EXHIBIT 1
▇▇▇▇▇▇ FINANCIAL CORPORATION
and
▇▇▇▇▇▇ BANK
Rights Agent
_________________
Amended and Restated
Rights Agreement
Dated as of April 27, 1999
TABLE OF CONTENTS
Section 1A. Amendment and Restatement................................................... 1
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Section 1. Certain Definitions......................................................... 1
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Section 2. Appointment of Rights Agent................................................. 5
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Section 3. Issuance of Rights Certificates............................................. 5
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Section 4. Form of Rights Certificates................................................. 6
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Section 5. Countersignature and Registration........................................... 7
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Section 6. Transfer, Split Up, Combination and Exchange of Rights
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Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.... 8
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights............... 9
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Section 8. Cancellation and Destruction of Rights Certificates......................... 11
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Section 9. Reservation and Availability of Capital Stock............................... 11
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Section 10. Common Stock Record Date.................................................... 12
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Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
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Number of Rights............................................................ 13
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Section 12. Certificate of Adjusted Purchase Price or Number of Shares.................. 21
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power........ 21
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Section 14. Fractional Rights and Fractional Shares..................................... 23
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Section 15. Rights of Action............................................................ 24
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Section 16. Agreement of Rights Holders................................................. 24
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Section 17. Rights Certificate Holder Not Deemed a Shareholder.......................... 25
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Section 18. Concerning the Rights Agent................................................. 25
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Section 19. Merger or Consolidation or Change of Name of Rights Agent................... 26
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Section 20. Duties of Rights Agent...................................................... 26
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Section 21. Change of Rights Agent...................................... 28
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Section 22. Issuance of New Rights Certificates......................... 29
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Section 23. Redemption and Termination.................................. 29
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Section 24. Notice of Certain Events.................................... 30
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Section 25. Notices..................................................... 31
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Section 26. Supplements and Amendments.................................. 31
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Section 27. Successors.................................................. 32
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Section 28. Determinations and Actions by the Board of Directors, etc. 32
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Section 29. Benefits of this Agreement................................. 33
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Section 30. Severability............................................... 33
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Section 31. Governing Law.............................................. 33
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Section 32. Counterparts............................................... 33
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Section 33. Descriptive Headings....................................... 33
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EXHIBITS
EXHIBIT A FORM OF RIGHTS CERTIFICATE.............................. 1
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EXHIBIT B ▇▇▇▇▇▇ FINANCIAL CORPORATION SUMMARY OF RIGHTS TO
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PURCHASE COMMON STOCK................................... 9
AMENDED AND RESTATED RIGHTS AGREEMENT
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AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of April 27, 1999 (the
"Agreement"), between ▇▇▇▇▇▇ Financial Corporation, a Pennsylvania corporation
(the "Company"), and ▇▇▇▇▇▇ Bank, a Pennsylvania banking corporation (the
"Rights Agent").
BACKGROUND:
The Company and the Rights Agent have heretofore entered into a Rights
Agreement dated as of June 20, 1989 (as amended, the "Original Rights
Agreement"). On June 20, 1989 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one right (an "Original Right") for each share of common stock,
par value $2.50 per share, of the Company (the "Common Stock") outstanding at
the close of business on July 6, 1989 (the "Record Date"), and has authorized
the issuance of one Original Right for each share of Common Stock of the Company
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issued between the Record Date and the Distribution Date, each Original Right
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initially representing the right to purchase one share of Common Stock of the
Company, upon the terms and subject to the conditions set forth in the Original
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Rights Agreement.
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth and intending to be legally bound, the parties hereby agree as
follows:
Section 1A. Amendment and Restatement. Pursuant to Section 26 of the
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Original Rights Agreement, the parties hereto hereby amend and restate the
Original Rights Agreement to read in its entirety in the form hereof. The Board
of Directors of the Company has approved the amendment and restatement such
that, as of April 27, 1999, each Original Right shall be deemed to be a common
share purchase right (a "Right") having the rights assigned to it pursuant to
this Agreement. As used herein the term "adoption of this Agreement" shall
refer to the adoption of this Amended and Restated Rights Agreement, and the
term "the date of this Agreement" or "the date hereof" shall mean April 27,
1999. The Board of Directors has also authorized the issuance of one Right (as
such number may be adjusted hereafter pursuant to the terms of this Agreement)
with respect to each share of Common Stock that shall become outstanding between
the date of this Agreement and the earliest to occur of the Distribution Date,
the Redemption Date or the Final Expiration Date (as such terms are hereinafter
defined). Each Right shall represent the right to purchase one share of Common
Stock.
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding, but shall not
include the Company, any Subsidiary of
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the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan.
(b) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(c) "Affiliate" and "Associate" 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.
(d) 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, 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 (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made
by such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
direct the voting of or to dispose of or direct the disposition
of or "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange
Act, as in effect on the date of this Agreement), including
pursuant to any agreement, arrangement or understanding, whether
or not in writing; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (A) arises solely
from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or on any
comparable or successor report); or
(iii) 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
(whether or not in writing), for the purpose of acquiring,
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holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph
(d)) or disposing of any voting securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the Commonwealth of Pennsylvania 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 Stock" shall mean the common stock, par value $2.50 per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power or the equity securities or other equity interest
having power to control or direct the management of such Person.
