to Section
11(d)(ii) hereof) per Preferred Share on such record date, the Purchase Price
to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares outstanding
on
such record date, plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares so to be offered and/or
equivalent preferred shares so to be offered (and/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 be the number of
Preferred Shares outstanding on such record date, plus the number of additional
Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be
paid
in a consideration part or all of which shall be in a form other than cash,
the
value of such consideration shall be as determined in good faith by the Board
of
Directors, whose determination shall be described in a statement filed with
the
Rights Agent and shall be conclusive for all purposes. Preferred Shares owned
by
or held for the account of the Company shall not be deemed outstanding for
the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In
case
the Company shall fix a record date for a distribution to all holders of
Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend), assets, stock (other than a dividend payable in Preferred
Shares) or subscription rights, options or warrants (excluding those referred
to
in or excluded pursuant to Section 11(b) hereof), the Purchase Price to be
in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined pursuant
to
Section 11(d)(ii) hereof) per one one-hundredth of a Preferred Share on such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes) of the portion
of the cash, assets, stock or evidences of indebtedness so to be distributed
or
of such subscription rights, options or warrants applicable to one one-hundredth
of a Preferred Share and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d)(ii) hereof) per one one-hundredth
of a Preferred Share. Such adjustments shall be made successively whenever
such
a record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d)
(i)
For
the
purposes of any computation hereunder, the “current
market price”
per
Common Share on any date shall be deemed to be the average of the daily closing
prices per Common Share for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided,
however,
that in
the event that the current market price per Common Share is determined during
a
period following the announcement by the issuer of such Common Shares of (A)
a
dividend or distribution on such Common Shares payable in such Common Shares
or
securities convertible into such Common Shares (other than the Rights) or (B)
any subdivision, combination or reclassification of such Common Shares and
prior
to the expiration of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the “current market price”
shall be appropriately adjusted to take into
account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, 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
or,
if the Common Shares are not listed or admitted to trading on the New York
Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
system then in use, or, if on any such date the Common Shares are not so quoted,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Shares selected by the Board of
Directors. If on any such date no market maker is making a market in the Common
Shares, the fair value of such shares on such date as determined in good faith
by the Board of Directors shall be used and shall be conclusive for all
purposes. The term “Trading
Day”
shall
mean a day on which the principal national securities exchange on which the
Common Shares are listed or admitted to trading is open for the transaction
of
business or, if the Common Shares are not listed or admitted to trading on
any
national securities exchange, a Business Day. If the Common Shares are not
publicly held or not so listed or traded, “current
market price”
per
share shall mean the fair value per share as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(ii)
For
the
purpose of any computation hereunder, the “current
market price”
per
Preferred Share shall be determined in the same manner as set forth above for
the Common Shares in subparagraph (i) of this Section 11(d) (other than the
last
sentence thereof). If the current market price per Preferred Share cannot be
determined in the manner provided above or if the Preferred Shares are not
publicly held or listed or traded in a manner described in subparagraph (i)
of
this Section 11(d), the “current
market price”
per
Preferred Share shall be conclusively deemed to be an amount equal to 100 times
the current market price per Common Share (as appropriately adjusted for such
events as stock splits, stock dividends and recapitalizations with respect
to
the Common Shares occurring after the date of this Agreement). If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or traded,
“current
market price”
per
Preferred Share shall mean the fair value per share as determined in good faith
by the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes.
(e) Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided,
however,
that
any adjustments which by reason
of
this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a
Common Share or other share or one-millionth of a Preferred Share, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three
(3) years from the date of the transaction which requires such adjustment or
(ii) the date of the expiration of the right to exercise any
Rights.
(f) If
as a
result of an adjustment made pursuant to Section 11(a) or Section 13(a) hereof,
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Preferred Shares, thereafter the number
of such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly equivalent
as
practicable to the provisions with respect to the Preferred Shares contained
in
this Section 11 and the provisions of Sections 6, 7, 9, 10, 13 and 15 with
respect to the Preferred Shares shall apply on like terms to any such other
shares.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to
the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a Preferred Share
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i),
upon
each adjustment of the Purchase Price as a result of the calculations made
pursuant to Sections 11(b) and (c), each Right outstanding immediately prior
to
the making of such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one-millionth) obtained by (i) multiplying
(x)
the number of one one-hundredths of a share covered by a Right immediately
prior
to this adjustment, by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price, and (ii) dividing the product so obtained
by the Purchase Price in effect immediately after such adjustment of the
Purchase Price.
(i) The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in substitution for any adjustment in the number
of Preferred Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment in the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for which a Right
was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may
be the date on which the Purchase Price is adjusted or any day thereafter,
but,
if the Right Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement.
If
Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to Section 15 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holder shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option
of
the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date specified
in
the public announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of one
one-hundredths of a Preferred Share issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one one-hundredth of a share and the number of shares
which were expressed in the initial Right Certificates issued
hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below one one-hundredth of the then par value, if any, of the Preferred Shares
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that
the
Company may validly and legally issue fully paid and nonassessable Preferred
Shares at such adjusted Purchase Price.
(l) In
any
case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the issuing to the holder
of any Right exercised after such record date of the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or securities of
the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided,
however,
that
the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder’s right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that
it
in its sole discretion shall determine to be advisable in order that any
consolidation or subdivision of the Preferred Shares, issuance wholly for cash
of any of the Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, stock dividends or
issuance of rights, options or warrants referred to hereinabove in this Section
11, hereafter made by the Company to holders of its Preferred Shares shall
not
be taxable to such stockholders.
