FIRST AMENDMENT TO STOCKHOLDERS RIGHTS AGREEMENT
First Amendment, dated as of December 15, 1998 (the "Amendment"), to
the Stockholders Rights Agreement, dated as of November 1, 1995 (the "Rights
Agreement"), by and between First Commonwealth, Inc., a Delaware corporation
(the "Company"), and First Chicago Trust Company of New York (the "Rights
Agent"). Capitalized terms used in this Agreement shall have the meanings
ascribed to them in the Rights Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
has directed the Rights Agent to amend the Rights Agreement as hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and mutual
agreements hereinafter set forth, the parties hereto agree as follows:
1. Section 1(i) and 1(t) of the Rights Agreement are hereby deleted in
their entirety and remaining Sections 1(j) through 1(nn) are hereby redesignated
as Sections 1(i) through 1(ll).
2. The first sentence of the legend in Section 3(c) of the
Rights Agreement is hereby amended to insert a comma after "1995" and to insert
the words "as amended" immediately following such comma.
3. Section 11(a)(iii) of the Rights Agreement is hereby amended to read in
its entirety as follows:
"(iii) In the event that there shall not be sufficient authorized and
unissued or treasury shares of Common Stock to permit the exercise in full
of the Rights in accordance with paragraph (ii) of this subsection (a),
the Company shall take all necessary action to authorize and reserve for
issuance such number of additional shares of Common Stock as may from time
to time be required to be issued upon the exercise in full of all
outstanding Rights and, if necessary, shall use its best efforts to obtain
stockholder approval thereof. Notwithstanding the preceding sentence, if
the Board shall determine that such action is necessary or appropriate and
is not contrary to the best interests of the holders of the Rights, the
Board may cause the Company, in lieu of issuing shares of Common Stock in
accordance with such paragraph (ii), to distribute, or if a sufficient
number of shares of Common Stock cannot be issued for such purpose in
accordance with the provisions hereof, the Company shall distribute, upon
the exercise of each Right, cash, debt securities, Preferred Shares, other
shares of Preferred Stock, other property or any combination thereof
having an aggregate Fair Market Value (determined as provided in
subsection (d) of this Section 11) equal to the Fair Market Value (as so
determined) of the number of shares of Common Stock which otherwise would
have been issuable pursuant to such paragraph (ii). Any such decision by
the Board must be made and publicly announced within 30 days after the
occurrence of any Section 11(a)(ii) Event."
4. Section 13(d) of the Rights Agreement is hereby deleted in its
entirety, and Sections 13(e) through 13(h) are hereby redesignated as Sections
13(d) through 13(g).
5. Sections 23(a) and (b) of the Rights Agreement are hereby amended to
read in their entirety as follows:
" (a) The Board may, at its option, at any time prior to the earliest of
(i) the Close of Business on the 10th Business Day after the Share
Acquisition Date (or, if the Share Acquisition Date shall have occurred
prior to the Record Date, the Close of Business on the 10th Business Day
after the Record Date), (ii) the occurrence of any Section 13 Event and
(iii) the Final Expiration Date, redeem all, but not less than all, of the
then outstanding Rights at a redemption price of $.01 per Right, adjusted
as provided in subsection (g) of this Section 23 (such redemption price
being hereinafter called the "Redemption Price").
(b) In addition to the right of redemption reserved in the first
sentence of subsection (a) of this Section 23, the Board may redeem all,
but not less than all, of the then outstanding Rights at the Redemption
Price after the Share Acquisition Date, but prior to the occurrence of any
Section 13 Event, if either (i) the Person who is an Acquiring Person
shall have transferred or otherwise disposed of (either alone or together
with its Affiliates and Associates) such number of shares of Common Stock
of the Company, in one or a series of related transactions not directly or
indirectly involving the Company or any of its Subsidiaries or the
occurrence of any Section 13 Event, as shall result in such Person
thereafter being a Beneficial Owner of less than 10% of the then
outstanding shares of Common Stock of the Company, and after such transfer
or other disposition there is no other Acquiring Person, or (ii) in
connection with any Section 13 Event which shall not involve an Interested
Stockholder and in which all holders of the Common Stock of the Company
are treated the same."
