WASHINGTON TRUST BANCORP, INC. and AMERICAN STOCK TRANSFER & TRUST COMPANY as Rights Agent SHAREHOLDER RIGHTS AGREEMENT Dated as of AUGUST 17, 2006
EXHIBIT 4.1
WASHINGTON
TRUST BANCORP, INC.
and
AMERICAN
STOCK TRANSFER & TRUST COMPANY
as
Rights Agent
Dated
as of AUGUST 17, 2006
TABLE
OF CONTENTS
| Section |
Page
|
||
| Section 1. Certain Definitions |
2
|
||
| Section 2. Appointment of Rights Agent |
8
|
||
| Section 3. Issue of Right Certificates |
8
|
||
| Section 4. Form of Right Certificates |
10
|
||
| Section 5. Countersignature and Registration |
11
|
||
| Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates |
11
|
||
| Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights |
12
|
||
| Section 8. Cancellation and Destruction of Right Certificates |
14
|
||
| Section 9. Reservation and Availability of Common Stock |
14
|
||
| Section 10. Common Stock Record Date |
16
|
||
| Section 11. Adjustment of Exercise Price, Number and Kind of Shares or Number of Rights |
16
|
||
| Section 12. Certificate of Adjusted Exercise Price or Number of Shares |
24
|
||
| Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power |
24
|
||
| Section 14. Fractional Rights and Fractional Shares |
27
|
||
| Section 15. Rights of Action |
27
|
||
| Section 16. Agreement of Right Holders |
28
|
||
| Section 17. Right Certificate Holder Not Deemed a Shareholder |
28
|
||
| Section 18. Concerning the Rights Agent |
29
|
||
| Section 19. Merger or Consolidation or Change of Name of Rights Agent |
29
|
||
| Section 20. Duties of Rights Agent |
30
|
||
| Section 21. Change of Rights Agent |
32
|
i
| Section 22. Issuance of New Right Certificates |
33
|
||
| Section 23. Redemption |
33
|
||
| Section 24. Exchange |
34
|
||
| Section 25. Notice of Certain Events |
36
|
||
| Section 26. Notices |
37
|
||
| Section 27. Supplements and Amendments |
37
|
||
| Section 28. Successors |
38
|
||
| Section 29. Determinations and Actions by the Board of Directors |
38
|
||
| Section 30. Benefits of this Agreement |
38
|
||
| Section 31. Severability |
39
|
||
| Section 32. Governing Law |
39
|
||
| Section 33. Counterparts |
39
|
||
| Section 34. Descriptive Headings |
39
|
||
| Exhibit
A -- Form of Right Certificate
|
|||
ii
Shareholder
Rights Agreement, dated as of August 17, 2006, between Washington Trust Bancorp,
Inc., a Rhode Island corporation (the “Company”),
and
American Stock Transfer & Trust Company, a New York corporation (the
“Rights
Agent”).
W
I T N E
S S E T H
WHEREAS,
the Board of Directors of the Company desires to provide shareholders of the
Company with the opportunity to benefit from the long-term prospects and value
of the Company and to ensure that shareholders of the Company receive fair
and
equal treatment in the event of any proposed takeover of the Company;
and
WHEREAS,
on August 15, 1996, the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each share of Common Stock
(as
such term is hereinafter defined) of the Company outstanding at the close of
business on September 3, 1996 (the “1996
Record Date”),
and
authorized the issuance of one Right for each share of Common Stock of the
Company issued between the 1996 Record Date and the earlier of the Distribution
Date or the Final Expiration Date (as such terms are defined in the Amended
and
Restated Rights Agreement dated as of March 1, 2002 between the Company and
the
Rights Agent (as successor to Mellon Investor Services, Inc.) (the “2002
Rights Agreement”)),
each
Right initially representing the right to purchase securities of the Company
upon the terms and subject to the conditions set forth in the 2002 Rights
Agreement; and
WHEREAS,
on August 17, 2006, the Board of Directors of the Company determined it
desirable and in the best interests of the Company and its shareholders for
the
Company to extend the benefits afforded by the 2002 Rights Agreement and to
implement such extension by executing this Agreement; and
WHEREAS,
on August 17, 2006, the Board of Directors of the Company authorized and
declared a dividend distribution of one Right (as such term is hereinafter
defined) for each share of Common Stock of the Company outstanding as of August
31, 2006 (the “Record
Date”),
and
authorized the issuance of one Right for each share of Common Stock of the
Company issued (whether or not originally issued or sold from the Company’s
treasury, except in the case of treasury shares having associated Rights)
between the Record Date and the earliest of the Distribution Date, the
Redemption Date or the Expiration Date (as such terms are hereinafter defined),
each Right initially representing the right to purchase one share of Common
Stock of the Company, upon the terms and subject to the conditions hereinafter
set forth (the “Rights”);
and
WHEREAS,
the Company desires to appoint the Rights Agent to act as rights agent
hereunder, in accordance with the terms and conditions hereof.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set
forth, the parties hereby agree as follows:
Section
1. Certain
Definitions.
For
purposes of this Agreement, the following terms have the meanings
indicated:
(a) “Acquiring
Person”
shall
mean any Person (as such term is hereinafter defined) who or which, together
with all Affiliates (as such term is hereinafter defined) and Associates (as
such term is hereinafter defined) of such Person, shall be the Beneficial Owner
(as such term is hereinafter defined) of 15% or more of the shares of Common
Stock of the Company then outstanding, but shall not include (i) the Company,
(ii) any Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan or compensation arrangement of the Company
or
any Subsidiary of the Company, or (iv) any Person holding shares of Common
Stock
of the Company organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any such employee
benefit plan or compensation arrangement (the Persons described in clauses
(i)
through (iv) above are referred to herein as “Exempt
Persons”);
provided,
however,
that
the term “Acquiring
Person”
shall
not include any Grandfathered Person, unless such Grandfathered Person becomes
the Beneficial Owner of a percentage of the shares of Common Stock of the
Company then outstanding equal to or exceeding such Grandfathered Person’s
Grandfathered Percentage.
Notwithstanding
the foregoing, no Person shall become an “Acquiring Person” as the result of an
acquisition by the Company of Common Stock of the Company which, by reducing
the
number of shares outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 15% (or
in
the case of a Grandfathered Person, the Grandfathered Percentage applicable
to
such Grandfathered Person) or more of the shares of Common Stock of the Company
then outstanding; provided,
however,
that if
a Person shall become the Beneficial Owner of 15% (or in the case of a
Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of the Company
then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
shares (other than pursuant to a stock split, stock dividend or similar
transaction) of Common Stock of the Company and immediately thereafter be the
Beneficial Owner of 15% (or in the case of a Grandfathered Person, the
Grandfathered Percentage applicable to such Grandfathered Person) or more of
the
shares of Common Stock of the Company then outstanding, then such Person shall
be deemed to be an “Acquiring Person.”
In
addition, notwithstanding the foregoing, and notwithstanding anything to the
contrary provided in the Agreement including without limitation in Sections
1(ii), 3(a) or 27, a Person shall not be an “Acquiring Person” if the Board of
Directors of the Company determines at any time that a Person who would
otherwise be an “Acquiring Person,” has become such without intending to become
an “Acquiring Person,” and such Person divests as promptly as practicable (or
within such period of time as the Board of Directors of the Company determines
is reasonable) a sufficient number of shares of Common Stock of the Company
so
that such Person would no longer be an “Acquiring Person,” as defined pursuant
to the foregoing provisions of this Section 1(a).
2
(b) “Adjustment
Shares”
shall
have the meaning set forth in Section 11(a)(ii) hereof.
(c) “Affiliate”
and
“Associate”
shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations (the “Rules”)
under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
as in
effect on the date of this Agreement; provided,
however,
that no
Person who is a director or officer of the Company shall be deemed an Affiliate
or an Associate of any other director or officer of the Company solely as a
result of his or her position as director or officer of the
Company.
(d) A
Person
shall be deemed the “Beneficial
Owner”
of,
and
shall be deemed to “Beneficially
Own”
and
have “Beneficial
Ownership”
of,
any
securities:
(i) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, Beneficially Owns (as determined pursuant to Rule 13d-3 of the
Rules
under the Exchange Act, as in effect on the date of this
Agreement);
(ii) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has:
(A) the
right
to acquire (whether or not such right is exercisable immediately or only after
the passage of time or upon the satisfaction of any conditions or both) pursuant
to any agreement, arrangement or understanding (whether or not in writing)
(other than customary agreements with and between underwriters and selling
group
members with respect to a bona fide public offering of securities) or upon
the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided,
however,
that a
Person shall not be deemed the “Beneficial Owner” of, or to “Beneficially Own”
or have “Beneficial Ownership” of, (1) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; (2) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event; or (3) securities issuable
upon exercise of Rights from and after the occurrence of a Triggering Event,
which Rights were acquired by such Person or any of such Person’s Affiliates or
Associates prior to the Distribution Date or pursuant to Sections 3(a), 11(i)
or
22 hereof; or
(B) the
right
to vote pursuant to any agreement, arrangement or understanding (whether or
not
in writing); provided,
however,
that a
Person shall not be deemed the “Beneficial Owner” of, or to “Beneficially Own”
or have “Beneficial Ownership” of, any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given in response to a public proxy or consent
solicitation made pursuant to a written proxy or consent solicitation statement
filed with the Securities and Exchange Commission in accordance with the Rules
of the Exchange Act, and (2) is not also then reportable by such person on
3
Schedule
13D under the Exchange Act (or any comparable or successor report);
or
(C) the
right
to dispose of pursuant to any agreement, arrangement or understanding (whether
or not in writing) (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities); or
(iii) which
are
Beneficially Owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person or any of such Person’s
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy or consent as described in clause (B) of Section
1(d)(ii) hereof) or disposing of any securities of the Company;
provided,
however,
that
(1) no Person engaged in business as an underwriter of securities shall be
deemed the Beneficial Owner of any securities acquired through such Person’s
participation as an underwriter in good faith in a firm commitment underwriting
until the expiration of forty (40) days after the date of such acquisition,
and
(2) no Person who is a director or an officer of the Company shall be
deemed, as a result of his or her position as director or officer of the
Company, the Beneficial Owner of any securities of the Company that are
Beneficially Owned by any other director or officer of the Company.
