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EXHIBIT 10
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POUGHKEEPSIE SAVINGS BANK, FSB
and
The Bank of New York,
Rights Agent
RIGHTS AGREEMENT
Dated as of May 1, 1988
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TABLE OF CONTENTS
(This Table of Contents is not a part of the Rights Agreement
and is only for convenience of reference)
Page
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
I. DEFINITIONS AND INTERPRETATION
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1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
II. FORM OF RIGHT CERTIFICATES
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2.1. Form Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2. Form of Legend for Certain Right Certificates . . . . . . . . . . . . . . . . . . . . . 10
2.3. Issuance of New Right Certificates; Adjustments . . . . . . . . . . . . . . . . . . . . 11
III. THE RIGHTS
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3.1. Issuance of Rights and Right Certificates . . . . . . . . . . . . . . . . . . . . . . . 11
3.2. Summary of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.3. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.4. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates . . . . . . . . . . . . . . . . 15
3.5. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . 16
3.6. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . 18
3.7. Common Shares Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(i)
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3.8. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . 19
3.9. Right to Defer Issuance of Common Shares upon Exercise of Rights . . . . . . . . . . . . 21
IV. COVENANTS OF THE BANK
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4.1. Reservation and Availability of Common Shares . . . . . . . . . . . . . . . . . . . . . 21
4.2. Certain Actions; Supplemental Agreements . . . . . . . . . . . . . . . . . . . . . . . . 23
V. ADJUSTMENTS
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5.1. Adjustment of Purchase Price, Number and Type of Shares
or Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.2. Consolidation, Merger, or Sale or Transfer of Assets
or Earning Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.3. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . 34
5.4. Cash Payment in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . 34
5.5. DeMinimis Adjustments; Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.6. Effect of Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5.7. Adjustment of Number of Rights in Lieu of Purchase Price . . . . . . . . . . . . . . . . 36
5.8. Taxable Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.9. Restrictions on Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
VI. RIGHTS HOLDERS
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6.1. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.2. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6.3. Right Certificate Holder Not Deemed a Stockholder . . . . . . . . . . . . . . . . . . . 40
6.4. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(ii)
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VII. RIGHTS AGENT
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7.1. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.2. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.3. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . 44
7.4. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.5. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
VIII. REDEMPTION
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8.1. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.2. Effect of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.3. Right to Relinquish Redemption Right . . . . . . . . . . . . . . . . . . . . . . . . . . 52
IX. MISCELLANEOUS
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9.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.2. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
9.3. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.4. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.5. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
9.6. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.7. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
9.8. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Exhibit A Form of Right Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Summary of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
(iii)
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Rights Agreement, dated as of May 1, 1988 ("Agreement"), between
Poughkeepsie Savings Bank, FSB, a federal savings bank (the "Bank"), and The
Bank of New York, a New York corporation authorized to do a banking business
(the "Rights Agent").
RECITALS
WHEREAS, on May 1, 1988, the Board of Directors of the Bank authorized
and declared a dividend distribution of one right (a "Right") for each share of
Common Stock, $0.01 par value per share, of the Bank (a "Common Share")
outstanding on the close of business on May 18, 1988 (the "Record Date"), and
authorized the issuance of one Right for each Common Share issued or delivered
by the Bank (whether originally issued or delivered from the Bank's treasury)
thereafter but prior to the Distribution Date (as hereinafter defined), each
Right initially representing the right to purchase one Common Share;
NOW, THEREFORE, the parties hereby agree as follows:
I. DEFINITIONS AND INTERPRETATION
1.1. Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Acquiring Person" shall mean, at the time any
determination is to be made, any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of 20%
or more of the Common Shares then outstanding, but shall not include the Bank
or any Related Person; provided, however, that no Person who is not an
Acquiring Person shall become an Acquiring Person solely
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by virtue of a reduction in the number of Common Shares outstanding, unless
subsequent to such reduction such Person shall acquire additional Common
Shares.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date hereof.
(c) "Bank" shall mean Poughkeepsie Savings Bank, FSB, a
federal savings bank.
(d) A Person shall be deemed the "Beneficial Owner" of
any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange
rights or other rights, warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of
securities (A) tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for payment or
exchange, (B) issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event, or (C) issuable from and after
the occurrence of a Triggering Event upon exercise of (1) Rights which
are acquired by a Person prior to the Distribution Date, or (2) Rights
issued pursuant to the provisions of Section 5.7 hereof in connection
with an adjustment made with respect to any such Rights referred to in
subparagraph (1) above; or
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(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of, including pursuant to any agreement, arrangement or
understanding, whether or not in writing; or
(iii) of which any other Person is the Beneficial Owner if the
Person or any of the Person's Affiliates or Associates has any
agreement, arrangement or understanding, whether or not in writing,
with such other Person (or any of such other Person's Affiliates or
Associates) with respect to acquiring, holding, voting or disposing of
any securities of the Bank; provided, however, that a Person shall not
be deemed the Beneficial Owner of any security if such Person has the
right to vote such security pursuant to an agreement, arrangement or
understanding which (1) arises solely from a revocable proxy given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act, and (2) is not also then reportable
on Schedule 13D under the Exchange Act (or any comparable or successor
report).
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York (or such
other state in which the designated office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
New York Time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York Time, on the next succeeding
Business Day.
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(g) "Common Shares" when used with reference to the Bank shall
mean the shares of Common Stock, $0.01 par value per share, of the Bank;
provided, however, that, if the Bank is the continuing or surviving corporation
in a transaction described in Sections 5.1 or 5.2 hereof, "Common Shares" when
used with reference to the Bank shall mean the capital stock or equity security
with the greatest aggregate voting power of the Bank, or, if the Bank is a
subsidiary of another corporation or other legal entity, the corporation or
other legal entity which ultimately controls the Bank. "Common Shares" when
used with reference to any corporation or other legal entity, other than the
Bank, shall mean the capital stock or equity security with the greatest
aggregate voting power of such corporation or other legal entity, or, if such
corporation or other legal entity is a subsidiary of another corporation or
other legal entity, the corporation or other legal entity which ultimately
controls such first-mentioned corporation or other legal entity.
(h) "Current Per Share Market Price" of the Common Shares
on any date shall be deemed to be the average of the daily closing prices per
share of such Common Shares 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 Common Shares is determined during a period following
the announcement by the issuer of such Common Shares (i) of a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares, or (ii) any subdivision, combination or
reclassification of such Common Shares, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution or
the record date for such subdivision, combination or reclassification, then,
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and in each such case, the Current Per Share Market Price shall be
appropriately adjusted to take into account ex-dividend trading or to reflect
the Current Per Share Market Price per Common Share equivalent. 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 (including when-issued trading as provided above), in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Common Shares are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Common Shares are listed or admitted
to trading or, if the Common Shares are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the NASDAQ or such other system then in use, or, if on
any such date the Common Shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Shares selected by the Board of
Directors of the Bank. If the Common Shares are not publicly held or not so
listed or traded, or not the subject of available bid and asked quotes the
Current Per Share Market Price shall mean the fair value per share as
determined in good faith by a majority of the Board of Directors of the Bank,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
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(i) "Distribution Date" shall mean the earlier of (i) the Close of
Business on the twentieth calendar day after the Share Acquisition Date, or
(ii) the Close of Business on the twentieth calendar day after the date of the
commencement of a tender or exchange offer (as determined by reference to Rule
14d-2(a) under the Exchange Act) by any Person (other than the Bank or any
Related Person) for 30% or more of the outstanding Common Shares (including any
such date which is after the date of this Agreement and prior to the issuance
of the Rights).
