RIGHTS AGREEMENT
BETWEEN
FIRST SENTINEL BANCORP, INC.
AND
REGISTRAR AND TRANSFER COMPANY, AS RIGHTS AGENT
Dated as of December 19, 2001
TABLE OF CONTENTS
PAGE
SECTION 1. CERTAIN DEFINITIONS............................................................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT....................................................................5
SECTION 3. ISSUE OF RIGHT CERTIFICATES....................................................................5
SECTION 4. FORM OF RIGHT CERTIFICATES.....................................................................6
SECTION 5. COUNTERSIGNATURE AND REGISTRATION..............................................................7
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHT CERTIFICATES...................................................................7
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE............................................8
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.............................................9
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK..................................................9
SECTION 10. PREFERRED SHARES RECORD DATE..................................................................10
SECTION 11. ADJUSTMENT OF PURCHASE PRICE NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS....................10
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES....................................16
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER..........................16
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.......................................................17
SECTION 15. RIGHTS OF ACTION..............................................................................18
SECTION 16. AGREEMENT OF RIGHT HOLDERS....................................................................18
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.............................................19
SECTION 18. CONCERNING THE RIGHTS AGENT...................................................................19
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.....................................20
SECTION 20. TERMS AND CONDITIONS OF RIGHTS AGENT'S APPOINTMENT............................................20
SECTION 21. CHANGE OF RIGHTS AGENT........................................................................22
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES............................................................23
SECTION 23. REDEMPTION....................................................................................23
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SECTION 24. EXCHANGE......................................................................................24
SECTION 25. NOTICE OF CERTAIN EVENTS......................................................................25
SECTION 26. NOTICES.......................................................................................26
SECTION 27. SUPPLEMENTS AND AMENDMENTS....................................................................26
SECTION 28. SUCCESSORS....................................................................................27
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS..........................................27
SECTION 30. BENEFITS OF THIS AGREEMENT....................................................................27
SECTION 31. SEVERABILITY..................................................................................27
SECTION 32. GOVERNING LAW.................................................................................27
SECTION 33. COUNTERPARTS..................................................................................28
SECTION 34. SECTION DESCRIPTIVE HEADINGS..................................................................28
Exhibit A -- Form of Certificate of Designations, Preferences and
Rights of Series A Junior Participating Preferred Stock of
First Sentinel Bancorp, Inc.
Exhibit B -- Form of Right Certificate
Exhibit C -- Summary of Rights to Purchase Preferred Shares or Common Stock
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RIGHTS AGREEMENT
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This Rights Agreement ("Agreement"), is made as of the 19th
day of December, 2001, by and between First Sentinel Bancorp, Inc., a Delaware
corporation having an office at 0000 Xxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 ("Company"), and Registrar and Transfer Company, a corporation
organized under the laws of the State of New Jersey, with its principal office
at 00 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000-0000 ("Rights Agent").
W I T N E S S E T H:
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WHEREAS, the Board of Directors of the Company desires to
provide all shareholders of the Company with the opportunity to benefit from the
long-term prospects and value of the Company and to ensure that all shareholders
of the Company receive fair and equal treatment in the event of any proposed
takeover of the Company; and
WHEREAS, on December 19, 2001, the Board of Directors of the
Company authorized and declared a dividend of one preferred share purchase right
("Right") for each share of common stock of the Company outstanding on January
1, 2002, each Right representing the right to purchase a one one-hundredth
(1/100) interest (subject to adjustment) in a Preferred Share (as defined
below), upon the terms and subject to the conditions set forth herein, and the
Company's Board has further authorized and directed the issuance of one Right
(subject to adjustment) with respect to each share of common stock of the
Company that shall become outstanding between the Record Date and the earliest
of the Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are defined below);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) ACQUIRING PERSON. The term "Acquiring Person" shall mean
any Person who or which, together with all Affiliates and Associates of such
Person, is the Beneficial Owner of 12% or more of the Company's Common Shares
then outstanding, but shall not include the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any Subsidiary of the
Company or any entity holding Common Shares of the Company for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, no Person shall
become an Acquiring Person as the result of an acquisition of Common Shares by
the Company which, by reducing the number of Common Shares outstanding,
increases the proportionate number of Common Shares beneficially owned by such
Person to 12% or more of the Common Shares then outstanding; PROVIDED, HOWEVER,
that if a Person becomes the Beneficial Owner of 12% or more of the Common
Shares then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner of any
additional Common Shares, then such Person shall be deemed to be an Acquiring
Person unless, upon the consummation of the acquisition of such additional
Common Shares, such Person does not own 12% or more of the Common Shares then
outstanding.
(b) AFFILIATE. The term "Affiliate" (whether referred to as an
"affiliate" of, or a Person "affiliated" with, a specified Person) shall mean a
Person that directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.
(c) ASSOCIATE. The term "Associate," when used to indicate a
relationship with any Person, shall mean:
(i) any corporation or organization of which such Person is an
officer or partner or is, directly or indirectly, either alone or
together with one or more members of such Person's immediate family,
the Beneficial Owner of 10% or more of any class of equity securities;
(ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as a
trustee or in a similar fiduciary capacity; and
(iii) any relative or spouse of such Person, or any relative
of such spouse who has the same home as such Person or who is a
director or officer of such Person or any of its Subsidiaries or
Affiliates.
(d) BENEFICIAL OWNER. A Person shall be deemed the "Beneficial
Owner" of and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other than the
Rights issued hereunder), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, securities tendered pursuant to a tender 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; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; PROVIDED, HOWEVER, that a
Person shall not be deemed the Beneficial Owner of, or to beneficially
own, any security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
Rules and Regulations promulgated under the Exchange Act, and (2) is
not also then reportable under the Exchange Act on Schedule 13D under
the Rules and Regulations (or any comparable or successor reports); or
(iii) which are beneficially 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 (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except to the extent contemplated by the proviso to Section
1(d)(ii)(B) hereof) or disposing of such securities.