(n) In
the
event that any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Shares payable in Common Shares or (ii) effect a subdivision, combination
or consolidation of the Common Shares (by reclassification or otherwise than
by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (i) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of Common Shares outstanding immediately
before such event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (ii) each Common Share outstanding
immediately after such event shall have issued with respect to it that number
of
Rights which each Common Share outstanding immediately prior to such event
had
issued with respect to it. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is declared or paid or
such
a subdivision, combination or consolidation is effected.
Section
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and/or 13 hereof,
the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Shares
and the Common Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing Common Shares) in accordance
with Section 27 hereof. The Rights Agent shall be fully protected in relying
on
any such certificate and on any adjustment therein contained.
(a) In
the
event that, following the Share Acquisition Date, (x) the Company, directly
or
indirectly, shall consolidate with, or merge with and into, any other Person,
and the Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person, directly or indirectly, shall
consolidate with, or merge with and into, the Company, and the Company shall
be
the continuing or surviving corporation of such consolidation or merger and,
in
connection with such consolidation or merger, all or part of the outstanding
Common Shares shall be changed into or exchanged for stock or other securities
of any other Person (or of the Company) or cash or any other property, or (z)
the Company, directly or indirectly, shall sell or otherwise transfer (or one
or
more of its Subsidiaries, directly or indirectly, shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the Company or one
or
more wholly owned Subsidiaries of the Company), then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon
the
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a Preferred Share for which a Right
is
then exercisable (without taking into account any adjustment previously made
pursuant to Section
11(a)(ii)
or 11(a)(iii) hereof), in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, nonassessable and freely
tradeable Common Shares of the Principal Party (as hereinafter defined), free
and clear of any liens, encumbrances and other adverse claims and not subject
to
any rights of call or first refusal, as shall be equal to the result obtained
by
(1) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right is then exercisable
(without taking into account any adjustment previously made pursuant to Section
11(a)(ii) or 11(a)(iii) hereof) and (2) dividing that product by 50% of the
current market price (determined pursuant to Section 11(d)(i) hereof) per Common
Share of the Principal Party on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) except for purposes of Section 1(f) hereof, the term “Company”
shall thereafter be deemed to refer to such Principal Party; (iv) such Principal
Party shall take such steps (including, but not limited to, the reservation
of a
sufficient number of its Common Shares) in connection with the consummation
of
any such transaction as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation
to
its Common Shares thereafter deliverable upon the exercise of the Rights;
provided,
however,
that,
upon the subsequent occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization, reclassification of shares,
reorganization or other extraordinary transaction in respect of such Principal
Party, each holder of a Right (except as otherwise provided herein) shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Purchase Price, such cash, shares, rights, warrants and other property which
such holder would have been entitled to receive had he, at the time of such
transaction, owned the Common Shares of the Principal Party purchasable upon
the
exercise of a Right (after giving effect to the foregoing provisions of this
Section 13(a)), and such Principal Party shall take such steps (including,
but
not limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property and (v) the provisions
of
Sections 11(a)(ii) and 11(a)(iii) hereof shall be of no effect following the
occurrence of any event described in clauses (x), (y) and (z) of this Section
13(a).
(b) “Principal
Party”
shall
mean
(i)
in
the
case of any merger described in clause (x) or (y) of Section 13(a), any Person
that is the issuer of any securities into which Common Shares of the Company
are
converted in such merger, and if no securities are so issued, any Person that
is
a party to such merger that survives the merger;
(ii)
in
the
case of any consolidation described in clause (x) or (y) of Section 13(a),
any
Person that directly controls, alone or with other Persons, a corporation that
is consolidating with the Company; and
(iii)
in
the
case of any transaction or transactions described in clause (z) of Section
13(a), any Person that receives any assets or earning power transferred pursuant
to such transaction or transactions;
provided,
however,
that
with respect to such Person (or, if there is more than one such Person, with
respect to each such Person), (1) if the Common Shares of such Person are not
at
such time and have not been continuously over the preceding twelve (12) month
period registered under Section 12 of the Exchange Act (“Registered
Common Shares”),
or
such Common Shares are deregistered as a consequence of any merger described
in
Section 13(a) hereof, or such Person is not a corporation, and such Person
is
(or, upon consummation of any merger described in Section 13(a) hereof, becomes)
a direct or indirect Subsidiary of another Person which has Registered Common
Shares outstanding, “Principal
Party”
shall
refer to such other Person; (2) if the Common Shares of such Person are not
Registered Common Shares, or such Common Shares are deregistered as a
consequence of any merger described in Section 13(a) hereof, or such Person
is
not a corporation, and such Person is (or, upon consummation of any merger
described in Section 13(a) hereof, becomes) a direct or indirect Subsidiary
of
another Person but is not a direct or indirect Subsidiary of another Person
which has Registered Common Shares outstanding, “Principal
Party”
shall
refer to the ultimate parent entity of such first-mentioned Person; (3) if
the
Common Shares of such Person are not Registered Common Shares, or such Common
Shares are deregistered as a consequence of any merger described in Section
13(a) hereof, or such Person is not a corporation, and such Person is (or,
upon
consummation of any merger described in Section 13(a) hereof, becomes) directly
or indirectly controlled by more than one Person, and one or more of such latter
Persons have Registered Common Shares outstanding, “Principal
Party”
shall
refer to whichever of such latter Persons is the issuer of outstanding
Registered Common Shares having the greatest aggregate current market value
(determined pursuant to Section 11(d)(i) hereof); or (4) if the Common Shares
of
such Person are not Registered Common Shares, or such Common Shares are
deregistered as a consequence of any merger described in Section 13(a) hereof,
or such Person is not a corporation, and such Person is (or, upon consummation
of any merger described in Section 13(a) hereof, becomes) directly or indirectly
controlled by more than one Person, and none of such latter Persons have
Registered Common Shares outstanding, “Principal
Party”
shall
refer to whichever ultimate parent entity is the entity having the greatest
net
assets;
provided,
further,
however,
that if
under the foregoing provisions of this Section 13(b) there shall for any reason
be more than one Principal Party, “Principal
Party”
shall
refer to whichever of such Persons is the issuer of outstanding Registered
Common Shares having the greatest aggregate current market value (determined
pursuant to Section 11(d)(i) hereof) or, if none of such Persons has Registered
Common Shares outstanding, whichever of such Persons is the entity having the
greatest net assets.
