RIGHTS AGREEMENT
dated as of May 13, 1997
by and between
ES&L Bancorp, Inc.
and
American Stock Transfer & Trust Company
as Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
Table of Contents
Page
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1 Certain Definitions 1
ARTICLE II
THE RIGHTS
Section 2.1 Summary of Rights 5
Section 2.2 Legend on Common Stock Certificates 5
Section 2.3 Exercise of Rights; Separation of Rights 6
Section 2.4 Adjustments to Exercise Price; Number of Rights 7
Section 2.5 Date on Which Exercise is Effective 8
Section 2.6 Execution, Authentication, Delivery and
Dating of Rights Certificates 8
Section 2.7 Registration, Registration of Transfer and
Exchange 8
Section 2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates 9
Section 2.9 Persons Deemed Owners 9
Section 2.10 Delivery and Cancellation of Certificates 9
Section 2.11 Agreement of Rights Holders 10
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF
CERTAIN TRANSACTIONS
Section 3.1 Distribution Date 10
Section 3.2 Flip-over 11
ARTICLE IV
THE RIGHTS AGENT
Section 4.1 General 12
Section 4.2 Merger or Consolidation or Change of Name
of Rights Agent 12
Section 4.3 Duties of Rights Agent 13
Section 4.4 Change of Rights Agent 14
ARTICLE V
MISCELLANEOUS
Page
Section 5.1 Redemption 15
Section 5.2 Expiration 15
Section 5.3 Issuance of New Rights Certificates 15
Section 5.4 Supplements and Amendments 15
Section 5.5 Fractional Shares 15
Section 5.6 Rights of Action 15
Section 5.7 Holder of Rights Not Deemed a Shareholder 15
Section 5.8 Notice of Proposed Actions 16
Section 5.9 Notices 16
Section 5.10 Suspension of Exercisability 16
Section 5.11 Costs of Enforcement 16
Section 5.12 Successors 16
Section 5.13 Benefits of this Agreement 17
Section 5.14 Descriptive Headings 17
Section 5.15 Governing Law 17
Section 5.16 Counterparts 17
Section 5.17 Severability 17
EXHIBITS
Exhibit A Form of Rights Certificate (Together with Form of
Election to Exercise)
Exhibit B Form of Certificate of Designations Establishing
Series of Shares of Participating Junior Preferred
Stock
RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is made and entered into
as of the 13th day of May, 1997 by and between ES&L Bancorp,
Inc., a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company, a New York corporation (the "Rights
Agent").
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one right (the "Right") in
respect of each share of Common Stock (as hereinafter defined) of
the Company outstanding as of the close of business on May 13,
1997 (the "Record Time") and authorized the issuance of one Right
in respect of each share of Common Stock issued after the Record
Time and prior to the Separation Time (as hereinafter defined);
WHEREAS, each Right entitles the holder thereof, after the
Separation Date, to purchase securities of the Company (or, in
certain cases, of certain other entities) pursuant to the terms
and subject to the conditions set forth herein; and
WHEREAS, in connection with the matters referred to herein,
the Company desires to appoint the Rights Agent to act on behalf
of the Company for the benefit of the holders of Rights, and the
Rights Agent is willing so to act;
NOW, THEREFORE, in consideration of the foregoing recitals
and the mutual agreements set forth herein, and for the benefit
of the holders of the Rights, the parties hereto hereby agree as
follows:
ARTICLE I - CERTAIN DEFINITIONS
--------- -------------------
1.1 Certain Definitions. For purposes of this Agreement,
the following terms have the meaning indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 15% or more of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not
include (i) any Person who shall become the Beneficial Owner of
15% or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company of shares of Common
Stock, until such time thereafter as such Person shall become the
Beneficial Owner (other than by means of a stock dividend or
stock split) of any additional shares of Common Stock; or (ii)
any Person who shall become the Beneficial Owner of 15% or more
of the outstanding shares of the Common Stock solely as a result
of purchasing the Common Stock directly from the Company pursuant
to a written agreement with the Company.