(h) "Common stock equivalent" shall have the meaning set forth in
Section 11(a)(iii).
(i) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board, who is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any Affiliate or Associate of an
Acquiring Person, and was a member of the Board prior to the date of this
Agreement, or (ii) any Person who subsequently becomes a member of the Board,
while such person is a member of the Board, who is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any Affiliate or Associate of an Acquiring Person, if
such Person's nomination for election or election to the Board is recommended or
approved by a majority of the Continuing Directors.
(j) "Current market price" shall have the meaning set forth in
Section 11(d).
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(l) "Distribution Date" shall mean the earlier of (i) the close of
business on the tenth business day after the Stock Acquisition Date, or (ii) the
close of business on the tenth business day after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14e-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 25% or more of the shares of Common Stock then
outstanding.
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(m) "Equivalent common stock" shall have the meaning set forth in
Section 11(b).
(n) "Expiration Date" and "Final Expiration Date" shall have the
meanings set forth in Section 7(a).
(o) "Outstanding Certificates" shall mean certificates representing
shares of Common Stock in respect of which Rights have been issued which were
issued after the Record Date and prior to the date of this Agreement and which
were outstanding as of the date of this Agreement.
(p) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(q) "Principal Party" shall have the meaning set forth in Section
13(b).
(r) "Purchase Price" shall have the meaning set forth in Section 4,
as the same may be adjusted from time to time pursuant to the provisions of this
Agreement.
(s) "Record Date" shall have the meaning set forth in the
"Background" section of this Agreement.
(t) "Redemption Price" shall have the meaning set forth in Section
23.
(u) "Rights Dividend Declaration Date" shall have the meaning set
forth in the "Background" section of this Agreement.
(v) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) hereof.
(w) "Section 13 Event" shall mean any event described in clauses (w),
(x), (y) or (z) of Section 13(a) hereof.
(x) "Spread" shall have the meaning set forth in Section 11(a)(iii).
(y) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that a Person has become an Acquiring Person.
(z) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which an amount of voting securities sufficient
to elect a majority of the directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or otherwise controlled by such Person.
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(aa) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(bb) "Trading Day" shall have the meaning set forth in Section 11(d).
(cc) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall, prior to the Distribution Date, also
be holders of Common Stock) 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 appropriate.
Section 3. Issuance of Rights Certificates.
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(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of paragraph (b), (c) and (d) of this Section 3) by
the certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date, the Rights Agent will send by first-
class, postage prepaid mail, to each such record holder of the Common Stock 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 A hereto (the "Rights Certificates"),
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evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the number of
Rights per share of Common Stock has been made pursuant to Section 11(i) hereof,
at the time of distribution of the Rights Certificates the Company shall make
the necessary and appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As soon as practicable after the date of this Agreement, the
Company shall file with the Securities and Exchange Commission the full text of
this Agreement and a revised summary thereof, which revised summary shall be in
substantially the form of Exhibit B hereto (the "Revised Summary of Rights").
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The Summary of Rights mailed to each record holder of Common Stock as of the
close of business on the Record Date shall be deemed amended and restated from
and after the date hereof by the Revised Summary of Rights. With respect to
certificates for the Common Stock outstanding as of the date hereof, until the
Distribution Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of such Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in Section 7
hereof), the transfer
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of any certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights have been, and shall be, issued in respect of all shares
of Common Stock which are issued after the Record Date but prior to the earlier
of the Distribution Date or the Expiration Date, unless the Board of Directors
provides to the contrary by resolution adopted at or before the time of the
issuance. Certificates representing such shares of subsequently issued Common
Stock shall also be deemed to be certificates for Rights.
(d) Any Outstanding Certificates (and any certificates issued by the
Company after the date of this Agreement bearing the same legend as the
Outstanding Certificates) shall be deemed to bear, and, except as set forth in
the previous clause, any certificates issued by the Company after the date of
this Agreement, that represent shares of Common Stock in respect of which Rights
have been issued shall bear, the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Amended and Restated Rights Agreement
between ▇▇▇▇▇▇ Financial Corporation (the "Company") and ▇▇▇▇▇▇ Bank (the
"Rights Agent") dated as of April 27, 1999 (as such Rights Agreement may be
amended from time to time, the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at
the principal 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, as in effect on the date of mailing, without charge promptly
after receipt of a written request therefor. Under certain circumstances
set forth in the Rights Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent holder,
may become null and void, and the transfer of such Rights may be deemed to
be restricted.
With respect to such certificates containing the foregoing legend (or
deemed to contain such legend), until the earlier of (i) the Distribution Date
or (ii) the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone
and registered holders of Common Stock shall also be the registered holders of
the associated Rights, and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificates.
Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
Section 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in
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Exhibit A hereto and may have such marks of identification or designation and
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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 the National
Association of Securities Dealers, Inc. or 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 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or in the case of
Rights issued in respect of Common Stock issued by the Company after the Record
Date, as of the date of issuance of such Common Stock), shall note the date of
issuance, and on their face shall entitle the holders thereof to purchase such
number of shares of Common Stock as shall be set forth therein at the price set
forth therein (such exercise price per share being referred to herein as the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents 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 of 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 such 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, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall bear (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified
in Section 7(e) of such Agreement, and the transfer of such Rights may be
deemed to be restricted.