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Notwithstanding the foregoing, none of the Company's
directors, officers, employees or financial advisors shall be deemed to be the
Beneficial Owner of, or to beneficially own, any Common Shares owned by any
other director, officer, employee or financial advisor of the Company by virtue
of such persons acting in their capacities as such, including, without
limitation, in connection with any formulation and publication of the Board of
Directors' recommendation of a position, and any actions taken in furtherance
thereof, with respect to any acquisition proposal relating to the Company, any
tender offer or exchange offer for the Common Shares, or any solicitation of
proxies with respect to the Common Shares.
(e) BUSINESS DAY. The term "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.
(f) CLOSE OF BUSINESS. The term "Close of Business" on any
given date shall mean 5:00 P.M., New York City time, on such date; PROVIDED,
HOWEVER, that if such date is not a Business Day it shall mean 5:00 P.M., New
York City time, on the next succeeding Business Day.
(g) COMMON SHARES. The term "Common Shares" when used with
reference to the Company shall mean the shares of common stock, par value $0.01
per share, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall mean the capital stock (or equity interest)
with the greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons that ultimately control
such first-mentioned Person.
(h) DISTRIBUTION DATE. The term "Distribution Date" shall have
the meaning set forth in Section 3(b) hereof.
(i) EXCHANGE ACT. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
(j) EXCHANGE RATIO. The tern "Exchange Ratio" shall have the
meaning set forth in Section 24(a) hereof.
(k) FINAL EXPIRATION DATE. The term "Final Expiration Date"
shall have the meaning set forth in Section 7(a) hereof.
(l) NASDAQ. The term "Nasdaq" shall mean The Nasdaq Stock
Market, Inc.
(m) PERSON. The term "Person" shall mean any individual, firm,
corporation, partnership, trust, association or other entity, and shall include
any successor (by merger or otherwise) of such entity.
(n) PREFERRED SHARES. The term "Preferred Shares" shall mean
shares of Series A Junior Participating Preferred Stock, par value $0.01 per
share, of the Company having the rights and preferences set forth in the form of
Exhibit A hereto.
(o) PURCHASE PRICE. The term "Purchase Price" shall have the
meaning set forth in Section 4 hereof.
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(p) REDEMPTION DATE. The term "Redemption Date" shall have the
meaning set forth in Section 7(a) hereof.
(q) REDEMPTION PRICE. The term "Redemption Price" shall have
the meaning set forth in Section 23(b) hereof.
(r) RECORD DATE. The term "Record Date" shall mean the Close
of Business on January 1, 2002.
(s) RIGHT CERTIFICATE. The term "Right Certificate" shall have
the meaning set forth in Section 3(a) hereof.
(t) RULES AND REGULATIONS. The term "Rules and Regulations"
shall mean the applicable rules and regulations promulgated by the Securities
and Exchange Commission, or any applicable federal or state regulatory agency or
authority that has jurisdiction over the Company at the relevant time.
(u) SECURITIES ACT. The term "Securities Act" shall mean the
Securities Act of 1933, as amended.
(v) SECURITY. The term "Security" shall have the meaning set
forth in Section 11(d)(i) hereof.
(w) SHARES ACQUISITION DATE. The term "Shares 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) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(x) SUBSIDIARY. The term "Subsidiary" with respect to any
Person shall mean any corporation or other entity of which a majority of the
voting power of the voting equity securities or equity interest is owned,
directly or indirectly, by such Person.
(y) SUMMARY OF RIGHTS. The term "Summary of Rights" shall have
the meaning set forth in Section 3(c) hereof.
(z) TRADING DAY. The term "Trading Day" with respect to a
Security shall mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(aa) VOTING STOCK. The term "Voting Stock" shall mean (i) the
Common Shares of the Company and (ii) any other shares of capital stock of the
Company entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger, consolidation,
sale of all or substantially all of the Company's assets, liquidation,
dissolution or winding up.
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Section 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to time
appoint such co-Rights Agents as it may deem necessary or desirable upon 10
days' prior written notice to the Rights Agent. The Rights Agent shall have no
liability for or duty to supervise any such co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) From the date hereof until, but not including, the
Distribution Date, (i) the Rights will be evidenced (subject to the provisions
of Section 3(c) hereof) by the certificates for Common Shares registered in the
names of the holders thereof and not by separate Right Certificates, and (ii)
the right to receive Right Certificates will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will notify the Rights Agent of the occurrence of
the Distribution Date, and the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, at the Company's expense, send) by first-class,
insured, postage-paid mail, to each record holder of Common Shares as of the
Close of Business on the Distribution Date, at the address of such holder shown
in the records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment) for each Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) For purposes of the foregoing, the Distribution Date shall
be the earlier of (i) the Close of Business on the 20th Business Day after the
Shares Acquisition Date or (ii) the Close of Business on the 20th Business Day
(or such later date as may be determined by the Board of Directors of the
Company, in its sole discretion) after the date of the commencement 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 entity
holding Common Shares for or pursuant to the terms of any such plan) of, or of
the first public announcement of the intention of 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 entity holding Common Shares of the
Company for or pursuant to the terms of any such plan) to commence, a tender
offer or exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares of the Company aggregating 12% or
more of the then outstanding Common Shares (including any such date that is
after the date of this Agreement and prior to the issuance of the Rights).