6. Section 23(d) of the Rights Agreement is hereby amended to strike and
remove the words "and the Disinterested Directors" from the first sentence
thereof.
7. Section 27 of the Rights Agreement is hereby amended in its entirety to
read as follows:
"Section 27. Supplements and Amendments. Prior to the Distribution
Date, but subject to the last sentence of this Section 27, the Company and
the Rights Agent, if so directed in writing by the Company, shall
supplement or amend any term, provision or condition of this Agreement,
without the approval of the registered holders of the stock certificates
representing the Common Stock and the Rights. From and after the
Distribution Date, but subject to the
last sentence of this Section 27, the Company and the Rights Agent, if so
directed in writing by the Company, shall supplement or amend this
Agreement, without the approval of the registered holders of the Rights
(however represented), in order: (a) to cure any ambiguity, (b) to correct
or supplement any term, provision or condition of this Agreement which may
be defective or inconsistent with any other term, provision or condition
hereof, (c) to shorten or lengthen any time period specified herein or (d)
to change or supplement one or more of the terms, provisions or conditions
hereof in any manner which the Company may deem necessary or desirable and
which shall not adversely affect, as determined by the Board, the
interests of the holders (other than any Restricted Person or the
transferees therefrom specified in Section 7(d) of the Rights (however
represented); provided, however, that this Agreement may not be
supplemented or amended pursuant to clause (c) of this sentence (i) to
lengthen any time period (except as permitted by Section 3(a)(ii)) unless
such lengthening is for the purpose of protecting, enhancing or clarifying
the rights of, and/or the benefits to, the holders (other than any
Restricted Person or the transferees therefrom specified in Section 7(d))
of the Rights or (ii) to lengthen any time period relating to when the
Rights may be redeemed if at such time the Rights are not then redeemable.
Upon the delivery of a certificate from an appropriate officer of the
Company stating that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment; provided, however, that the Rights Agent shall
not be required to execute any supplement or amendment which affects any
of the Rights Agent's rights, powers, obligations, duties or immunities
under this Agreement without its consent. On and after the Distribution
Date, no supplement or amendment shall be made which changes the Exercise
Price, the number of one one-hundredths of a Preferred Share for which a
Right is exercisable, the Redemption Price or the Final Expiration Date.
Prior to the Distribution Date, the interests of the holders of the Rights
shall be deemed coincident with the interests of the holders of the Common
Stock of the Company."
8. Section 29 of the Rights Agreement is hereby amended to strike and
remove the parenthetical phrase "(or, as and when set forth herein, the
Disinterested Directors)" from the second sentence thereof and to strike and
remove the parenthetical phrases "(or the Disinterested Directors)" and
"(including any Disinterested Director)" from the third sentence thereof.
9. Section 31 of the Rights Agreement is hereby amended to
strike and remove the parenthetical phrase "(with the concurrence of at least a
majority of the Disinterested Directors then in office)" from the proviso
thereof.
10. Exhibit C to the Rights Agreement is amended and restated in its
entirety in the form attached hereto.
11. This Amendment shall be governed by and construed in accordance with
the laws of the State of Delaware.
12. This Amendment may be executed in any number of counterparts, and each
of such counterparts shall be deemed to be an original, and all such
counterparts shall together constitute but one and the same agreement.
13. Except as specifically provided in this Amendment to the Rights
Agreement, this Amendment shall not by implication or otherwise alter, modify,
amend or in any such way affect any of the terms, conditions, obligations,
covenants or agreements contained in the Rights Agreement, all of which are
ratified and affirmed in all respects and shall continue in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
the Rights Agreement to be duly executed, all as of the date and year first
above written.