"Adverse Person" shall mean a Person declared as such by the
Board of Directors of the Company, upon (i) a determination that
such Person, alone or together with its Affiliates and
Associates, has become the Beneficial Owner of 10% or more of the
outstanding shares of Common Stock and (ii) a determination by
the Board of Directors, including at least a majority of the
Disinterested Directors, after reasonable inquiry and
investigation, including such consultation with such persons as
such directors shall deem appropriate, that (A) such Beneficial
Ownership by such Person is intended to cause, is reasonably
likely to cause or will cause the Company to repurchase the
Common Stock beneficially owned by such Person or to cause
pressure on the Company to take action or enter into a
transaction or series of transactions which would provide such
Person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term
interests of the Company and its stockholders, but for the
actions and possible actions of such Person, would not be served
by taking such action or entering into such transactions or
series of transactions at that time or (B) such Beneficial
Ownership is having or is reasonably likely to have a material
adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company's
ability to maintain its competitive position) on the business or
prospects of the Company; provided, however, that the Board of
Directors of the Company may determine not to declare a Person to
be an Adverse Person if, prior to the time that such Person
acquired 10% or more of the shares of Common Stock then
outstanding (or, in the case of a Person who is the Beneficial
Owner of 10% or more of the outstanding Common Stock as of the
date of this Agreement, within 90 days following adoption of this
Agreement), such Person provided to the Board of Directors in
writing a statement of such Person's purpose and intentions in
connection with the proposed acquisition of Common Stock,
together with any other information reasonably requested of such
Person by the Board of Directors, and the Board of Directors,
based on such statement and reasonable inquiry and investigation,
including consultation with such persons as the directors shall
deem appropriate, determines to notify and notifies such Person
in writing that it will not declare such Person to be an Adverse
Person; provided further, that the Board of Directors, with the
concurrence of a least a majority of the Disinterested Directors,
may expressly condition in any manner a determination not to
declare a Person an Adverse Person on such conditions as the
Board of Directors may select, including without limitation, such
Person's not acquiring more than a specified amount of stock
and/or on such Person's not taking actions inconsistent with the
purposes and intentions disclosed by such Person in the statement
provided to the Board of Directors. In the event that the Board
of Directors should at any time determine, upon reasonable
inquiry and investigation, including consultation with such
Persons as the directors shall deem appropriate, that such Person
has not met or complied with any condition specified by the Board
of Directors, the Board of Directors, with the concurrence of at
least a majority of the Disinterested Directors, may at any time
thereafter declare such Person to be an Adverse Person pursuant
to the provisions hereof.
"Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934 ("Exchange Act"), as in
effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "Beneficially Own":
(i) any securities which such Person or any of such
Person's Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act or
Rule 13d-3 promulgated thereunder (or any comparable or successor
law or regulation), in each case as in effect on the date hereof;
(ii) any securities which such Person or any of such
Person's Affiliates or Associates has the right to acquire
(whether such right is exercisable immediately, or only after the
passage of time, compliance with regulatory requirements, the
fulfillment of a condition, or otherwise) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise, provided that a
Person shall not under this clause (ii) be deemed the Beneficial
Owner of, or to Beneficially Own, securities tendered pursuant to
a tender offer or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange;
(iii) any securities which such Person or any such
Person's Affiliates or Associates has the right to vote, alone or
in concert with others, pursuant to any agreement, arrangement or
understanding, provided that a Person shall not under this clause
(iii) be deemed the Beneficial Owner of, or to Beneficially Own,
any security if the agreement, arrangement or understanding to
vote such security (A) arises solely from a revocable proxy given
to such Person or any of such Person's Affiliates or Associates
in response to a public proxy solicitation made pursuant to and
in accordance with the applicable rules and regulations of the
Exchange Act, and (B) is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report);
(iv) any securities which are owned, directly or
indirectly, by any other Person with which such Person or any of
such Person's Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting (other than voting pursuant to a revocable proxy
as described in the proviso to clause (iii) hereof) or disposing
of any securities of the Company; and
(v) on any day on or after a Distribution Date, all
Rights that prior to such date were represented by certificates
for Common Stock that such Person owns on such day.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to
close.
"Close of Business" on any given date shall mean 5:00 p.m.,
New York time, on such date; provided, however, that if such date
is not a Business Day, it shall mean 5:00 p.m., New York time, on
the next succeeding Business Day.
"Common Stock" shall mean one share of Common Stock, par
value $0.01 per share, of the Company.
"Disinterested Director" shall mean (i) any member of the
Company's Board of Directors who is not an officer or employee of
the Company or any of its Subsidiaries and is not an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any
such Person or a representative or nominee of an Acquiring
Person, an Adverse Person or any such Affiliate or Associate and
was a member of the Company's Board of Directors prior to the
date of this Agreement, and (ii) any Person who subsequently
becomes a member of the Company's Board of Directors who is not
an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person or a representative or nominee of an
Acquiring Person, an Adverse Person or of any such Affiliate or
Associate, if such Person's nomination is recommended or approved
by a majority of the Disinterested Directors.
"Distribution Date" shall mean (i) the first date of public
announcement by the Company (by any means) or by an Acquiring
Person (by means of filing a Schedule 13D under the Exchange Act
or any comparable or successor report or schedule or an amendment
thereto) that an Acquiring Person has become such or (ii) the
first date of public announcement by the Company (by any means)
that an Adverse Person has become such.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise
of one whole Right. Until adjustment thereof in accordance with
the terms hereof, the Exercise Price shall equal $70.00.
"Expiration Date" shall mean the earlier of (i) the
Redemption Date or (ii) the close of business on May 13, 2007.