(c) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase Preferred Shares
or Common Shares, in substantially the form of Exhibit C hereto ("Summary of
Rights"), by first-class, postage-paid mail, to each record holder of Common
Shares as of the Close of Business on the Record Date, at the address of such
holder shown in the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Shares
outstanding
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on the Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(d) Certificates for Common Shares that become outstanding
(including, without limitation, reacquired Common Shares referred to in this
paragraph (d)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement, dated as
of December 19, 2001, by and between First Sentinel Bancorp,
Inc. and Registrar and Transfer Company, as Rights Agent (as
the same 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
executive offices of First Sentinel Bancorp, Inc. 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. First Sentinel
Bancorp, Inc. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt of a
written request therefor. As described in the Rights Agreement,
Rights owned by any Person who is or becomes an Acquiring
Person (as defined in the Rights Agreement) and certain
transferees thereof will become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificates shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares that are no
longer outstanding. The Rights Agent shall deem any such Rights not outstanding
if it has actual knowledge that they are owned by the Company.
Section 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the form of election to purchase
Preferred Shares and the form of assignment printed on the reverse thereof)
shall be substantially in the form of Exhibit B hereto. The Right Certificates
shall be in machine printable format and in a form reasonably satisfactory to
the Rights Agent, and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any Rule or
Regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates
shall entitle the holders thereof to purchase such number of one one-hundredth
interests in a Preferred Share as shall be set forth therein at the price per
one one-hundredth interest in a Preferred Share set forth therein (the
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"Purchase Price"), but the number of such one one-hundredth interests in a
Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof and shall be attested by the Secretary or
an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned and dated by an
authorized signatory of the Rights Agent either manually or by facsimile
signature and shall not be valid for any purpose unless countersigned. In case
any officer of the Company who shall have signed any of the Right Certificates
shall cease to be such an officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such an officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
on the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although on 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 designated office, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates. In case any authorized signatory of the
Rights Agent who shall have countersigned any of the Right Certificates shall
cease to be such a signatory before delivery of the Right Certificates by the
Company, such Right Certificates, nevertheless, may be issued and delivered by
the Company with the same force and effect as though the person who
countersigned such Right Certificates had not ceased to be such a signatory; and
any Right Certificate may be countersigned on behalf of the Rights Agent by any
person who, on the actual date of the countersignature of such Right
Certificate, shall be a proper signatory of the Rights Agent to countersign such
Right Certificate, although on the date of the execution of this Agreement any
such person was not such a signatory.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN
RIGHT CERTIFICATES.
(a) Subject to the provisions of 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 earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-hundredth interests in a Preferred Share as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
designated office of the Rights
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Agent, along with a signature guarantee and such other and further documentation
as the Rights Agent may reasonably require. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested from the holders of such
Right Certificate. The Company may require payment from the holders of 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 Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
or the Rights Agent's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender of the Right
Certificate and a signature guarantee and such other and further documentation
as the Rights Agent may reasonably require to the Rights Agent and cancellation
of the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the designated office of the
Rights Agent, together with payment of the Purchase Price for each one
one-hundredth interest in a Preferred Share as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of Business on January
1, 2012 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date") or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof. The
Company shall provide the Rights Agent with a prompt written notice of the
occurrence of any of the events provided for in this Section 7(a).
(b) The Purchase Price for each one one-hundredth interest in
a Preferred Share pursuant to the exercise of a Right shall initially be $37.00,
shall be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased and
an amount equal to any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred Shares certificates for the number of Preferred Shares to
be purchased, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) requisition from the depositary agent
depositary receipts representing interests in such number of one one-hundredth
interests in a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent), and the Company
hereby directs the depositary agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in
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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 Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such Right
Certificate. The provisions of this Section 7(c) shall apply whenever cash or
securities (such as Common Shares) may be received in lieu of the Preferred
Shares upon exercise of the Rights and surrender of the Right Certificates.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14 hereof.
(e) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
or any Preferred Shares held in its treasury, the number of Preferred Shares
that will be sufficient to permit the exercise in full of all outstanding Rights
in accordance with this Section 7.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall
be canceled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Rights Agreement.
The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such canceled Right
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 it will take all
such action as may be necessary to ensure that all Preferred Shares delivered
upon exercise of Rights (and, following the date on which a person becomes an
Acquiring Person, out of its authorized and unissued Common Shares and/or other
securities or out of its authorized and issued shares held in the treasury)
shall, at the time of delivery of the certificates for such Preferred Shares or
Common Shares (subject to payment of the Purchase Price), be duly authorized,
validly issued and fully paid and nonassessable shares.
(b) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares or Common Shares upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of certificates
or depositary receipts for the Preferred Shares or Common Shares in a name other
than that of, the registered holder of the Right Certificates evidencing Rights
surrendered for transfer, delivery or exercise or to issue or to deliver any
certificates or depositary
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receipts for Preferred Shares or Common Shares upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificates at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE.
Each person in whose name any certificate for Preferred Shares
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the Preferred Shares
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 Preferred Shares transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred 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.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS.
The Purchase Price, the number of Preferred Shares or other
securities or interests therein covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the number and kind of
shares of capital stock or interests therein issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock or interests therein which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares transfer
books of the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock or interests therein of the
Company issuable upon exercise of one Right.