(c) Notwithstanding
anything herein to the contrary, if the Principal Party as determined pursuant
to paragraph (b) above is not a corporation, proper provision shall be made
so
that such Principal Party shall create or otherwise make available for purposes
of the exercise of the Rights in accordance with the terms of this Agreement,
a
type or types of securities having a fair market value (as determined by a
nationally recognized investment banking firm selected by the Board of
Directors) equal to at least the value of the Common Shares which each holder
of
a Right would have been entitled to receive if such Principal Party had been
a
corporation.
(d) The
Company shall not consummate any such consolidation, merger, sale or transfer
unless (1) at the time of and after such consummation the Principal Party shall
have a sufficient number of authorized Common Shares which have not been issued
or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and (2) prior to such consummation the Company
and such Principal Party shall have executed and delivered to the Rights Agent
a
supplemental agreement providing for the terms set forth in this Section 13
and
further providing that, as soon as practicable after the date of any
consolidation, merger or sale or transfer of assets mentioned in paragraph
(a)
of this Section 13, the Principal Party will
(i)
prepare
and file a registration statement under the Securities Act with respect to
the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing
and
(B) remain effective (with a prospectus at all times meeting the requirements
of
the Securities Act) until the Final Expiration Date, and similarly comply with
applicable state securities or “blue sky” laws; and
(ii)
deliver
to holders of the Rights historical financial statements for the Principal
Party
and each of its Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(a) Except
as
expressly provided herein, no adjustment to the Purchase Price, the number
of
Preferred Shares or other securities for which a Right is exercisable or the
number of Rights outstanding (except as permitted by Section 24 or Section
25
hereof) or any similar adjustment shall be made or be effective if such
adjustment would have the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such adjustment, including, without
limitation, the benefits under Section 11(a)(ii) and Section 13 hereof, unless
the terms of this Agreement are amended so as to preserve such
benefits.
(b) The
Company covenants and agrees that, following the Share Acquisition Date, except
as permitted by Section 25 hereof, it shall not, directly or indirectly, take
any action the purpose or effect of which is to eliminate or otherwise diminish
in any material respect the benefits intended to be afforded by the
Rights.
(c) The
Company covenants and agrees that, following the Share Acquisition Date, it
shall not consummate any of the transactions described in clauses (x), (y)
and
(z) of Section 13(a) hereof if (i) at the time of or after such consummation
there are or would be any charter or by-law provisions or any rights, warrants
or other instruments or securities outstanding or agreements in effect (whether
of the Company or any other Person) or any other action taken (whether by the
Company or any other Person) the purpose or effect of which is to eliminate
or
otherwise diminish in any material respect the benefits intended to be afforded
by the Rights or (ii) the stockholders of the Principal Party shall have
received, either prior to,
simultaneously
with, or after the consummation of such transaction, a distribution of Rights
previously owned by the Principal Party or any of its Affiliates and
Associates.
(d) The
Company further covenants and agrees that, following the Share Acquisition
Date,
it shall not consummate any of the transactions described in clauses (x), (y)
and (z) of Section 13(a) hereof unless prior thereto the Company and the
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with paragraph (c) above and
further providing that the Principal Party covenants and agrees that it shall
not, directly or indirectly, take any action the purpose or effect of which
is
to eliminate or otherwise diminish in any material respect the benefits intended
to be afforded by the Rights. The provisions of this paragraph (d) and paragraph
(c) above shall similarly apply to successive mergers, consolidations, sales
or
other transfers.
Section
15. Fractional
Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a
whole
Right. For the purposes of this Section 15(a), the current market value of
a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such
day,
the average of the closing bid and asked prices, regular way, 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
or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are
not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the system then in use
or,
if on any such date the Rights are not so quoted, the average of the closing
bid
and asked prices as furnished by a professional market maker making a market
in
the Rights selected by the Board of Directors. If on any such date no such
market maker is making a market in the Rights the fair value of the Rights
on
such date as determined in good faith by the Board of Directors shall be used
and shall be conclusive for all purposes.
(b) The
Company shall not be required to issue fractions of Preferred Shares (other
than
fractions which are integral multiples of one one-hundredth of a Preferred
Share) upon exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are integral multiples
of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they
are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares
that
are
not integral multiples of one one-hundredth of a Preferred Share, the Company
may pay to the registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same fraction
of
the current market value of one one-hundredth of a Preferred Share. For purposes
of this Section 15(b), the current market value of one one-hundredth of a
Preferred Share shall be one one-hundredth of the closing price of a Preferred
Share (as determined pursuant to Section 11(d)(ii) hereof) for the Trading
Day
immediately prior to the date of such exercise.
(c) The
holder of a Right by the acceptance of the Right expressly waives his right
to
receive any fractional Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 15.
Section
16. Rights
of Action.
All
rights of action in respect of this Agreement are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares); and any registered holder
of
any Right Certificate (or, prior to the Distribution Date, of any of the Common
Shares), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of any of the Common
Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
Section
17. Agreement
of Rights Holders.