"Flip-over Stock" of any Person shall mean the capital stock
(or similar equity interest) with the greatest voting power in
respect of the election of directors (or other Persons similarly
responsible for the direction of the business and affairs) of
such Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately controls such
first-mentioned Person.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions in which, directly or indirectly, (i) the
Company shall consolidate with or merge with or into an Acquiring
Person, an Adverse Person, or any other Person acting together in
any respect with such Person, or an Acquiring Person or Adverse
Person or any other Person acting together in any respect with
such Person shall merge with or into the Company, (ii) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer) assets (A)
aggregating more than 50% of the assets (measured by either book
value or fair market value) or (B) generating more than 50% of
the operating income or cash flow, of the Company and its
Subsidiaries (taken as a whole) to an Acquiring Person or Adverse
Person or any other Person acting together in any respect with
such Person (provided that for purposes of clauses (i) and (ii),
but without limitation, a Person shall be deemed to be acting
together in any respect with an Acquiring Person or Adverse
Person if such Person enters into any transaction of the type
described in clause (i) or (ii) within one year after the time
the Acquiring Person or Adverse Person has become such, unless
(x) such transaction was initiated by the Company and (y) the
Acquiring Person or Adverse Person or any Person acting together
in any respect with such Person has not acquired control of the
Board of Directors of the Company), (iii) any Acquiring Person or
Adverse Person shall (A) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of,
to, from, or with, as the case may be, the Company or any of its
Subsidiaries, over any period of 12 consecutive calendar months,
assets or liabilities (x) having an aggregate fair market value
of more than $15,000,000 or (y) on terms and conditions less
favorable to the Company than the Company would be able to obtain
through arm's-length negotiations with an unaffiliated third
party, (B) receive any compensation for services from the Company
or any of its Subsidiaries, other than compensation for full-time
employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (C) receive
the benefit, directly or indirectly (except proportionately as a
shareholder), over any period of 12 consecutive calendar months,
of any loans, advances, guarantees, pledges, insurance,
reinsurance or other financial assistance or any tax credits or
other tax advantage provided by the Company or any of its
Subsidiaries involving an aggregate principal amount in excess of
$5,000,000 or an aggregate cost or transfer of benefits from the
Company or any of its Subsidiaries in excess of $5,000,000 or, in
any case, on terms and conditions less favorable to the Company
than the Company would be able to obtain through arm's length
negotiations with a third party, or (iv) as a result of any
reclassification of securities (including any reverse stock
split), or recapitalization, of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any
other transaction or series of transactions (whether or not with
or into or otherwise involving an Acquiring Person or Adverse
Person), the proportionate share of the outstanding shares of any
class of equity or convertible securities of the Company or any
of its Subsidiaries which is directly or indirectly owned by any
Acquiring Person or Adverse Person is increased by more than 1%.
The terms "Acquiring Person" and "Adverse Person" shall include
any Acquiring Person and/or any Adverse Person and its Affiliates
and Associates (other than the Company, a wholly owned Subsidiary
of the Company or any employee stock ownership or other employee
benefit plan of the Company or a wholly owned Subsidiary of the
Company), counted together as a single Person.
"Junior Preferred Stock" shall mean the series of Junior
Participating Preferred Stock, par value $0.10 per share, of the
Company created by a Certificate of Designations Establishing
Series of Shares in substantially the form set forth in Exhibit B
hereto appropriately completed.
"Market Price" per share of any security on any date (the
"Determination Date") shall mean the arithmetic average of the
daily closing prices per share of such security (determined as
described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding the
Determination Date; provided, however, that if an event of a type
analogous to any of the events described in Section 2.4 hereof
shall have caused the closing price on one or more Trading Days
during such period of 20 Trading Days not to be fully comparable
with the closing price on the Determination Date, each such
closing price so used shall be appropriately adjusted in order to
make it fully comparable with the closing price on the
Determination Date. The closing price per share of any security
on any date shall be the last reported sale price, regular way,
or, in case no such sale takes place or is reported on such date,
the average of the closing bid and asked prices, regular way, for
such security, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock
Exchange, Inc. or, if such security is not listed or admitted to
trading on the New York Stock Exchange, Inc., as reported in the
principal consolidated transaction reporting system with respect
to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading
or, if such security is not listed or admitted to trading on any
national securities exchange, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other self-regulatory organization or
registered securities information processor (as such terms are
used under the Exchange Act) as then reports trading information
concerning such security, or, if on any such date such security
is not listed or admitted to trading on any national securities
exchange or quoted by any such organization, the average of the
closing bid and asked prices as furnished by any registered
securities dealer that is a market maker (as such term is used
under the Exchange Act) in such security and which is selected by
the Board of Directors of the Company; provided, however, that if
on any such date such security is not listed or admitted to
trading on a national securities exchange or traded in the over-
the-counter market, the closing price of such security on such
date shall mean the fair value of such security on such date as
determined in good faith by the Board of Directors of the
Company, after consultation with a nationally recognized
investment banking firm, and set forth in a certificate delivered
to the Rights Agent.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the
Exchange Act, as such Rule is in effect on the date of this
Agreement), corporation or other entity.
"Redemption Price" shall mean an amount (calculated to the
nearest one one-hundredth of a cent) equal to the Exercise Price,
as in effect at the Redemption Time, divided by $0.01 (i.e.,
initially $0.01).
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1
hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the later of (A) the tenth day, after the date on
which any Person (other than the Company, a majority-owned
Subsidiary of the Company or an employee stock ownership or other
employee benefit plan of the Company or a majority-owned
Subsidiary of the Company) commences a tender or exchange offer
which, if consummated, would result in such Person's becoming an
Acquiring Person and (B) such later date as the Board of
Directors of the Company may from time to time fix by resolution
adopted prior to the Separation Time and (ii) the Distribution
Date; provided that, if the foregoing results in the Separation
Time being prior to the Record Time, the Separation Time shall be
the Record Time and provided further that, if any tender or
exchange offer referred to in clause (i) of this definition is
canceled, terminated or otherwise withdrawn prior to the
Separation Time, such offer shall be deemed, for purposes of this
definition, never to have been made.