For
all
purposes of this Agreement, the phrase “then
outstanding,”
when
used with reference to the percentage of the then outstanding securities
Beneficially Owned by a Person, shall mean the number of securities then issued
and outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to Beneficially Own
hereunder.
(e) “Business
Day”
shall
mean any day other than a Saturday, Sunday, or a day on which banking
institutions in the State of Rhode Island and Providence Plantations are
authorized or obligated by law or executive order to close.
(f) “Certificate
of Incorporation”
when
used in reference to the Company shall mean the Restated Articles of
Incorporation, as may be amended from time to time, of the Company.
(g) “Close
of Business”
on
any
given date shall mean 5:00 p.m., Providence, Rhode Island time, on such date;
provided,
however,
that if
such date is not a Business Day it shall mean 5:00 p.m., Providence, Rhode
Island time, on the next succeeding Business Day.
(h) “Common
Stock”
when
used in reference to the Company shall mean the common stock, par value $.0625
per share, of the Company or any other shares of capital stock of the Company
into which such stock shall be reclassified or changed. “Common
Stock”
when
used with reference to any Person other than the Company organized in corporate
form shall mean (i) the capital stock or other equity interest of such Person
with the greatest voting power,
4
(i) “Common
Stock Equivalents”
shall
have the meaning set forth in Section 11(a)(iii) hereof.
(j) “Company”
shall
have the meaning set forth in the preamble hereof.
(k) “Current
Value”
shall
have the meaning set forth in Section 11(a)(iii) hereof.
(l) “Depositary
Agent”
shall
have the meaning set forth in Section 7(c) hereof.
(m) “Distribution
Date”
shall
have the meaning set forth in Section 3(a) hereof.
(n) “Exchange
Act”
shall
have the meaning set forth in the definition of “Affiliate” and
“Associate.”
(o) “Exempt
Person”
shall
have the meaning set forth in the definition of “Acquiring Person.”
(p) “Exercise
Price”
shall
have the meaning set forth in Section 4(a) hereof.
(q) “Exchange
Date”
shall
have the meaning set forth in Section 7(a) hereof.
(r) “Expiration
Date”
and
“Final
Expiration Date”
shall
have the meanings set forth in Section 7(a) hereof.
(s) “Fair
Market Value”
of
any
securities or other property shall be as determined in accordance with Section
11(d) hereof.
(t) “Grandfathered
Percentage”
shall
mean the percentage of the outstanding shares of Common Stock of the Company
that a Grandfathered Person, together with all Affiliates and Associates of
such
Grandfathered Person, Beneficially Owns as of the Grandfathered Time, plus
an
additional ½%; provided,
however,
that,
in the event any Grandfathered Person shall sell, transfer, or otherwise dispose
of any outstanding shares of Common Stock of the Company after the Grandfathered
Time, the Grandfathered Percentage shall, subsequent to such sale, transfer
or
disposition, mean, with respect to such Grandfathered
5
(u) “Grandfathered
Person”
shall
mean any Person who or which, together with all Affiliates and Associates of
such Person, is, as of the Grandfathered Time, the Beneficial Owner of 15%
or
more of the shares of Common Stock of the Company then outstanding.
Notwithstanding anything to the contrary provided in this Agreement, any
Grandfathered Person who after the Grandfathered Time becomes the Beneficial
Owner of less than 15% of the shares of Common Stock of the Company then
outstanding shall cease to be a Grandfathered Person and shall be subject to
all
of the provisions of this Agreement in the same manner as any Person who is
not
and was not a Grandfathered Person.
(v) “Grandfathered
Time”
shall
mean 11:00 a.m., Providence, Rhode Island time, on August 18, 2006.
(w) “Group”
shall
have the meaning set forth in clause (ii) of the definition of
“Person.”
(x) “NASDAQ”
shall
have the meaning set forth in Section 9(b) hereof.
(y) “1996
Record Date”
shall
have the meaning set forth in the second WHEREAS clause hereof.
(z) “Person”
shall
mean (i) an individual, a corporation, a partnership, a limited liability
company, an association, a joint stock company, a trust, a business trust,
a
government or political subdivision, any unincorporated organization, or any
other association or entity including any successor (by merger or otherwise)
thereof or thereto, and (ii) a “group” as that term is used for purposes of
Section 13(d)(3) of the Exchange Act.
(aa) “Preferred
Stock”
shall
mean any series or class of preferred stock of the Company as any other share
of
capital stock of the Company into which such shares shall be reclassified or
changed.
(bb) “Principal
Party”
shall
have the meaning set forth in Section 13(b) hereof.
(cc) “Record
Date”
shall
have the meaning set forth in the fourth WHEREAS clause hereof.
(dd) “Redemption
Price”
shall
have the meaning set forth in Section 23(a) hereof.
(ee) “Redemption
Date”
shall
have the meaning set forth in Section 7(a) hereof.
(ff) “Registered
Common Stock”
shall
have the meaning set forth in Section 13(b) hereof.
6
(gg) “Rhode
Island Courts”
shall
have the meaning set forth in Section 32 hereof.
(hh) “Right
Certificate”
shall
have the meaning set forth in Section 3(a) hereof.
(ii) “Rights”
shall
have the meaning set forth in the fourth WHEREAS clause hereof.
(jj) “Rights
Agent”
shall
have the meaning set forth in the preamble hereof.
(kk) “Section
11(a)(ii) Event”
shall
have the meaning set forth in Section 11(a)(ii) hereof.
(ll) “Section
11(a)(ii) Trigger Date”
shall
have the meaning set forth in Section 11(a)(iii) hereof.
(mm) “Section
13 Event”
shall
mean any event described in clauses (x), (y) or (z) of Section 13(a)
hereof.
(nn) “Section
24(a)(i) Exchange Ratio”
shall
have the meaning set forth in Section 24(a)(i) hereof.
(oo) “Section
24(a)(ii) Exchange Ratio”
shall
have the meaning set forth in Section 24(a)(ii) hereof.
(pp) “Securities
Act”
shall
have the meaning set forth in Section 9(c) hereof.
(qq) “Spread”
shall
have the meaning set forth in Section 11(a)(iii) hereof.
(rr) “Stock
Acquisition Date”
shall
mean the date of the first public announcement (which for purposes of this
definition shall include, without limitation, the issuance of a press release
or
the filing of a publicly-available report or other document with the Securities
and Exchange Commission or any other governmental agency) by the Company, acting
pursuant to a resolution adopted by the Board of Directors of the Company,
or by
an Acquiring Person, subject in each case to the last paragraph of Section
1(a),
that an Acquiring Person has become such.
(ss) “Subsidiary”
shall
mean, with reference to any Person, any corporation or other entity of which
securities or other ownership interests having ordinary voting power sufficient,
in the absence of contingencies, to elect a majority of the board of directors
or other persons performing similar functions of such corporation or other
entity are at the time directly or indirectly Beneficially Owned or otherwise
controlled by such Person either alone or together with one or more Affiliates
of such Person.
(tt) “Substitution
Period”
shall
have the meaning set forth in Section 11(a)(iii) hereof.
(uu) “Trading
Day”
shall
have the meaning set forth in Section 11(d)(i) hereof.
7
(vv) “Triggering
Event”
shall
mean any Section 11(a)(ii) Event or any Section 13 Event.
(ww) “2002
Rights Agreement”
shall
have the meaning set forth in the second WHEREAS clause hereof.
Section
2. Appointment
of Rights Agent.
The
Company hereby appoints the Rights Agent to act as agent for the Company and
the
holders of the Rights (who, in accordance with Section 3 hereof, shall
prior to the Distribution Date also be the holders of the Common Stock of the
Company) in accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable. In the event the
Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine.
The Company shall give ten (10) days’ prior written notice to the Rights Agent
of the appointment of one or more Co-Rights Agents and the respective duties
of
the Rights Agent and any such Co-Rights Agents. The Rights Agent shall have
no
duty to supervise, and shall in no event be liable for, the acts or omissions
of
any such Co-Rights Agent.
Section
3. Issue
of Right Certificates.