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(k) "Expiration Date" shall mean the earlier of (i) the Close
of Business on the Final Expiration Date, and (ii) the time at which the Rights
are redeemed as provided in Section 8.1 hereof.
(l) "Final Expiration Date" shall mean May 1, 1998.
(m) "Issuer" shall mean (i) in the case of any merger or
consolidation described in Sections 5.2(a)(i) or 5.2(a)(ii) hereof, the Person
that is the continuing, surviving, resulting or acquiring Person (including the
Bank as the continuing or surviving corporation of a transaction described in
Section 5.2(a)(ii) hereof), and (ii) in the case of any transaction or series
of related transactions described in Section 5.2(a)(iii) hereof, the Person
that is the party receiving the greatest portion of the assets or earning power
(including, without limitation, securities creating any obligation on the part
of the Bank and/or any of its Subsidiaries) transferred pursuant to such
transaction or transactions; provided, however, that, in any such case, (A) if
(1) no class of equity security of such
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Person is, at the time of such merger, consolidation or transaction and has
been continuously over the preceding 12-month period, registered pursuant to
Section 12 of the Exchange Act, and (2) such Person is a Subsidiary, directly
or indirectly, of another Person, a class of equity security of which is and
has been so registered, the term "Issuer" shall mean such other Person; and
(B), in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, a class of equity security of two or more of which are and have
been so registered, the term "Issuer" shall mean whichever of such Persons is
the issuer of the equity security having the greatest aggregate market value.
(n) "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.
(o) "Person" shall mean any individual, firm, corporation,
partnership or other legal entity, and shall include any successor (by merger
or otherwise) of such entity.
(p) "Purchase Price" shall mean initially $75.00 per Common Share
or such other price set forth on the face of the Right Certificate, subject to
adjustment from time to time as provided in this Agreement.
(q) "Redemption Price" shall mean $0.01 per Right, subject to
adjustment by resolution of the Board of Directors of the Bank to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof.
(r) "Related Person" shall mean (i) any Subsidiary of the Bank,
(ii) any employee benefit or stock ownership plan of the Bank or any entity
holding Common Shares for or pursuant to the terms of any such plan, or (iii)
any Person who acquires Common Shares from the Bank or any other Related Person
in one or a series of related
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transactions, each of which is approved by a majority of the Board of Directors
of the Bank; provided, however, that if any Person who becomes a Related Person
solely by virtue of subparagraphs (iii) above subsequently acquires additional
Common Shares in a transaction or transactions not approved by a majority of
the Board of Directors of the Bank, such Person shall no longer be deemed a
"Related Person" with respect to all Common Shares of which it, or any of its
Affiliates or Associates, is the Beneficial Owner.
(s) "Right" shall have the meaning given thereto in the Recitals
to this Agreement.
(t) "Right Certificate" shall mean certificates evidencing the
Rights, in substantially the form of Exhibit A attached hereto.
(u) "Rights Agent" shall mean The Bank of New York, and its
successors and assigns.
(v) "Share Acquisition Date" shall mean the first date of public
announcement by the Bank or an Acquiring Person (by press release, filing made
with the Federal Home Loan Bank Board, the Securities and Exchange Commission
or otherwise) that an Acquiring Person has become such.
(w) "Subsidiary" shall mean any corporation or other legal entity
of which a majority of the voting power of the voting equity securities or
equity interests is owned, directly or indirectly, by another Person.
(x) "Summary of Rights" shall mean a summary of Rights, in
substantially the form of Exhibit B attached hereto.
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(y) "Trading Day" shall mean any day on which the principal
national securities exchange on which the Common Shares are listed or admitted
to trading is open for the transaction of business or, if the Common Shares are
not listed or admitted to trading on any national securities exchange, a
Business Day.
(z) "Triggering Event" shall mean any event described in Sections
5.1(a)(ii) or 5.2(a) hereof.
1.2. Interpretation. Words importing a singular number shall
include the plural number in each case and vice versa. The words "herein",
"hereby", "herewith" and similar words, phrases, references or associations
shall refer to this Agreement in its entirety.
II. FORM OF RIGHT CERTIFICATES
2.1. Form Generally. The Right Certificates (and the forms of
election to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth as Exhibit A attached hereto
with such changes, marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Bank 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 or any
transaction reporting system on which the Shares or the Rights may from time to
time be listed or quoted, or to conform to usage. The Right Certificates shall
be in machine printable format and in a form satisfactory to the Rights Agent.
The Right Certificates, whenever issued, shall be dated as of their date of
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distribution, shall show the date of countersignature, and on their face shall
entitle the holders thereof to purchase such number of Common Shares as shall
be set forth therein at the Purchase Price, but the number and type of
securities purchasable upon the exercise of each Right and the Purchase Price
shall be subject to adjustment as provided herein.
2.2. Form of Legend for Certain Right Certificates. Any Right
Certificate issued pursuant to the provisions of Sections 2.3, 3.1 or 3.4
hereof that represents Rights the Beneficial Owner of which is any Acquiring
Person or any Associate or Affiliate of an Acquiring Person, and any Right
Certificate 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, shall be subject to and contain the
following legend or such similar legend as the Board of Directors of the Bank
may deem appropriate and as is 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 or any transaction reporting system on which the Shares or the
Rights may from time to time be listed or quoted, or to conform to usage:
"The Rights represented by this Right Certificate were issued
to, or beneficially owned by, a person who was an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement). This
Right Certificate and the Rights represented hereby may become
null and void in the circumstances specified in the Rights
Agreement."
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The Rights Agent shall issue Right Certificates containing the foregoing legend
upon the written instruction of the Bank.
2.3. Issuance of New Right Certificates; Adjustments.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Bank 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
securities or property issuable upon the exercise of the Rights made in
accordance with the provisions of this Agreement. Irrespective of any
adjustment or change in the Purchase Price or the number or kind or class of
securities or property issuable upon the exercise of the Rights, however, the
Right Certificates theretofore and thereafter issued may continue, at the
option of the Bank, to express the Purchase Price per Common Share and the
number of Common Shares which were expressed in the initial Right Certificates
issued hereunder.
III. THE RIGHTS
3.1. Issuance of Rights and Right Certificates. (a) Until the
Distribution Date, (i) the Rights shall be evidenced by the certificates for
Common Shares registered in the names of the record holders thereof (which
certificates for Common Shares shall also be deemed to be Right Certificates)
and not by separate Right Certificates, (ii) the Rights shall be transferable
only in connection with the transfer of the underlying Common Shares, and (iii)
the transfer of any certificates evidencing Common Shares in respect of
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which Rights have been issued shall also constitute the transfer of the Rights
associated with the Common Shares evidenced by such certificates.
(b) Rights will be issued by the Bank in respect of all Common
Shares issued or delivered by the Bank (whether originally issued or delivered
from the Bank's treasury) thereafter but prior to the Distribution Date.