"Subsidiary" of any Person shall mean any corporation or
other entity of which equity securities or equity interests
representing a majority of the voting power are owned, directly
or indirectly, or which is effectively controlled, by such
Person.
"Trading Day" shall mean, as to any stock or other security,
a day on which the principal national securities exchange or
NASDAQ on which such stock or other security is listed, quoted or
admitted to trading is open for the transaction of business or,
if such stock or other security is not listed, quoted or admitted
to trading on any national securities exchange or NASDAQ, a
Business Day.
ARTICLE II - THE RIGHTS
---------- ----------
2.1 Summary of Rights. As soon as practicable after the
Record Time, the Company will mail a copy of a letter to
shareholders summarizing the terms of the Rights to each holder
of record of Common Stock as of the Record Time, at such holder's
address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for
the Common Stock issued after the Record Time but prior to the
Separation Time shall evidence one Right for each share of Common
Stock represented thereby and shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
Until the Separation Time (as defined in the Rights
Agreement referred to below), this certificate also
evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement, dated as of
May 13, 1997 (as such may be amended from time to
time, the "Rights Agreement"), between ES&L Bancorp,
Inc. (the "Company") and American Stock Transfer &
Trust Company, the Rights Agent, the terms of which
are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be
redeemed, may be exchanged for shares of Common Stock
or other securities or assets of the Company, may
expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or "Adverse Person" or
an Affiliate or Associate thereof, as such terms are
defined in the Rights Agreement, or by any transferee
of any of the foregoing) or may be evidenced by
separate certificates and may no longer be evidenced
by this certificate. The Company will mail or arrange
for the mailing of a copy of the Rights Agreement to
the holder of this certificate without charge within
five days after the receipt of a written request
therefor.
Certificates representing shares of Common Stock that are issued
and outstanding at the Record Time shall evidence one Right for
each share of Common Stock evidenced thereby notwithstanding the
absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a)
Subject to adjustment as herein set forth, each Right will
entitle the holder thereof, after the Separation Time, to
purchase, for the Exercise Price, one one-hundredth of a share of
Junior Preferred Stock.
(b) Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the
certificate for the associated share of Common Stock and will be
transferable only together with, and will be transferred by a
transfer of, such associated share. Notwithstanding any other
provision of this Agreement, any Rights held by the Company or
any of its Subsidiaries other than in fiduciary capacity shall
not be exercisable. Nothing in the preceding sentence shall be
construed as limiting the right of the Company and its
Subsidiaries to acquire or transfer Rights.
(c) Subject to the terms and conditions herein set
forth, after the Separation Time and prior to the Expiration
Date, the Rights (i) may be exercised, and (ii) may be
transferred independently of the shares of Common Stock in
respect of which they were originally issued. Promptly following
the Separation Time, the Rights Agent will mail to each holder of
record of Common Stock as of the Separation Time, at such
holder's address as shown by the records of the Company (the
Company hereby agreeing to furnish copies of such records to the
Rights Agent for this purpose), (x) a certificate (a "Rights
Certificate") in substantially the form of Exhibit A hereto
appropriately completed, representing the number of rights held
by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or other self-
regulatory organization (as such terms are used under the
Exchange Act) on which the Rights may from time to time be listed
or through which the Rights may from time to time be traded, or
to conform to usage, and (y) a disclosure statement describing
the Rights.
(d) Subject to Sections 2.3(b) and 5.10, Rights may
be exercised on any Business Day after the Separation Time and
prior to the Expiration Time by submitting to the Rights Agent
the Rights Certificate evidencing such Rights with an election to
exercise (an "Election to Exercise") substantially in the form
attached to the Rights Certificate duly completed, accompanied by
payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the
Exercise Price multiplied by the number of Rights being exercised
together with a sum sufficient to cover any transfer tax or
charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for shares or depositary
receipts (or both) in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an
Election to Exercise accompanied by payment as set forth in
Section 2.3(d) above, and subject to the conditions set forth in
this Agreement, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent for the stock or other
securities purchasable upon exercise of the Rights certificates
evidencing such number of shares or other securities to be
purchased (the Company hereby irrevocably authorizing its
transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 hereof not to issue
certificates representing fractional shares, requisition from the
depositary selected by the Company depositary receipts
representing the fractional shares to be purchased or requisition
from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 hereof and (ii)
after receipt of such certificates, depositary receipts and/or
cash, deliver the same to or upon the order of the registered
holder of such Rights Certificate, registered (in the case of
certificates or depositary receipts) in such name or names as may
be designated by such holder.