(ii) Subject to Section 24 hereof, in the event any Person
shall become an Acquiring Person, each holder of a Right shall have the
right to receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one
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one-hundredth interests in a Preferred Share for which a Right is then
exercisable (regardless of whether the Right is then exercisable), in
accordance with the terms of this Agreement and in lieu of interests in
Preferred Shares, such number of Common Shares of the Company as shall
equal the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-hundredth interests in a Preferred Share
for which a Right is then exercisable (regardless of whether the Right
is then exercisable) and dividing that product by (B) 50% of the then
current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date such Person
became an Acquiring Person; provided, however, that the Purchase Price
and the number of Common Shares so purchasable upon exercise of a Right
shall, following the occurrence of such event, be subject to further
adjustment as appropriate in accordance with Section 11(f) hereof. In
the event that any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action
(except as permitted under Sections 24 and 27 hereof) that would
eliminate or diminish the benefits intended to be afforded by the
Rights, except as provided in Section 23(b) hereof. Notwithstanding
anything in this Agreement to the contrary, from and after the time any
Person becomes an Acquiring Person, any Rights that are or were
acquired or beneficially owned by such Acquiring Person (or any
Associate or Affiliate of such Acquiring Person) shall be void, and any
holder of such Rights shall thereafter have no right to exercise such
Rights under any provision of this Agreement. No Right Certificate
shall be issued pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person or any Associate or Affiliate
thereof whose Rights would be void pursuant to the preceding sentence;
no Right Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or Affiliate
whose Rights would be void pursuant to the preceding sentence. Where a
Right Certificate is delivered to the Rights Agent for transfer to an
Acquiring Person or an Associate or Affiliate thereof, and the Rights
Agent has actual knowledge or has received notice from the Company that
the transferee is an Acquiring Person or an Associate or Affiliate
thereof, that Right Certificate shall be canceled. The Rights Agent
shall have no liability for canceling Right Certificates so delivered
for transfer.
(iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit
the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii) of this paragraph (a), (A) the Company shall take all
such action as may be necessary to authorize additional Common Shares
for issuance upon exercise of the Rights or (B) the Company, at its
option, notwithstanding any other provision of this Agreement, with
respect to each Right, to the extent permitted by applicable law and
any agreements or instruments in effect on the Distribution Date to
which the Company is a party, upon exercise of the Rights, may pay cash
and/or securities equal to the Purchase Price per Right, in lieu of
issuing such additional Common Shares and requiring payment therefor.
To the extent that any legal or contractual restrictions prevent the
Company from paying the full amount of cash and/or securities payable
in accordance with the foregoing sentence, the Company shall pay to
holders of the Rights as to which such payments are being made all
amounts which are not then restricted on a pro rata basis. The Company
shall continue to make payments on a pro rata basis as funds become
available until such payments have been paid in full. The Company shall
provide the Rights Agent with written notice of any election made
pursuant to this Section 11(a)(iii).
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(iv) In the event that the Rights become exercisable or
exchangeable under the provisions of this Agreement, the Company
covenants and agrees to use its best efforts to (A) cause a
registration statement under the Securities Act, or, if the Securities
Act is not applicable, under the comparable federal or state securities
laws applicable to the Common Shares and Preferred Shares, as in effect
on the date in question, and under the applicable Rules and Regulations
thereunder, on an appropriate form, with respect to the shares
purchasable upon exercise of the Rights or exchangeable for such
Rights, to remain effective (with a prospectus or offering circular at
all times meeting the requirements of the Securities Act or any other
applicable federal or state law) until the Final Expiration Date; (B)
qualify or register the Common Shares or Preferred Shares purchasable
upon exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate; and (C) list the
shares purchasable upon exercise of the Rights on each national
securities exchange on which shares of the same class or series were
listed prior to exercisability of the Rights or, if such shares are not
listed or admitted to the trading on any national securities exchange,
on Nasdaq or such other system then in use. The Company covenants and
agrees to bear the full cost of any registration, qualification or
listing required under this Section 11(a)(iv).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as defined in
Section 11(d) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the shares of capital stock
or interests therein of the Company issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
binding upon the Rights Agent and the holders of the Rights. Preferred Shares
owned by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price that would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution of evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section
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11(b) hereof) to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), 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 then current per share market price of the
Preferred Shares 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 and binding upon
the Rights Agent and the holders of the Rights) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one Preferred Share and the denominator of which shall be
such current per share market price of the Preferred Shares; PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock (or
interests therein) of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days immediately prior to such date; PROVIDED, HOWEVER, that in the event that
the current per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security or securities
convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately adjusted to
reflect the current market price per share equivalent of such Security. 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 Security is 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 Security is
listed or admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported on Nasdaq or such other system then in use, or, if on any
such date the Security is 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 Security selected by the Board of Directors of the
Company.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i)
hereof. If the Preferred Shares are not publicly traded, the "current
per share market price" of the Preferred Shares shall be conclusively
deemed to be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) hereof (appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by 100. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed
or traded, "current per share market price"
-13-
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 binding upon
the Rights Agent and the holders of the Preferred Shares.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; PROVIDED, HOWEVER, that any adjustments that by reason of
this Section 1l(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 one one-millionth
interest in a Preferred Share or one ten-thousandth interest in any other share
or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction that
requires such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares or interests therein, thereafter the Purchase Price and the number of
such other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
Sections 11(a), (b), (c), (e), (h), (i) and (m) hereof, as applicable, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares. The Company shall
provide the Rights Agent with prompt written notice of any such election to
utilize other securities, the type of securities and the exchange ratio of Right
Certificates therefor.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredth
interests in a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredth interests in a Preferred Share (calculated to the nearest one
one-millionth interest in a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths interests covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of one one-hundredth interests in a Preferred
Share purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-hundredth interests in a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The
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Company shall make a public announcement of its election to adjust the number of
Rights and shall simultaneously provide the Rights Agent with written notice of
such election to adjust, which announcement and notice shall indicate the record
date for the adjustment and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 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 the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably require, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. The Company shall provide the Rights
Agent with written notice of the occurrence of any distribution effected
pursuant to the foregoing. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein and shall
be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredth interests in a Preferred Share issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-hundredth interests in a Preferred Share that were expressed in the
initial Right Certificates issued hereunder but shall be deemed to represent the
Purchase Price and the number of one one-hundredth interests in a Preferred
Share as adjusted pursuant to the terms hereof.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action that may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment. The Company
shall give the Rights Agent prompt written notice of its election to defer the
issuance of Preferred Shares.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for
-15-
cash of any Preferred Shares at less than the current market price, issuance
wholly for cash of Preferred Shares or securities that by their terms are
convertible into or exchangeable for Preferred Shares, dividends on Preferred
Shares payable in Preferred Shares or issuance of rights, options or warrants
referred to above in Section 11(b) hereof, hereafter made by the Company to
holders of its Preferred Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i) the
number of one one-hundredth interests in a Preferred Share purchasable after
such event upon proper exercise of each Right shall be determined by multiplying
the number of one one-hundredth interests in a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (ii) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights that each
Common Share outstanding immediately prior to such event had issued with respect
to it. The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES.