Every
holder of a Right by accepting the same consents and agrees with the Company
and
the Rights Agent and with every other holder of a Right that:
(a) prior
to
the Distribution Date, the Rights will be transferable only in connection with
the transfer of the Common Shares;
(b) after
the
Distribution Date, the Right Certificates will be transferable only on the
registry books of the Rights Agent if surrendered at the office or offices
of
the Rights Agent designated for such purposes, duly endorsed or accompanied
by a
proper instrument of transfer;
(c) subject
to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem
and
treat the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is registered
as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificate or the associated
Common Shares certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the
Company
nor the Rights Agent, subject to the last sentence of Section 7(e) hereof,
shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as
a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree
or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided,
however,
the
Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section
18. Right
Certificate Holder Not Deemed a Stockholder.
No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company 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 Section 26 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section
19. Concerning
the Rights Agent.
(a) The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this 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
hereunder. In no case will the Rights Agent be liable for special, indirect,
incidental or consequential loss or damages of any kind whatsoever (including,
but not limited to, lost profits), even if the Rights Agent has been advised
of
the possibility of such damages. The indemnity provided under this Section
19
shall survive the termination of this Agreement and the exercise or expiration
of the Rights.
(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 Right Certificate or
certificate for any of the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, instruction, consent, certificate,
statement,
or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper person
or
persons.
Section
20. Merger
or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged with or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent
or any successor Rights Agent shall be a party, or any Person succeeding to
the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall 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 Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have
been
countersigned but not delivered, any such successor Rights Agent may adopt
the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at such time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In
case
at any time the name of the Rights Agent shall be changed and at such time
any
of the Right Certificates shall have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at such time any of the Right
Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and
in
all such cases such Right Certificates shall have the full force provided in
the
Right Certificates and in this Agreement.
Section
21. 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 Right 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 shall 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 shall
deem 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 any one of the Chairman or Vice Chairman of the Board,
the
President, a Vice President, the Treasurer or the Secretary of the Company
and
delivered to the Rights Agent; and such certificate shall be full authorization
to the
Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The
Rights Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this Agreement or in the Right Certificates or
be
required to verify the same (except as to its countersignature thereof), but
all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The
Rights Agent shall not be under any responsibility in respect of the validity
of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible
for
any adjustment required under the provisions of Sections 11 or 13 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 evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Common Shares or Preferred Shares to be issued pursuant
to
this Agreement or any Right Certificate or as to whether any Common Shares
or
Preferred Shares will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and
other
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.
(g) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman
or Vice Chairman of the Board, the President, a Vice President, the Secretary
or
the Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The
Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not 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 Person.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its
attorneys
or agents, and the Rights Agent shall not be answerable or accountable for
any
act, default, neglect or misconduct of any such attorneys or agents 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.
(j) If,
with
respect to any Right Certificate surrendered to the Rights Agent for exercise
or
transfer, the certificate attached to the form of assignment or form of election
to purchase, as the case may be, has either not been completed or indicates
an
affirmative response to any item therein, the Rights Agent shall not take any
further action with respect to such requested exercise or transfer without
first
consulting with the Company.
Section
22. Change
of Rights Agent.
The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon thirty (30) days’ notice in writing mailed to
the Company and, if instructed by the Company, to each transfer agent of the
Common Shares and Preferred Shares by registered or certified mail, and, at
the
expense of the Company, to the holders of the Right Certificates by first-class
mail. In the event the transfer agency relationship in effect between the
Company and the Rights Agent terminates, the Rights Agent will be deemed to
resign automatically on the effective date of such termination; and any required
notice will be sent by the Company. The Company may remove the Rights Agent
or
any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified
in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate 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 Person
organized and doing business under the laws of the United States or any State
of
the United States, in good standing, having a principal office in the State
of
New York, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal
or
state authority and which has (or whose Affiliate has) at the time of such
Person’s appointment as Rights Agent a combined capital and surplus of at least
$100 million. After appointment, the successor Rights Agent shall be vested
with
the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any
further assurance or conveyance, and perform any other act or deed, necessary
for the purpose. Not later than the effective date of any such appointment
the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and the Preferred Shares, and
mail
a notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 22, however, or any
defect therein, shall not affect the legality or validity of the
resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section
23. Issuance
of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors
to
reflect any adjustment or change in the Purchase Price and/or the number or
kind
or class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following
the
Distribution Date and prior to the earliest of the Redemption Date, the Exchange
Date and the Final Expiration Date, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
stock appreciation rights or the vesting of restricted stock units, or pursuant
to the terms of other awards under any employee or director benefit plan or
arrangement, outstanding, granted or awarded as of the Distribution Date, or
upon the exercise, conversion or exchange of securities issued by the Company
prior to such date, and (b) may, in any other case, if deemed necessary or
appropriate by a majority of the Board of Directors, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided,
however,
that
(i) no such Right Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificates would be issued and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section
24. Redemption.
(a) The
Board of Directors may, at its option, at any time prior to such time as any
Person becomes an Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the “Redemption
Price”).
The
redemption of the Rights may be made effective at such time, on such basis
and
with such conditions as the Board of Directors in its sole discretion may
establish. Without limiting the generality of the foregoing, the Company may,
at
its option, pay the Redemption Price in cash, Common Shares (based on the
“current
market price,”
as
defined in Section 11(d)(i) hereof, of the Common Shares at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors.