Section 5. Countersignature and Registration
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(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Executive Vice
President or 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 of the Company, either
manually or by a facsimile signature. The Rights Certificates shall be
countersigned by an authorized signatory of the Rights Agent but it shall not be
necessary for the same signatory to
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countersign all of the Rights Certificates issued hereunder. The Rights
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 Rights Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights 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 Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights 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 its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
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Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
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(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of shares of Common Stock (or,
following a Triggering Event, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or 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 Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights 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
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment from the holder of the
Rights 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
Rights 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 Rights Certificate, and, in case
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of loss, theft or destruction, of indemnity or security reasonably satisfactory
to them, and 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 Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Subject to Section 7(e) and the last sentence of Section 23(a)
hereof, the registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 13(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and the certificate 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 aggregate
Purchase Price with respect to the total number of shares of Common Stock (or
other securities or property, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the earlier of (i) the close of
business on April 27, 2009 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the earlier of
(i) and (ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $90.00, and shall be subject to
adjustment from time to time as provided in Section 11 hereof and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per share of Common Stock (or other shares, securities or property, as the
case may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly, (i) (A) requisition from any transfer agent of the
shares of Common Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of shares of Common
Stock 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 total number of shares of Common Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of shares of
Common Stock as are to be purchased (in which case certificates for the shares
of Common Stock 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 fractional shares in accordance with
Section 14 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 Rights 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
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registered holder of such Rights Certificate. The payment of the Purchase Price
(as such amount may be reduced (including to zero) pursuant to Section
11(a)(iii) hereof) may be made in any combination of (x) cash or certified bank
check or bank draft payable to the order of the Company, or (y) delivery of a
certificate or certificates (with appropriate stock power executed in blank
attached thereto) for whole numbers of shares of Common Stock, which shall be
credited at their current market price (as determined pursuant to Section 11(d)
hereof). If the Company receives payment from any holder of Rights in a number
of whole shares of Common Stock with a current market price (as determined
pursuant to Section 11(d) hereof) that exceeds the total Purchase Price due from
such holder, the Company may, at its election, (i) accept only such whole number
of shares with a current market price (as determined pursuant to Section 11(d)
hereof) that is less than the total Purchase Price and require that the balance
of the total Purchase Price be paid under clause (x), above, or (ii) make a cash
refund of the difference between the current market price (as determined
pursuant to Section 11(d) hereof) of the whole number of shares received and the
total Purchase Price due from such holder. In the event that the Company is
obligated to issue other securities of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, (i) any Rights
beneficially owned by an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) any Rights transferred by an Acquiring Person (or any
such Associate or Affiliate) after the Acquiring Person becomes such, or (iii)
any Rights transferred by an Acquiring Person (or any such Associate or
Affiliate) prior to or concurrently with the Acquiring Person becoming such and
if the transferee 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, arrangement or understanding
which has 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. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of Rights
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
exercise as set forth in this Section 7 unless
10
such registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such 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 Rights Certificates. All
---------------------------------------------------
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or 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 Rights
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 Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) The Company covenants and agrees that prior to the occurrence of
a Triggering Event it will cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock, the number of shares of Common
Stock that, except as provided in Section 11 (a)(iii) hereof and without
consideration of the adjustments under Section 11(a)(ii), will be sufficient to
permit the exercise in full of all outstanding Rights. The Company covenants and
agrees that following the occurrence of a Triggering Event it will cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock and/or other securities, the number of shares of Common Stock and/or other
securities that, except as provided in Section 11(a)(iii) hereof, 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 shares reserved for such
issuance to be listed with the National Association of Securities Dealers, Inc.
or on any national securities exchange on which the Company's Common Stock then
trades upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11(a)(ii) Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act of 1933 (the
"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) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B) the date
of the expiration of the Rights. The
11
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 set
forth 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. Upon any such suspension, the Company shall issue a public
announcement stating, and notify the Rights Agent, 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. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Stock and/or other
securities 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.