(f) In case the holder of any Rights shall exercise
less than all the Rights evidenced by such holder's Rights
Certificate, a new Rights Certificate evidencing the Rights which
remain unexercised will be issued by the Rights Agent to such
holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will
(i) cause to be kept available until the Expiration Date out of
its authorized and unissued shares of capital stock a number of
shares of preferred stock that will be sufficient to permit the
creation and establishment of the Junior Preferred Stock and the
exercise in full of all outstanding Rights; (ii) immediately upon
the occurrence of the Separation Time, file with the Secretary of
State of Delaware a Certificate of Designations Establishing a
Series of Shares in substantially the form set forth in Exhibit B
hereto and take all such further action as may be necessary to
create and establish the Junior Preferred Stock; (iii) take all
such action as may be necessary to ensure that all shares
delivered upon exercise of Rights shall, at the time of delivery
thereof (subject to payment of the Exercise Price), be duly and
validly authorized, executed, issued and delivered and fully paid
and nonassessable; (iv) take all such action as may be necessary
to ensure that all securities other than shares delivered upon
exercise of Rights shall, at the time of delivery thereof
(subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and valid and binding
obligations of the issuer thereof; (v) take all such action as
may be necessary to comply with any applicable requirements of
the Securities Act of 1933 or the Exchange Act, and the rules and
regulations thereunder, and any other applicable law, rule or
regulation, in connection with the issuance of any shares upon
exercise of Rights; (vi) use its best efforts to cause all shares
and other securities issued upon exercise of Rights to be listed
on a national securities exchange or traded in the over-the-
counter market, as reported by NASDAQ or another self-regulatory
organization or registered securities information processor (as
such terms are used under the Exchange Act), upon issuance; and
(vii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
original issuance or delivery of the Rights Certificates or of
any shares issued upon the exercise of Rights, provided that the
Company shall not be required to pay any transfer tax or charge
which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares in a name other than that of
the holder of the Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a)
In the event the Company shall at any time after the Record Date
and prior to the Separation Time (i) declare or pay a dividend on
Common Stock payable in Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, then (x)
the Exercise Price in effect after such adjustment will be equal
to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common Stock (the
"Expansion Factor") that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof and (y) each Right held
prior to such adjustment will become that number of Rights equal
to the Expansion Factor, and (z) the adjusted number of Rights
will be deemed to be distributed among the shares of Common Stock
with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such
dividend, subdivision or combination, so that each such share of
Common Stock will have exactly one Right associated with it.
Each adjustment made pursuant to this paragraph shall be made as
of the payment or effective date for the applicable dividend,
subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common
Stock otherwise than in a transaction referred to in the
preceding paragraph, each such share of Common Stock so issued
shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such
share.
(b) In the event the Company shall at any time after
the Record Time and prior to the Separation Time issue or
distribute any securities or assets in respect of, in lieu of or
in exchange for Common Stock (other than pursuant to a regular
periodic cash dividend or a dividend paid solely in Common Stock)
whether by dividend, in a reclassification or recapitalization
(including any such transaction involving a merger, consolidation
or binding share exchange), or otherwise, the Company shall make
such adjustments, if any, in the Exercise Price, number of Rights
and/or securities or other property purchasable upon exercise of
Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in
order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall
amend this Agreement as necessary to provide for such
adjustments.
(c) Each adjustment to the Exercise Price made
pursuant to this Section 2.4 shall be calculated to the nearest
cent. Whenever an adjustment to the Exercise Price is made
pursuant to this Section 2.4, the Company shall (i) promptly
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (ii)
promptly file with the Rights Agent and with each transfer agent
for the Common Stock a copy of such certificate and (iii) mail a
brief summary thereof to each holder of Rights.
(d) Irrespective of any adjustment or change in the
securities purchasable upon exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to
express the securities so purchasable which were expressed in the
initial Rights Certificates issued hereunder.
2.5 Date on Which Exercise is Effective. Each person in
whose name any certificate for shares issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of the shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and
payment of the Exercise Price for such Rights (and any applicable
taxes and other governmental charges payable by the exercising
holder hereunder) was made; provided, however, that if the date
of such surrender and payment is a date upon which the stock
transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day
on which the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates. (a) The Rights Certificates shall be
executed on behalf of the Company by its Chairman of the Board,
President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on
the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding
that such individuals or any of them have ceased to hold such
offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Company learns of the Separation Time,
the Company will notify the Rights Agent of such Separation Time
and will deliver Rights Certificates executed by the Company to
the Rights Agent for countersignature, and the Rights Agent shall
manually countersign and deliver such Rights Certificates to the
holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose until manually
countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof by the Rights Agent.
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be kept
a register (the "Rights Register") in which, subject to such
reasonable regulations as it may prescribe, the Company will
provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Company and registering
Rights and transfers of Rights after the Separation Time as
herein provided. In the event that the Rights Agent shall cease
to be the Rights Registrar, the Rights Agent will have the right
to examine the Rights Register at all reasonable times after the
Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any
Rights Certificate, and subject to the provisions of Section
2.7(c) below, the Company will execute, and the Rights Agent will
countersign and deliver, in the name of the holder or the
designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights
Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b)
hereof, all Rights issued upon any registration of transfer or
exchange of Rights Certificates shall be the valid obligations of
the Company, and such Rights shall be entitled to the same
benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for
registration of transfer or exchange shall be duly endorsed, or
be accompanied by a written instrument of transfer in form
satisfactory to the Company or the Rights Agent, as the case may
be, duly executed by the holder thereof or such holder's attorney
duly authorized in writing. As a condition to the issuance of
any new Rights Certificate under this Section 2.7, the Company
may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation
thereto.