(b) Immediately
upon the action of the Board of Directors ordering the redemption of the Rights
(or at such later time as the Board of Directors may establish for the
effectiveness of such redemption), and without any further action and without
any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
The Company shall promptly give public notice of any such redemption;
provided,
however,
that
the failure to give or any defect in such notice shall not affect the validity
of such redemption. Within ten (10) days after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to the Rights Agent and to all such holders at
their last address as it appears upon the
registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed
in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
(c) Neither
the Company nor any of its Subsidiaries may redeem, acquire or purchase for
value any Rights at any time in any manner except (i) pursuant to a redemption
in accordance with this Section 24 or an exchange pursuant to Section 25 hereof
or (ii) in connection with the purchase or other acquisition of Common Shares
prior to the Distribution Date.
(d) In
connection with a redemption of Rights pursuant to this Section 24, as an
antidilution adjustment to outstanding awards (and without limitation of the
other terms of such award), the Company shall (i) pay to the holder of each
restricted stock unit outstanding at the time of redemption, upon the vesting
thereof, an amount equal to the Redemption Price per Right multiplied by the
number of Common Shares underlying such restricted stock unit and (ii) pay
to
the holder of each stock option or stock appreciation right outstanding at
the
time of redemption, upon the exercise thereof, an amount equal to the Redemption
Price per Right multiplied by the number of Common Shares underlying such stock
option or stock appreciation right. The Redemption Price paid pursuant to this
paragraph (d) shall be paid in the same form paid to holders of Rights pursuant
to the other paragraphs of this Section 24.
Section
25. Exchange.
(a)
Subject to paragraph (c) of this Section 25, the Board of Directors may, at
its
option, at any time following such time as any Person becomes an Acquiring
Person, exchange all but not less than all of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend, reclassification or similar transaction
occurring after the date hereof (such exchange being hereinafter referred to
as
the “Exchange”
and
such exchange ratio being hereinafter referred to as the “Exchange
Ratio”).
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to
effect the Exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such
Subsidiary, or any entity organized, appointed or established by the Company
for
or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of Common Shares
aggregating 50% or more of the Common Shares then outstanding.
(b) Immediately
upon the action of the Board of Directors authorizing the Exchange, and without
any further action and without any notice, the right to exercise the Rights
shall terminate and the only right thereafter of a holder of Rights included
in
the Exchange shall be to receive that number of Common Shares equal to the
number of Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of the Exchange; provided,
however,
that
the failure to give or any defect in such notice shall not affect the validity
of the Exchange. Within ten (10) days after the effectiveness of the Exchange
pursuant to the first sentence of this Section 25(b), the Company shall
mail a notice of Exchange to the Rights Agent and the holders of such Rights
at
their last addresses as they appear upon the
registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given whether or not the holder receives the notice.
Each such notice of Exchange will state the method by which the Exchange will
be
effected.
(c) In
the
event that the number of Common Shares which are authorized by the Company’s
Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit
the
Exchange, the Exchange Ratio shall equal one Common Stock Equivalent (in lieu
of
one Common Share) per Right. Alternatively, the Board of Directors may, at
its
option, determine that the Company shall (i) issue Common Shares in the
Exchange to the extent Common Shares are available and (ii) utilize Common
Stock Equivalents in the Exchange as provided above to the extent Common Shares
are not available, in which case such Common Shares shall be allocated on such
basis as the Board of Directors determines pursuant to Section 30
hereof.
(d) The
Company shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares. In lieu of
such
fractional shares, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional shares would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of one Common Share. For the purposes of this paragraph (d), the current
market value of one Common Share shall be the closing price of a Common Share
(as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the Exchange Date.
(e) In
connection with an Exchange of Rights pursuant to this Section 25, as an
antidilution adjustment to outstanding awards (and without limitation of the
other terms of such award), the Company shall (i) pay to the holder of each
restricted stock unit outstanding at the time of the Exchange, upon the vesting
thereof, an amount equal to the payment made to a holder of a Right in the
Exchange multiplied by the number of Common Shares underlying such restricted
stock unit and (ii) pay to the holder of each stock option or stock appreciation
right outstanding at the time of the Exchange, upon the exercise thereof, an
amount equal to the payment made to a holder of a Right in the Exchange
multiplied by the number of Common Shares underlying such stock option or stock
appreciation right. Payment pursuant to this paragraph (e) shall be made in
the
same form paid to holders of Rights pursuant to the other paragraphs of this
Section 25 (or, in the discretion of the Board of Directors, a cash payment
shall be made in lieu thereof reflecting the value of the Common Shares at
the
time of the Exchange).
Section
26. Notice
of Certain Events.
(a) In
case the Company shall propose, at any time after the Distribution Date, (i)
to
pay any dividend payable in stock of any class to the holders of Preferred
Shares or to make any other distribution to the holders of Preferred Shares
(other than a regular quarterly cash dividend), (ii) to offer to the holders
of
Preferred Shares rights, options or warrants to subscribe for or to purchase
any
additional Preferred Shares at less than the current market price of the
Preferred Shares, or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred
Shares (other than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one
or
more
of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company
and
its Subsidiaries (taken as a whole) to, any other Person or Persons, or
(v) 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
Certificate, in accordance with Section 27 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights, options or warrants, or the date
on
which such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Preferred Shares, if any such date is to be fixed,
and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least twenty (20) days prior to the record date
for determining holders of the Preferred Shares for purposes of such action,
and
in the case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Preferred Shares, whichever shall be the
earlier.
(b) In
case
the event set forth in Section 11(a)(ii) of this Agreement shall occur, then
(i)
the Company shall as soon as practicable thereafter give to each holder of
a
Right Certificate, in accordance with Section 27 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences
of
the event to holders of Rights under Section 11(a)(ii) hereof and (ii) all
references in the preceding paragraph to Preferred Shares shall thereafter
be
deemed to refer to Common Shares or, if appropriate, to Common Stock
Equivalents.