(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 Rights Certificates
and of any certificates for shares of Common Stock and/or other securities, as
the case may be, upon the exercise of Rights. The Company shall not, however, be
required (i) to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of Common Stock and/or other securities, as the case may
be, in respect of a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or, (ii) to issue or
deliver any certificates for Common Stock and/or other securities, as the case
may be, in a name other than that of the registered holder upon the exercise of
any Rights until such tax shall have been paid (any such tax being payable by
the holder of such Rights 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. Common Stock Record Date. Each person in whose name any
------------------------
certificate for shares of Common Stock and/or other securities, as the case may
be, is issued upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of such shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the total Purchase
Price therefor (and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
applicable stock transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or otherwise)
on, and such certificate shall be dated, the next succeeding Business Day on
which the applicable stock transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
12
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and
-----------------------------------------------------------
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 Common Stock payable in
shares of Common Stock, (B) subdivide or split the outstanding Common
Stock, (C) combine the outstanding Common Stock into a smaller number
of shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Stock (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 Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or at the time of the effective date of such subdivision,
combination or reclassification, and/or the number and kind of shares
of Common Stock or 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, upon
payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Common Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such date
and at a time when the Common Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in the case of a dividend on
the Common Stock payable in shares of Common Stock as referenced in
clause (A) of this Section 11(a)(i), where the record date of such
dividend is prior to the Distribution Date and where each share of
Common Stock issued pursuant to such dividend is issued Rights under
Section 3(c) hereof, then in such case the Purchase Price shall be
reduced (and no other adjustment shall be made pursuant to this
Section 11(a)(i)) on the record date of such dividend to a number
which is equal to the result obtained by multiplying the Purchase
Price then in effect by a fraction, the numerator of which is the
number of Rights outstanding prior to such dividend and the
denominator of which is the number of Rights outstanding immediately
following such dividend. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) shall merge into the
Company or otherwise combine with the Company and the
Company shall be the continuing or surviving corporation of
such merger or combination and the Common Stock of the
Company shall remain outstanding and
13
unchanged, (2) shall effect a statutory share exchange with
the Company, after which the Company is not a Subsidiary of
any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, (3) shall, in one or more transactions,
other than in connection with the exercise of Rights or the
exercise or conversion of securities exercisable or
convertible into capital stock of the Company or any of its
Subsidiaries, transfer any assets to the Company or any of
its Subsidiaries in exchange (in whole or in part) for
shares of any class of capital stock of the Company or any
of its Subsidiaries or for securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries or otherwise obtain from
the Company or any of its Subsidiaries, with or without
consideration, any additional shares of any class of capital
stock of the Company or any of its Subsidiaries or
securities exercisable for or convertible into shares of any
class of capital stock of the Company or any of its
Subsidiaries (other than as part of a pro rata distribution
to all holders of Common Shares), (4) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise
dispose (in one or more transactions), to, from, with or of,
as the case may be, the Company or any of its Subsidiaries,
assets, including securities, on terms and conditions less
favorable to the Company than the Company would be able to
obtain in arm's-length negotiation with an affiliated third
party, (5) shall receive any compensation from the Company
or any of the Company's Subsidiaries other than compensation
for services as a director or for full-time employment as a
regular employee, in either case at rates in accordance with
the Company's (or its Subsidiaries') past practices, or (6)
shall receive the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances,
guarantees, pledges, or other financial assistance or any
tax credits or other tax advantage provided by the Company
or any of its Subsidiaries, or
(B) any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together
with its Affiliates and Associates, shall, at any time after
the Rights Dividend Declaration Date, become the Beneficial
Owner of 20% or more of the shares of Common Stock then
outstanding, other than pursuant to any transaction set
forth in Section 13(a) hereof,
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any
reverse stock split), or recapitalization of the Company, or
any merger or
14
consolidation of the Company with any of its Subsidiaries or
any other transaction or series of transactions involving
the Company or any subsidiary of the Company (whether or not
with or into or otherwise involving an Acquiring Person)
which has the effect, directly or indirectly, of increasing
by more than 1% the proportionate share of the outstanding
shares of any class of equity securities or of securities
exercisable for or convertible into securities of the
Company or any of its Subsidiaries that is directly or
indirectly owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, then within five (5) days
after the date of the occurrence of an event described in
Section 11(a)(ii)(B) hereof and promptly following the
occurrence of any event described in Section 11 (a)(ii)(A)
or (C) hereof, proper provision shall he made by the Company
so that each holder of a Right (except as provided below and
in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in
lieu of the number of shares of Common Stock for which the
Rights were theretofore exercisable, such number of shares
of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price
by the then number of shares of Common Stock for which a
Right was exercisable immediately prior to the first
occurrence of a Section 11 (a)(ii) Event and dividing that
product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (y) 50% of
the current market price (determined pursuant to Section
11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment
Shares").
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's articles 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) of this Section 11(a), and subject to such
limitations as are necessary to prevent a default under any
agreement for money borrowed as presently constituted to which
the Company is a part and subject to any limitations contained in
Section 1551 of the Pennsylvania Business Corporation Law of
1988, as amended, the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value") over (2) the Purchase Price
(such excess, the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including,
15
without limitation, shares, or units of shares, of preferred
stock which the Board of Directors of the Company has deemed to
have the same value as shares of Common Stock (such shares of
preferred stock, "common stock equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of
a nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the first occurrence of a Section 11(a)(ii) Event, then the
Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then,
if necessary, cash, which in the aggregate equal in value to the
Spread. If the Board of Directors of the Company shall determine
in good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise in
full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety
(90) days following the first occurrence of a Section 11(a)(ii)
Event, in order that the Company may seek shareholder approval
for the authorization of such additional shares (such period, as
it may be extended, the "Substitution Period"). To the extent
that the Company determines that some action needs to be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event
of any such suspension, the 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. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall
be the current market price (as determined pursuant to Section
11(d) hereof) per share of the Common Stock on the date of the
first occurrence of a Section 11(a)(ii) Event and the value of
any "common stock equivalent" shall be deemed to have the same
value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five (45) calendar
days after such record date) Common Stock (or shares having the same rights,
privileges and preferences as the shares of Common Stock ("equivalent common
stock")) or securities convertible into Common Stock or equivalent common stock
at a price per share of Common Stock or per share of equivalent common stock (or
having a
16
conversion price per share, if a security convertible into Common Stock or
equivalent common stock) less than the current market price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock 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 shares of Common
Stock outstanding on such record date, plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
and/or equivalent common stock 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 shares of Common Stock outstanding on such record date, plus the number of
additional shares of Common Stock and/or equivalent common stock 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
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Common Stock 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 Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the continuing
corporation) or evidence of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) or subscription rights or warrants
(excluding those referred to in 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) hereof) per share of Common Stock on such record date, less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to a
share of Common Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per share of Common
Stock. 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 be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current market
price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined)
17
immediately prior to such date, and for purposes of computations made pursuant
to Section 11(a)(iii) hereof, the "current market price" per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the
current market price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, 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 properly 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 shares of Common
Stock 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
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, the last reported sale price as reported on the National Market System
of the National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ"), or in case no such reported sale takes place on such day, the
average of the reported closing bid and asked quotations in such System, or such
other system then in use, or, if on any such date the shares of Common Stock are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board of Directors of the
Company shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is 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 of the
Company, 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 one percent (1%) in the Purchase 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 share of Common Stock
or other share, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this
18
Section 11 shall be made no later than the earlier of (i) three (3) years from
the date of the transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and/or the Purchase Price thereof 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 Common Stock contained in Section 11(a), (b),
(c), (e), (g), (h), (i), (j), (k), and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Common Stock shall apply on like terms
to any such other shares.
