CODORUS VALLEY BANCORP, INC.
and
PEOPLES BANK OF XXXX ROCK
Rights Agent
Rights Agreement
Dated as of November 4, 1995
Table of Contents
Section Page
1. Certain Definitions . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . 5
3. Issuance of Rights Certificates . . . . . . . . . 5
4. Form of Rights Certificates . . . . . . . . . . . 8
5. Countersignature and Registration . . . . . . . . 9
6. Transfer, Split Up, Combination an
Exchange of Rights Certificate;
Mutilated, Destroyed, Lost or
Stolen Rights Certificates . . . . . . . . . . 10
7. Exercise of Rights; Purchase
Price; Expiration Date of Rights . . . . . . . . 11
8. Cancellation and Destruction
of Rights Certificates . . . . . . . . . . . . . 15
9. Reservation and Availability of
Capital Stock . . . . . . . . . . . . . . . . . 15
10. Common Stock Record Date . . . . . . . . . . . . 17
11. Adjustment of Purchase Price,
Number and Kind of Shares or
Number of Rights . . . . . . . . . . . . . . . . 18
12. Certificate of Adjusted Purchase
Price or Number of Shares . . . . . . . . . . . 30
13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power . . . . . . 31
14. Fractional Rights and Fractional Shares . . . . 34
15. Rights of Action . . . . . . . . . . . . . . . . 35
16. Agreement of Rights Holder . . . . . . . . . . . 35
17. Rights Certificate Holder Not
Deemed a Stockholder . . . . . . . . . . . . . . 36
18. Concerning the Rights Agent . . . . . . . . . . . 37
19. Merger or Consolidation or
Change of Name of Rights Agent . . . . . . . . . 38
20. Duties of Rights Agent . . . . . . . . . . . . . 39
21. Change of Rights Agent . . . . . . . . . . . . . 42
22. Issuance of New Rights Certificates . . . . . . . 43
23. Redemption and Termination . . . . . . . . . . . 44
24. Notice of Certain Events . . . . . . . . . . . . 45
25. Notices . . . . . . . . . . . . . . . . . . . . . 47
26. Supplements and Amendments . . . . . . . . . . . 47
27. Successors . . . . . . . . . . . . . . . . . . . 48
28. Determinations and Actions
by the Board of Directors, etc. . . . . . . . . 48
29. Benefits of this Agreement . . . . . . . . . . . 49
30. Severability . . . . . . . . . . . . . . . . . . 49
31. Governing Law . . . . . . . . . . . . . . . . . . 50
32. Counterparts . . . . . . . . . . . . . . . . . . 50
33. Descriptive Headings . . . . . . . . . . . . . . 50
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (the "Agreement") is dated as of
November 4, 1995, and is between Codorus Valley Bancorp, Inc., a
Pennsylvania corporation (the "Company"), and Peoples Bank of Xxxx
Rock, a Pennsylvania bank and trust company (the "Rights Agent").
BACKGROUND:
On November 4, 1995 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a
dividend distribution of one Right for each share of common stock,
par value $2.50 per share, of the Company (the "Common Stock")
outstanding at the close of business on December 15, 1995 (the
"Record Date"), and has authorized the issuance of one Right for
each share of Common Stock of the Company outstanding on the Record
Date, each Right initially representing the right to purchase one
share of Common Stock of the Company, upon the terms and subject to
the conditions hereafter set forth (the "Rights").
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 who or
which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding, but shall not include the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan.
(b) "Adjustment Shares" shall have the meaning set forth
in Section 11(a)(ii).
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of
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1934, as amended (the "Exchange Act"), as in effect on the date of
this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person
or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (B)
securities issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
vote or direct the voting of or to dispose of or direct the
disposition of or "beneficial ownership" of (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act), including 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," any security under this subparagraph (ii) as a
result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A)
arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange Act
(or on any comparable or successor report);
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
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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), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (d)) or disposing of
any voting securities of the Company.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the
Commonwealth of Pennsylvania are authorized or obligated by law or
executive order to close.