Whenever an adjustment is made as provided in Sections 11 and
13 hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, including, but not limited to, the adjusted Purchase Price and
a brief statement of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Common Shares or the Preferred
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The Rights
Agent may rely, and shall incur no liability for relying upon, the most recent
such certificate that it has received.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
In the event, directly or indirectly, at any time after a
Person has become an Acquiring Person, (a) the Company shall consolidate with,
or merge with and into, any other Person, (b) any Person shall consolidate with
the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof at a price equal
to the then current Purchase Price multiplied by the number of one one-hundredth
interests in a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement, and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredth interests in a
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Preferred Share for which a Right is then exercisable and (B) dividing that
product by 50% of the then current per share market price of the Common Shares
of such other Person (determined pursuant to Section 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer; (ii) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof and the making
of payments in cash and/or securities equal to the Purchase Price in accordance
with Section 11(a)(iii) hereof) in connection with such consummation as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to the Common Shares thereafter
deliverable upon the exercise of the Rights. The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The prior written consent of the Rights
Agent must be obtained in connection with any such supplemental agreement that
alters the rights or duties of the Rights Agent. The Company shall not enter
into any transaction of the kind referred to in this Section 13 if at the time
of such transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements that, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers. The Rights Agent may rely, and shall be fully protected in
relying, on a certificate of the Company stating that the provisions of this
Section 13 have been fulfilled.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates that evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported on 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.
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(b) The Company shall not be required to issue fractional
interests in Preferred Shares (other than fractional interests that are integral
multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates that evidence fractional interests in Preferred
Shares (other than fractions that are integral multiples of one one-hundredth of
a Preferred Share). Fractional interests in Preferred Shares in integral
multiples of one one-hundredth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts, and provided, further, that the Company shall notify the Rights Agent
of any such election pursuant to this Section 14(b). In lieu of fractional
interests in Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Preferred Share. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Upon accepting a Right, the holder of such Right expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, excepting
the rights of action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in such holder's own behalf and
for such holder's own benefit, 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 the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same, consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the designated office of the Rights Agent, duly
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endorsed or accompanied by a proper instrument of transfer along with a
signature guarantee and such other and further documentation as the Rights Agent
may reasonably require; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
Preferred Shares or interests therein or any other securities of the Company
that may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to 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 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed to in writing between the Company and the Rights
Agent for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements (including reasonable attorneys' 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 reasonable attorneys'
fees and expenses and the costs and expenses of defending against any claim of
liability in the premises. In no case will the Rights Agent be liable for
special, indirect, incidental or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the possibility of such damages. Any liability of the Rights
Agent will be limited to the amount of fees paid by the Company hereunder. This
Section 18(a) shall survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, instructions or other paper or document believed by it
to be genuine and to be signed and executed by the proper
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person or persons and, where necessary, verified or acknowledged, or otherwise
upon the advice of counsel as set forth in Section 20 hereof.
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
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or 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 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 and any of the Right Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. TERMS AND CONDITIONS OF RIGHTS AGENT'S APPOINTMENT.
The Rights Agent undertakes the duties and obligations imposed
by this Agreement upon the following terms and conditions, to all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
-20-
(c) The Rights Agent shall be liable 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
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining
of the existence of facts that would require any such change or adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when 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 performance
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 and
certificates delivered pursuant to any provision hereof from the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and is authorized 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 such
instructions of any such officer. An application by the Rights Agent for
instructions may set forth in writing any action proposed to be taken or omitted
by the Rights Agent with respect to its duties and obligations under this
Agreement and the date on and/or after which such actions 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 not be less than one Business Day after the
Company receives such application) without the consent of the Company unless
prior to taking or omitting such action, the Rights Agent has received written
instructions in response to such application specifying the actions to be taken
or omitted.
(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
-21-
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 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 the Rights Agent shall have reasonable grounds for believing the
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement in
reliance upon (i) the proper execution of the certification concerning
beneficial ownership appended to the Form of Assignment and the Form of Election
to Purchase included as part of Exhibit B hereto (the "Certification"), unless
the Rights Agent shall have actual knowledge that, as executed, the
Certification is untrue or (ii) the non-execution or failure to complete the
Certification including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such nonexecution or failure.
(l) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership that comes to the Company's attention that
would prohibit the exercise or transfer of the Rights Certificates.
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 30 days' notice in
writing mailed to the Company and, at the Company's expense, to each transfer
agent of the Common Shares or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the Company shall become the Rights Agent, and the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation organized and doing
business under the laws of the United States or any State of the United States,
in good standing, that is authorized under such laws to exercise the powers of
the Rights Agent contemplated by this
-22-
Agreement and is subject to supervision or examination by federal or state
authority. 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 Shares or Preferred Shares and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 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 RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement.
Section 23. REDEMPTION.
(a) The Rights may be redeemed by action of the Board of
Directors of the Company pursuant to paragraph (b) of this Section 23 and shall
not be redeemed in any other manner. The Rights Agent shall be given written
notice of any such redemption.
(b) The Board of Directors of the Company may, at its option,
at any time prior to the 20th Business Day after any Person becomes an Acquiring
Person, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, 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").