(a) From
the
date hereof until the earlier of (i) the Close of Business on the tenth
(10th)
calendar day after the Stock Acquisition Date, or (ii) the Close of Business
on
the tenth (10th)
Business Day (or such later calendar day, if any, as the Board of Directors
of
the Company may determine in its sole discretion) after the date a tender or
exchange offer by any Person, other than an Exempt Person, is first published
or
sent or given within the meaning of Rule 14d-4(a) of the Exchange Act, or any
successor rule, if, upon consummation thereof, such Person could become the
Beneficial Owner of 15% (or in the case of a Grandfathered Person, the
Grandfathered Percentage applicable to such Grandfathered Person) or more of
the
shares of Common Stock of the Company then outstanding (including any such
date
which is after the date of this Agreement and prior to the issuance of the
Rights) (the earliest of such dates being herein referred to as the
“Distribution
Date”),
(x)
the Rights will be evidenced (subject to the provisions of Section 3(b)
hereof) by the certificates for the Common Stock of the Company registered
in
the names of the holders of the Common Stock of the Company (which certificates
for Common Stock of the Company shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares
of
Common Stock of the Company. As soon as practicable after the Distribution
Date,
the Rights Agent will, at the Company’s expense send, by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock of the Company
as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more certificates, in
substantially the form of Exhibit A
hereto
(the “Right
Certificates”),
evidencing one Right for each share of Common Stock of the Company so held,
subject to adjustment as provided herein. As of and after the Close of Business
on the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) With
respect to certificates for the Common Stock of the Company issued prior to
the
Close of Business on the Record Date, the Rights will be evidenced by such
certificates for the Common Stock of the Company on or until the Distribution
Date (or the earlier redemption, expiration or termination of the Rights),
and
the registered holders of the Common Stock of the Company also shall be the
registered holders of the associated Rights. Until the Distribution Date (or
the
8
(c) Certificates
for the Common Stock of the Company issued after the Record Date, but prior
to
the earliest of the Distribution Date, Redemption Date, Exchange Date or Final
Expiration Date, shall be deemed also to be certificates for Rights, and shall
bear a legend, substantially in the form set forth below:
This
certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in a Shareholder Rights Agreement between Washington Trust Bancorp,
Inc. and American Stock Transfer & Trust Company (or any successor thereto),
as Rights Agent, dated as of August 17, 2006, as amended, restated, renewed,
supplemented or extended from time to time (the “Rights
Agreement”),
the
terms of which are hereby incorporated herein by reference and a copy of which
is on file at the principal offices of Washington Trust Bancorp, Inc. and the
stock transfer administration office of the Rights Agent. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Washington Trust Bancorp, Inc. may redeem the Rights at a
redemption price of $0.01 per Right, subject to adjustment, under the terms
of
the Rights Agreement. Washington Trust Bancorp, Inc. will mail to the holder
of
this certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request therefor.
Under certain circumstances, Rights issued to or held by Acquiring Persons
(as
defined in the Rights Agreement) or any Affiliates or Associates thereof (as
defined in the Rights Agreement), and any subsequent holder of such Rights,
may
become null and void. The Rights shall not be exercisable, and shall be void
so
long as held, by a holder in any jurisdiction where the requisite qualification,
if any, to the issuance to such holder, or the exercise by such holder, of
the
Rights in such jurisdiction shall not have been obtained or be
obtainable.
With
respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock of the Company represented by such certificates
shall be evidenced by such certificates until the earliest of the Distribution
Date, Redemption Date, Exchange Date or Final Expiration Date, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock of the Company represented by such
certificates. In the event that the Company purchases or acquires any shares
of
Common Stock of the Company after the Record Date but prior to the Distribution
Date, any Rights associated
9
Section
4. Form
of Right Certificates.
(a) The
Right
Certificates (and the forms of election to purchase shares and of assignment
and
certificate to be printed on the reverse thereof) shall each be substantially
in
the form of Exhibit A
hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may
be
required to comply with any applicable law, rule or regulation or with any
rule
or regulation of any stock exchange on which the Rights may from time to time
be
listed, or to conform to customary usage. The Right Certificates shall be in
a
machine printable format and in a form reasonably satisfactory to the Rights
Agent. Subject to the provisions of Section 11 and Section 22 hereof,
the Right Certificates, whenever distributed, shall be dated as of the Record
Date, shall show the date of countersignature, and on their face shall entitle
the holders thereof to purchase such number of shares of Common Stock of the
Company as shall be set forth therein at the price set forth therein (the
“Exercise
Price”),
but
the number of such shares and the Exercise Price shall be subject to adjustment
as provided herein.
(b) Any
Right
Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights Beneficially Owned by (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any Associate or Affiliate of an Acquiring Person) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of
an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights, the shares of Common Stock of the Company
associated with such Rights or the Company, or (B) a transfer which the Board
of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(e) hereof, and any Right Certificate issued pursuant to Section 6,
Section 11 or Section 22 upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall have deleted
therefrom the second sentence of the existing legend on such Right Certificate
and in substitution therefor shall contain the following legend:
The
Rights represented by this Right Certificate are or were Beneficially Owned
by a
Person who was or became 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
10
void
under certain circumstances as specified in Section 7(e) of the Rights
Agreement.
The
Company shall give notice to the Rights Agent promptly after it becomes aware
of
the existence and identity of any Acquiring Person or any Associate or Affiliate
thereof. The Company shall instruct the Rights Agent in writing of the Rights
which should be so legended. The failure to print the foregoing legend on any
such Right Certificate or any defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of
Section 7(e) hereof.
Section
5. Countersignature
and Registration.
(a) The
Right
Certificates shall be executed on behalf of the Company by its Chairman of
the
Board of Directors, or its President or any Vice President, and by its Treasurer
or any Assistant Treasurer, or by its Secretary or any Assistant Secretary,
either manually or by facsimile signature, and shall have affixed thereto the
Company’s seal or a facsimile thereof which shall be attested to by the
Secretary or any Assistant Secretary of the Company, 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, and such countersignature upon any Right
Certificate shall be conclusive evidence, and the only evidence, that such
Right
Certificate has been duly countersigned as required hereunder. In case any
officer of the Company who shall have signed any of the Right Certificates
shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by an authorized signatory of the Rights
Agent, and issued and delivered by the Company with the same force and effect
as
though the person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificates may be signed on behalf
of
the Company by any person who, at the actual date of the execution of such
Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement
any
such person was not such an officer.
(b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at one
of
its offices designated as the appropriate place for surrender of Right
Certificates upon exercise or transfer, books for registration and transfer
of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date
of
each of the Right Certificates.
Section
6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.
(a) Subject
to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Right Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or Certificates, entitling the registered holder to purchase
a
like number of shares of Common Stock of the Company (or following a Triggering
Event, Common Stock of the Company, cash, property,
11
(b) Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security
satisfactory to them, and reimbursement to the Company and the Rights Agent
of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate, if mutilated, the Company
will
execute and deliver a new Right Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section
7. Exercise
of Rights; Exercise Price; Expiration Date of Rights.
(a) Subject
to Section 7(e) hereof, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein)
in
whole or in part at any time after the Distribution Date upon surrender of
the
Right Certificate, with the form of election to purchase and the certificate
on
the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
of the aggregate Exercise Price for the total number of shares of Common Stock
of the Company (or other securities, cash or other assets, as the case may
be)
as to which such surrendered Rights are then exercised, at or prior to the
earlier of (i) the Close of Business on the tenth (10th)
anniversary of the Record Date (the “Final
Expiration Date”),
(ii)
the time at which the Rights are redeemed as provided in Section 23 hereof
(the “Redemption
Date”),
or
(iii) the time at which such Rights are exchanged as provided in Section 24
hereof (the “Exchange
Date”)
(the
earliest of (i), (ii) or (iii) being herein referred to as the “Expiration
Date”).
Except as set forth in Section 7(e) hereof and notwithstanding any other
provision of this Agreement, any Person who prior to the Distribution Date
becomes a record holder of shares of Common Stock of the Company may exercise
all of the rights of a registered holder of a Right Certificate with respect
to
the Rights associated with such shares of Common Stock of the
12
(b) The
Exercise Price for each share of Common Stock of the Company pursuant to the
exercise of a Right shall initially be One Hundred United States Dollars (U.S.
$100.00), shall be subject to adjustment from time to time as provided in
Section 11 and Section 13 hereof and shall be payable in lawful money of
the United States of America in accordance with Section 7(c) below.
(c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form
of
election to purchase and the certificate on the reverse side thereof duly
executed, accompanied by payment of the Exercise Price for the shares to be
purchased and an amount equal to any applicable transfer tax (as determined
by
the Rights Agent) by certified check or bank draft payable to the order of
the
Company or by money order, the Rights Agent shall, subject to Section 20(k)
and
Section 14(b) hereof, thereupon promptly (i) requisition from any transfer
agent for the Common Stock of the Company (the “Depositary
Agent”)
(or
make available, if the Rights Agent is the transfer agent for the Common Stock
of the Company) depositary receipts or certificates for the number of shares
of
Common Stock of the Company to be purchased and the Company hereby irrevocably
authorizes the Depositary Agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be
paid
in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after receipt of such
certificate or depositary receipts promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the event that
the
Company is obligated to issue other securities (including Common Stock) of
the
Company, pay cash or distribute other property pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such other securities,
cash or other property are available for distribution by the Rights Agent,
if
and when appropriate. The payment of the Exercise Price may be made by certified
or bank check payable to the order of the Company, or by money order or wire
transfer of immediately available funds to the account of the Company (provided
that notice of such wire transfer shall be given by the holder of the related
Right to the Rights Agent).
(d) In
case
the registered holder of any Right Certificate shall exercise less than all
the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14
hereof.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Section 11(a)(ii) Event or Section 13 Event, any Rights Beneficially Owned
by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any Associate or
Affiliate of an Acquiring Person) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of
any Associate or Affiliate of an Acquiring Person) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and receives
such
13
(f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported exercise as set forth
in
this Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of election to purchase set
forth on the reverse side of the Right Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section
8. Cancellation
and Destruction of Right Certificates.
All
Right Certificates surrendered for the purpose of exercise, transfer, split
up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel
and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company.
Section
9. Reservation
and Availability of Common Stock.
(a) The
Company covenants and agrees that on and after the Distribution Date, it will
use reasonable efforts to cause to be reserved and kept available, out of its
authorized and unissued shares of Common Stock, the number of shares of Common
Stock that, except as provided in Section 11(a)(iii) hereof, would then be
sufficient to permit the exercise in full of all outstanding Rights;
provided,
however,
that
the reservation of such shares shall be subject and subordinate to any other
reservation of shares of Common Stock of the Company made by the Company at
any
time for any lawful purpose; and further provided,
however,
that in
no event shall such failure to so reserve shares affect the rights of any holder
of Rights hereunder.