(f) "Close of Business" on any given date shall mean
5:00 P.M., Harrisburg, Pennsylvania time, on such date; provided,
however, that if such date is not a Business Day it shall mean 5:00
P.M., Harrisburg, Pennsylvania time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the common stock, par
value $2.50 per share, of the Company, except that "Common Stock"
when used with reference to any Person other than the Company shall
mean the capital stock of such Person with the greatest voting
power or the equity securities or other equity interest having
power to control or direct the management of such Person.
(h) "Common stock equivalent" shall have the meaning set
forth in Section 11(a)(iii).
(i) "Continuing Director" shall mean (i) any member of
the Board of Directors of the Company, while such Person is a
member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative
of an Acquiring Person or of any Affiliate or Associate of an
Acquiring Person, and was a member of the Board prior to the date
of this Agreement, or (ii) any Person who subsequently becomes a
member of the Board, while such person is a member of the Board,
who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, or a representative of an Acquiring Person or of
any Affiliate or Associate of an Acquiring Person, if such Person's
nomination for election or election to the Board is recommended or
approved by a majority of the Continuing Directors.
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(j) "Current market price" shall have the meaning set
forth in Section 11(d).
(k) "Current Value" shall have the meaning set forth in
Section 11(a)(iii).
(l) "Distribution Date" shall mean the earlier of (i)
the close of business on the tenth Business Day after the Stock
Acquisition Date, or (ii) the close of business on the tenth
Business Day after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of
Rule 14e-2(a) of the General Rules and Regulations under the
Exchange Act if, upon consummation thereof, such Person would he
the Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding.
(m) "Equivalent common stock" shall have the meaning set
forth in Section 11(b).
(n) "Expiration Date" and "Final Expiration Date" shall
have the meanings set forth in Section 7(a).
(o) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(p) "Principal Party" shall have the meaning set forth
in Section 13(b).
(q) "Purchase Price" shall have the meaning set forth in
Section 4, as the same may be adjusted from time to time pursuant
to the provisions of this Agreement.
(r) "Record Date" shall have the meaning set forth in
the "BACKGROUND" clause of this Agreement.
(s) "Redemption Price" shall have the meaning set forth
in Section 23.
(t) "Rights Dividend Declaration Date" shall have the
meaning set forth in the "BACKGROUND" clause of this Agreement.
(u) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii) (A), (B) or (C) hereof.
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(v) "Section 13 Event" shall mean any event described in
clauses (w), (x), (y) or (z) of Section 13(a) hereof.
(w) "Spread" shall have the meaning set forth in Section
11(a)(iii).
(x) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that a Person has become an Acquiring Person.
(y) "Subsidiary" shall mean, with reference to any
Person, any corporation or other entity of which an amount of
voting securities sufficient to elect a majority of the directors
or Persons having similar authority of such corporation or other
entity is beneficially owned, directly or indirectly, by such
Person, or otherwise controlled by such Person.
(z) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii).
(zz) "Trading Day" shall have the meaning set forth in
Section 11-(d).
(aa) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
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 holders of Common
Stock) 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 appropriate.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of paragraph (b), (c) and (d)
of this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii)
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the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a
transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class,
postage prepaid mail, to each such record holder of the Common
Stock 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 right certificates, in substantially the form of Exhibit A
hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights
per share of Common Stock has been made pursuant to Section 11(i)
hereof, at the time of distribution of the Rights Certificates the
Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As
of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) As promptly as practicable following the Rights
Dividend Declaration Date, the Company will send a copy of a
Summary of Rights, in substantially the form attached hereto as
Exhibit B (the "Summary of Rights"), by first-class, postage
prepaid mail, to each record holder of Common Stock as of the close
of business on that day, at the address of such holder shown on the
records of the Company. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of such Common Stock shall
also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date (as such
term is defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in respect of
which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
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(c) Rights shall be issued in respect of all shares of
Common Stock which are issued after the Record Date but prior to
the earlier of the Distribution Date or the Expiration Date
(including the issuance of Common Stock pursuant to the exercise of
rights under the Company's benefit plans), unless the Board of
Directors provides to the contrary by resolution adopted at or
before the time of the issuance. Certificates representing such
shares of subsequently issued Common Stock shall also be deemed to
be certificates for Rights.