Section
27. Notices.
Notices
or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid, or
by
facsimile transmission, addressed as follows (until another address or facsimile
number is filed in writing with the Rights Agent):
Flushing
Financial Corporation
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Secretary
Facsimile
No.: ▇▇▇-▇▇▇-▇▇▇▇
Subject
to the provisions of Section 22 hereof, any notice or demand authorized by
this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, or by facsimile transmission,
addressed as follows (until another address or facsimile number is filed in
writing with the Company):
Computershare
Trust Company N.A.
▇▇
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇, Relationship Management
Facsimile
No.: ▇▇▇-▇▇▇-▇▇▇▇
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Right Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to such
holder at the address of such holder as shown on the registry books of the
Company.
Section
28. Supplements
and Amendments.
Prior
to the Share Acquisition Date, and subject to the last sentence of this Section
28, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement, whether or not adverse
to
the holders of Rights, without any approval of the holders of Rights. From
and
after the Share Acquisition Date, and subject to the last sentence of this
Section 28, the Company and the Rights Agent may from time to time supplement
or
amend this Agreement without any approval of the holders of Rights in order
(i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or (iii) to change or supplement the provisions herein to effectuate the
purposes of this Agreement, or to make any other provisions with respect to
the
Rights, which, in either such case, shall not materially adversely affect the
interests of the holders of Rights (other than Acquiring Persons and Affiliates
or Associates thereof). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment
is
in compliance with the terms of this Section 28, the Rights Agent shall execute
such supplement or amendment; provided,
however,
that
the Rights Agent may, but shall not be obligated to, enter into any such
supplement or amendment which affects the Rights Agent’s own rights, duties,
liabilities or obligations under this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall
be
made which decreases the Redemption Price.
Section
29. 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.
Section
30. Determinations
and Actions by the Board of Directors, etc.
The
Board of Directors shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically granted to
the
Board of Directors or to the Company, or as may be necessary or advisable in
the
administration of this Agreement, including, without limitation, the right
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 (including a determination to redeem or not to redeem the Rights
pursuant to Section 24 hereof, to exchange or not to exchange the Rights
pursuant to Section 25 hereof or to supplement or amend this Agreement). All
such actions, calculations, interpretations and determinations (including,
for
purpose of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board of Directors 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 to
any
liability to the holders of the Rights.
Section
31. 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 registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares) 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 registered
holders of the Right Certificates (and, prior to the Distribution Date, the
Common Shares).
Section
32. Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
Section
33. Governing
Law.
This
Agreement and each Right Certificate issued hereunder shall be deemed to be
a
contract made under the laws of the State of Delaware 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.
Section
34. 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.
Section
35. Descriptive
Headings.
Descriptive headings of the several Sections of this Agreement are inserted
for
convenience only and shall not control or affect the meaning or construction
of
any of the provisions hereof.
Section
36. Force
Majeure.
Notwithstanding
anything to the contrary contained herein, the Rights Agent shall not be liable
for any delays or failures in performance resulting from acts beyond its
reasonable control including, without limitation, acts of God, terrorist acts,
shortage of supply, breakdowns or malfunctions, interruptions or malfunction
of
computer facilities, or loss of data due to power failures or mechanical
difficulties with information storage or retrieval systems, labor difficulties,
war, or civil unrest.
[Signature
page follows.]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first above written.
|
FLUSHING
FINANCIAL CORPORATION
|
|
|
By:
|
/s/
▇▇▇▇ ▇. ▇▇▇▇▇
|
|
Name:
|
▇▇▇▇
▇. ▇▇▇▇▇
|
|
Title:
|
President
and Chief Executive Officer
|
|
COMPUTERSHARE
TRUST COMPANY N.A.
|
|
|
By:
|
/s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
|
|
Name:
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
Title:
|
Managing
Director
|
CERTIFICATE
OF INCREASE
OF
SHARES
DESIGNATED AS
SERIES
A JUNIOR PARTICIPATING PREFERRED STOCK
Flushing
Financial Corporation, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the “Corporation”),
DOES
HEREBY CERTIFY:
That
a Certificate of Designations of Series A Junior Participating Preferred Stock,
par value $.01 per share (the “Series
A Preferred”),
was filed in the office of the Secretary of State of the State of Delaware
on
September 30, 1996.
That
the Board of Directors of the Corporation, at a meeting held on September 5,
2006, duly adopted a resolution authorizing and directing an increase in the
number of shares designated as Series A Preferred, from 100,000 shares to
250,000 shares, in accordance with the provisions of Section 151 of The General
Corporation Law of the State of Delaware.
IN
WITNESS WHEREOF, the Corporation has caused this certificate to be signed by
______________________, its ________________, this _____ day of September,
2006.
|
FLUSHING
FINANCIAL CORPORATION
|
|
|
By
|
|
|
Name:
|
|
|
Title:
|
|
[Form
of
Right Certificate]
| Certificate No. R- |
____________
Rights
|
NOT
EXERCISABLE AFTER SEPTEMBER 30, 2016 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION OF THE COMPANY AT
$.01 PER RIGHT, AND TO EXCHANGE AT THE OPTION OF THE COMPANY, ON THE TERMS
SET
FORTH IN THE RIGHTS AGREEMENT. AS DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY (1) AN ACQUIRING PERSON OR ANY ASSOCIATE OR AFFILIATE
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), (2) A TRANSFEREE
OF
AN ACQUIRING PERSON (OR OF ANY SUCH ASSOCIATE OR AFFILIATE) WHO BECOMES A
TRANSFEREE AFTER THE ACQUIRING PERSON BECOMES SUCH OR (3) UNDER CERTAIN
CIRCUMSTANCES, A TRANSFEREE OF AN ACQUIRING PERSON (OR OF ANY SUCH ASSOCIATE
OR
AFFILIATE) WHO BECOMES A TRANSFEREE BEFORE OR CONCURRENTLY WITH THE ACQUIRING
PERSON BECOMING SUCH, SHALL BECOME NULL AND VOID.