(g) All Rights first issued by the Company subsequent to any
adjustments made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
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 in 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 shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the
number of shares 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 lieu of any adjustment in
the number of shares of Common Stock purchasable upon the exercise of a Right.
Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of shares of Common Stock 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 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 Rights Certificates have been issued, shall be at least ten (10) days later
than the-date of the public announcement. If Rights 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 Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 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
19
the Rights Certificates held by such holders prior to the date of adjustment and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights 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 Rights 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 shares of Common Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated or par value, if any, of the number of
shares of Common Stock 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 shares of Common Stock 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 issuance to the holder of any Right exercised after such record date
the shares of Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of shares of
Common Stock 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 holders' right
to receive such additional shares (fractional or otherwise) or securities 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 in its good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of any shares of
Common Stock at less than the current market price, (iii) issuance wholly for
cash of shares of Common Stock or securities which by their terms are
convertible into or exchangeable for shares of Common Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common Stock shall
not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person, (ii) merge
with or into any other Person, (iii) effect a statutory share exchange with any
Person, or (iv) sell or transfer (or permit any Subsidiary to sell or transfer),
in one transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
20
Subsidiaries (taken as a whole) to any other Person or Persons, if at the time
of or immediately after such consolidation, merger, statutory share exchange or
sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 and Section 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,
and (b) promptly file with the Rights Agent, and with each transfer agent for
the Common Stock, a copy of such certificate. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
--------------------------------------------------------------
Power.
-----
(a) In the event that, following the Stock Acquisition Date, directly
or indirectly, (w) the Company 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, (x) any Person shall consolidate
with, or merge with or 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
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, (y) the Company
shall be a party to a statutory share exchange with any other Person after which
the Company is a Subsidiary of any other Person, or (z) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related 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,
then, and in each such case, proper provisions shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such
shares for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by (2)
50% of the current market price (determined pursuant to Section 11(d) hereof)
21
per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to ensure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean (i) in the case of any transaction
described in clause (w), (x) or (y) of the first sentence of Section 13(a), the
Person that is the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger, consolidation or statutory share
exchange, and if no securities are so issued, the Person that is the other party
to such merger or consolidation; and (ii) in the case of any transaction
described in clause (z) of the first sentence of Section 13(a), the Person that
is the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided, however,
--------
that in any such case, (1) if the Common Stock of such Person is not at such
time and has not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is and has been
so registered, "Principal Party" shall refer to such other Person; and (2) in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, the capital stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
statutory share exchange, sale or transfer unless the Principal Party shall have
a sufficient number of authorized shares of its Common Stock 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 unless prior thereto 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 paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger, statutory share exchange or sale of
assets mentioned in paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the 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 Act) until the Expiration Date; and (ii) will
deliver to holders of the
22
Rights historical consolidated 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.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or statutory share exchanges or sales or other
transfers. In the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights which have not
theretofore been exercised shall after the occurrence of a Section 13 Event be
exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights 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 purposes of this Section 14(a), the current market
value of a whole Right shall be the closing bid 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 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 NASDAQ or such other system then in use or, if on any such date the
Rights are not quoted by any such organization, 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 of the Company. 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 of the
Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
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 share of
Common Stock. For purposes of this Section 14(b), the current market value of
one share of Common Stock shall be the closing price of a share of Common Stock
(as determined pursuant to Section 11 (d) hereof) for the Trading Day
immediately prior to the date of such exercise.
23
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
----------------
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock in respect of which Rights have been issued); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, of such
Common Stock), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of such Common
Stock), 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 Rights Certificate in the manner provided in such Rights
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 shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. 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 Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) any restriction on transfer deemed to be imposed by this Agreement
is valid and enforceable against the holder and any transferee of the holder in
accordance with Section 1529 of the Pennsylvania Business Corporation Law of
1988, as amended, or any successor provision; and
(d) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock 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.