(d) Any certificates issued by the Company after the
Record Date that represent shares of Common Stock in respect of
which rights have been issued shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Codorus Valley Bancorp, Inc. (the "Company") and Peoples
Bank of Xxxx Rock (the "Rights Agent") dated as of November 4, 1995
(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 the Company. 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. The Company 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 set forth in the
Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void, and the transfer of
such Rights may be deemed to be restricted.
With respect to such certificates containing the
foregoing legend, until the earlier of (i) the Distribution Date or
(ii) the Expiration Date, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the
7
transfer of the Rights associated with the Common Stock represented
by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in 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 or with any rule or regulation made pursuant
thereto or with any rule or regulation of the National Association
of Securities Dealers, Inc. or any stock exchange on which the
Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the
Record Date (or in the case of Rights issued in respect of Common
Stock issued by the Company after the Record Date, as of the date
of issuance of such Common Stock), shall note the date of issuance,
and on their face shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth therein
at the price set forth therein (such exercise price per share being
referred to herein as the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights 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 such Associate or Affiliate ) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate of 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
8
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Rights Certificate referred to in this
sentence, shall bear (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate
are or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of
such Agreement, and the transfer of such Rights may be
deemed to be restricted.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President or any
Executive Vice President or Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually
or by a facsimile signature. The Rights Certificates shall be
countersigned by an authorized signatory of the Rights Agent but it
shall not be necessary for the same signatory to countersign all of
the Rights Certificates issued hereunder. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
9
signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on behalf
of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of
the Company to sign such Rights 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 its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the
Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
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 Rights Certificate or Certificates may
be transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to
purchase a like number of shares of Common Stock (or, following a
Triggering Event, other securities, cash or other assets, as the
case may be) as the Rights Certificate or Certificates surrendered
then entitled such holder (or former holder in the case of
transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged at
the principal office or offices of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
10
transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such
Rights Certificate and shall have 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. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The
Company may require payment from the holder of the Rights of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case of
loss, theft or destruction, of indemnity or security reasonably
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 Rights
Certificate if mutilated, the Company will execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) and the last sentence of
Section 23(a) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 12(a) hereof) in whole or in part at any
time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the
certificate on the reverse side thereof duly executed, to the
11
Rights Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of shares of Common
Stock (or other securities or property, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to
the earlier of (i) the close of business on November 4, 2005 (the
"Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and
(ii) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall initially be $100.00, and
shall be subject to adjustment from time to time as provided in
Section 11 hereof and shall be payable in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per share of Common
Stock (or other shares, securities or property, as the case may be)
to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly, (i) (A) requisition from any
transfer agent of the shares of Common Stock (or make available, if
the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Common Stock to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B), if the
Company shall have elected to deposit the total number of shares of
Common Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary
receipts representing such number of shares of Common Stock as are
to be purchased (in which case certificates for the shares of
Common Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will
direct the depositary agent to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be paid
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in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced (including to
zero) pursuant to Section 11(a)(iii) hereof) may be made in any
combination of (x) cash or certified bank check or bank draft
payable to the order of the Company, or (y) delivery of a
certificate or certificates (with appropriate stock power executed
in blank attached thereto) for whole numbers of shares of Common
Stock, which shall be credited at their current market price (as
determined pursuant to Section 11(d) hereof). If the Company
receives payment from any holder of Rights in a number of whole
shares of Common Stock with a current market price (as determined
pursuant to Section 11(d) hereof) that exceeds the Purchase Price
due from such holder, the Company may, at its election, (i) accept
only such whole number of shares with a current market price (as
determined pursuant to Section 11(d) hereof) that is less than the
Purchase Price and require that the balance of the Purchase Price
be paid under clause (x), above, or (ii) make a cash refund of the
difference between the current market price (as determined pursuant