(c) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph (b) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate, and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights pursuant to Section 23(b)
hereof, the Company shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice that 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.
-23-
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its sole
option, at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 11(a)(ii)
hereof) for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). The Rights Agent shall be
given written notice of any such exchange and the Exchange Ratio pursuant to
which such exchange is effected. Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate, and the only right thereafter of a
holder of such Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange, and the
Rights Agent shall be given written notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall promptly mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common Shares for
Rights will be effected and, in the event of any partial exchange, the number of
Rights that will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights that have become void pursuant
to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute interests in Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for Common
Shares exchangeable for Rights, at the initial rate of one one-hundredth
interest in a Preferred Share (or equivalent preferred share) for each Common
Share, as appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Shares pursuant to Section 3(a) of Exhibit A hereto so that the
fraction of a Preferred Share delivered in lieu of each Common Share shall have
the same voting rights as one Common Share. The Rights Agent shall be given
written notice of any such substitution.
(d) In the event that there shall not be sufficient Common
Shares or Preferred Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this Section
24, (i) the Company shall take all such action as may be necessary to authorize
additional Common Shares or Preferred Shares for issuance upon exchange of the
Rights or (ii) the Company, at is option, notwithstanding any other provision of
this Agreement, with respect to each Right, to the extent permitted by
applicable law and any agreements or instruments in effect on the Distribution
Date to which the Company is a party, upon exercise of
-24-
the Rights, may pay cash and/or securities equal to the Purchase Price per
Right, in lieu of issuing such additional Common Shares and requiring payment
therefor. To the extent that any legal or contractual restrictions prevent the
Company from paying the full amount of cash payable in accordance with the
foregoing sentence, the Company shall pay to holders of the Rights as to which
such payments are being made all amounts that are not then restricted on a pro
rata basis. The Company shall continue to make payments on a pro rata basis as
funds become available until such payments have been paid in full. The Company
shall provide the Rights Agent with written notice of any election made pursuant
to this Section 24(d).
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates that evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Common Share. For the
purposes of this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate and the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the Common
Shares and/or Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be earlier.
(b) In case an event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which notice shall
describe the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
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Section 26. NOTICES.
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right Certificate to or on the
Company, shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
First Sentinel Bancorp, Inc.
0000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: President
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Registrar and Transfer Company
00 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000-0000
Attn: Vice President, Corporate Relations
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS.
The Company may, at any time prior to the time a Person
becomes an Acquiring Person, by resolution of its Board of Directors, from time
to time supplement or amend this Agreement without the approval of any holders
of Right Certificates in any respect, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; PROVIDED,
HOWEVER, that from and after such time as any Person becomes an Acquiring
Person, this Agreement may be amended by the Board of Directors of the Company
in any manner which would not adversely affect the interests of any holders of
Right Certificates (other than an Acquiring Person or an Affiliate of Associate
thereof). Upon the delivery of a certificate from an executive officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment, provided that the Rights Agent shall not be required to
consent to any amendment or supplement that is adverse to its interests. Without
limiting the foregoing, the Company may, at any time prior to such time as any
Person becomes an Acquiring Person, amend this Agreement to lower the thresholds
set forth in Sections 1(a) and 3(b) hereof to not less than the largest
percentage of the outstanding Common Shares then known by the Company to be
beneficially owned by any Person.
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Section 28. 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 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
(a) The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to such Board of Directors or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including,
without limitation, a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors of the Company in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights.
(b) In taking any action referred to in Section 29(a), the
Board of Directors shall be entitled to consider, without limitation, the
financial and managerial resources and future prospects of an Acquiring Person,
the possible effects of the action on the business of the Company and its
Subsidiaries and on the employees, customers, suppliers and creditors of the
Company and its Subsidiaries and the effects on the communities in which the
Company's and its Subsidiaries' facilities are located.
Section 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any
person or corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).
Section 31. SEVERABILITY.
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
Section 32. GOVERNING LAW.
This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State.
-27-
Section 33. 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 34. SECTION 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.
-28-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and year first
above written.
FIRST SENTINEL BANCORP, INC.
By:
/s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Xxxx X. Xxxxxxxx
President and Chief Executive Officer
Attest:
By: /s/ Xxxxxxxxxxx Xxxxxx
-----------------------------------------
Xxxxxxxxxxx Xxxxxx
Corporate Secretary
REGISTRAR AND TRANSFER COMPANY,
as Rights Agent
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
Attest:
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Account Executive
-29-
Exhibit A
---------
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
FIRST SENTINEL BANCORP, INC.
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
----------------------------
We, Xxxx X. Xxxxxxxx and Xxxxxxxxxxx Xxxxxx, being the President
and Chief Executive Officer and the Corporate Secretary, respectively, of First
Sentinel Bancorp, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware ("Corporation"), in accordance with the
provisions of Sections 103 and 151 thereof, DO HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors of the Corporation ("Board") by the Corporation's Certificate of
Incorporation ("Certificate of Incorporation"), at a meeting duly called and
held on December 19, 2001, at which a quorum was present and acting throughout,
the Board duly adopted the following resolution creating a series of 700,000
shares of preferred stock, par value $0.01 per share, designated "Series A
Junior Participating Preferred Stock":
RESOLVED, that, pursuant to the authority vested in the
Board of Directors of the Corporation ("Board") by the
Corporation's Certificate of Incorporation ("Certificate of
Incorporation"), the Board does hereby provide for the issuance
of a series of preferred stock, par value $0.01 per share, of the
Corporation, to be designated "Series A Junior Participating
Preferred Stock," initially consisting of seven hundred thousand
(700,000) shares, and to the extent that the designations,
powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions thereof are not
stated and expressed in the Certificate of Incorporation, does
hereby fix and herein state and express such designations,
powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions thereof, as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such
series shall be designated as "Series A Junior Participating Preferred Stock,"
par value $0.01 per share ("Series A Preferred Stock"), and the number of shares
constituting such series shall be 700,000. Such number of shares may be
increased or decreased by resolution of the Board; PROVIDED, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the rights of the holders of any shares of
any series of preferred stock (or any similar stock) ranking prior and superior
to the Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of shares of common
stock of the Corporation, par value $0.01 per share ("Common Stock"), and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board out of funds legally available therefor, quarterly dividends payable
in cash on the first day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of: (a)
$1.00 and (b) subject to the provision for adjustment set forth herein, 100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(b) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph (a) of
this section immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock);
PROVIDED, that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend
-2-
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board may fix a record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the dated fixed for the payment
thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a
vote of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other
resolution creating a series of preferred stock or any similar
stock, in any amendment to the Certificate of Incorporation or by
law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall vote together
as one class on all matters submitted to a vote of stockholders
of the Corporation.