(b) The
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares of Common Stock of the Company issued
or
14
(c) The
Company shall use its best efforts to (i) file, as soon as practicable
following the earliest date after the occurrence of a Section 11(a)(ii) Event
on
which the consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii) hereof, or
as soon as required by law following the Distribution Date, as the case may
be,
a registration statement under the Securities Act of 1933, as amended (the
“Securities
Act”),
with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus that at all times
meets the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities,
or
(B) the Expiration Date. The Company will also take such action as may be
appropriate under, and which will ensure compliance with, the securities or
“blue sky” laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date determined in accordance with the
provisions of the first sentence of this Section 9(c), the exercisability of
the
Rights in order to prepare and file such registration statement and permit
it to
become effective. Upon such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension
is no
longer in effect, in each case with prompt written notice to the Rights Agent.
Notwithstanding any such provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all shares of Common Stock of the Company delivered
upon the exercise of the Rights shall, at the time of delivery of the
certificates or depositary receipts for such shares (subject to payment of
the
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The
Company further covenants and agrees that it will pay when due and payable
any
and all federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any
certificates for shares of Common Stock of the Company and/or other
consideration upon the exercise of Rights. The Company shall not, however,
be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Right Certificates or the issuance or delivery of certificates
for any shares of Common Stock of the Company and/or other consideration to
a
person other than, or in respect of the issuance or delivery of securities
in a
name other than that of, the registered holder of the Right Certificates
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for securities in a name other than that of the registered holder
upon the exercise of any Rights until such tax shall have been paid (any such
tax being payable by the holder of such
15
Section
10. Common
Stock Record Date.
Each
person in whose name any certificate for any shares of Common Stock of the
Company (or other securities) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of such shares of
Common Stock of the Company (or such other securities, as the case may be)
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 Exercise 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 transfer books
for the Common Stock of the Company (or, if applicable, such other securities)
are closed, such person shall be deemed to have become the record holder of
such
shares on, and such certificate shall be dated, the next succeeding Business
Day
on which such transfer books are open; and further provided,
however,
that if
delivery of shares of Common Stock of the Company (or, if applicable, other
securities) is delayed pursuant to Section 9(c), such Person shall be deemed
to
have become the record holder of such shares of Common Stock of the Company
(or,
if applicable, such other securities) only when such shares first become
deliverable. Prior to the exercise of the Right evidenced thereby, the holder
of
a Right Certificate shall not be entitled to any rights of a shareholder of
the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to
receive any notice of any proceedings of the Company, except as provided
herein.
Section
11. Adjustment
of Exercise Price, Number and Kind of Shares or Number of Rights.
The
Exercise Price, the number and kind of shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)
(i)
In
the
event the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Common Stock of the Company payable in shares
of Common Stock of the Company, (B) subdivide the outstanding Common Stock
of the Company, (C) combine the outstanding Common Stock of the Company
into a smaller number of shares, or (D) issue, change or alter any shares
of its capital stock in a reclassification or recapitalization (including any
such reclassification or recapitalization in connection with a consolidation
or
merger in which the Company is the continuing or surviving Person), except
as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the Exercise
Price in effect at the time of the record date for such dividend or the
effective time of such subdivision, combination, reclassification or
recapitalization, and the number and kind of shares of capital stock issuable
at
such time, 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 time at the Exercise Price then in effect and at
a
time when the transfer books for such capital stock were open, such holder
would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, reclassification or recapitalization;
provided,
however,
that in
no event shall the consideration to be paid upon the exercise of a Right
16
be
less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of a Right. If an event occurs which would require
an
adjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to,
and
shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject
to the provisions of Section 24 hereof, in the event any Person, alone or
together with its Affiliates and Associates, shall become an Acquiring Person,
then, promptly following any such occurrence (a “Section
11(a)(ii) Event”),
proper provision shall be made so that each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have a right to receive,
upon
exercise thereof at the then current Exercise Price in accordance with the
terms
of this Agreement, such number of shares of Common Stock of the Company as
shall
equal the result obtained by (x) multiplying the then current Exercise
Price by the then number of shares of Common Stock of the Company for which
a
Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, whether or not such Right was then exercisable, and dividing
that product by (y) 50% of the Fair Market Value per share of Common Stock
of the Company (determined pursuant to Section 11(d)) on the date of the
occurrence of a Section 11(a)(ii) Event (such number of shares being referred
to
as the “Adjustment
Shares”).
(iii) In
lieu
of issuing any shares of Common Stock of the Company in accordance with Section
11(a)(ii) hereof, the Company, acting by or pursuant to a resolution of the
Board of Directors of the Company, may, and in the event that the number of
shares of Common Stock of the Company which are authorized by the Company’s
Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient to permit
the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii) of this Section 11(a), the Company, acting by or pursuant to a resolution
of the Board of Directors of the Company, shall take such action as may be
necessary to authorize additional shares of Common Stock of the Company for
issuance upon exercise of the Rights. In the event that the Company shall,
after
good faith effort, be unable to take such actions as may be necessary to
authorize such additional shares of Common Stock of the Company, the Company,
acting by or pursuant to a resolution of the Board of Directors of the Company,
shall: (A) determine the excess of (X) the Fair Market Value of the Adjustment
Shares issuable upon the exercise of a Right (the “Current
Value”)
over
(Y) the Exercise Price attributable to each Right (such excess being referred
to
as the “Spread”),
and
(B) with respect to all or a portion of each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Exercise Price, (1) Common Stock of the Company or
other equity securities, if any, of the Company (including without limitation
shares, or units of shares, of Preferred Stock that the Board of Directors
of
the Company has determined to have the same value as shares of Common Stock
of
the Company (such shares of equity securities being referred to herein as
“Common
Stock Equivalents”)),
to
the extent permitted by the Company’s Certificate of Incorporation, (2) cash,
(3) a reduction in the Exercise Price, (4) debt securities of the Company,
(5)
other assets or securities of the Company, or (6) any combination of the
foregoing having an aggregate value equal to the Current Value,
17
where
such aggregate value has been determined by the Board of Directors of the
Company after receiving advice of a nationally recognized investment banking
firm selected by the Board of Directors of the Company; provided,
however,
that if
the Company shall not have made adequate provision to deliver value pursuant
to
clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event, and (y) the date on which the Company’s
right of redemption pursuant to Section 23(a) expires (the later of (x) and
(y)
being referred to herein as the “Section
11(a)(ii) Trigger Date”),
then
the Company shall be obligated to deliver, upon the surrender for exercise
of a
Right and without requiring payment of the Exercise Price, shares of Common
Stock of the Company (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread. If
the
Board of Directors of the Company shall determine in good faith that it is
likely that sufficient additional shares of Common Stock of the Company could
be
authorized for issuance upon exercise in full of the Rights, the 30-day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the
Company may seek shareholder approval for the authorization of such additional
shares (such period, as it may be extended, being referred to herein as the
“Substitution
Period”).
To
the extent that the Company determines that some action need be taken pursuant
to the first and/or second sentences of this Section 11(a)(iii), the Company
(x)
shall provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability
of
the Rights until the expiration of the Substitution Period in order to seek
any
authorization of additional shares and/or to decide the appropriate form
of
distribution to be made pursuant to such first sentence and to determine
the
value thereof. In the event of any such suspension, the Company shall issue
a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and a public announcement at such time as the suspension
is no longer in effect. For purposes of this Section 11(a)(iii), the value
of
the Common Stock of the Company shall be the Fair Market Value (as determined
pursuant to Section 11(d) hereof) per share of the Common Stock of the Company
on the Section 11(a)(ii) Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock of
the
Company on such date.
(b) If
the
Company shall fix a record date for the issuance of rights, options or warrants
to all holders of Common Stock of the Company entitling them (for a period
expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase shares of Common Stock of the Company or Common Stock
Equivalents, or securities convertible into shares of Common Stock of the
Company or Common Stock Equivalents, at a price per share of Common Stock of
the
Company or per share of Common Stock Equivalents (or having a conversion price
per share, if a security convertible into Common Stock of the Company or Common
Stock Equivalents) less than the Fair Market Value (as determined pursuant
to
Section 11(d) hereof) per share of Common Stock of the Company on such record
date, the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to
such
record date by a fraction, the numerator of which shall be the number of shares
of Common Stock of the Company outstanding on such record date, plus the number
of shares of Common Stock of the Company that the aggregate offering price
of
the total number of shares of Common Stock of the Company and/or Common Stock
Equivalents to be
18
(c) If
the
Company shall fix a record date for the making of a distribution to all holders
of Common Stock of the Company (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), of evidences of indebtedness, cash (other than a
regular periodic cash dividend out of the earnings or retained earnings of
the
Company), assets (other than a dividend payable in Common Stock of the Company,
but including any dividend payable in stock other than Common Stock of the
Company) or convertible securities, subscription rights or warrants (excluding
those referred to in Section 11(b)), the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value (as determined pursuant to Section 11(d) hereof)
per share of Common Stock of the Company on such record date, less the Fair
Market Value (as determined pursuant to Section 11(d) hereof) of the
portion of the cash, assets or evidences of indebtedness so to be distributed
or
of such convertible securities, subscription rights or warrants distributable
in
respect of a share of Common Stock of the Company, and the denominator of which
shall be the Fair Market Value (as determined pursuant to Section 11(d) hereof)
per share of Common Stock of the Company on such record date; provided,
however,
that in
no event shall the consideration to be paid upon the exercise of a Right be
less
than the aggregate par value of the shares of stock of the Company issuable
upon
exercise of a Right. Such adjustments shall be made successively whenever such
a
record date is fixed; and in the event that such distribution is not so made,
the Exercise Price shall again be adjusted to be the Exercise Price which would
be in effect if such record date had not been fixed.