24
(e) 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 17. Rights Certificate Holder Not Deemed a Shareholder. No
--------------------------------------------------
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Common Stock
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 Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. 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
disbursements 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
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 or
defending against any claim of liability in the premises.
(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 Rights
Certificate or certificate for Common Stock 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.
25
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agents or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust 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, however, that such corporation would be
--------
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound.
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel 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
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") 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 the
Chairman of the Board, the President, any Executive Vice President or Senior
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant 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.
26
(c) The Rights Agent shall be liable hereunder only for its own
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 Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), 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 Rights 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 Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
Section 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
Rights 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 shares of Common Stock or other securities
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or other securities 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 the
Chairman of the Board, the President, any Executive Vice President or Senior
Vice President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant 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. At any time the Rights Agent may apply to the
Company for written instructions with respect to any matter arising in
connection with the Rights Agent's duties and obligations arising under this
Agreement. Such application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent with respect to its
duties or obligations under this Agreement and the date on and/or after which
such action shall be taken and the Rights Agent shall not be liable for any
action taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall be not less
than one business day after the Company receives such application, without the
Company's consent) unless, prior to taking or initiating any such action, the
Rights Agent has received written instructions in response to such application
specifying the action to be taken or omitted.
27
(h) The Rights Agent and any shareholder, 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 legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that reasonable care was exercised in
--------
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) 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 clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
Section 21. 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 to each
transfer agent of the Common Stock, by registered or certified mail. 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 Stock, by
registered or certified mail, and to the holders of the Rights 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 Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights 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
corporation organized and doing business under the laws of the United States or
of the State of New York or of the Commonwealth of Pennsylvania (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the State of New York or of the
28
Commonwealth of Pennsylvania if such authorization is required in order to
fulfill its responsibilities under this Agreement), in good standing, having a
principal-office in the State of New York or of the Commonwealth of Pennsylvania
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000. 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, conveyance, 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 Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, 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 22. Issuance of New Rights Certificates. Notwithstanding any of
-----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, the Company may,
if deemed necessary or appropriate by the Board of Directors of the Company,
issue Rights Certificates representing the appropriate number of Rights in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date.
Section 23. Redemption and Termination.
--------------------------
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the close of business on the tenth business day
following the Stock Acquisition Date, or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.01 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"); provided, however, if the Board of Directors of the Company authorizes
--------
redemption of the Rights in either of the circumstances set forth in clauses (i)
and (ii) below, then such authorization shall require the concurrence of a
majority of the Continuing Directors then in office: (i) such authorization
occurs on or after the time a Person becomes an Acquiring Person, or (ii) such
authorization occurs on or after the date of a change (resulting from a proxy or
consent solicitation) in a majority of the directors in office at the
commencement of such solicitation if any Person who is a participant in such
solicitation has stated (or, if upon the commencement of such solicitation, a
majority of the Board of Directors of the Company has determined in good faith)
that such Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action which would result in such Person becoming an
Acquiring Person or which would cause the occurrence of a Triggering Event;
provided further,
-------- -------
29
however, that if, following the occurrence of a Stock Acquisition Date and
following the expiration of the right of redemption hereunder but prior to any
Triggering Event, (i) a Person who is an Acquiring Person shall have transferred
or otherwise disposed of a number of shares of Common Stock in one transaction
or series of transactions, not directly or indirectly involving the Company or
any of its Subsidiaries, such that such Person is thereafter a Beneficial Owner
of 10% or less of the outstanding shares of Common Stock, and (ii) there are no
other Persons, immediately following the occurrence of the event described in
clause (i), who are Acquiring Persons, then the right of redemption shall be
reinstated and thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable (i) after the first occurrence of a Section 11(a)(ii)
Event until such time as the Company's right of redemption hereunder has
expired, or (ii) during the period in which the Company's right of redemption
shall have been reinstated under Section 30 hereof.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board 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 all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Section 24. Notice of Certain Events.
------------------------
(a) In case the Company shall take action, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Common Stock or to make any other distribution to the holders of
Common Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Common
Stock rights or warrants to subscribe for or to purchase any additional shares
of Common Stock or shares of stock of any class or any other securities, rights
or options, or (iii) to effect any reclassification of its Common Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Common Stock), or (iv) to effect any consolidation or merger into or with any
other Person, or to effect a statutory share exchange with any Person, 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 transaction or a series of related
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 Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation,
30
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, 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 shares of Common Stock 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 shares of Common Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 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 Common Stock shall be deemed thereafter
to refer to other securities, if appropriate.
Section 25. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
▇▇▇▇▇▇ Financial Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
▇▇▇▇▇▇ Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) 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 26. Supplements and Amendments. Prior to the Distribution Date
--------------------------
and subject to the next-to-last sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates
representing shares of Common Stock. From and after the Distribution
31
Date and subject to the next-to-last sentence of this Section 26, the Company
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
or (iii) to change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the holders of Rights Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, that this Agreement may not be supplemented or amended to lengthen,
pursuant to this sentence, a time period relating to when the Rights may be
redeemed. 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 26, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made (1) that changes the
Redemption Price, the Final Expiration Date or the Purchase Price, (2) that
reduces the number of shares of Common Stock for which a Right is exercisable or
(3) that amends this Section 26, unless such supplement or amendment is approved
by a majority of the Continuing Directors then in office. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 27. 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 28. Determinations and Actions by the Board of Directors, etc.