to Section 11(d) hereof) of the whole number of shares received and
the Purchase Price due from such holder. In the event that the
Company is obligated to issue other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder
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of such Rights Certificate, registered in such name or names as may
be designated by such holder, 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, (i) any Rights beneficially owned by an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii)
any Rights transferred by an Acquiring Person (or any such
Associate or Affiliate) after the Acquiring Person becomes such, or
(iii) any Rights transferred by an Acquiring Person (or any such
Associate or Affiliate) prior to or concurrently with the Acquiring
Person becoming such and if the transferee 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 regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has a primary purpose
or effect the avoidance of this Section 7(e), shall become null and
void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or
other Person as a result of its failure to make any determinations
with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(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 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 Rights
14
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 Rights
Certificates. All Rights 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 cancelled form, or, if
surrendered to the Rights Agent, shall be cancelled by it, and no
Rights 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 Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled
Rights Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that prior to the
occurrence of a Triggering Event it will 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 and without consideration of
the adjustments under Section 11(a)(ii), will be sufficient to
permit the exercise in full of all outstanding Rights. The Company
covenants and agrees that following the occurrence of a Triggering
Event it will cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock and/or other
securities, the number of shares of Common Stock and/or other
securities that, except as provided in Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all
outstanding Rights.
15
(b) The Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed with the National
Association of Securities Dealers, Inc. or on any national
securities exchange on which the Company's Common Stock then trades
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first
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 is required by law following the Distribution Date, as the case
may be, a registration statement under the Securities Act of 1933
(the "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 at all times meeting the
requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and
(A) the date of the expiration of the Rights. The Company will
also take such action as may be appropriate under, or to 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 set forth in clause (i) of the
first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare, file and achieve effectiveness of such
registration statements. Upon any such suspension, the Company
shall notify the Rights Agent and 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. Notwithstanding any 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.
16
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all Common Stock
and/or other securities delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such shares (subject
to payment of the Purchase 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 Rights Certificates and of any
certificates for shares of Common Stock and/or other securities, as
the case may be, upon the exercise of Rights. The Company shall
not, however, be required (i) to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of
Common Stock and/or other securities, as the case may be, in
respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or,
(ii) to issue or deliver any certificates for Common Stock and/or
other securities, as the case may be, 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 Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax
is due.
Section 10. Common Stock Record Date. Each person in whose
name any certificate for shares of Common Stock and/or other
securities, as the case may be, is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment
is a date upon which the applicable stock transfer books of the
Company are closed, such Person shall be deemed to have become the
17
record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on
which the applicable stock transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder
of a Rights Certificate shall not be entitled to any rights of a
stockholder 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 Purchase Price, Number and Kind
of Shares and Number of Rights. The Purchase 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 payable in shares of Common Stock, (B) subdivide or
split the outstanding Common Stock, (C) combine the outstanding
Common Stock into a smaller number of shares, or (D) issue any
shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a) and Section 7(e) hereof, the Purchase Price in effect
at the time of the record date for such dividend or at the time of
the effective date of such subdivision, combination or
reclassification, and/or the number and kind of shares of Common
Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number
and kind of shares of Common Stock or capital stock, as the case
may be, which, if such Right had been exercised immediately prior
to such date and at a time when the Common Stock transfer books of
18
the Company were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in the
case of a dividend on the Common Stock payable in shares of Common
Stock as referenced in clause (A) of this Section 11(a)(i), where
the record date of such dividend is prior to the Distribution Date
and where each share of Common Stock issued pursuant to such
dividend is issued Rights under Section 3(c) hereof, then in such
case the Purchase Price shall be reduced (and no other adjustment
shall be made pursuant to this Section 11(a)(i)) on the record date
of such dividend to a number which is equal to the result obtained
by multiplying the Purchase Price then in effect by a fraction, the
numerator of which is the number of Rights outstanding prior to
such dividend and the denominator of which is the number of Rights
outstanding immediately following such dividend. If an event
occurs which would require an adjustment under both this 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) In the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of
this Agreement, directly or indirectly, (1) shall merge into the