(d) For
the
purpose of this Agreement, the “Fair
Market Value”
of
any
share of Common Stock or any other stock or any Right or other security or
any
other property shall be determined as provided in this Section
11(d).
(i) In
the
case of a publicly-traded stock or other security, the Fair Market Value on
any
date shall be deemed to be the average of the daily closing prices per share
of
such stock or per unit of such other security for the thirty (30) consecutive
Trading Days immediately prior to such date; provided,
however,
that in
the event that the Fair Market Value per share of any share of stock is
determined during a period
19
(ii) If
a
security is not publicly held or not so listed or traded, “Fair
Market Value”
shall
mean the fair value per share of stock or per other unit of such security,
determined reasonably and in good faith to the holders of the Rights by the
Board of Directors of the Company; provided,
however,
that if
at the time of such determination there is an Acquiring Person, the Fair Market
Value of such security on such date shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, which determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights.
(iii) In
the
case of property other than securities, the Fair Market Value thereof shall
be
determined reasonably and in good faith to the holders of Rights by the Board
of
Directors of the Company; provided,
however,
that if
at the time of such determination there is an Acquiring Person, the Fair Market
Value of such property on
20
such
date
shall be determined by a nationally recognized investment banking firm selected
by the Board of Directors of the Company, which determination shall be described
in a statement filed with the Rights Agent and shall be binding upon the
Rights
Agent and the holders of the Rights.
(e) Anything
herein to the contrary notwithstanding, no adjustment in the Exercise Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Exercise Price; provided,
however,
that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one hundred-thousandth of a share of Common
Stock
or to such other figure as the Board of Directors of the Company may deem
appropriate. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If
as a
result of any provision of Section 11(a) or Section 13(a) hereof, the holder
of
any Right thereafter exercised shall become entitled to receive any shares
of
capital stock of the Company other than Common Stock of the Company, 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 Stock
of
the Company contained in Section 11(a), (b), (c), (d), (e), (g) through (m),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Common Stock of the Company shall apply on like terms to any
such
other shares.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to
the
Exercise Price hereunder shall evidence the right to purchase, at the adjusted
Exercise Price, the number of shares of Common Stock of the Company (or other
securities or amount of cash or combination thereof) purchasable from time
to
time hereunder upon exercise of the Rights, all subject to further adjustment
as
provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i),
upon
each adjustment of the Exercise Price as a result of the calculations made
in
Section 11(b) and (c), each Right outstanding immediately prior to the making
of
such adjustment shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of shares of Common Stock of the Company (calculated
to the nearest one hundred-thousandth of a share) as the Board of Directors
of
the Company determines is appropriate to preserve the economic value of the
Rights, including, by way of example, that number obtained by (i) multiplying
(x) the number of shares of Common Stock of the Company for which a Right may
be
exercisable immediately prior to this adjustment by (y) the Exercise Price
in
effect immediately prior to such adjustment of the Exercise Price, and (ii)
dividing the product so obtained by the Exercise Price in effect immediately
after such adjustment of the Exercise Price.
(i) The
Company may elect on or after the date of any adjustment of the Exercise Price
to adjust the number of Rights, in substitution for any adjustment in the number
of shares of Common Stock of the Company purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the
21
(j) Irrespective
of any adjustment or change in the Exercise Price or the number of shares of
Common Stock of the Company issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Exercise Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder without prejudice to any adjustment
or change.
(k) Before
taking any action that would cause an adjustment reducing the Exercise Price
below the then stated value, if any, of the number of shares of Common Stock
of
the Company issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in
order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock of the Company at such adjusted Exercise
Price.
(l) In
any
case in which this Section 11 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event,
the
Company may elect to defer until the occurrence of such event the issuing to
the
holder of any Right exercised after such record date the number of shares of
Common Stock of the Company or other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of shares of
Common Stock of the Company and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the Exercise Price
in effect prior to such adjustment; provided,
however,
that the
Company shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder’s right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
22
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Exercise Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent
that in its good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any consolidation or subdivision of
the
Common Stock of the Company, issuance wholly for cash of any shares of Common
Stock of the Company at less than the Fair Market Value, issuance wholly for
cash of shares of Common Stock of the Company or securities which by their
terms
are convertible into or exchangeable for shares of Common Stock of the Company,
stock dividends or issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to holders of
Common Stock of the Company, shall not be taxable to such
shareholders.
(n) The
Company covenants and agrees that it shall not, at any time after the
Distribution Date and so long as the Rights have not been redeemed pursuant
to
Section 23 hereof or exchanged pursuant to Section 24 hereof, (i) consolidate
with, (ii) merge with or into, or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 50% or more of the assets
or
earning power of the Company and its Subsidiaries taken as a whole, to any
other
Person or Persons if (x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments outstanding
or agreements or arrangements in effect which would substantially diminish
or
otherwise eliminate the benefits intended to be afforded by the Rights, or
(y)
prior to, simultaneously with or immediately after such consolidation, merger
or
sale the shareholders of a Person who constitutes, or would constitute, the
“Principal Party” for the purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates; provided,
however,
that,
subject to the following sentence, this Section 11(n) shall not affect the
ability of any Subsidiary of the Company to consolidate with, or merge with
or
into, or sell or transfer assets or earning power to, any other Subsidiary
of
the Company. The Company further covenants and agrees that after the
Distribution Date it will not, except as permitted by Section 23 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action
will
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) Notwithstanding
anything to the contrary set forth herein, in the event that the Company
declares a dividend per share (whether cash, securities, rights or other
distribution) in respect of the Common Stock of the Company for holders as
of a
record date and if Rights become exercisable (automatically or otherwise) and
are exercised after the date of such declaration but prior to such record date,
the aggregate amount (or number of securities or other rights) of such dividend
shall remain the same and the per share dividend shall be reduced to reflect
the
increased number of shares of Common Stock of the Company outstanding following
such exercise of Rights.
(p) In
the
event that the Rights become exercisable following a Section 11(a)(ii) Event,
the Company, by action of the Board of Directors of the Company, may permit
the
Rights, subject to Section 7(e), to be exercised for 50% of the shares of Common
Stock of the Company (or cash, other securities or property) that would
otherwise be purchasable under Section 11(a), in consideration of the surrender
to the Company of the Rights so exercised and
23
(q) The
exercise (or, pursuant to Section 24, exchange) of Rights under Section
11(a)(ii) shall only result in the loss of rights under Section 11(a)(ii) to
the
extent so exercised and shall not otherwise affect the rights of holders of
Right Certificates under this Rights Agreement, including rights to purchase
securities of the Principal Party following a Section 13 Event which has
occurred or may thereafter occur, as set forth in Section 13 hereof. Upon
exercise of a Right Certificate under Section 11(a)(ii), the Rights Agent shall
return such Right Certificate duly marked to indicate that such exercise has
occurred.
Section
12. Certificate
of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth
such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock of the Company a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a certificate representing shares of Common
Stock of the Company) in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment contained therein and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such
certificate.
Section
13. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
(a) In
the
event that, following the Stock Acquisition Date, directly or indirectly, (x)
the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction which is not prohibited
by Section 11(n) hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which is not prohibited by
the
proviso at the end of the first sentence of Section 11(n) hereof) shall
consolidate with the Company, or merge with and into the Company and the Company
shall be the continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the shares of Common Stock of the
Company shall be changed into or exchanged for stock or other securities of
any
other Person or cash or any other property, or (z) the Company shall sell,
mortgage or otherwise transfer (or one or more of its Subsidiaries shall sell,
mortgage or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 50% or more of the assets
or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company or any Subsidiary of the Company
in one or more transactions, each of which is not prohibited by the proviso
at
the end of the first sentence of Section 11(n) hereof), then, and in each such
case, proper provision shall be made so that: (i) each holder of a Right, except
as provided in Section 7(e) hereof, shall have the right to receive, upon the
exercise thereof at the then current Exercise Price in accordance with the
terms
of this Agreement, such number of validly authorized and issued, fully paid
and
nonassessable shares of freely tradable Common Stock of the Principal Party,
free and clear of rights of call or first refusal, liens, encumbrances, transfer
restrictions or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Exercise Price by the number of shares
of
Common Stock of the Company for which a Right is
24
(b) “Principal
Party”
shall
mean
(i) in
the
case of any transaction described in clause (x) or (y) of the first sentence
of
Section 13(a), the Person that is the issuer of any securities into which shares
of Common Stock of the Company are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer of Common Stock that
has
the highest aggregate Fair Market Value (determined pursuant to Section 11(d)),
and if no securities are so issued, the Person that is the other party to the
merger or consolidation, or, if there is more than one such Person, the Person
the Common Stock of which has the highest aggregate Fair Market Value
(determined pursuant to Section 11(d)); and
(ii) in
the
case of any transaction described in clause (z) of the first sentence of Section
13(a), the Person that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or transactions,
or,
if each Person that is a party to such transaction or transactions receives
the
same portion of the assets or earning power transferred pursuant to such
transaction or transactions or if the Person receiving the largest portion
of
the assets or earning power cannot be determined, whichever Person the Common
Stock of which has the highest aggregate Fair Market Value (determined pursuant
to Section 11(d)); provided,
however,
that in
any such case described in clauses (i) or (ii) of Section 13(b) hereof, (1)
if
the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act (“Registered
Common Stock”)
or
such Person is not a corporation, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person who has Registered Common Stock
outstanding, “Principal Party” shall refer to such other Person; (2) if the
Common Stock of such Person is not Registered Common Stock or such Person is
not
a corporation, and such Person is a direct or indirect Subsidiary of another
Person but is not a direct or indirect Subsidiary of another Person which has
Registered Common Stock outstanding, “Principal Party” shall refer to the
ultimate parent entity of such first-mentioned Person; (3) if the Common Stock
of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by more than
one
25
Person,
and one or more of such other Persons has Registered Common Stock outstanding,
“Principal Party” shall refer to whichever of such other Persons is the issuer
of the Registered Common Stock having the highest aggregate Fair Market Value
(determined pursuant to Section 11(d)); and (4) if the Common Stock of such
Person is not Registered Common Stock or such Person is not a corporation,
and
such Person is directly or indirectly controlled by more than one Person,
and
none of such other Persons has Registered Common Stock outstanding, “Principal
Party” shall refer to whichever ultimate parent entity is the corporation having
the greatest shareholders’ equity or, if no such ultimate parent entity is a
corporation, “Principal Party” shall refer to whichever ultimate parent entity
is the entity having the greatest net assets.