(c) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common Stock
as set forth herein) for taking any corporate action.
-3-
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably
on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred
Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A Preferred
Stock, except in accordance with a purchase offer made in writing
or by publication (as determined by the Board) to all holders of
such shares upon such terms as the Board, after consideration of
the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall, upon their
-4-
cancellation, become authorized but unissued shares of preferred stock and may
be reissued as part of a new series of preferred stock subject to the conditions
and restrictions on issuance set forth herein, in a resolution of the Board, in
the Certificate of Incorporation or in any other Certificate of Amendment
creating a series of preferred stock or any similar stock or as otherwise
required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of: (i) $100.00 per share, plus
an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, and (ii) an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (b) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled immediately prior to
such event under the proviso in clause (a) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
-5-
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable, except as otherwise provided herein.
Section 9. RANK. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all other series of the Corporation's preferred stock.
Section 10. AMENDMENT. At any time that any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation shall not be
amended in any manner, nor shall the Board take any action, which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractions of a share, which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
-6-
IN WITNESS WHEREOF, First Sentinel Bancorp, Inc. has caused this
certificate to be executed by its President and Chief Executive Officer, and
attested by its Corporate Secretary, this 19th day of December, 2001.
FIRST SENTINEL BANCORP, INC.
By:
---------------------------------
Xxxx X. Xxxxxxxx
President and Chief Executive Officer
Attest:
By:
---------------------------------
Xxxxxxxxxxx Xxxxxx
Corporate Secretary
-7-
Exhibit B
---------
FORM OF RIGHT CERTIFICATE
Certificate No. R- __ RIGHTS
NOT EXERCISABLE AFTER JANUARY 1, 2012, OR, IF EARLIER,
IF REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. ANY RIGHTS BENEFICIALLY OWNED BY OR
TRANSFERRED TO AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE THEREOF OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME VOID AND WILL NO LONGER BE
TRANSFERABLE.
RIGHT CERTIFICATE
FIRST SENTINEL BANCORP, INC.
This certifies that ______________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of December 19, 2001 (as the same
may be amended from time to time, "Rights Agreement"), by and between First
Sentinel Bancorp, Inc., a Delaware corporation ("Company"), and Registrar and
Transfer Company ("Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York City time, on January 1, 2012 at the designated
office of the Rights Agent, or at the office of its successor as Rights Agent, a
one one-hundredth interest in a fully-paid, non-assessable share of Series A
Junior Participating Preferred Stock, par value $0.01 per share ("Preferred
Shares"), of the Company, at a purchase price of $37.00 ("Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably require. The number of
Rights evidenced by this Right Certificate (and the number of one one-hundredth
interests in Preferred Shares that may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number and Purchase
Price as of ______________ ____, 20___, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredth interests in Preferred Shares that may
be purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Rights Agreement are on file at the principal
executive offices of the Company and of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the designated office of the Rights Agent, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably require, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of interests in
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive, upon surrender hereof, another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be, and under certain circumstances are
required to be, redeemed by the Company at a redemption price of $0.01 per Right
or (ii) may be exchanged in whole or in part for Preferred Shares or shares of
the Company's common stock, par value $0.01 per share.
No fractional interests in Preferred Shares will be issued
upon the exercise of any Right or Rights evidenced hereby (other than fractional
interests that are integral multiples of one one-hundredth of a Preferred Share,
which may, at the election of the Company, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
-2-
WITNESS the facsimile signature of the proper officers of the
company and its corporate seal. Dated as of ____________ ___, 20__.
FIRST SENTINEL BANCORP, INC.
By:
---------------------------------
Name:
Title:
Attest:
By:
---------------------------------
Name:
Title:
Countersigned:
REGISTRAR AND TRANSFER COMPANY,
AS RIGHTS AGENT
By:
---------------------------------
Authorized Signatory.
Dated: _________ ___, 20__
-3-
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________ hereby
sell(s), assign(s) and transfer(s) unto ________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
do(es) hereby irrevocably constitute(s) and appoint(s) _________________________
as Attorney, to transfer the within Right Certificate on the books of First
Sentinel Bancorp, Inc. with full power of substitution.
Dated: ______________________, 20__
------------------------------
Signature
------------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed by an eligible financial
institution or broker who is a member/participant in a Medallion Program
approved by the Securities Transfer Association, Inc.
--------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------
Signature
------------------------------
Signature
--------------------------------------------------------------------------------
-4-
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if such holder
desires to exercise the Right Certificate.)
To: FIRST SENTINEL BANCORP, INC.