Company or otherwise combine with the Company and the Company shall
be the continuing or surviving corporation of such merger or
combination and the Common Stock of the Company shall remain
outstanding and unchanged, (2) shall effect a statutory share
exchange with the Company, after which the Company is not a
Subsidiary of any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, (3) shall, in one or more transactions, other
than in connection with the exercise of Rights or the exercise or
conversion of securities exercisable or convertible into capital
stock of the Company or any of its Subsidiaries, transfer any
assets to the Company or any of its Subsidiaries in exchange (in
whole or in part) for shares of any class of capital stock of the
19
Company or any of its Subsidiaries or for securities exercisable
for or convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries or otherwise obtain from the
Company or any of its Subsidiaries, with or without consideration,
any additional shares of any class of capital stock of the Company
or any of its Subsidiaries or securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as part of a pro
rata distribution to all holders of Common Shares), (4) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
dispose (in one or more transactions), to, from, with or of, as the
case may be, the Company or any of its Subsidiaries, assets,
including securities, on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an affiliated third party, (5) shall receive any
compensation from the Company or any of the Company's Subsidiaries
other than compensation for services as a director or for full-time
employment as a regular employee, in either case at rates in
accordance with the Company's (or its Subsidiaries') past
practices, or (6) shall receive the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans, advances,
guarantees, pledges, or other financial assistance or any tax
credits or other tax advantage provided by the Company or any of
its Subsidiaries, or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant
to the terms of any such plan), alone or together with its
Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding, other than
pursuant to any transaction set forth in Section 13(a) hereof,
20
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any of
its Subsidiaries or any other transaction or series of transactions
involving the Company or any subsidiary of the Company (whether or
not with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more than
1% the proportionate share of the outstanding shares of any class
of equity securities or of securities exercisable for or
convertible into securities of the Company or any of its
Subsidiaries that is directly or indirectly owned by any Acquiring
Person or any Associate or Affiliate of any Acquiring Person, then
within five (5) Business Days after the date of the occurrence of
a Section 11(a)(ii)(B) Event and promptly following the occurrence
of any Section 11 (a)(ii)(A) or (C) Event, proper provision shall
he made by the Company so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have
the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, in
lieu of the number of shares of Common Stock for which the Rights
were theretofore exercisable, such number of shares of Common Stock
of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of
shares of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of Section 11 (a)(ii)
Event and dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by (y) 50%
of the current market price (determined pursuant to Section 11(d)
hereof) per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of
Common Stock which are authorized by the Company's articles of
incorporation but not outstanding or reserved for issuance for
21
purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), and subject to
such limitations as are necessary to prevent a default under any
agreement for money borrowed as presently constituted to which the
Company is a party and subject to any limitations contained in
Section 1551 of the Pennsylvania Business Corporation Law of 1988,
as amended, or any similar successor provision thereof, the Company
shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value")
over (2) the Purchase Price (such excess, the "Spread"), and (B)
with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which
the Board of Directors of the Company has deemed to have the same
value as shares of Common Stock (such shares of preferred stock,
"common stock equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the Company
based upon the advice of an investment banking firm selected by the
Board of Directors of the Company; provided, however if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the first
occurrence of a Section 11(a)(ii) Event, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary,
cash, which in the aggregate is equal in value 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
could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90)
22
days following the first occurrence of a Section 11(a)(ii) Event,
in order that the Company may seek shareholder approval for the
authorization of such additional shares (such period, as it may be
extended, 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, as well as 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 shall be the current
market price (as determined pursuant to Section 11(d) hereof) per
share of the Common Stock on the date of the first occurrence of a
Section 11(a)(ii) Event and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common
Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common
Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record
date) Common Stock (or shares having the same rights, privileges
and preferences as the shares of Common Stock ("equivalent common
stock")) or securities convertible into Common Stock or equivalent
common stock at a price per share of Common Stock or per share of
equivalent common stock (or having a conversion price per share, if
a security convertible into Common Stock or equivalent common
stock) less than the current market price (as determined pursuant
to Section 11(d) hereof) per share of Common Stock on such record
date, the Purchase Price to be in effect after such record date
23
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator
of which shall be the number of shares of Common Stock outstanding
on such record date, plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of
Common Stock and/or equivalent common stock so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market
price, and the denominator of which shall be the number of shares
of Common Stock outstanding on such record date, plus the number of
additional shares of Common Stock and/or equivalent common stock to
be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible).