(c) The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto (x) the Principal Party shall have a sufficient number
of
authorized shares of its Common Stock, which have not been issued or reserved
for issuance, to permit the exercise in full of the Rights in accordance with
this Section 13, and (y) the Company and each Principal Party and each
other Person who may become a Principal Party as a result of such consolidation,
merger, sale or transfer shall have executed and delivered to the Rights Agent
a
supplemental agreement providing for the terms set forth in Section 13(a) and
(b) and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer of assets mentioned in Section 13(a),
the Principal Party at its own expense will:
(i) prepare
and file a registration statement under the Securities Act with respect to
the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, cause such registration statement to become effective as
soon
as practicable after such filing and cause such registration statement to remain
effective (with a prospectus that at all times meets the requirements of the
Securities Act) until the Expiration Date;
(ii) qualify
or register the Rights and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as may be necessary or
appropriate;
(iii) list
(or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on a national securities exchange or to meet the eligibility
requirements for quotation on NASDAQ; and
(iv) deliver
to holders of the Rights historical financial statements for the Principal
Party
and each of its Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) In
case
the Principal Party which is to be a party to a transaction referred to in
this
Section 13 has a provision in any of its authorized securities or in its
certificate of incorporation or by-laws or other instrument governing its
affairs, which provision would have the effect of (i) causing such Principal
Party to issue (other than to holders of Rights pursuant to this Section 13),
in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Stock of such Principal Party
at less than the then current Fair Market Value (determined pursuant to Section
11(d)) or securities exercisable
26
The
provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers.
Section
14. Fractional
Rights and Fractional Shares.
(a) The
Company shall not be required to issue fractions of Rights, except prior to
the
Distribution Date as provided in Section 11(o) hereof, or to distribute Right
Certificates which evidence fractional Rights. If the Company elects not to
issue such fractional Rights, the Company shall pay, in lieu of such fractional
Rights, 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 Fair Market Value of a whole Right, as determined
pursuant to Section 11(d) hereof.
(b) The
Company shall not be required to issue fractions of shares of Common Stock
of
the Company upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock of the Company. In lieu of fractional
shares of Common Stock of the Company, the Company may pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Fair Market Value
of one share of Common Stock of the Company. For purposes of this Section 14(b),
the Fair Market Value of one share of Common Stock of the Company shall be
determined pursuant to Section 11(d) hereof for the Trading Day immediately
prior to the date of such exercise.
(c) The
holder of a Right by the acceptance of the Rights expressly waives his right
to
receive any fractional Rights or any fractional shares upon exercise of a Right,
except as permitted by this Section 14.
Section
15. Rights
of Action.
All
rights of action in respect of this Agreement, other than rights of action
vested in the Rights Agent pursuant to Sections 18 and 20 hereof, are vested
in
the respective registered holders of the Right Certificates (or, prior to the
Distribution Date, the registered holders of the Common Stock of the Company);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock of the Company), 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 Stock of the Company), may, in such
registered holder’s own behalf and for such registered holder’s own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Right evidenced by such Right Certificate in the manner
27
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 shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys’ fees, incurred by them in any action to enforce
the provisions of this Agreement.
Section
16. Agreement
of Right Holders.
Every
holder of a Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior
to
the Distribution Date, each Right will be transferable only simultaneously
and
together with the transfer of shares of Common Stock of the
Company;
(b) after
the
Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office or offices of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer;
(c) subject
to Sections 6(a) and 7(f), the Company and the Rights Agent may deem and treat
the person in whose name a Right Certificate (or, prior to the Distribution
Date, the associated certificate representing Common Stock of the Company)
is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates
or the associated certificate representing Common Stock of the Company made
by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and, subject to the last sentence of Section 7(e), neither the Company nor
the
Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as
the
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree
or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such obligations;
provided,
however,
that
the Company must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section
17. Right
Certificate Holder Not Deemed a Shareholder.
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 shares of Common Stock
of the Company or any other securities of the Company which may at any time
be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a shareholder
of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof),
or to
28
receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance
with
the provisions hereof.
Section
18. Concerning
the Rights Agent.
(a) The
Company agrees to pay to the Rights Agent such compensation as shall be agreed
to in writing between the Company and the Rights Agent for all services rendered
by it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or
expense, incurred without gross negligence, bad faith or willful misconduct
on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly. The provisions of this Section 18(a)
shall survive the expiration of the Rights and the termination of this
Agreement.
(b) The
Rights Agent shall be protected and shall incur no liability for or in respect
of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate representing Common Stock of the Company or other securities of
the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it in good faith and without negligence to be
genuine and to be signed and executed by the proper Person or
Persons.
(c) The
Rights Agent shall not be liable for consequential damages under any provision
of this Agreement or for any consequential damages arising out of any act or
failure to act hereunder.
Section
19. Merger
or Consolidation or Change of Name of Rights Agent.
(a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the corporate trust
or
shareholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided
that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
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 or in the name of the
successor Rights Agent; and in all such
29
(b) In
case
at any time the name of the Rights Agent shall be changed and at such time
any
of the Right Certificates shall have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and
in
all such cases such Right Certificates shall have the full force provided in
the
Right Certificates and in this Agreement.
Section
20. Duties
of Rights Agent.
The
Rights Agent undertakes the duties and obligations expressly imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The
Rights Agent may consult with legal counsel selected by it (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of “Fair
Market Value”) be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence
in
respect thereof shall be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by a person believed
by the Rights Agent to be the Chairman of the Board of Directors, a Vice
Chairman of the Board of Directors, the President, a Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or an Assistant Secretary
of
the Company and delivered to the Rights Agent. Any such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in
good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The
Rights Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this Agreement or in the Right Certificates
(except its countersignature thereof) or be required to verify the same, but
all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The
Rights Agent shall not be under any responsibility in respect of the validity
of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or execution of any
Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible
for
any change in the exercisability of the Rights (including the Rights becoming
30
(f) The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and
other
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.
(g) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder and certificates delivered
pursuant to any provision hereof from any person believed by the Rights Agent
to
be the Chairman of the Board of Directors, any Vice Chairman of the Board of
Directors, the President, a Vice President, the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer of the Company, and is
authorized to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered
to
be taken by it in good faith in accordance with instructions of any such
officer. Any application by the Rights Agent for written instructions from
the
Company may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Agreement and
the
date on or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in such
application on or after the date specified in such application (which date
shall
not be less than five (5) Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent shall
have
received written instructions in response to such application specifying the
action to be taken or omitted.
(h) The
Rights Agent and any shareholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not the Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents.
31
(j) No
provision of this Agreement shall require the Rights Agent to expend or risk
its
own funds or otherwise incur any financial liability in the performance of
any
of its duties hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) If,
with
respect to any Right Certificate surrendered to the Rights Agent for exercise
or
transfer, the certificate attached to the form of assignment or form of election
to purchase, as the case may be, has either not been completed or indicates
an
affirmative response to clause (1) or clause (2) thereof, the Rights Agent
shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section
21. Change
of Rights Agent.
The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon thirty (30) days’ notice in writing mailed to
the Company by first class mail; provided,
however,
that in
the event the transfer agency relationship in effect between the Company and
the
Rights Agent terminates, the Rights Agent will be deemed to have resigned
automatically on the effective date of such termination. The Company may remove
the Rights Agent or any successor Rights Agent (with or without cause),
effective immediately or on a specified date, by written notice given to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock of the Company, and by giving notice to the holders
of
the Right Certificates by any means reasonably determined by the Company to
inform such holders of such removal (including without limitation, by including
such information in one or more of the Company’s reports to shareholders or
reports or filings with the Securities and Exchange Commission). If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or
by
the holder of a Right Certificate (who shall, with such notice, submit his
Right
Certificate for inspection by the Company), then the incumbent Rights Agent
or
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be
(a)
a corporation organized and doing business under the laws of the United States
or of the State of Delaware or 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 Delaware or the State of New York), in
good
standing, which is authorized under such laws to exercise stock transfer or
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 $10,000,000, or (b) an Affiliate
of a
Person described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder,
and
execute and deliver any further assurance, conveyance, act or deed necessary
for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock of the Company, and give notice
to
the holders of the Right Certificates by any
32
means
reasonably determined by the Company to inform such holders of such appointment
(including without limitation, by including such information in one or more
of
the Company's reports to shareholders or reports or filings with the Securities
and Exchange Commission). Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section
22. Issuance
of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by the Board of Directors
of
the Company to reflect any adjustment or change in the Exercise Price per share
and the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or
sale of shares of Common Stock of the Company following the Distribution Date
and prior to the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock of the Company so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
or
upon the exercise, conversion or exchange of securities hereafter issued by
the
Company, and (b) may, in any other case, if deemed necessary or appropriate
by
the Board of Directors of the Company, issue Right Certificates representing
the
appropriate number of Rights in connection with such issuance or sale;
provided,
however,
that
(i) no such Right Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustments
shall otherwise have been made in lieu of the issuance thereof.