(d) The Company shall not be required to register the
transfer or exchange of any Rights after the Rights have been
redeemed pursuant to Section 5.1 hereof or become void pursuant
to Section 3.1(b) hereof.
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates. (a) If any mutilated Rights Certificate is
surrendered to the Rights Agent prior to the Expiration Time, the
Company shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so
surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to their
satisfaction of the destruction, loss or theft of any Rights
Certificate and (ii) such security or indemnity as may be
required by them to save each of them and any of their agents
harmless, then, in the absence of notice to the Company or the
Rights Agent that such Rights Certificate has been acquired by a
bona fide purchaser, the Company shall execute and upon its
request the Rights Agent shall countersign and deliver, in lieu
of any such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the
payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to
this Section 2.8 in lieu of any mutilated, destroyed, lost or
stolen Rights Certificate shall evidence an original additional
contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Rights Certificate shall be
at any time enforceable by anyone, and shall be entitled to all
the benefits of this Agreement equally and proportionately with
any and all other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the
associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in
whose name such Rights Certificate (or, prior to the Separation
Time, such Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary. As used
in this Agreement, unless the context otherwise requires, the
term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Separation Time, the associated
shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any
person other than the Rights Agent, be delivered to the Rights
Agent and, in any case, shall be promptly canceled by the Rights
Agent. The Company may at any time deliver to the Rights Agent
for cancellation any Rights Certificates previously countersigned
and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Rights Certificates so delivered
shall be promptly canceled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for
any Rights Certificates canceled as provided in this Section
2.10, except as expressly permitted by this Agreement. The
Rights Agent shall return all canceled Rights Certificates to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights
by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a
transfer of, the associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates
will be transferable only on the Rights Register as provided
herein;
(c) prior to due presentment of a Rights Certificate
(or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the
Rights Agent and any agent of the Company or the Rights Agent may
deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation time, the associated Common Stock
certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any
notice to the contrary;
(d) Rights beneficially owned by certain Persons will
under the circumstances set forth in Section 3.1(b) become void;
and
(e) This Agreement may be supplemented or amended from
time to time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III - ADJUSTMENTS TO THE RIGHTS IN THE EVENT
OF CERTAIN TRANSACTIONS
----------------------------------------------------
3.1 Distribution Date. (a) In the event that prior to the
Expiration Time a Distribution Date shall occur, then, if
applicable law does not preclude Rights owned by certain Persons
referred to in Section 3.1(b) hereof to become void pursuant to
the provisions thereof, the Company shall take such action as
shall be necessary to ensure and provide that, except as provided
below, each Right shall constitute the right to purchase from the
Company, upon exercise thereof in accordance with the terms
hereof (but subject to Sections 5.1 and 5.10 hereof), that number
of shares of Common Stock having an aggregate Market Price on the
Distribution Date equal to twice the Exercise Price for an amount
in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the
holders of Rights generally in the event that on or after such
Distribution Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred
with respect to the Common Stock).
(b) Notwithstanding the foregoing, to the extent
permitted by applicable law, any Rights that are or were
Beneficially Owned on or after the Distribution Date by an
Acquiring Person, an Adverse Person, or an Affiliate or Associate
thereof or by a transferee, direct or indirect, of any of the
foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no rights to
exercise or transfer such Rights. For purposes of the preceding
sentence, a transferee of an Acquiring Person, Adverse Person or
Affiliate or Associate thereof shall include only a Person who
(i) becomes a transferee after the Acquiring Person or Adverse
Person becomes such or (ii) becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring
Person or Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section
3.1(b). If any Rights Certificate is presented for assignment or
exercise and the Person presenting the same does not complete the
certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its
Affiliates and Associates (or former Beneficial Owners and their
Affiliates and Associates) as the Company shall reasonably
request, then the Company shall be entitled to conclusively deem
the Beneficial Owner thereof to be an Acquiring Person or an
Adverse Person, or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will, to the
extent permitted by applicable law, deem the Rights evidenced
thereby to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Distribution Date and prior to the
time that an Acquiring Person or an Adverse Person becomes the
Beneficial Owner of more than 50% of the outstanding shares of
Common Stock, but only if applicable law does not preclude Rights
owned by certain Persons referred to in Section 3.1(b) hereof to
become void pursuant to the provisions thereof, elect to exchange
all (but not less than all) of the then outstanding Rights (which
shall not include Rights that have become void pursuant to the
provisions of Section 3.1(b)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of
holders of Rights generally in the event that after the
Separation Time an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with
respect to the Common Stock (such exchange ratio, as adjusted
from time to time, being hereinafter referred to as the "Exchange
Ratio").
Immediately upon the action of the Board of Directors
of the Company electing to exchange the Rights, without any
further action and without any notice, the right to exercise the
Rights will terminate and each Right will thereafter represent
only the right to receive a number of shares of Common Stock
equal to the Exchange Ratio. Promptly after the action of the
Board of Directors electing to exchange the Rights, the Company
shall give notice thereof (specifying the steps to be taken to
receive shares of Common Stock in exchange for Rights) to the
Rights Agent and the holders of the then outstanding Rights by
mailing such notice in accordance with Section 5.9.