Certificates evidencing such Common Shares shall have stamped on, impressed on,
printed on, written on or otherwise affixed to them the following legend or
such similar legend as the Bank may deem appropriate and as is 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 or any transaction reporting system on
which the Shares or the Rights may from time to time be listed or quoted, or to
conform to usage:
"This Certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Poughkeepsie Savings Bank, FSB and The Bank of New
York, dated as of May 1, 1988 (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 Poughkeepsie Savings Bank, FSB. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may expire, may be amended or may be
evidenced by separate certificates and no longer be evidenced
by this Certificate. Poughkeepsie Savings Bank, FSB will mail
to the holder of this Certificate a copy of the Rights
Agreement without charge within five business days after
receipt of a written request therefor. Under certain
circumstances, Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void."
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(c) As soon as practicable after the Distribution Date and notice
thereof in writing by the Bank to the Rights Agent, the Rights Agent shall send
at the Bank's expense, by first-class, postage prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date,
at the address of such holder shown on the records of the Bank, a Right
Certificate, evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
3.2. Summary of Rights. As soon as practicable after the Record
Date, the Bank will send a copy of the Summary of Rights by first-class,
postage prepaid mail, to each record holder of Common Shares on the Record
Date, at the address of such holder shown on the records of the Bank.
3.3. Countersignature and Registration. (a) The Right Certificates
shall be executed on behalf of the Bank by its Chief Executive Officer,
President or any Vice President, either manually or by facsimile signature, and
have affixed thereto the Bank's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Bank, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by an authorized signatory of the Rights Agent and shall not be
valid for any purpose unless so countersigned. In case any officer of the Bank
who shall have signed any of the Right Certificates shall cease to be such
officer of the Bank before countersignature by the Rights Agent and issuance
and delivery by the Bank, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Bank with
the same force and effect as though the
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person who signed such Right Certificates had not ceased to be such officer of
the Bank; and any Right Certificate may be signed on behalf of the Bank by any
person who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Bank to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person was not
such an officer.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Bank, such Right Certificates, nevertheless, may be
issued and delivered by the Bank with the same force and effect as though the
person who countersigned such Right Certificates had not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at 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 at the date of the execution of
this Agreement any such person was not such a signatory.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at the designated office of the Rights Agent and at such
other of its offices 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 or any transaction reporting system on which
the Shares or the Rights may from time to time be listed or quoted, 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
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Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
3.4. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Section 3.8 hereof, at any time after the Close of
Business on the Distribution Date, and at or prior to the Expiration Date, any
Right Certificate or Certificates may be transferred, split up, combined or
exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of Common Shares as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
designated office of the Rights Agent together with a signature guarantee and
such other documentation as the Rights Agent may reasonably request. Neither
the Rights Agent nor the Bank shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate unless
the Certificate contained on the reverse side of such Right Certificate shall
have been completed and signed by the registered holder thereof. 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.
The Bank may require payment from the holder of the Right Certificate of a sum
sufficient to cover any tax or governmental
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charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Bank and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Bank and the
Rights Agent of all reasonable expense incidental thereto, and upon surrender
to the Rights Agent for cancellation of the Right Certificate (if mutilated)
together with a signature guarantee and such other documentation as the Rights
Agent may reasonably request, the Bank will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
3.5. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(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 and at or prior to the Expiration Date,
upon surrender of the Right Certificate together with a Signature Guarantee and
such other documentation as the Rights Agent may reasonably request, 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 Common Share as to which the Rights are
exercised.
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(b) The Purchase Price for each Common Share pursuant to the
exercise of a Right shall be payable in lawful money of the United States of
America in accordance with Section 3.5(c) hereof.
(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 Common Shares as to which the Rights are
exercised and an amount equal to any applicable transfer tax by certified check
or bank draft payable to the order of the Rights Agent, the Rights Agent shall
thereupon promptly (i) requisition from any transfer agent of the Common Shares
(or make available, if the Rights Agent is the transfer agent) certificates for
the number of Common Shares to be purchased and the Bank hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) promptly
after receipt of such certificates, 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, (iii) when appropriate,
requisition from the Bank the amount of cash to be paid in lieu of the issuance
of fractional shares in accordance with the provisions of Section 3.8 hereof or
in lieu of the issuance of Common Shares in accordance with the provisions of
Section 5.4 hereof, (iv) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such Right Certificate,
and (v) deliver any due xxxx or other instrument provided to the Rights Agent
by the Bank for delivery to the registered holder of such Right Certificate as
provided by Section 3.9 hereof.
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(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 3.8
hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Bank shall be obligated to undertake any
action with respect to a registered holder of Rights upon the occurrence of any
purported exercise as set forth in this Section 3.5 unless the certificate
contained in the form of election to purchase on the reverse side of the Right
Certificate surrendered for such exercise shall have been completed and signed
by the registered holder thereof.
3.6. 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 Bank or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Bank 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 Bank otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Bank, or shall, at
the written request of the Bank, destroy such
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cancelled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Bank.
3.7. Common Shares Record Date. Each Person in whose name any
certificate for Common Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Common 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 Common Shares transfer books are closed, such Person shall be
deemed to have become the record holder of such Common Shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Common Shares transfer books are open.
3.8. Fractional Rights and Fractional Shares. (a) The Bank shall
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Bank shall pay as promptly as practicable after such fractional
Rights would otherwise be issuable 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 3.8(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,
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or, in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by 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 Bank. 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 Bank shall be used and shall be
conclusive for all purposes.
(b) The Bank shall not be required to issue fractions of Common
Shares upon exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares, the Bank may
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of
the current market value of one Common Share. For purposes of this Section
3.8, the current market value of a Common Share
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shall be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 1.1(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
3.9. Right to Defer Issuance of Common Shares upon Exercise of
Rights. In any case in which an adjustment in the Purchase Price pursuant to
Section 5.1 hereof shall be made effective as of a record date for a specified
event, the Bank may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the Common
Shares issuable upon such exercise over and above the Common Shares issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Bank shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to receive
such additional Common Shares upon the occurrence of the event requiring such
adjustment. The Bank shall give the Rights Agent prompt written notice of any
such election.
IV. COVENANTS OF THE BANK
4.1. Reservation and Availability of Common Shares. The Bank
covenants and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Common Shares or any authorized and issued Common
Shares held in its treasury, the number of Common Shares that will be
sufficient to permit the exercise pursuant to Section 3.5 hereof of all
outstanding Rights; such number of Common Shares
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26
reserved and kept available shall be adjusted from time to time, if and to the
extent required (and subject to the provisions of Section 5.4 hereof), upon the
occurrence of any of the events described in Sections 5.1 or 5.2 hereof.
(b) So long as the Bank's Common Shares are quoted by NASDAQ, it
will endeavor to cause, from and after such time as the Rights become
exercisable, all Common Shares reserved for issuance upon exercise of the
Rights to be so quoted upon official notice of issuance.
(c) It will take all such action as may be necessary to ensure
that all Common Shares delivered upon exercise of Rights shall be, at the time
of delivery of the certificates for such Common Shares (subject to payment of
the Purchase Price), duly and validly authorized and issued, fully paid,
nonassessable and freely tradeable shares, free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call or
first refusal.
(d) Before taking any action pursuant to Section 5.1 hereof that
would cause an adjustment reducing the Purchase Price below the then par value,
if any, of the Common Shares issuable upon exercise of the Rights, it will take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Bank may validly and legally issue fully paid and nonassessable
Common Shares at such adjusted Purchase Price.