Section
23. Redemption.
(a) The
Board
of Directors of the Company may, at its option, redeem all but not less than
all
of the then outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any stock dividend declared or paid, any
subdivision or combination of the outstanding shares of Common Stock of the
Company or any similar event occurring after the date of this Agreement (such
redemption price, as adjusted from time to time, being hereinafter referred
to
as the “Redemption
Price”).
The
Rights may be redeemed only until the earlier to occur of (i) the time at which
any Person becomes an Acquiring Person, or (ii) the Final Expiration
Date.
(b) Immediately
upon the action of the Board of Directors of the Company ordering the redemption
of the Rights in accordance with this Section 23, and without any further action
and without any notice, the right to exercise the Rights will terminate and
the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of the Board
of Directors of the Company ordering the redemption of the Rights in accordance
with this Section 23, the Company shall give notice of such redemption to the
Rights Agent and the holders of the then outstanding Rights by mailing such
notice to the Rights Agent and to all such holders at their last addresses
as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Stock of the Company. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. The
Company promptly shall mail a notice of any such exchange to all of the holders
of such Rights at their last addresses as they appear upon the registry books
of
the Rights Agent. Any notice which is mailed in the
33
(c) The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock of the Company (based on the Fair Market Value of the Common Stock of
the
Company as of the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors of the Company.
Section
24. Exchange.
(a) (i)
The
Board
of Directors of the Company may, at its option, at any time on or after the
occurrence of a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for shares of
Common Stock of the Company at an exchange ratio of one share of Common Stock
of
the Company per Right (or a lesser ratio as determined by the Board of Directors
of the Company, if the Company does not have sufficient authorized and
unreserved shares of Common Stock of the Company), appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such exchange ratio being hereinafter referred to as the
“Section
24(a)(i) Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors of the Company shall
not
be empowered to effect such exchange at any time after any Person (other than
an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock of the
Company.
(ii) Notwithstanding
the foregoing, the Board of Directors of the Company may, at its option, at
any
time on or after the occurrence of a Section 11(a)(ii) Event, exchange all
or
part of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section
7(e)
hereof) for shares of Common Stock of the Company at an exchange ratio specified
in the following sentence (or a lesser ratio as determined by the Board of
Directors of the Company, if the Company does not have sufficient authorized
and
unreserved shares of Common Stock of the Company), as appropriately adjusted
to
reflect any stock split, stock dividend or similar transaction occurring after
the date of this Agreement. Subject to the adjustment described in the foregoing
sentence, each Right may be exchanged for that number of shares of Common Stock
of the Company obtained by dividing the Spread by the then Fair Market Value
of
one share of Common Stock of the Company on the earlier of (x) the date on
which
any person becomes an Acquiring Person, or (y) the date on which a tender or
exchange offer by any Person (other than an Exempt Person) is first published
or
sent or given within the meaning of Rule 14d-4(a) of the Exchange Act or any
successor rule, if upon consummation thereof such Person could become an
34
Acquiring
Person (such exchange ratio being referred to herein as the “Section
24(a)(ii) Exchange Ratio”).
Notwithstanding the foregoing, the Board of Directors of the Company shall
not
be empowered to effect such exchange at any time after any Person (other
than an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock of the
Company.
(b) Immediately
upon the action of the Board of Directors of the Company ordering the exchange
of any Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such Rights
pursuant to Section 11(a)(ii) shall terminate and the only right thereafter
of a
holder of such Rights shall be to receive that number of shares of Common Stock
of the Company equal to the number of such Rights held by such holder multiplied
by the Section 24(a)(i) Exchange Ratio or the Section 24(a)(ii) Exchange Ratio,
as applicable; provided,
however,
that
the holder of a Right exchanged pursuant to this Section 24 shall continue
to
have the right to purchase securities of the Principal Party following a Section
13 Event which has occurred or may thereafter occur, as set forth in Section
13
hereof. The Company shall promptly give notice of any such exchange in
accordance with Section 26 hereof and shall promptly mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent; provided,
however,
that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. Any notice which is mailed in the manner herein provided
shall
be deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock of the Company for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In
any
exchange pursuant to this Section 24, the Company, at its option, may
substitute Common Stock Equivalents for Common Stock of the Company exchangeable
for Rights, at the applicable Section 24(a)(i) Exchange Ratio or Section
24(a)(ii) Exchange Ratio, for each share of Common Stock of the Company, as
appropriately adjusted to reflect adjustments in the voting, liquidation and
dividend rights of the Common Stock Equivalents pursuant to the terms thereof,
so that such Common Stock Equivalents delivered in lieu of each share of Common
Stock of the Company shall have the same voting, liquidation and dividend rights
as one share of Common Stock of the Company.
(d) In
the
event that there shall not be sufficient shares of Common Stock of the Company
(or Common Stock Equivalents) issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, (i) the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock of the Company (or
Common Stock Equivalents) for issuance upon exchange of the Rights, and (ii)
the
Board of Directors of the Company may determine to exchange shares of Common
Stock of the Company for then outstanding and exercisable Rights at an exchange
ratio of less than one share of Common Stock of the Company per Right,
appropriately adjusted so that all (and not less than all) shares of Common
Stock of the Company issued but not outstanding or authorized but unissued
(and
not reserved for issuance other than upon exercise of the Rights) are issued
in
the exchange contemplated by this Section 24.
35
(e) The
Company shall not be required to issue fractions of Common Stock of the Company
or to distribute certificates which evidence fractional shares of Common Stock
of the Company. If the Company elects not to issue such fractional shares of
Common Stock of the Company, the Company shall pay, in lieu of such fractional
shares of Common Stock of the Company, to the registered holders of the Right
Certificates with regard to which such fractional shares of Common Stock of
the
Company would otherwise be issuable, an amount in cash equal to the same
fraction of the Fair Market Value of a whole share of Common Stock of the
Company. For the purposes of this paragraph (e), the Fair Market Value of a
whole share of Common Stock of the Company shall be the closing price of a
share
of Common Stock of the Company (as determined pursuant to the second sentence
of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of
exchange pursuant to this Section 24.
Section
25. Notice
of Certain Events.
(a) In
case
the Company shall propose, at any time after the Distribution Date, (i) to
pay
any dividend payable in stock of any class to the holders of shares of Common
Stock of the Company or to make any other distribution to the holders of shares
of Common Stock of the Company (other than a regular periodic cash dividend
out
of earnings or retained earnings of the Company), or (ii) to offer to the
holders of shares of Common Stock of the Company rights or warrants to subscribe
for or to purchase any additional shares of shares of Common Stock of the
Company or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its shares of Common Stock
of the Company (other than a reclassification involving only the subdivision
of
outstanding shares of shares of Common Stock of the Company), or (iv) to effect
any consolidation or merger into or with, or to effect any sale, mortgage or
other transfer (or to permit one or more of its Subsidiaries to effect any
sale,
mortgage or other transfer), in one transaction or a series of related
transactions, of 50% or more of the assets or earning power of the Company
and
its Subsidiaries (taken as a whole) to, any other Person (other than a
Subsidiary of the Company in one or more transactions each of which is not
prohibited by the proviso at the end of the first sentence of Section 11(n)
hereof), or (v) to effect the liquidation, dissolution or winding up of the
Company, then in each such case, the Company shall give to each holder of a
Right Certificate and to the Rights Agent, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock of the
Company, if any such date is to be fixed, and such notice shall be so given
in
the case of any action covered by clause (i) or (ii) above at least twenty
(20)
days prior to the record date for determining holders of the shares of Common
Stock of the Company for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the taking of
such
proposed action or the date of participation therein by the holders of the
shares of Common Stock of the Company, whichever shall be the earlier;
provided,
however,
no such
notice shall be required pursuant to this Section 25 as a result of any
Subsidiary of the Company effecting a consolidation or merger with or into,
or
effecting a sale or other transfer of assets or earnings power to, any other
Subsidiary of the Company in a manner not inconsistent with the provisions
of
this Agreement.
36
(b) In
case
any Section 11(a)(ii) Event shall occur, then, in any such case, the Company
shall as soon as practicable thereafter give to each registered holder of a
Right Certificate and to the Rights Agent, in accordance with Section 26
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof.
Section
26. Notices.
Notices
or demands authorized by this Agreement to be given or made by the Rights Agent
or by the holder of any Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid, by
facsimile transmission or by nationally-recognized overnight courier addressed
(until another address is filed in writing with the Rights Agent) as
follows:
Washington
Trust Bancorp, Inc.
00
Xxxxx
Xxxxxx
Xxxxxxxx,
XX 00000
Attention:
Secretary
Subject
to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, by facsimile transmission or by
nationally-recognized overnight courier addressed (until another address is
filed in writing with the Company) as follows:
American
Stock Transfer & Trust Company
0000
00xx
Xxxxxx
Xxxxxxxx,
XX 00000
Attention:
Corporate Trust Department
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Right Certificate (or, prior to the
Distribution Date, to the holder of any certificate representing shares of
Common Stock of the Company) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address
of
such holder as shown on the registry books of the Company.
Section
27. Supplements
and Amendments.