FIRST COMMONWEALTH, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By: /s/ Xxxxxx Xxxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Assistant Vice President
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On October 20, 1995, the Board of Directors (the "Board") of First
Commonwealth, Inc., a Delaware corporation (the "Company"), declared a dividend
of one preferred stock purchase right (a "Right") for each outstanding share of
Common Stock, $.001 par value (the "Common Stock"), of the Company. The dividend
was paid to holders of record of the Common Stock on November 16, 1995, the
effective date of the Company's initial public offering registration statement,
file no. 33-97426 (the "Record Date"). Each Right entitles the holder thereof
(except as described below) to purchase from the Company one one-hundredth of a
share of the Series A Junior Participating Preferred Stock, $.001 par value (the
"Preferred Shares"), of the Company at a price (the "Exercise Price") of $40.00
per one one-hundredth of a Preferred Share, subject to adjustment. The terms of
the Rights are set forth in the Stockholders Rights Agreement dated as of
November 1, 1995, as amended (the "Rights Agreement") between the Company and
First Chicago Trust Company of New York, as Rights Agent (the "Rights Agent").
Capitalized terms not defined herein have the respective meanings specified in
the Rights Agreement.
Distribution Date; Transfer of Rights
Initially, the Rights associated with the Common Stock outstanding
as of the Record Date will be evidenced solely by the stock certificates for
such Common Stock, with a copy of this Summary of Rights attached thereto. The
Rights will separate from the Common Stock upon the earlier to occur of (i) 10
Business Days after the first public announcement that any Person (other than an
Exempt Person (as hereinafter defined)) has become an Acquiring Person (as
hereinafter defined) and (ii) 10 Business Days (or such other Business Day as
may be determined by action of the Board prior to the time that any Person shall
become an Acquiring Person (as hereinafter defined) after the commencement by
any Person (other than an Exempt Person) of, or the first public announcement of
its intention to commence, a tender or exchange offer if, upon the consummation
thereof, such Person would be the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock (the earlier of the dates specified in
clauses (i) and (ii) being hereinafter called the "Distribution Date"). After
the Distribution Date, the Rights will be evidenced solely by separate
certificates and will trade independently from the Common Stock.
An "Acquiring Person" is any Person who or which, together with its
Affiliates and Associates, has acquired 15% or more of the shares of Common
Stock then outstanding, but does not include (i) the Company, (ii) any
Subsidiary of the
Company, (iii) any employee benefit plan or other compensation program or
arrangement of the Company or of any such Subsidiary or (iv) any Person holding
shares of Common Stock for or pursuant to the terms of any such plan, program or
arrangement (the Persons specified in clauses (i) through (iv) being herein
collectively called "Exempt Persons"). Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," has become so inadvertently, and such
Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring Person," then
such Person shall not be deemed to be an "Acquiring Person."
A "Restricted Person" is an Acquiring Person or any Affiliate or
Associate thereof.
The Rights Agreement provides that, until the Distribution Date (or
the earlier redemption or expiration of the Rights), the Rights may be
transferred only with the associated shares of Common Stock. Until the
Distribution Date (or the earlier redemption or expiration of the Rights), stock
certificates for Common Stock issued after the Record Date, either upon transfer
of outstanding shares or original issuance of additional shares of Common Stock,
will contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or the earlier redemption or expiration of the Rights), the
surrender for transfer of any stock certificate for shares of Common Stock, with
or without such legend and whether or not a copy of this Summary of Rights is
attached thereto, will also constitute the transfer of the Rights associated
with the shares of Common Stock represented by such stock certificate.
As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to the
holders of record of the Common Stock as of the Close of Business on the
Distribution Date, which thereafter will constitute the sole evidence of the
Rights. Each share of Common Stock issued by the Company after the Record Date
and prior to the earlier redemption or expiration of the Rights, including any
shares of Common Stock issued by reason of the exercise of any option, warrant,
right (other than the Rights) or conversion or exchange privilege (however
evidenced) issued by the Company prior to the Distribution Date, will be
accompanied by a Right (unless the Board expressly provides to the contrary at
the time of issuance of any such option, warrant, right or privilege), and
Rights Certificates evidencing such Rights will be issued at the same time as
the stock certificates for the associated shares of Common Stock.
The Rights are not exercisable until the Distribution Date.