---------------------------------------------------------
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company (and, where
specifically provided for herein, the Continuing Directors) shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Company (or, where
specifically provided for herein, the Continuing Directors), 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 decisions and determinations deemed necessary or
advisable for the administration of this Agreement (including without limitation
a decision to redeem or not redeem the Rights or to amend the Agreement and a
determination of whether or not a person is or was an Acquiring Person or
beneficially owns a certain percentage of stock of the Company). All such
actions, calculations, interpretations, decisions and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board (or, where specifically provided for herein,
by the Continuing Directors) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights Certificates
and all other parties, and (y) not subject the Board or the Continuing Directors
to any liability to the holders of the Rights.
32
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
he construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) 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 Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 30. 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;
provided, however, that notwithstanding anything in this Agreement to the
--------
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth business day following the date of such determination by the Board of
Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
-------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed in accordance with the laws of such Commonwealth applicable to
contracts made and to be performed entirely within such Commonwealth.
Section 32. 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 33. 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.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: ▇▇▇▇▇▇ FINANCIAL CORPORATION
By:
------------------------------ ------------------------------------
Name: Name:
Title: Title:
Attest: ▇▇▇▇▇▇ BANK
By:
------------------------------ ------------------------------------
Name: Name:
Title: Title:
34
EXHIBIT A
---------
[Form of Rights Certificate]
Certificate No. R- ________________ Rights
NOT EXERCISABLE AFTER APRIL 27, 2009 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT (SUBJECT TO ADJUSTMENT) ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]
Rights Certificate
▇▇▇▇▇▇ 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 Amended and Restated Rights Agreement, dated as of April 27, 1999 (the
"Rights Agreement"), between ▇▇▇▇▇▇ Financial Corporation, a Pennsylvania
corporation (the "Company"), and ▇▇▇▇▇▇ Bank, a Pennsylvania banking corporation
(the "Rights Agent"), to purchase from the Company at any time prior to 5:00
P.M. (New York City time) on April 27, 2009 at the office or offices of the
Rights Agent designated for such purpose, or
1
its successors as Rights Agent, one fully paid, non-assessable share of Common
Stock, par value $2.50 per share (the "Common Stock") of the Company, at a
purchase price of $90.00 per share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The Purchase Price shall be paid, at the
election of the holder, in cash or shares of Common Stock of the Company having
an equivalent value. The number of Rights evidenced by this Rights 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 April 27, 1999, based on the Common Stock as
constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Triggering Event and the transfer of such rights may be
deemed to be restricted.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to certain rights of extension and the other provisions of the
Rights Agreement, the Rights evidenced by this Certificate may be redeemed by
the Company at its option at a redemption price of $.01 per Right (subject to
adjustment) at any time prior to the earlier of the close of business on (i) the
tenth business day following the Stock Acquisition Date (as such time period may
be extended pursuant to the Rights Agreement), and (ii) the Final Expiration
Date. Under certain circumstances set forth in the Rights Agreement, the
decision to redeem shall require the concurrence of a majority of the Continuing
Directors. After the expiration of the redemption
2
period, the Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Common Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its facsimile corporate seal.
Dated as of ____________________, 19 ___.
ATTEST: ▇▇▇▇▇▇ Financial Corporation
_________________________________ By:_______________________________
Countersigned:
_________________________________
By:______________________________
3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires
to transfer the Rights Certificate).
FOR VALUE RECEIVED _________________________________________________________
hereby sells, assigns and transfers unto
___________________________________
____________________________________________________________________________
(Please print name and address of transferee)
____________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated: _____________________, 19 ___.
___________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is 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 any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
Dated: ______________________, 19 ___. ________________________________
Signature
4
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise Rights represented by
the Rights Certificate)
To: ▇▇▇▇▇▇ FINANCIAL CORPORATION:
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
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
and delivered to:
Please insert social security or
other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
________________________________________________________________________________
If such number Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security or
other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
________________________________________________________________________________
________________________________________________________________________________
Dated: ________________________, 19 __. __________________________________
Signature
Signature Guaranteed:
6
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights 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 any such Acquiring Person (as such terms are
defined pursuant to 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 Rights Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________________, 19 __. _________________________________
Signature
Signature Guaranteed:
7
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
8
EXHIBIT B
---------
▇▇▇▇▇▇ FINANCIAL CORPORATION
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On June 20, 1989, the Board of Directors of ▇▇▇▇▇▇ Financial Corporation
(the "Company") declared a dividend distribution of the right (an "Original
Right") to purchase one share of common stock, par value $2.50 per share (the
"Common Stock"), for each outstanding share of the Common Stock of the Company
to shareholders of record at the close of business on July 6, 1989 (the "Record
Date"). On April 27, 1999 the Board of Directors amended the Original Rights
in their entirety to represent a right (a "Right") to purchase one share of
Common Stock of the Company at a price of $90 (as the same may be adjusted, the
"Purchase Price"). The amendment of the Original Rights shall take effect on
April 27, 1999. The description and terms of the Rights are set forth in an
Amended and Restated Rights Agreement (as the same may be amended from time to
time, the "Rights Agreement") dated as of April 27, 1999, between the Company
and ▇▇▇▇▇▇ Bank, as Rights Agent (the "Rights Agent").