(e) 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 Common Shares upon the exercise of
Rights. The Bank
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shall not, however, be required to pay any transfer tax or charge 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 for the Common
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue or deliver
any certificates for Common Shares upon the exercise of any Rights until any
such tax or charge shall have been paid (any such tax or charge being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Bank's satisfaction that no such tax or charge is
due.
4.2. Certain Actions; Supplemental Agreements. The Bank covenants
and agrees that it shall not (a) consolidate with, (b) merge with or into, or
(c) sell or transfer to, in one or more transactions, assets or earning power
(including, without limitation, securities creating any obligation on the part
of the Bank and/or any of its Subsidiaries) representing in the aggregate more
than 50% of the assets or earning power of the Bank and its Subsidiaries, taken
as a whole, any other Person if at the time of or after such consolidation,
merger or sale there would be any charter or by-law provisions or any rights,
options, warrants or other instruments or securities outstanding or agreements
in effect or any other actions taken which would eliminate or otherwise
diminish the benefits intended to be afforded by the Rights without the
affirmative vote of the holders of at least 80% of the then-outstanding Rights
beneficially owned by Persons other than the Acquiring Person or its Affiliates
or Associates. The Bank shall not consummate any such consolidation, merger or
sale unless prior thereto the Bank and such other Person
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shall have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section.
V. ADJUSTMENTS
5.1. Adjustment of Purchase Price, Number and Type of Shares or
Number of Rights. The Purchase Price, the number and type of Common Shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 5.1.
(a)(i) In the event that the Bank shall at any time after the
date of this Agreement (A) declare a dividend on the Common Shares
payable in Common Shares, (B) subdivide the outstanding Common Shares,
(C) combine the outstanding Common Shares into a smaller number of
Common Shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which
the Bank is the continuing or surviving corporation), 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/or the number and/or kind of shares of capital
stock issuable on such date upon exercise of a Right, 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 which, if such Right had been
exercised immediately prior to such date and at a time when the Common
Shares transfer books were open, he would
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have owned upon such exercise and been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
5.1(a)(i) and Section 5.1(a)(ii) hereof or Section 5.2 hereof, the
adjustment provided for in this Section 5.1(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section 5.1(a)(ii) or Section 5.2 hereof.
(ii) In the event that:
(A) at any time after the date of this Agreement,
any of the following transactions shall occur: (1) any merger
or other combination of the Bank with (a) any Acquiring Person
or (b) any other Person (whether or not itself an Acquiring
Person) which is, or after such merger or combination would
be, an Affiliate or Associate of an Acquiring Person and the
Bank shall be the continuing or surviving corporation of such
merger or combination, other than in a transaction subject to
Section 5.2(a)(ii) hereof, (2) any merger or other combination
of any Subsidiary of the Bank with (a) any Acquiring Person or
(b) any other Person (whether or not itself an Acquiring
Person) which is, or after such merger or combination would
be, an Affiliate or Associate of an Acquiring Person, (3) any
sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions)
to or with any Acquiring Person or any Affiliate or Associate
of any Acquiring Person of any assets of the Bank or any
Subsidiary of the Bank having an aggregate
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fair market value of $5,000,000 or more or any loan, advance,
guarantee or other financial assistance, including any tax
credit or other tax advantages, to or with any Acquiring
Person or any Affiliate or Associate of any Acquiring Person
which involves a financial obligation or benefit of $5,000,000
or more, other than in a transaction subject to Section 5.2(a)
hereof, (4) the issuance or transfer by the Bank or any
Subsidiary of the Bank (in one transaction or a series of
transactions) of any securities of the Bank or of any
Subsidiary of the Bank to any Acquiring Person or any
Affiliate or Associate of any Acquiring Person in exchange for
cash, securities or other property (or a combination thereof)
having an aggregate fair market value of $5,000,000 or more,
other than in a transaction subject to Section 5.2(a) hereof,
(5) the adoption of any plan or proposal for the liquidation
or dissolution of the Bank proposed by or on behalf of any
Acquiring Person or any Affiliate or Associate of any
Acquiring Person, or (6) the receipt by any Acquiring Person
or any Associate or Affiliate of any Acquiring Person of any
compensation from the Bank or any Subsidiary of the Bank other
than compensation for full-time employment as a regular
employee at rates in accordance with the Bank's (or its
predecessor or Subsidiaries') past practices, or
(B) during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of
the Bank, or any merger or consolidation of the Bank
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with any Subsidiary of the Bank or any other transaction or
series of transactions (whether or not with or into or
otherwise involving an Acquiring Person), other than a
transaction subject to Section 5.2(a) hereof, which has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class
of equity securities or of securities exercisable for or
convertible into equity securities of the Bank or any
Subsidiary of the Bank of which any Acquiring Person or any
Associate or Affiliate of any Acquiring Person is the
Beneficial Owner, or
(C) any Person (other than the Bank or any
Related Person) who or which, together with all Affiliates and
Associates of such Person, shall become the Beneficial Owner
of 20% or more of the Common Shares then outstanding, other
than pursuant to any transaction set forth in Section 5.2(a)
hereof,
then, and in each such case, proper provision shall be made so that each holder
of a Right, except as provided below, shall thereafter have a right to receive,
upon exercise thereof in accordance with the terms of this Agreement at an
exercise price per Right equal to the product of the then-current Purchase
Price multiplied by the then number of Common Shares for which a Right was
exercisable immediately prior to the occurrence of such Triggering Event, such
number of Common Shares as shall equal the result obtained by (x) multiplying
the then-current Purchase Price by the then number of Common Shares for which a
Right is then exercisable and dividing that product by (y)
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32
50% of the Current Per Share Market Price of the Common Shares on the date of
the occurrence of any such Triggering Event. Notwithstanding the foregoing,
upon the occurrence of any of the Triggering Events listed above in this
Section 5.1(a)(ii), any Rights of which any Acquiring Person or any Associate
or Affiliate of such Acquiring Person is or was at any time the Beneficial
Owner after the date upon which such Acquiring Person became such shall become
void and any holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Agreement.
(iii) If as a result of an adjustment of the Purchase Price
made pursuant to this Section 5.1(a), the holder of any Right
thereafter exercised shall become entitled to receive any shares of
capital stock of the Bank other than shares of its Common Stock
authorized on the date of this Agreement, thereafter the number of
such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the
Common Shares contained in this Article V and the provisions of
Sections 3.1, 3.5, 3.7, 3.8, 3.9 and 4.1 hereof with respect to the
Common Shares shall apply on like terms to any such other shares.