Prior
to the occurrence of a Section 11(a)(ii) Event, the Company and the Rights
Agent
shall, if the Board of Directors of the Company so directs, supplement or amend
any provision of this Agreement as the Board of Directors of the Company may
deem necessary or desirable without the approval of any holders of certificates
representing shares of Common Stock of the Company. From and after the
occurrence of a Section 11(a)(ii) Event, the Company and the Rights Agent shall,
if the Board of Directors of the Company so directs, supplement or amend this
Agreement without the approval of any holder of Right Certificates in order
(i)
to cure any ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or (iv) to change or
supplement the provisions hereof in any manner which the Board of Directors
of
the Company may deem necessary or desirable and which shall not adversely affect
the interests of the holders of Right Certificates (other than an Acquiring
Person or any Affiliate or Associate of an Acquiring Person); provided,
37
Section
28. Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section
29. Determinations
and Actions by the Board of Directors.
The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary
or
advisable in the administration of this Agreement, including without limitation,
the right and power to (a) interpret the provisions of this Agreement, and
(b)
make all determinations and computations deemed necessary or advisable for
the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the
Board
of Directors of the Company in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject any member of the Board of Directors of
the
Company to any liability to the holders of the Rights or to any other
person.
Section
30. Benefits
of this Agreement.
Nothing
in this Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock of the
Company) any legal or equitable right, remedy or claim under this Agreement;
but
this Agreement shall be for the sole and exclusive benefit of the Company,
the
Rights Agent and the
38
registered
holders of the Right Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock of the Company).
Section
31. Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided,
however,
that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
the Agreement would adversely affect the purpose or effect of the Agreement,
the
right of redemption set forth in Section 23 hereof shall be reinstated and
shall
not expire until the Close of Business on the tenth (10th)
day
following the date of such determination by the Board of Directors of the
Company.
Section
32. Governing
Law.
This
Agreement, each Right and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Rhode Island and
Providence Plantations and for all purposes shall be governed by and construed
in accordance with the laws of the State of Rhode Island and Providence
Plantations applicable to contracts to be made and to be performed entirely
within the State of Rhode Island and Providence Plantations. The courts of
the
State of Rhode Island and Providence Plantations and of the United States of
America located in the State of Rhode Island and Providence Plantations (the
“Rhode
Island Courts”)
shall
have exclusive jurisdiction over any litigation arising out of or relating
to
this Agreement and the transactions contemplated hereby, and any Person
commencing or otherwise involved in any such litigation shall waive any
objection to the laying of venue of such litigation in the Rhode Island Courts
and shall not plead or claim in any Rhode Island Court that such litigation
brought therein has been brought in an inconvenient forum.
Section
33. Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument. One
or
more counterparts of this Agreement may be delivered by telecopier or pdf
electronic transmission, with the intention that they shall have the same effect
as an original counterpart hereof.
Section
34. 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.
[Remainder
of page intentionally left blank]
39
IN
WITNESS WHEREOF, the parties hereto have caused this Shareholder Rights
Agreement to be duly executed as an instrument under seal and attested, all
as
of the day and year first above written.
| ATTEST: | WASHINGTON TRUST BANCORP, INC. | |
| By: /s/ Xxxxx X. Xxxx |
By:
|
/s/ Xxxxx X. Xxxxxxx |
| Name: Xxxxx X. Xxxxxxx | ||
| Title: Executive Vice President, Secretary, Treasurer and Chief Financial Officer | ||
|
ATTEST:
|
AMERICAN STOCK TRANSFER & TRUST COMPANY | |
| By: /s/ Xxxxx X. Xxxxxx |
By:
|
/s/ Xxxxxxx X. Xxxxxx |
| Name: Xxxxxxx X. Xxxxxx | ||
| Title: Vice President | ||
Exhibit
A
[Form
of
Right Certificate]
Certificate
No. R-______ Rights
NOT
EXERCISABLE AFTER AUGUST 31, 2016 OR EARLIER IF NOTICE OF REDEMPTION IS GIVEN.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF WASHINGTON TRUST BANCORP,
INC., AT $0.01 PER RIGHT, ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS
AGREEMENT BETWEEN WASHINGTON TRUST BANCORP, INC. AND AMERICAN STOCK TRANSFER
& TRUST COMPANY, AS RIGHTS AGENT, DATED AS OF AUGUST 17, 2006 (THE “RIGHTS
AGREEMENT”). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND
VOID.
Right
Certificate
WASHINGTON
TRUST BANCORP, INC.
This
certifies that ________________, or registered assigns, is the registered owner
of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Shareholder
Rights Agreement dated as of August 17, 2006 (the “Rights Agreement”) between
Washington Trust Bancorp, Inc. (the “Company”) and American Stock Transfer &
Trust Company, as Rights Agent (the “Rights Agent”), to purchase from the
Company at any time after the Distribution Date (as such term is defined in
the
Rights Agreement) and prior to the close of business on August 31, 2016 at
the
office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one fully paid, non-assessable share of the common
stock, $.0625 par value per share (the “Common Stock”), of the Company, at a
purchase price of $100.00 per share (the “Exercise Price”), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and the related Certificate duly executed. The number of Rights evidenced by
this Right Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Exercise Price per share set forth
above, are the number and Exercise Price as of ___________ based on the Common
Stock as constituted at such date.
Upon
the
occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Right Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of any such Person
(as such terms are defined in the Rights Agreement), (ii) a transferee of any
such Acquiring Person or Associate or Affiliate thereof, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a Person who,
after such transfer, became an Acquiring Person or an Affiliate or Associate
of
an Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
As
provided in the Rights Agreement, the Exercise Price and the number of shares
of
Common Stock or other securities 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.
This
Right Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability
of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal office of the
Company and the designated office of the Rights Agent and are also available
upon written request to the Company or the Rights Agent.
This
Right Certificate, with or without other Right Certificates, upon surrender
at
the office or offices of the Rights Agent designated for such purpose, may
be
exchanged for another Right Certificate or Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number
of
shares of Common Stock as the Rights evidenced by the Right Certificate or
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 Certificates for
the
number of whole Rights not exercised. If this Right Certificate shall be
exercised in whole or in part pursuant to Section 11(a)(ii) of the Rights
Agreement, the holder shall be entitled to receive this Right Certificate duly
marked to indicate that such exercise has occurred as set forth in the Rights
Agreement.
Under
certain circumstances, subject to the provisions of the Rights Agreement, the
Board of Directors of the Company at its option may exchange all or any part
of
the Rights evidenced by this Certificate for shares of the Company’s Common
Stock at an exchange ratio (subject to adjustment) specified in the Rights
Agreement.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Board of Directors of the Company at its
option at a redemption price of $0.01 per Right (payable in cash, Common Stock
or other consideration deemed appropriate by the Board of
Directors).
The
Company is not obligated to issue fractional shares of stock upon the exercise
of any Right or Rights evidenced hereby. If the Company elects not to issue
such
fractional shares, in lieu thereof a cash payment will be made, as provided
in
the Rights Agreement.
No
holder
of this Right Certificate, as such, shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Common Stock
or
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of
a
shareholder of the Company or any right to vote for the election of directors
or
upon any matter submitted to shareholders at any meeting thereof, or to give
or
withhold consent to any corporate action, or to receive notice of meetings
or
other actions
2
This
Right Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by an authorized signatory of the Rights
Agent.
WITNESS
the facsimile signature of the proper officers of the Company as a document
under corporate seal.
| ATTEST: | WASHINGTON TRUST BANCORP, INC. | |
| By: |
By:
|
|
| Name: | ||
| Title: | ||
|
ATTEST:
|
AMERICAN STOCK TRANSFER & TRUST COMPANY | |
| By: |
By:
|
|
| Name: | ||
| Title: | ||
3
[Form
of Reverse Side of Right Certificate]
FORM
OF ASSIGNMENT
(To
be executed by the registered holder if such
holder
desires to transfer the Right Certificate.)
FOR
VALUE
RECEIVED ___________________________ hereby sells, assigns and transfers unto
____________________________________ (Please print name and address of
transferee) ____________________________________ this Right Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ___________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power
of
substitution.
| Dated: | |
| Signature: | |
| Signature Medallion Guaranteed: |
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate ______ are ______ are not being
transferred by or on behalf of a Person who is or was an Acquiring Person or
an
Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement); and
(2) after
due
inquiry and to the best knowledge of the undersigned, the undersigned ____
did
____ did not directly or indirectly acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any such Person.
| Dated: | |
| Signature: |
NOTICE
The
signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
FORM
OF ELECTION TO PURCHASE
(To
be executed if holder desires to
exercise
the Right Certificate.)
To
WASHINGTON TRUST BANCORP, INC.:
The
undersigned hereby irrevocably elects to exercise _______ Rights represented
by
this Right Certificate to purchase the shares of Common Stock issuable upon
the
exercise of the Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and requests
that
certificates for such shares be issued in the name of:
Please
insert social security or other identifying taxpayer number:
__________________
________________________________________________________________________
________________________________________________________________________
(Please
print name and address)
If
such
number of Rights shall not be all the Rights evidenced by this Right Certificate
or if the Rights are being exercised pursuant to Section 11(a)(ii) of the Rights
Agreement, a new Right Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please
insert social security or other identifying taxpayer number:
__________________
_______________________________________________________________________
_______________________________________________________________________
(Please
print name and address)
| Dated: | |
| Signature: | |
| Signature Guaranteed: |
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate ____ are ____ are not being exercised
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate
or
Associate of any such Person (as such terms are defined in the Rights
Agreement); and
(2) after
due
inquiry and to the best knowledge of the undersigned, the undersigned ____
did
____ did not directly or indirectly acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any such Person.
| Dated: | |
| Signature: |
NOTICE
The
signature to the foregoing Election to Purchase and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