Right
Certificate
FLUSHING
FINANCIAL CORPORATION
This
certifies that ____________________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of September 8, 2006 (the
“Rights
Agreement”),
between Flushing Financial Inc., a Delaware corporation (the “Company”),
and
Computershare Trust Company N.A. (the “Rights
Agent”),
to
purchase from the Company at any time after the Distribution Date (as such
term
is defined in the Rights Agreement) and prior to 5:00 P.M. (New York City
time) on September 30, 2016 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-hundredth of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the “Preferred
Shares”)
of the
Company, at a purchase price of $65 per one one-hundredth of a share (the
“Purchase
Price”),
upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above,
are
the number and Purchase Price as of September 30, 2006, based on the Preferred
Shares as constituted at such date.
From
and
after the occurrence of the event described in Section 11(a)(ii) of the Rights
Agreement, if the Rights evidenced by this Right Certificate are beneficially
owned by (i) an Acquiring Person or any Associate or Affiliate thereof (as
such terms are defined in the Rights Agreement), (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) under certain
circumstances, a transferee of an Acquiring Person (or of any such Associate
or
Affiliate) who becomes a transferee before or concurrently with the Acquiring
Person becoming such, such Rights shall become null and void and no holder
hereof shall have any rights with respect to such Rights.
As
provided in the Rights Agreement, the Purchase Price and the number and kind
of
Preferred Shares or other securities that may be purchased upon the exercise
of
the Rights evidenced by this Right Certificate are subject to modification
and
adjustment upon the happening of certain events.
This
Right 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 Right Certificates. Copies
of
the Rights Agreement are on file at the principal executive office of the
Company and are also available upon written request to the
Company.
This
Right Certificate, with or without other Right Certificates, upon surrender
at
the principal office or offices of the Rights Agent designated for such purpose,
may be exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to
purchase. If this Right Certificate shall be exercised in part, the holder
shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at its option at a redemption
price of $.01 per Right or (ii) may be exchanged by the Company at its option
for Common Shares (or, in certain circumstances, Common Stock Equivalents (as
such term is defined in the Rights Agreement)).
No
fractional Preferred Shares will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples
of
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depositary receipts), but in lieu thereof a cash payment will
be
made, as provided in the Rights Agreement.
No
holder
of this Right Certificate shall be entitled to vote or receive dividends or
be
deemed for any purpose the holder of Preferred Shares or of any other securities
of the Company which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder
of
the Company 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 evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This
Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal.
Dated
as
of _______________, ____
|
ATTEST:
|
FLUSHING
FINANCIAL CORPORATION
|
|||
|
|
By:
|
|
||
|
Secretary
|
Title:
|
|||
|
Countersigned:
|
|
|||
|
COMPUTERSHARE
TRUST COMPANY N.A.
|
||||
|
By:
|
|
|||
|
Authorized
Signature
|
||||
[Form
of
Reverse Side of Right Certificate]
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Right Certificate.)
FOR
VALUE
RECEIVED
________________________________________________________________________________________________________________________
hereby
sells, assigns and transfers unto
____________________________________________________________________________________________________________
___________________________________________________________________________________________________________________________________________
(Please
print name and address of transferee)
___________________________________________________________________________________________________________________________________________
this
Right Certificate, together with all right, title and interest therein, and
does
hereby irrevocably constitute and appoint __________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated
as
of _______________, ____
|
|
|
Signature
|
Signature
Guaranteed:
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate [ ] are [ ] are
not being sold, assigned and transferred by or on behalf of a Person who is
or
was an Acquiring Person or an Affiliate or Associate of an Acquiring Person
(as
such terms are defined in the Rights Agreement);
(2) after
due
inquiry and to the best knowledge of the undersigned, the Rights evidenced
by
this Right Certificate [ ] are [ ] are not being sold,
assigned and transferred to a Person who is an Acquiring Person, an Affiliate
or
Associate of an Acquiring Person or a nominee of any such Acquiring Person,
Associate or Affiliate;
(3) after
due
inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who
is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
of
an Acquiring Person.
Dated
as
of _______________, ____
|
|
|
Signature
|
NOTICE
The
signatures to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM
OF ELECTION TO PURCHASE
(To
be
executed if holder desires to exercise Rights represented by the Right
Certificate.)
To
FLUSHING FINANCIAL CORPORATION:
The
undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of the Rights (or such other securities of the Company or
of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of:
Please
insert social security
or
other
identifying number
(Please
print name and address)
If
such
number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance of such Rights shall be
registered in the name and delivered to:
Please
insert social security
or
other
identifying number
(Please
print name and address)
Dated
as
of _______________, ____
|
|
|
Signature
|
Signature
Guaranteed:
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) after
due
inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who
is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
of
an Acquiring Person.
Dated
as
of _______________, ____
NOTICE
The
signatures to the foregoing Election to Purchase and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
SUMMARY
OF RIGHTS TO PURCHASE
PREFERRED
STOCK
On
September 5, 2006, the Board of Directors of Flushing Financial Corporation
(the “Company”)
renewed the Company’s Stockholder Rights Plan (which was originally adopted in
and has been in place since September 1996 and which is scheduled to expire
on
September 30, 2006) by declaring a dividend distribution of one Right for each
outstanding share of Common Stock, par value $.01 per share, of the Company
(the
“Common
Shares”)
to
stockholders of record on September 30, 2006 (the “Record
Date”).