Initially, the Rights will be evidenced by all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 business days following
a public announcement that a person or a group of affiliated or associated
persons (an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 25% or more of such outstanding shares of Common
Stock. Until the Distribution Date, (i) the Rights will be evidenced by such
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after the Record
Date will contain a notation incorporating the Rights Agreement by reference,
and (iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and, thereafter, such separate Rights
Certificates alone will evidence the rights.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on April 27, 2009, unless earlier redeemed by the
Company as described below.
In the event that (i) the Company is the surviving corporation in a merger
or the acquiring corporation in a statutory share exchange with an Acquiring
Person and its Common Stock is not changed or exchanged, (ii) an Acquiring
Person engages in certain self-dealing transactions with the Company, (iii) a
Person (other than the Company and its affiliates) becomes the beneficial owner
of 25% or more of the then outstanding shares of Common Stock, or (iv) during a
time that there is an Acquiring Person, one or more specified events occur that
result in such Acquiring Person's ownership interest in the Company being
increased by more than 1%, the Rights Agreement provides that proper provision
shall be made so that each holder of a Right will thereafter have the
9
right to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value equal to two
(2) times the exercise price of the Right.
For example, at an exercise price of $90.00 per Right, each Right not owned
by an Acquiring Person (or by certain related parties and transferees of the
Acquiring Person) following an event set forth in the preceding paragraph would
entitle its holder to purchase $180.00 worth of Common Stock (or other
consideration, as noted above) for $90.00. Assuming that the Common Stock had a
per share value of $90.00 at such time, the holder of each valid Right would be
entitled to purchase two shares of Common Stock for $90.00.
In the event that, at any time following the Distribution Date, (i) the
Company is acquired in a merger, statutory share exchange 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 Stock is changed or exchanged, or (iii) 50% or more 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
shall thereafter have the right to receive, upon exercise of the Right, common
stock or other consideration of the acquiring company having a value equal to
two (2) times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence of any of
the events set forth in the preceding paragraph and the third preceding
paragraph (the "Triggering Events"), any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by any
Acquiring Person shall immediately become null and void. Also, under no
circumstances may a Right be exercised following the occurrence of an event set
forth in clause (iii) of the third preceding paragraph prior to expiration of
the Company's right of redemption.
The Purchase Price shall be paid, at the option of the holder, in cash or
shares of Common Stock having an equivalent value. The Purchase Price payable,
and the number of shares of Common Stock or other securities or property
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 Common Stock, (ii) upon the
grant to holders of the Common Stock of certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the then current market
price of Common Stock, or (iii) upon the distribution to holders of the Common
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than the Rights).
No adjustment in the Purchase Price will be required until cumulative
adjustments amount to at least 1% of the Purchase Price. No fractional shares
will be issued upon exercise of a Right and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
The term "Continuing Directors" means any member of the Board of Directors
of the Company who was a member of the Board prior to the date of the Rights
Agreement, and any person who is subsequently elected to the Board if such
person is recommended or approved by a
10
majority of the Continuing Directors, but shall not include an Acquiring Person,
or any affiliate or associate of an Acquiring Person, or any representative of
an Acquiring Person or of an affiliate or associate of an Acquiring Person.
At any time until ten (10) business days following the Stock Acquisition
Date, the Board of Directors may cause the Company to redeem the Rights in
whole, but not in part, at a price of $0.01 per Right, subject to adjustment
(the "Redemption Price"); provided, however, if the Board of Directors of the
Company authorizes redemption of the Rights in either of the circumstances set
forth in clauses (i) and (ii) below, then such authorization requires the
concurrence of a majority of Continuing Directors then in office: (i) such
authorization occurs on or after the time a person or group acquires beneficial
ownership of 20% or more of the outstanding Common Stock, or (ii) such
authorization occurs on or after the date of a change in a majority of the
directors resulting from a proxy solicitation if the solicitor (or any
participant in the solicitation) indicates an intention to become an Acquiring
Person or to cause a Triggering Event. Thereafter, the Company's right of
redemption may be reinstated if an Acquiring Person reduces his beneficial
ownership to 10% or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company and there is
then no other Acquiring Person.
Immediately upon the action of the Board of Directors of the Company, with,
where required, the concurrence of the Continuing Directors, ordering redemption
of the Rights, 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.
No amendment of the Rights Agreement may change the Purchase Price,
Redemption Price or final expiration date or may reduce the number of shares of
Common Stock for which a Right is exercisable unless such amendment is approved
by a majority of the Continuing Directors then in office. Subject to those
restrictions, the provisions of the Rights Agreement may be amended by the Board
of Directors, prior to the Distribution Date, in any manner, including without
limitation shortening or lengthening any redemption period. After the
Distribution Date, amendments may not be made to lengthen any redemption period,
but other amendments or modifications not adverse to the interests of Rights
holders may be made.
A copy of the Amended and Restated Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K
dated April ___, 1999. A copy of the Amended and Restated Rights Agreement is
available free of charge from the Rights Agent. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Amended and Restated Rights Agreement, which is incorporated by
herein by reference.
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