(d) Whenever the Company shall become obligated under
Section 3.1(a) or (c) to issue shares of Common Stock upon
exercise of or in exchange for Rights, the Company, at its
option, may substitute therefor shares of Junior Preferred Stock,
at a ratio of one one-hundredth of a share of Junior Preferred
Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock
or Junior Preferred Stock of the Company to permit the exercise
or exchange in full of the Rights in accordance with Section
3.1(a) or (c), the Company shall either (i) cause sufficient
additional shares to be authorized (provided that if such
authorization is not obtained, the Company will take the action
specified in clause (ii) of this sentence) or (ii) take such
action as shall be necessary to ensure and provide, to the extent
permitted by applicable law and any agreements or instruments in
effect on the Distribution Date to which it is a party, that each
Right shall thereafter constitute the right to receive, (x) at
the Company's option, either (A) in return for the Exercise
Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the
Exercise Price, or (B) without payment of consideration (except
as otherwise required by applicable law), debt or equity
securities or other assets (or a combination thereof) having a
fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or
other assets (or a combination thereof) having a fair value equal
to the product of the Market Price of a share of Common Stock on
the Distribution Date times the Exchange Ratio in effect on the
Distribution Date, where in any case set forth in (x) or (y)
above the fair value of such debt or equity securities or other
assets shall be as determined in good faith by the Board of
Directors of the Company, after consultation with a nationally
recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time the
Company shall not enter into any agreement with any Acquiring
Person, any Adverse Person or any Affiliate or Associate of an
Acquiring Person or Adverse Person with respect to, or consummate
or permit to occur, any Flip-over Transaction or Event, unless
and until it shall have entered into a supplemental agreement
with the Person engaging in such Flip-over Transaction or Event
(the "Flip-over Entity"), for the benefit of the holders of the
Rights, providing that, upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right shall thereafter
constitute the right to purchase from the Flip-over Entity, upon
exercise thereof in accordance with the terms hereof, that number
of shares of Flip-over Stock of the Flip-over Entity having an
aggregate Market Price on the date of consummation or occurrence
of such Flip-over Transaction or Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in order to protect the
interests of the holders of Rights generally in the event that
after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b)
shall have occurred with respect to the Flip-over Stock) and (ii)
the Flip-over Entity shall thereafter be liable for, and shall
assume, by virtue of such Flip-over Transaction or Event and such
supplemental agreement, all the obligations and duties of the
Company pursuant to this Agreement. The provisions of this
Section 3.2 shall apply to successive Flip-over Transactions or
Events.
(b) Prior to the Expiration Time, unless the Rights
will be redeemed pursuant to Section 5.1 hereof in connection
therewith, the Company shall not enter into any agreement with
respect to, or consummate or permit to occur, any Flip-over
Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements,
agreements or instruments which would eliminate or otherwise
diminish in any respect the benefits intended to be afforded by
this Agreement to the holders of Rights upon consummation or
occurrence of such transaction or event.
ARTICLE IV - THE RIGHTS AGENT
---------- ----------------
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company agrees to pay to the Rights Agent
reasonable compensation as shall be agreed to in writing from
time to time for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable
expenses (including expenses incurred by the Rights Agent under
Section 4.4) and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending
against any claim of liability.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration
of this Agreement in reliance upon any certificate for securities
purchasable upon exercise of Rights, Rights Certificate,
certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified
or acknowledged, by the proper person or persons.
4.2 Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the
shareholder services business of the Rights Agent or any
successor Rights Agent, will be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 4.4
hereof. In case, at the time such successor Rights Agent
succeeds to the agency created by this Agreement, any of the
Rights Certificates have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates have not been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name
of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Rights Certificates will
have the full force provided in the Rights Certificates and in
this Agreement.
(b) In case at any time the name of the Rights Agent
is changed and at such time any of the Rights Certificates have
been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of
the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in
its prior name or in is changed name; and in all such cases such
Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and
the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel will be full and complete authorization and
protection to the Rights Agent as to any action taken or omitted
by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent deems it necessary or desirable
that any fact or matter be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by a person believed by
the Rights Agent to be the Chairman of the Board, the President
or any Vice President and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate
will be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the certificates for securities purchasable
upon exercise of Rights or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due authorization,
execution and delivery hereof by the Rights Agent) or in respect
of the validity or execution of any certificate for securities
purchasable upon exercise of Rights or Rights Certificate (except
its countersignature thereof); nor will it be responsible for any
breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 3.1(b)
hereof) or any adjustment required under the provisions of
Section 2.4, 3.1 or 3.2 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights after receipt of
the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make
any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights
or any Rights or as to whether any securities purchasable upon
exercise of Rights will, when issued, be duly and validly
authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from any person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President
or the Secretary or any Assistance Secretary or the Treasurer or
any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it
in good faith in accordance with instructions of any such person.
Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or such omission shall be
effective. Until the Rights Agent has received written
instructions in response to such application specifying the
action to be taken or omitted, the Rights Agent shall not be
liable for any inaction or omission related to the subject of the
proposal included in any such application.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
Common Stock, Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though it were not the
Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent will not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
4.4 Change of Rights Agent. The Rights Agent may resign
and be discharged from its duties under this Agreement upon 60
days' notice (or such lesser notice as is acceptable to the
Company) in writing mailed to the Company and to each transfer
agent of Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The
Company may remove the Rights Agent upon 60 days' notice in
writing, mailed to the Rights Agent and to each transfer agent of
the Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become
incapable of acting, the Company will appoint a successor to the
Rights Agent. If the Company fails to make such appointment
within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any
Rights (which holder shall, with such notice, submit such
holder's Rights Certificate for inspection by the Company), then
the holder of any Rights or the Rights Agent may apply to any
court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by
the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or any
other state of the United States which is authorized under such
laws to exercise the powers of the Rights Agent contemplated by
this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent
any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary
for the purpose. Not later than the effective date of any such
appointment, the Company will file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the
Common Stock, and mail a notice thereof in writing to the holders
of the Rights. Failure to give any notice provided for in this
Section 4.4, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the
case may be.
ARTICLE V - MISCELLANEOUS
--------- -------------
5.1 Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to the Distribution Date,
or ten days thereafter, subject to extension by a vote of two-
thirds of the Board of Directors, elect to redeem all (but not
less than all) the then outstanding Rights at the Redemption
Price.
(b) Immediately upon the action of the Board of
Directors of the Company electing to redeem the Rights, without
any further action and without any notice, the right to exercise
the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash.
Promptly after the action of the Board of Directors electing to
redeem, and thereby redeeming, the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of
the then outstanding Rights by mailing such notice in accordance
with Section 5.9.
5.2 Expiration. No Person shall have any rights pursuant
to this Agreement or any Right after the Expiration Time, except,
if the Rights are redeemed, as provided in Section 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by
its Board of Directors to reflect any adjustment or change in the
number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this
Agreement.
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement
without the approval of any holder of Rights (i) in any respect
prior to the Distribution Date (other than to change the
Redemption Price or the Expiration Time, except as contemplated
elsewhere herein), (ii) to make any changes following the close
of business on the Distribution Date which the Company may deem
necessary or desirable and which shall not materially adversely
affect the interests of the holders of Rights generally or (iii)
in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with any
other provisions herein or otherwise defective. The Rights Agent
will duly execute and deliver any supplement or amendment hereto
requested by the Company which satisfies the terms of the
preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise of
Rights, the Company shall, in lieu thereof, (a) evidence such
fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that
each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled
as a beneficial owner of such fractional share, or (b) pay to the
registered holder of such Rights the same fraction of the Market
Price (determined as of the date of exercise) of one share of the
stock issuable upon such exercise.
5.6 Rights of Action. Subject to the terms of this
Agreement, rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights; and any holder of
any Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may on such holder's own behalf and
for such holder's own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise such holder's Rights
in the manner provided in such holder's Rights Certificate and in
this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations of, and
injunctive relief against actual or threatened violations of the
obligations of, any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Shareholder. No holder,
as such, of any Rights shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of shares or
any other securities which may at any time be issuable on the
exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder
of any Rights, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
shareholders (except as provided in Section 5.8 hereof), or to
receive dividends or subscription rights, or otherwise, until
such Rights shall have been exercised in accordance with the
provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Time and prior to the Expiration
Time (i) to effect or permit (in cases where the Company's
permission is required) occurrence of any Distribution Date or
Flip-over Transaction or Event or (ii) to effect the liquidation,
dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Right, in
accordance with Section 5.9 hereof, a notice of such proposed
action, which shall specify the Distribution Date or the date on
which such Flip-over Transaction or Event, liquidation,
dissolution, or winding up is to take place, and such notice
shall be so given at least 20 Business Days prior to the date of
the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights to or on the Company shall be sufficiently
given or made if delivered or sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
ES&L Bancorp, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Any notice or demand authorized or required by this Agreement to
be given or made by the Company or by the holder of any Rights to
or on the Rights Agent shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President
Notices or demands authorized or required by this Agreement to be
given or made by the Company or the Rights Agent to or on the
holder of any Rights shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid, addressed
to such holder at the address of such holder as it appears upon
the registry books of the Rights Agent or, prior to the
Separation Time, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action need be taken
pursuant to Section 3.1(e) or to comply with federal or state
securities laws, the Company may suspend the exercisability of
the Rights following the date of the occurrence of the Separation
Time or the Distribution Date in order to take such action or
comply with such laws. In the event of any such suspension, the
Company shall issue as promptly as practicable a public
announcement stating that the exercisability of the Rights has
been temporarily suspended.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are
purchasable upon exercise of Rights fails to fulfill any of its
obligations pursuant to this Agreement, then the Company or such
Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in
actions to enforce such holder's rights pursuant to any Rights or
this Agreement.
5.12 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company,
the Rights Agent and the holders of the Rights any legal or
equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Descriptive Headings. Descriptive headings appear
herein for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
5.15 Governing Law. This Agreement and each Right issued
hereunder shall be deemed to be a contract made under the State
of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
5.16 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
5.17 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such
term or provision shall be ineffective as to such jurisdiction to
the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or
unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
ES&L BANCORP, INC.
By ________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
AMERICAN STOCK TRANSFER & TRUST COMPANY
By ________________________
_____________________
Title: ______________
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