The undersigned hereby irrevocably elects to exercise
________________ Rights represented by this Right Certificate to purchase the
interests in Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such interests in Preferred Shares be issued in
the name of:
------------------------------
------------------------------
------------------------------
(Please insert social security or
other taxpayer identification number)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
-------------------------------
-------------------------------
-------------------------------
(Please print name and address)
-------------------------------
(Please insert social security or
other taxpayer identification number)
Dated: ___________________, 20__
------------------------------
Signature
------------------------------
Signature
-5-
[Form of Reverse Side of Right Certificate -- continued]
Signature Guarantee:
Signatures must be guaranteed by an eligible financial
institution or broker who is a member/participant in a Medallion Program
approved by the Securities Transfer Association, Inc.
--------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------
Signature
------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
------
The signature in the foregoing Forms of Assignment and
Election to Purchase must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement), and such
Assignment or Election to Purchase will not be honored.
-6-
Exhibit C
---------
[Logo of First Sentinel Bancorp, INc.]
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES OR COMMON SHARES
1. IN GENERAL. On December 19, 2001, the Board of Directors of First
Sentinel Bancorp, Inc. ("First Sentinel" or the "Company") declared a dividend
of one preferred share purchase right ("Right") for each share of First
Sentinel's common stock. The dividend is payable on January 1, 2002 ("Record
Date") to the stockholders of record on that date. Each Right entitles the
registered holder to purchase, after the Distribution Date (as defined below), a
one one-hundredth (1/100) interest in a share of Series A Junior Participating
Preferred Stock ("Preferred Shares"), of First Sentinel, at a price of $37.00
("Purchase Price"), subject to adjustment.
The terms of the Rights are set forth in a Rights Agreement, dated as
of December 19, 2001, by and between First Sentinel and Registrar and Transfer
Company, as rights agent. A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated December 20, 2001. You can obtain a copy of the Rights Agreement,
free of charge, by calling (000) 000-0000.
Set forth below is a summary description of the Rights. This
description is only a summary, is not complete and is qualified in its entirety
by reference to the Rights Agreement.
2. DISTRIBUTION DATE. Until the Distribution Date (as defined below),
the Rights will be attached to and traded with First Sentinel's common stock and
will be evidenced by the certificates for the common stock. The Rights "detach"
from the common stock on the Distribution Date. After the Distribution Date,
separate Right Certificates will be mailed to stockholders, and all Rights held
by an Acquiring Person (as defined below) will become null and void.
"Distribution Date" means the earlier of (a) the close of business on
the 20th business day following a public announcement that a person or group of
persons has acquired beneficial ownership of 12% or more of First Sentinel's
outstanding common stock ("Acquiring Person") or (b) the 20th business day
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in a person or
group becoming an Acquiring Person.
3. TRANSFER OF RIGHTS AND CERTIFICATES. Until the Distribution Date,
(a) the Rights will be transferred with and only with the common stock, (b)
common stock certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference, and (c) the surrender for
transfer of any common stock certificates, even without such notation, will also
constitute the transfer of the Rights associated with common stock represented
by such certificates. After the Distribution Date, the Right Certificates alone
will evidence the Rights.
4. EXPIRATION. The Rights will expire on January 1, 2012, unless such
date is extended or the Rights are earlier redeemed by the Company.
5. ANTI-DILUTION ADJUSTMENTS. The Purchase Price, the number of
interests in Preferred Shares issuable and the number of outstanding Rights may
be adjusted from time to time to prevent
dilution from certain events, such as a stock dividend, a stock split or a
reclassification of the Preferred Shares or the common stock. Adjustments to the
Purchase Price will not be made until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price.
6. PREFERRED SHARES. Interests in Preferred Shares purchasable upon
exercise of the Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend payment in an amount per
share equal to the greater of (a) $1.00 and (b) 100 times the dividend declared
per share of common stock for such quarter. In the event of liquidation, the
holders of the interests in Preferred Shares will be entitled to a minimum
preferential liquidation payment in an amount per share equal to the greater of
(i) $100.00 and (ii) 100 times the payment made per share of common stock. Each
Preferred Share will have 100 votes, voting together with the common shares. In
the event of any merger, consolidation or other transaction in which common
shares are exchanged, each Preferred Share will be entitled to receive 100 times
the amount received per common share. These rights are protected by customary
anti-dilution provisions.
Because of the nature of the dividend, liquidation and voting rights of
the Preferred Shares, the value of the 1/100 interest in a Preferred Share
purchasable upon exercise of a Right should approximate the value of one share
of common stock.
7. EXERCISE OF RIGHTS FOR COMMON SHARES. If any person becomes an
Acquiring Person, proper provision will be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will have the right to receive, upon the exercise thereof
at the then-current Purchase Price, that number of common shares having a market
value of two times the Purchase Price. In the event that the Company is acquired
in a merger or other business combination transaction or 50% or more of its
consolidated assets or earning power is sold, proper provision will be made so
that each holder of a Right will have the right to receive, upon the exercise
thereof at the then-current Purchase Price, that number of shares of common
stock of the acquiring company that, at the time of such transaction, has a
market value of two times the Purchase Price.
8. OPTIONAL EXCHANGE OF RIGHTS. After any person or group becomes an
Acquiring Person, but before an Acquiring Person acquires 50% or more of our
common stock, our Board may extinguish the Rights by exchanging one share of
common stock (or equivalent preferred stock) for each Right (other than Rights
owned by an Acquiring Person, which shall be void).
9. REDEMPTION OF RIGHTS. At any time before the 20th business day after
any person or group becomes an Acquiring Person, the Company's Board of
Directors may redeem the Rights in whole, but not in part, at a price of $0.01
per Right. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate, and the only right of the holders of Rights will be
to receive the redemption price.
10. AMENDMENTS. The terms of the Rights may be amended by the Company's
Board of Directors without the consent of the holders of the Rights; PROVIDED,
HOWEVER, that, after a person or group becomes an Acquiring Person, the Board
may not amend the terms of the Rights in any manner that adversely affects the
holders of the Rights.
11. RIGHTS PRIOR TO EXERCISE. 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.