(b) In the event that the Bank shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares (or securities having
equivalent rights, privileges and preferences as the Common Shares or which are
convertible into Common Shares) at a price per Common Share (or per such
equivalent share or having a conversion price per share, if a security
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33
convertible into Common Shares) less than the Current Per Share Market Price of
the Common Shares 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 Common Shares outstanding on such record date plus
the number of Common Shares which the aggregate offering price of the total
number of Common Shares so to be offered (and/or such equivalent shares and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Per Share Market Price and the
denominator of which shall be the number of Common Shares outstanding on such
record date plus the number of additional Common Shares (and/or such equivalent
shares) to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Bank, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. Common Shares owned by or held for the
account of the Bank shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
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34
(c) In the event that the Bank shall fix a record date for the
making of a distribution to all holders of the Common Shares (including any
such distribution made in connection with a consolidation or merger in which
the Bank is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend as determined
in good faith by the Board of Directors of the Bank), assets, stock (other than
a dividend payable in Common Shares) or subscription rights, options or
warrants (excluding those referred to in Section 5.1(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Per Share Market Price of
the Common Shares on such record date or, if earlier, the date on which Common
Shares begin to trade on an ex-dividend or when-issued basis for such
distribution, less the fair market value (as determined in good faith by the
Board of Directors of the Bank, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes)
of the portion of the cash, assets, stock or evidences of indebtedness so to be
distributed (in the case of cash dividends, only that portion in excess of the
rate of the regular periodic cash dividends as determined in good faith by the
Board of Directors of the Bank) or of such subscription rights, options or
warrants applicable to one Common Share, and the denominator of which shall be
such Current Per Share Market Price of the Common Shares. 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
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35
again be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(d) Unless the Bank shall have exercised its election as provided
in Section 5.7 hereof, upon each adjustment of the Purchase Price pursuant to
Section 5.1(b) hereof and each adjustment of the Purchase Price pursuant to
Section 5.1(a) hereof made with respect to a distribution of subscription
rights, options or warrants applicable to Common Shares, 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 Common
Shares (calculated to the nearest thousandth) obtained by (i) multiplying (x)
the number of Common Shares covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
5.2. Consolidation, Merger, or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Distribution Date, directly or indirectly,
(i) the Bank shall consolidate with, or merge with or
into, any Acquiring Person or any Associate or Affiliate of any
Acquiring Person and the Bank shall not be the continuing or surviving
corporation of such merger or combination,
(ii) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person shall consolidate with the Bank, or merge with or
into the Bank and the Bank shall be the continuing or surviving
corporation of such merger or
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36
consolidation and, in connection with such merger or consolidation,
all or part of the Common Shares shall be changed into or exchanged
for stock or other securities of such other Person or cash or any
other property, or
(iii) the Bank shall sell or otherwise transfer (or one or
more Subsidiaries of the Bank shall sell or otherwise transfer), in
one transaction or in a series of related transactions, assets or
earning power (including, without limitation, securities creating any
obligation on the part of the Bank and/or any of its Subsidiaries)
representing in the aggregate more than 50% of the assets or earning
power of the Bank and its Subsidiaries (taken as a whole) to any
Acquiring Person or any Associate or Affiliate of any Acquiring
Person, then, and in each such case, proper provision shall be made so
that (A) except as provided below, each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement at an exercise price per
Right equal to the product of the then-current Purchase Price
multiplied by the then number of Common Shares for which a Right is
then exercisable, such number of validly authorized and issued, fully
paid, nonassessable and freely tradeable Common Shares of the Issuer,
free and clear of any liens, encumbrances and other adverse claims
(including, without limitation, receipt of all regulatory approvals)
and not subject to any rights of call or first refusal, as shall be
equal to the result obtained by (x) multiplying the then-current
Purchase Price by the number of Common Shares for which a Right is
then exercisable and dividing that product by (y) 50% of the Current
Per Share Market Price of the Common
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Shares of the Issuer immediately prior to the consummation of such
consolidation, merger, sale or transfer; (B) the Issuer shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and
duties of the Bank pursuant to this Agreement; (C) the term "Bank" in
this Agreement shall thereafter be deemed to refer to the Issuer; and
(D) the Issuer shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares in
accordance with Section 4.1 hereof and compliance with all regulatory
requirements) 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 possible, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights.
(b) Notwithstanding the foregoing, if the Issuer in any of the
events listed in Section 5.2(a)(i) through (iii) hereof, inclusive, is not a
legal entity having outstanding equity securities, then, and in each such case,
(i) if the Issuer is directly or indirectly wholly owned by a legal entity
having outstanding equity securities, then all references to Common Shares of
the Issuer shall be deemed to be references to the Common Shares of the legal
entity having outstanding equity securities which ultimately controls the
Issuer, and (ii) if there is no such legal entity having outstanding equity
securities, (A) proper provision shall be made so that the Issuer shall create
or otherwise make available for purposes of the exercise of the Rights in
accordance with the terms of this Agreement, a type or types of security or
securities having a fair market value at least equal to the economic value of
the Common Shares which each holder of a Right would
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38
have been entitled to receive if the Issuer had been a legal entity having
outstanding equity securities, and (B) all other provisions of this Agreement
shall apply to the Issuer as if such securities were Common Shares.
(c) The Bank shall not consummate any of the transactions listed
above in Section 5.2(a)(i) through (iii) hereof, inclusive, unless prior
thereto the Bank and the Issuer shall have executed and delivered to the Rights
Agent a supplemental agreement so providing.
(d) The provisions of this Section 5.2 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that any of the transactions described in Section 5.2(a) hereof occur at any
time after the occurrence of a transaction described in Section 5.1(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in this Section 5.2.
5.3. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 5.1 or 5.2 hereof, the
Bank shall (a) promptly prepare a certificate setting forth such adjustment and
a brief statement of the facts accounting for such adjustment and the adjusted
Purchase Price, (b) promptly file with the Rights Agent and with each transfer
agent for the Common Shares a copy of such certificate, and (c) mail a brief
summary of such adjustment to each holder of a Right Certificate in accordance
with Section 9.1 hereof.
5.4. Cash Payment in Certain Circumstances. In the event that
there shall not be sufficient authorized but unissued Common Shares or
authorized and issued Common
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39
Shares held in treasury to permit the exercise in full of the Rights upon any
adjustment pursuant to this Article V, the Bank shall take all such action as
may be necessary to authorize additional Common Shares for issuance upon
exercise of the Rights; provided, however, if the Bank is unable to cause the
authorization of additional Common Shares then, notwithstanding any other
provision of this Agreement, the Bank, with respect to each Right, to the
extent permitted by applicable law and any agreements or instruments in effect
on the Share Acquisition Date to which it is a party, shall pay cash, at a rate
per Right equal to the product of the Purchase Price in effect at the time of
exercise multiplied by the number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of any Triggering Event,
in lieu of issuing such additional Common Shares and requiring payment
therefor, upon exercise of the Rights. The Bank shall give the Rights Agent
prompt written notice of such election to pay cash. To the extent that any
legal or contractual restrictions prevent the Bank from paying the full amount
of cash payable in accordance with the foregoing sentence, the Bank 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. In such event, the Bank
shall take all such action as may be necessary to authorize and issue as
promptly thereafter as practicable to each holder who has exercised Rights
pursuant to Section 3.5 hereof a number of additional Common Shares equal to
the difference between (a) the number of any Common Shares issued to such
holder pursuant to the exercise of the Rights, and (b) the quotient of (i) the
amount of any cash paid to such holder in lieu of issuing Common Shares upon
exercise of Rights pursuant to this Section 5.4, and (ii) the Purchase Price in
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40
effect at the time of exercise. Until all Common Shares have been issued
and/or cash paid in respect of the exercise of Rights, the Bank shall continue
to make cash payments, without interest, on a pro rata basis as funds become
available until such payments have been paid in full; provided, however, that
the Bank shall have no obligation to make any such payment (whether the right
to receive such payment has accrued or otherwise) to the extent additional
Common Shares are issued in respect of the exercise of the Rights.
5.5. DeMinimis Adjustments; Calculation. Anything herein to the
contrary notwithstanding, no adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
Section 5.5 are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Article V
shall be made to the nearest cent or to the nearest thousandth of a share as
the case may be.