Moreover, the time when the Rights may be exercised is restricted as described
in the next paragraph. The Rights will expire on the tenth anniversary of the
Record Date (the "Final Expiration Date"), unless the Final Expiration Date is
extended or unless the Rights are earlier redeemed or exchanged by the Company,
in each case as described below.
Exercise of Rights Under Certain Circumstances
In the event that any Person becomes an Acquiring Person, proper
provision will be made so that the registered holder of each Right (other than
Rights Beneficially Owned as described in the next sentence) will thereafter
have the right to receive, upon exercise thereof, the number of shares of Common
Stock which, at the time of the occurrence of such event, will have a market
value equal to two times the then current Exercise Price. After the occurrence
of the event described in the preceding sentence, all Rights which are, or
(under certain circumstances specified in the Rights Agreement) were,
Beneficially Owned by a Restricted Person or specified transferees therefrom
will be or become void. Under no circumstances may a Right be exercised after
the occurrence of either such event unless the Company's right to redeem the
Rights (as described below) has expired.
If, on or after the date on which any Person has become an Acquiring
Person, any of the following transactions occur: (i) the Company merges into or
consolidates with an Interested Stockholder (as hereinafter defined) or, unless
all holders of the Company's outstanding shares of Common Stock are treated the
same, another Person (with limited designated exceptions); (ii) an Interested
Stockholder or, unless all holders of the Company's outstanding shares of Common
Stock are treated the same, another Person (with limited designated exceptions)
merges into the Company and either (A) all or part of the outstanding shares of
Common Stock of the Company are converted into capital stock or other securities
of any other Person (or the Company), cash and/or other property or (B) such
shares remain outstanding, unconverted and unchanged; or (iii) the Company sells
or transfers 50% or more of its consolidated assets or earning power to an
Interested Stockholder (as hereinafter defined) or, unless all holders of the
Company's outstanding shares of Common Stock are treated the same, another
Person (with limited designated exceptions); proper provision will be made so
that the registered holder of each Right (other than Rights which have become
void) will thereafter have the right (the "Flip-Over Right") to receive, upon
exercise thereof, the number of common shares of the acquiror (or of another
Person affiliated therewith) which, at the time of consummation of such
transaction, will have a market value equal to two times the then current
Exercise Price. An "Interested Stockholder" is any Restricted Person or any
Affiliate or Associate of any other Person in which such Restricted Person has
an interest, or any Person acting, directly or indirectly, on behalf of or in
concert with any such Restricted Person.
Adjustments to Exercise Price and Stock Purchasable Upon Exercise
The Exercise Price payable, the number and kind of shares of capital
stock issuable upon exercise of the Rights and the number of Rights outstanding
are subject to adjustment from time to time to prevent dilution (i) in the event
of a dividend payable in Preferred Shares on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) upon the grant to the holders of
the Preferred Shares of certain options, warrants or rights to subscribe for or
purchase Preferred Shares at a price, or securities convertible into or
exchangeable for Preferred Shares with a conversion or
exchange price, less than the then Fair Market Value of the Preferred Shares or
(iii) upon the distribution to the holders of the Preferred Shares of cash,
securities, evidences of indebtedness or other property (other than a regular
quarterly cash dividend or a dividend payable in Preferred Shares) or options,
warrants or rights (other than those referred to in clause (ii) above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a dividend on the Common Stock
payable in shares of Common Stock or a subdivision, combination or
reclassification of the Common Stock occurring, in any such case, prior to the
Distribution Date.
With certain specified exceptions, no adjustment in the Exercise
Price will be made until the cumulative adjustments required equal at least 1%
of the Exercise Price. The Company is not required to issue fractional Preferred
Shares (other than fractions which are multiples of one one-hundredth of a
Preferred Share), but in lieu thereof the Company would be required to make a
cash payment based on the Fair Market Value of the Preferred Shares on the
trading day immediately preceding the date of exercise.