In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Shares of Common Stock owned by or held for
the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event
that such rights or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) or evidence of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date
24
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator
of which shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of Common Stock on such record
date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to a share of Common Stock and the denominator of which shall be
such current market price (as determined pursuant to Section 11(d)
hereof) per share of Common Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share
of such Common Stock for the thirty (30) consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the "current market price" per share of Common
Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the current market price per share
of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into shares of such Common
stock (other than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, after the ex-dividend date
25
for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each
such case, the "current market price" shall be properly adjusted to
take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case furnished by a
professional market maker making a market in the Common Stock
selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good faith
by the Board of Directors of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal market in
which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common
Stock are not so admitted, a Business Day. If the Common Stock is
not publicly held or not so listed or traded, "current market
price" per share shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase 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 ten thousandth of a
share of Common Stock or other share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
26
thereafter exercised shall become entitled to receive any shares of
capital stock other than Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Right and/or
the Purchase Price thereof 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
contained in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k),
and (m), and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Common Stock shall apply on like terms to any
such other shares.
(g) All Rights first issued by the Company subsequent to
any adjustments made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number
of shares of Common Stock 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 Purchase
Price as a result of the calculations made in Sections 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 Purchase Price, that number of shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
lieu of any adjustment in the number of shares of Common Stock
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 number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of
27
Rights shall become that number of Rights (calculated to the
nearest one-ten thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of
its election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten
(10) days later than the-date of the public announcement. If
Rights Certificates have been issued, upon each adjustment of the
number of rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders
prior to the date of adjustment and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders
of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Common Stock issuable
upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were
expressed in the initial Rights Certificates issued hereunder.
28
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated or par
value, if any, of the number of shares of Common Stock 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 at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the shares of Common
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of shares of
Common Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holders' right to receive
such additional shares (fractional or otherwise) or securities upon
the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that in
its good faith judgment the Board of Directors of the Company shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of
any shares of Common Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Common
Stock shall not be taxable to such stockholders.
29
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any
other Person, (ii) merge with or into any other Person, (iii)
effect a statutory share exchange with any Person, or (iv) 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 more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons, if at the time of or immediately after such
consolidation, merger, statutory share exchange or sale there are
any rights, warrants or other instruments or securities outstanding
or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 26 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 diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 and 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, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate
representing share of Common Stock) in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained.