5.6. Effect of Adjustments. All Rights originally issued by the
Bank subsequent to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the number of
Common Shares purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
5.7. Adjustment of Number of Rights in Lieu of Purchase Price. The
Bank 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 Common Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after such
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41
adjustment of the number of Rights shall be exercisable for the number of
Common Shares 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
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 Bank shall make a public
announcement, and shall give simultaneous written notice to the Rights Agent,
of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Right Certificates have been issued, shall
be at least 10 calendar 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 5.7, the Bank 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 3.8
hereof, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Bank upon notice in writing
to the Rights Agent, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Bank, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
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42
manner provided for herein (and may bear, at the option of the Bank, the
adjusted Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
5.8. Taxable Transactions. Notwithstanding any other provision of
this Agreement to the contrary, the Bank shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by Section 5.1 hereof, as and to the extent that a majority of the
Board of Directors of the Bank shall determine to be advisable in order that
any consolidation or subdivision of the Common Shares, issuance wholly for cash
of any of the Common Shares at less than the current market price, issuance
wholly for cash of Common Shares or securities which by their terms are
convertible into or exchangeable for Common Shares, stock dividends or issuance
of rights, options or warrants referred to in Section 5.1 hereof, hereafter
made by the Bank to holders of its Common Shares shall not be taxable to such
stockholders.
5.9. Restrictions on Adjustments. Notwithstanding any other
provision of this Agreement to the contrary, after the Distribution Date,
except as permitted by Section 8.1 hereof, the Bank shall not make any
adjustment to the Purchase Price, the number of Common Shares (or fractions of
a Common Share) for which a Right is exercisable or the number of Rights
outstanding if such adjustment would have the effect of reducing or limiting
the benefits the holders of the Rights would have had absent such adjustment,
including, without limitation, the benefits under Sections 5.1(a)(ii) and 5.2
hereof, unless such action is approved by a majority of the Board of Directors
of the Bank or the
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43
holders of 80% of the Rights beneficially owned by Persons other than any
Acquiring Person or any Associates or Affiliates thereof.
VI. RIGHTS HOLDERS
6.1. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of 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 his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Bank to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific
performance of the obligations under this Agreement, and injunctive relief
against actual or threatened violations of the obligations of any Person
subject to this Agreement.
6.2. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Bank and the Rights Agent and
with every other holder of a Right that:
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44
(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 endorsed or accompanied by a
proper instrument of transfer together with a signature guarantee and such
other documentation as the Rights Agent may reasonably request;
(c) the Bank 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 Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Bank or the Rights Agent) for all
purposes whatsoever, and neither the Bank nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) the holder expressly waives any right to receive any
fractional Rights or any fractional Common Shares upon exercise of a Right.
6.3. 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 Common Shares or any other
securities of the Bank which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Bank or
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45
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 6.4 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.
6.4. Notice of Certain Events. (a) In case, after the Distribution
Date, the Bank shall propose (i) to pay any dividend payable in stock of any
class to the holders of Common Shares or to make any other distribution to the
holders of Common Shares (other than a regular periodic cash dividend as
determined in good faith by the Board of Directors of the Bank), (ii) to offer
to the holders of Common Shares rights, options or warrants to subscribe for or
to purchase any additional Common Shares or shares of stock of any class or any
other securities, rights or options, (iii) to effect any reclassification of
its Common Shares (other than a reclassification involving only the subdivision
of outstanding Common 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 assets or earning power (including, without limitation,
securities creating any obligation on the part of the Bank and/or any of its
Subsidiaries) representing in the aggregate more than 50% of the assets or
earning power of the Bank and its Subsidiaries, taken as a whole, to any other
Person or Persons, or (v) to effect the liquidation, dissolution or winding up
of the Bank, then, in each such case, the Bank shall give to the Rights Agent
and to each
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46
holder of a Right Certificate, in accordance with Section 9.1 hereof, a notice
of such proposed action, which shall specify the record date for the purposes
of such stock dividend, distribution or offering of rights, options or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the Common 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 20 calendar days prior to
the record date for determining holders of the Common Shares for purposes of
such action, and, in the case of any such other action, at least 20 calendar
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, whichever shall be
the earlier.
(b) In case any Triggering Event shall occur, then, in any such
case, the Bank shall as soon as practicable thereafter give to the Rights Agent
and each holder of a Right Certificate, in accordance with Section 9.1 hereof,
a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights.
VII. RIGHTS AGENT
7.1. Appointment of Rights Agent. The Bank hereby appoints the
Rights Agent to act as agent for the Bank and the holders of the Rights (who,
in accordance with Section 3.1 hereof, shall also be, prior to the Distribution
Date, the holders of Common Shares) in accordance with the terms and conditions
hereof, and the Rights
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47
Agent hereby accepts such appointment and hereby certifies that it complies
with the applicable requirements of the New York Stock Exchange governing
transfer agents and registrars. The Bank may from time to time act as
Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or
desirable upon three Business Days prior written notice to the Rights Agent.
Any actions which may be taken by the Rights Agent pursuant to the terms of
this Agreement may be taken by any such Co-Rights Agent. The Rights Agent shall
have no duty to supervise or be liable for the actions of any such Co-Rights
Agent.
7.2. Concerning the Rights Agent. (a) The Bank agrees to pay to the
Rights Agent reasonable compensation as agreed to in writing for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Bank also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, suit,
action, proceeding or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
any claim of liability and including reasonable fees and expenses of counsel.
(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
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48
Shares or for other securities of the Bank, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, instruction, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
7.3. 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 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 7.5 hereof. In case at
the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at 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
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49
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.
7.4. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Bank and the holders of Right Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Bank), 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 Bank prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may
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50
be deemed to be conclusively proved and established by a certificate signed by
any one of the Chief Executive Officer, the President, any Vice President, the
Treasurer, the Secretary or any Assistant Secretary of the Bank and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
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 Bank 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 and delivery 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
Bank of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Article V hereof (including any adjustment which results in
Rights becoming void) or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual
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51
notice of any such adjustment or voidance); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Common Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Bank agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chief Executive Officer, the President, any Vice President, the
Treasurer, the Secretary, or any Assistant Secretary of the Bank, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer. 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
action shall be taken, and the Rights Agent shall not be liable for any action
taken or omitted in accordance with a proposal included in any such application
on or after the date specified therein (which date shall not be less than three
Business Days after the Bank receives such application) without the consent of
the Bank unless prior to taking or
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52
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 stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Bank or become pecuniarily interested in any
transaction in which the Bank may be interested, or contract with or lend money
to the Bank or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Bank 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 Bank resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof. The Rights Agent shall not be
under any duty or responsibility to insure compliance with any applicable
federal or state securities laws in connection with the issuance, transfer or
exchange of Right Certificates.
(j) Upon collection thereof by the Rights Agent, the Rights Agent
shall promptly remit to the Bank any funds paid to it upon exercise of the
Rights pursuant to Section 3.5 hereof.
(k) 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
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53
of its duties hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing the repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(l) 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 A 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
non-execution or failure.
7.5. 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 Bank and to each transfer agent of
the Common Shares by registered or certified mail, and, at the expense of the
Bank, to the holders of the Right Certificates by first-class mail. The Bank
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 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 Bank shall appoint a successor to the Rights Agent.