Terms of Preferred Shares
The Preferred Shares receivable upon exercise of the Rights will not
be redeemable. Each Preferred Share will entitle the holder thereof to receive a
preferential quarterly dividend equal to 100 times the aggregate per share
amount of all cash dividends, plus 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends and other distributions (other than
in shares of Common Stock), declared on the Common Stock during such quarter,
adjusted to give effect to any dividend on the Common Stock payable in shares of
Common Stock or any subdivision, combination or reclassification of the Common
Stock (a "Dilution Event"). Each Preferred Share will entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the
Company, voting together as a single class with the holders of the Common Stock
and the holders of any other class of capital stock having general voting
rights, adjusted to give effect to any Dilution Event. In the event of
liquidation of the Company, the holder of each Preferred Share will be entitled
to receive a preferential liquidation payment equal to 100 times the aggregate
per share amount to be distributed to the holders of the Common Stock, adjusted
to give effect to any Dilution Event, plus an amount equal to accrued and unpaid
dividends and distributions on such Preferred Share, whether or not declared, to
the date of such payment. In the event of any merger, consolidation or other
transaction in which the outstanding shares of Common Stock of the Company are
exchanged for or converted into other capital stock, securities, cash and/or
other property, each Preferred Share will be similarly exchanged or converted
into 100 times the per share amount applicable to the Common Stock, adjusted to
give effect to any Dilution Event.
Because of the nature of the dividend, voting, liquidation and other
rights
accorded to each Preferred Share, the value of the one one-hundredth of a
Preferred Share receivable upon the exercise of each Right should approximate
the value of one share of Common Stock.
Redemption of Rights
At any time prior to the earliest of (i) 10 Business Days after the
first public announcement that any Person (other than an Exempt Person) has
become an Acquiring Person, (ii) the occurrence of any transaction which permits
the exercise of the Flip-Over Right and (iii) the Final Expiration Date, the
Board may redeem the Rights in whole, but not in part, at the redemption price
of $.01 per Right, adjusted to give effect to any Dilution Event (the
"Redemption Price"). The redemption of the Rights may be made effective at such
time, on such basis and with such conditions as the Board, in its sole
discretion, may establish. After the redemption period has expired, the
Company's right of redemption may be reinstated, under the circumstances
specified in the Rights Agreement, if either (i) the Person who became an
Acquiring Person shall reduce, in one or a series of related transactions not
involving the Company or any Subsidiary or the occurrence of any transaction
which permits the exercise of the Flip-Over Right, its Beneficial Ownership of
the outstanding shares of Common Stock to less than 10% of such outstanding
shares or (ii) in connection with any transaction which permits the exercise of
the Flip-Over Right, which does not involve an Interested Stockholder and in
which all holders of the Common Stock are treated the same. Immediately after
action by the Board directing the redemption of the Rights, the option to
exercise the Rights will terminate, and thereafter each registered holder of the
Rights will only be entitled to receive the Redemption Price therefor.
Exchange of Rights
At any time after any Person has become an Acquiring Person and
prior to the time that any Person (other than an Exempt Person), together with
its Affiliates and Associates, has become the Beneficial Owner of 50% or more of
the outstanding shares of Common Stock, the Board may direct that all or any
part of the outstanding Rights (other than Rights which have become void) be
exchanged for shares of Common Stock at the exchange rate of one share of Common
Stock (or one one-hundredth of a Preferred Share or of another share of capital
stock of the Company having equivalent rights, preferences and privileges) per
Right, adjusted to give effect to any Dilution Event.
Amendment of the Rights and the Rights Agreement
Prior to the Distribution Date, the terms of the Rights and the
Rights Agreement may be supplemented or amended by the Board in any manner. From
and after the Distribution Date, the Rights may be supplemented or amended by
the Board, without the approval of the holders of the Rights, in certain
respects which do not adversely affect, as determined by the Board, the
interests of such holders; provided, however, that the Rights Agreement cannot
be amended to lengthen (i) any time period
unless such lengthening is for the benefit of the holders of the Rights or (ii)
any time period relating to when the Rights may be redeemed if at such time the
Rights are not then redeemable.
Miscellaneous
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
hereby incorporated herein by reference.