Each
Right entitles the registered holder to purchase from the Company a unit
(“Unit”)
consisting of one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company (the “Preferred
Shares”),
at a
price of $65 per Unit (the “Purchase
Price”),
subject to adjustment. The description and terms of the Rights are set forth
in
a Rights Agreement (the “Rights
Agreement”)
between the Company and Computershare Trust Company N.A., as Rights
Agent.
Initially,
the Rights will be attached to all Common Share certificates representing Common
Shares then outstanding, and no separate Right certificates will be distributed.
Until the earlier to occur of (i) 10 days following a public announcement that
a
person or group of affiliated or associated persons has acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding
Common Shares (an “Acquiring
Person”),
or
(ii) 10 business days (or such later day as may be determined by action of
the Board of Directors prior to such time as any person or group becomes an
Acquiring Person) following the commencement of a tender offer or exchange
offer
if, upon consummation thereof, any person or group would be an Acquiring Person
(the earlier of such dates being called the “Distribution
Date”),
the
Rights will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such certificate together with a copy
of
this Summary of Rights. The date of announcement of the existence of an
Acquiring Person referred to in clause (i) above is hereinafter referred to
as
the “Share
Acquisition Date.”
The
Rights Agreement provides that, until the Distribution Date, the Rights will
be
transferred with and only with the Common Share certificates. Until the
Distribution Date (or earlier redemption, exchange or expiration of the Rights),
new Common Share certificates issued after the Record Date upon transfer or
new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record Date, with or
without a copy of this Summary of Rights attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by
such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (“Right
Certificates”)
will
be
mailed
to
holders of record of Common Shares on the Distribution Date and, thereafter,
such separate Right Certificates alone will evidence the Rights.
The
Rights are not exercisable until the Distribution Date and will expire at the
close of business on September 30, 2016, unless earlier redeemed or
exchanged by the Company as described below.
In
the
event that any person or group of affiliated or associated persons becomes
an
Acquiring Person, the Rights Agreement provides that proper provision shall
be
made so that each holder of a Right, except as provided below, shall thereafter
have the right to receive, upon exercise, Common Shares (or, in certain
circumstances, Common Stock Equivalents (as such term is defined in the Rights
Agreement)) having a value equal to two (2) times the exercise price of the
Right. Upon the occurrence of any event described in the preceding sentence,
any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate (as such terms are defined in the Rights Agreement) of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate
or
Affiliate) who becomes a transferee after the Acquiring Person becomes such,
or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any person with whom the
Acquiring 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, agreement,
arrangement or understanding which has as a primary purpose or effect the
avoidance of the Rights Agreement, shall become null and void without any
further action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under any provision of the Rights Agreement
or otherwise.
At
any
time after the occurrence of the event described in the first sentence of the
preceding paragraph (and prior to the acquisition by any person or group of
affiliated or associated persons of 50% or more of the outstanding Common
Shares), the Board of Directors of the Company may exchange the Rights (except
Rights which previously have been voided as described above), in whole, but
not
in part, at an exchange ratio of one Common Share (or, in certain circumstances,
one Common Stock Equivalent) per Right.
In
the
event that, at any time after any person or group of affiliated or associated
persons becomes an Acquiring Person, (i) the Company engages in a merger or
other business combination transaction in which the Company is not the surviving
corporation, (ii) the Company engages in a merger or other business combination
transaction with another person in which the Company is the surviving
corporation, but in which its Common Shares are changed or exchanged, or (iii)
more than 50% of the Company’s assets or earning power is sold or transferred,
the Rights Agreement provides that proper provision shall be made so that each
holder of a Right (except Rights which previously have been voided as described
above) shall thereafter have the right to receive, upon the exercise thereof
at
the then current exercise price of the Right, common stock of the acquiring
company having a value equal to two (2) times the exercise price of the Right.
The
Purchase Price payable, and the number of Units of Preferred Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment
from
time to time to prevent dilution (i) in the event of a stock dividend on, or
a
subdivision, combination or reclassification of, the Preferred Shares, (ii)
upon
the grant to holders of the Preferred Shares of certain rights, options or
warrants to subscribe for Preferred Shares or convertible securities at less
than the current market price of the Preferred Shares, or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness,
stock (other than a dividend payable in Preferred Shares), assets or cash
(excluding regular quarterly cash dividends) or of subscription rights, options
or warrants (other than those referred to above). Such terms are also subject
to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case,
prior to the Distribution Date.
With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment
in
cash will be made as provided in the Rights Agreement.
At
any
time prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person, the Board of Directors may redeem the
Rights in whole, but not in part, at a price of $.01 per Right, subject to
adjustment (the “Redemption
Price”).
Immediately upon the action of the Board of Directors of the Company ordering
the redemption of the Rights (or at such later time as the Board of Directors
may establish for the effectiveness of such redemption), the Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price. Until a Right is exercised, the holder thereof, as such,
will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
The
terms
of the Rights may be amended by the Company and the Rights Agent, provided
that
following the Share Acquisition Date the amendment does not materially adversely
affect the interests of holders of Rights (other than an Acquiring Person)
and
provided that no amendment shall be made which decreases the Redemption
Price.
A
copy of
the Rights Agreement is being filed with the Securities and Exchange Commission
as an Exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement
will be available free of charge from the Company. This summary description
of
the Rights does not purport to be complete and is qualified in its entirety
by
reference to the Rights Agreement, which is incorporated herein by
reference.
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