If the Bank
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54
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 Bank), then the Bank 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 Bank or by such a court,
shall be a corporation organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of New York), in good standing, having a principal
office in the State of New York, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 and which
shall otherwise meet any requirements imposed by the New York Stock Exchange on
transfer agents and registrars. 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 Bank shall file
notice thereof in writing with the predecessor Rights
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55
Agent and each transfer agent of the Common 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 7.5, 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.
VIII. REDEMPTION
8.1. Redemption. (a) The Board of Directors of the Bank may, at its
option, at any time prior to the Close of Business, on the earlier of (i) the
later of (A) the Share Acquisition Date and (B) the calendar day next preceding
the Distribution Date, or (ii) the Final Expiration Date, redeem all but not
less than all of the then-outstanding Rights at the Redemption Price.
(b) In addition, if during any time after there is an Acquiring
Person, such Acquiring Person, together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of less than 10% of the Common
Shares of the Bank then outstanding and no Triggering Event has occurred or is
occurring and there are no other Persons who are Acquiring Persons, then upon
the vote of a majority of the Board of Directors of the Bank, the Bank shall
redeem all but not less than all of the then-outstanding Rights at the
Redemption Price.
(c) The right of redemption may also be reinstated as provided in
Section 9.5 hereof.
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56
8.2. Effect of Redemption. Immediately upon the action of the
Board of Directors of the Bank ordering the redemption of the Rights, 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. Promptly after the action of the
Board of Directors of the Bank ordering the redemption of the Rights, the Bank
shall publicly announce such action, and, within 10 calendar days thereafter,
the Bank shall give notice of such redemption to the Rights Agent and to the
holders of the then-outstanding Rights by mailing such notice to all such
holders 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 Shares. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of
the Redemption Price will be made.
8.3. Right to Relinquish Redemption Right. At any time following
the Share Acquisition Date, a majority of the Board of Directors of the Bank
may relinquish its rights to redeem the Rights under Section 8.1 subparagraphs
(a) and (b) hereof, or either thereof, by duly adopting a resolution to that
effect. Immediately upon adoption of such resolution, the rights of the Board
of Directors of the Bank under the portions of Section 8.1 hereof specified in
such resolution shall terminate without further action and without any notice.
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IX. MISCELLANEOUS
9.1. 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 Bank 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:
Poughkeepsie Savings Bank, FSB
0 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxx 00000
Attention: Secretary
Subject to the provisions of Section 6.4 hereof, any notice or demand
authorized by this Agreement to be given or made by the Bank 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 Bank) as follows:
The Bank of New York
Stock Transfer Administration
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Notices or demands authorized by this Agreement to be given or made by the Bank
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 Rights Agent.
9.2. Supplements and Amendments. (a) Except as provided in this
Section 9.2, the Bank may supplement or amend this Agreement, whether by
additions, deletions or modifications of any term, provision, section,
subsection, paragraph, clause, covenant or
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58
restriction hereof, without the consent or agreement of any holders of Rights
or any other Person (including, without limitation, the Rights Agent) (i) at
any time and from time to time in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other provisions
in regard to matters or questions arising hereunder which a majority of the
Board of Directors of the Bank may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights, and (ii)
notwithstanding the foregoing, at any time and from time to time prior to the
Distribution Date, in any way as a majority of the Board of Directors of the
Bank may deem necessary or desirable and which, except as otherwise permitted
in (i) above, shall not (A) reduce the Redemption Price, (B) change the Final
Expiration Date, or (C) increase the Purchase Price or reduce the number of
Common Shares for which a Right is exercisable (other than in accordance with
the provisions of Article V hereof).
(b) Upon consent of the Rights Agent if required by Section 9.2(c)
hereof and delivery to the Rights Agent of a supplement to or amendment of this
Agreement, together with a certificate stating that such supplement or
amendment is in compliance with the provisions of this Section 9.2, executed on
behalf of the Bank by its Chief Executive Officer, President, any Vice
President, Treasurer, Secretary or any Assistant Secretary, the Rights Agent
shall execute such supplement or amendment; provided, however, that the failure
or refusal of the Rights Agent to execute such supplement or amendment shall
not affect the validity or effectiveness thereof.
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(c) Notwithstanding the provisions of this Section 9.2 to the
contrary, the Bank shall not supplement or amend this Agreement without the
consent of the Rights Agent if such supplement or amendment would adversely
affect the Rights Agent's interest under this Agreement.
9.3. Successors. Subject to the provisions of Section 4.2 hereof,
all the covenants and provisions of this Agreement by or for the benefit of the
Bank or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
9.4. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Bank, 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 Bank, the Rights Agent and the registered holders of
the Right Certificates (or, prior to the Distribution Date, the Common Shares).
9.5. Severability. If any term, provision, section, subsection,
paragraph, subparagraph, clause, 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, sections,
subsections, paragraphs, clauses, covenants and restrictions of this Agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that, notwithstanding anything in this
Agreement to contrary, in the event that (a) any such term, provision,
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60
section, subsection, paragraph, subparagraph, clause, covenant or restriction
is held by any such court or authority to be invalid, void or unenforceable,
and (b) a majority of the Board of Directors of the Bank determines in good
faith that severing the invalid, void or unenforceable language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 8.1 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth calendar day
following the date of such determination by the Board of Directors of the Bank.
9.6. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the principles
of conflict of laws of such state.
9.7. 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.
9.8. 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.
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61
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
Attest: POUGHKEEPSIE SAVINGS BANK, FSB
By: /s/ By: /s/
--------------------- -------------------------------
General Counsel Xxxxxxx X. Xxxxxxx
Chairman and Chief
Executive Officer
RIGHTS AGENT
Attest:
By: /s/ By: /s/
--------------------- -------------------------------
Trust Officer and Title: Assistant Vice President
Assistant Secretary
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EXHIBIT A
(Form of Right Certificate]
Certificate No. R- Rights
---------
NOT EXERCISABLE AFTER MAY 11, 1998 OR
EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE BANK, AT $0.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS
RIGHT CERTIFICATE WERE ISSUED TO, OR BENEFICIALLY OWNED BY, A
PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT.*]
Right Certificate
POUGHKEEPSIE SAVINGS BANK, FSB
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 May 1, 1988 (the "Rights Agreement"), between
Poughkeepsie Savings Bank, FSB (the "Bank"), and The Bank of New York, (the
"Rights Agent"), to purchase from the Bank 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 Time) on May 1, 1998 at the designated office of the Rights Agent, or
its successor as Rights Agent, one fully paid nonassessable share of the Common
Stock, $0.01 par value, per share (a "Common Share"), of the Bank, at a
--------------------------
* The portion of the legend in brackets shall be inserted only if applicable.
63
purchase price of $75.00 per share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed together with a signature guarantee and such other documentation
as the Rights Agent may reasonably request. The number of Rights evidenced by
this Right Certificate (and the number of Common Shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of May 18, 1988, based on the
Common Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
of Common Shares which 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, and the Rights are subject to amendment,
redemption and certain other 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 Bank and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the designated office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent together with a
signature guarantee and such other documentation as the Rights Agents may
reasonably request, may be exchanged for
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64
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Common 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 may be redeemed by the Bank's Board of Directors
at its option at a redemption price of $0.01 per Right.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Common Shares
or of any other securities of the Bank which may at any time be issuable on the
exercise of the Rights represented hereby, 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 shareholder of the Bank or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action or, to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or
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65
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.
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66
WITNESS the facsimile signature of the proper officers of the Bank and
its corporate seal. Dated as of [the issuance date].
ATTEST: POUGHKEEPSIE SAVINGS BANK, FSB
By:
------------------------------- -------------------------
Secretary Title:
-------------------------
Countersigned:
By:
----------------------
Authorized Signature
Date:
----------------------
[Seal]
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67
[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 Certificates.)
FOR VALUE RECEIVED,
------------------------------------------------
hereby sells, assigns and transfers unto
-------------------------------------
------------------------------------------------------------------------------
(Please print name and address of transferee)
------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Right Certificate on the books of the
within-named Bank, with full power of substitution.
The undersigned hereby certifies that the Rights evidenced by
this Rights Certificate are not being sold, assigned or transferred by or on
behalf of a person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement).
Dated: , 19
----------- ---
----------------------------------
Signature
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68
Signature Guarantee (may be given by a commercial bank or trust company in the
United States or by a member firm of any national securities exchange or of the
National Association of Securities Dealers, Inc.): ____________________________
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
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69
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Poughkeepsie Savings Bank, FSB:
The undersigned hereby irrevocably elects to exercise
______________________ Rights represented by this Right Certificate to
purchase the Common Shares issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
Please insert social security
or taxpayer identification number
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or tax identification number
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Rights Certificate are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement).
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70
Dated: , 19
---------------- --
---------------------------------------
Signature
(Signature must conform in all respects
to name of holder as specified on
the face of this Right Certificate)
Signature Guaranteed:
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71
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On May 1, 1988, the Board of Directors of Poughkeepsie Savings Bank,
FSB (the "Bank") declared a dividend of one right (a "Right") for each share of
Common Stock, $0.01 par value per share of the Bank (a "Common Share"). The
dividend is payable to the shareholders of record as of the close of business
on May 18, 1988 (the "Record Date").
Each Right entitles the registered holder initially to purchase from
the Bank one Common Share at a price of $75.00 per share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement dated as of May 1, 1988 (the "Rights
Agreement") between the Bank and The Bank of New York, as Rights Agent (the
"Rights Agent"). A copy of the Rights Agreement is available to beneficial
owners of the Bank's "Common Shares" by request to the Secretary of the Bank at
00 Xxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxx Xxxx 00000.
Until the earlier to occur of (i) 20 days following a public
announcement that a person or group of affiliated or associated persons
including partnerships and corporations (an "Acquiring Person") has acquired,
or generally obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding Common Shares, or (ii) 20 days following the commencement of
a tender offer or exchange offer for 30% or more of the outstanding Common
Shares (the earlier of such dates being hereinafter called the "Distribution
Date"), the Rights will be evidenced by the certificates for Common Shares
registered in the names of the record holders thereof and not by separate
certificates evidencing the Rights (the "Right Certificates"), the Rights will
be transferable only in connection with the transfer of the underlying Common
Shares, and the transfer of any certificates evidencing Common Shares in
respect of which Rights have been issued will also constitute the transfer of
the Rights associated with the Common Shares evidenced by such certificates.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Share certificates issued upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on May 1, 1998 (the "Final Expiration Date") unless earlier
redeemed by the Bank as described below.
The Purchase Price payable, and the number of Common Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a
72
subdivision, combination or reclassification of, the Common Shares, (ii) upon
the grant to holders of the Common Shares of certain rights, options or
warrants to subscribe for Common Shares or convertible securities at less than
the current market price of the Common Shares, or (iii) upon the distribution
to holders of the Common Shares of evidences of indebtedness, cash (excluding
regular periodic cash dividends other than dividends payable in Common Shares),
assets, stock (other than a dividend payable in Common Shares) or of
subscription rights, options or warrants (other than those referred to above).
In the event that (i) an Acquiring Person merges into or otherwise
combines with the Bank and the Bank is the continuing or surviving corporation
and the Common Shares are not changed or exchanged, (ii) an Acquiring Person
engages in one of a number of self-dealing transactions specified in the Rights
Agreement, (iii) during such time as there is an Acquiring Person, an event
occurs which results in such Acquiring Person's ownership interest being
increased by more than 1%, or (iv) a person or group of affiliated or
associated persons becomes the beneficial owner of 20% or more of the Common
Shares of the Bank then outstanding, proper provision shall be made so that
each holder of a Right, other than Rights that are or were beneficially owned
by the Acquiring Person after the date upon which the Acquiring Person became
such (which will thereafter be void), will thereafter have the right to receive
upon exercise thereof at the then current exercise price of the Right, that
number of Common Shares having a market value of two times the exercise price
of the Right.
To illustrate the operation of such an adjustment to the Purchase
Price, at a Purchase Price of $75.00 per Common Share, assuming the current
market price (as determined pursuant to the provisions of the Rights Agreement)
per Common Share was $37.50, each Right not beneficially owned by an Acquiring
Person following such an occurrence would entitle its holder to purchase (after
the Distribution Date) from the Bank four Common Shares (having a market value
of $150.00) for $75.00.
In the event that (i) the Bank merges with or into any Acquiring
Person and the Bank is not the surviving corporation, (ii) any Acquiring Person
merges with or into the Bank and the Bank is the surviving corporation, but its
Common Shares are changed or exchanged, or (iii) 50% or more of the Bank's
assets or earning power are sold to an Acquiring Person, proper provision shall
be made so that each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock (or, under certain circumstances,
an economically equivalent security or securities) of the surviving, resulting
or acquiring person which at the time of such transaction would have a market
value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional shares will be issued and in lieu thereof,
a payment in cash will be
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made based on the market price of the Common Shares on the last trading day
prior to the date of exercise.
The Bank may redeem the Rights in whole, but not in part, at a price
of $0.01 per Right (the "Redemption Price") (i) at any time prior to the close
of business on the earlier of (a) the later of (1) the first date of public
announcement by the Bank or an Acquiring Person that an Acquiring Person has
become such and (2) the day before the Distribution Date, or (b) the Final
Expiration Date; or (ii) after an Acquiring Person becomes the owner of less
than 10% of the outstanding Common Shares of the Bank. Immediately upon the
action of the Board of Directors of the Bank electing to redeem 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. The Bank will give notice
of such redemption to the holders of the then outstanding Rights by mailing
such notice to all such holders at their last addresses as they appear on the
registry books of the Rights Agent.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Bank, including, without limitation, the right
to vote or to receive dividends.
The Bank may supplement or amend the Rights Agreement without the
consent or agreement of any holders of Rights or any other person (other than
the Rights Agent in respect of certain supplements or amendments which would
adversely affect the interests of the Rights Agent) (i) at any time and from
time to time in any way in order to cure any ambiguity, to correct or
supplement any provision in the Rights Agreement which may be defective or
inconsistent with any other provisions therein, or to make other provisions in
regard to matters or questions arising under the Rights Agreement which the
Bank's Board of Directors may deem necessary or desirable and which shall not
adversely affect the interests of the holders of the Rights, and (ii) at any
time and from time to time prior to the Distribution Date, in any way as the
Bank's Board of Directors may deem necessary or desirable and which, except as
otherwise permitted in (i) above, shall not reduce the Redemption Price, change
the Final Expiration Date, or increase the Purchase Price or reduce the number
of Common Shares for which a Right is exercisable.
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