30
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, (w) the Company shall consolidate
with, or merge with and into, any other Person, and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger, (x) any Person shall consolidate with, or
merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part
of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash
or any other property, (y) the Company shall be a party to a
statutory share exchange with any other Person after which the
Company is a Subsidiary of any other Person, or (z) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one transaction
or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons, then, and in each such case, proper provisions shall be
made so that: (i) each holder of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely
tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of shares of Common Stock for
which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such shares for which a Right was
exercisable immediately prior to the first occurrence of a Section
31
11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and dividing that product (which,
following the first occurrence of Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of
such Section 13 Event; (ii) such Principal Party shall thereafter
be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of
shares of its capital stock) in connection with the consummation of
any such transaction as may be necessary to ensure that the
provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of capital stock
thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party shall mean (i) in the case of any
transaction described in clause (w), (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, consolidation or statutory share
exchange, and if no securities are so issued, the Person that is
the other party to such merger or consolidation; 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; provided, however,
that in any such case, (1) if the capital stock of such Person is
not at such time and has not been continuously over the preceding
32
twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the capital stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the capital stocks of two or more of which
are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the capital stock having
the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, statutory share exchange, sale or transfer
unless the Principal Party shall have a sufficient number of
authorized shares of its capital 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 unless prior thereto
the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in paragraphs (a) and (b) of this Section
13 and further providing that, as soon as practicable after the
date of any consolidation, merger, statutory share exchange or sale
of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will
(i) prepare and file a registration statement
under the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
will use its best efforts to cause such registration statement to
(A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and (ii) will
deliver to holders of the Rights historical consolidated 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.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or statutory share exchanges
or sales or other transfers. In the event that a Section 13 Event
33
shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised shall
after the occurrence of a Section 13 Event be exercisable in the
manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there shall
be paid to the registered holders of the Rights Certificates with
regard to which such fractional Rights would otherwise be issuable,
an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing bid
price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise
issuable. The closing price of the Rights for any day shall be the
last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by
the system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of the
Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions
of shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Common
Stock. In lieu of fractional shares of Common Stock, the Company
may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one share
of Common Stock. For purposes of this Section 14(b), the current
market value of one share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to Section
34
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 are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock in respect of
which Rights have been issued); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of such
Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the
Distribution Date, of such Common Stock), may, in his own behalf
and for his 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 Rights
evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and
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.
Section 16. Agreement of Rights Holders. Every holder of
a Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
35
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) any restriction on transfer deemed to be imposed by
this Agreement is valid and enforceable against the holder and any
transferee of the holder in accordance with Section 1529 of the
Pennsylvania Business Corporation Law of 1988, as amended, or any
successor provision; and
(d) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose
name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or
the associated Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be required to be affected
by any notice to the contrary.
(e) 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 a 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
obligation; provided, however, 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. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any purpose
the holder of the shares of Common Stock or any other securities of
the Company which may at any time be issuable on the exercise of
36
the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder
of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights 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
reasonable compensation 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 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.
(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 Rights Certificate or certificate
for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, instruction, consent,
certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
37
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 Agents or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided,
however, 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 Rights
Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its
prior name or in its changed name; and in all such cases such
Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound.
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel 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 "current
market price") be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, the
President, any Executive Vice President or Senior Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it
under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in
this Agreement or in the Rights Certificates or be required to
verify the same (except as to its countersignature on such Rights
Certificates), 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
39
execution and delivery hereof (except the due execution hereof by
the Rights Agent) or in respect of the validity or execution of any
Rights 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 Rights Certificate;
nor shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof or responsible for
the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced
by Rights Certificates after actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Common Stock or other securities to be issued
pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock or other securities will, when
so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its
duties hereunder from the Chairman of the Board, the President, any
Executive Vice President or Senior Vice President, the Secretary,
any Assistant Secretary, the Treasurer or any Assistant Treasurer
of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of any such officer. At any
time the Rights Agent may apply to the Company for written
instructions with respect to any matter arising in connection with
the Rights Agent's duties and obligations arising under this
40
Agreement. Such 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 with respect to its duties or
obligations under this Agreement and the date on and/or after which
such action shall be taken and the Rights Agent shall not be liable
for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified
therein (which date shall be not less than one business day after
the Company receives such application, without the Company's
consent) unless, prior to taking or initiating any such action, the
Rights Agent has received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in
any of the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may
be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
41
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 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such
requested exercise of 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, and to each transfer agent of the Common
Stock, by registered or certified mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common
Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of
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
Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered
holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business
under the laws of the United States or of the Commonwealth of
Pennsylvania (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 Commonwealth of Pennsylvania if such
42
authorization is required in order to fulfill its responsibilities
under this Agreement), in good standing, having a principal-office
in the Commonwealth of Pennsylvania which is authorized under such
laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $15,000,000. 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 and the Preferred Stock,
and mail a notice thereof in writing to the registered holders of
the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this
Agreement. In addition, the Company may, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in
connection with the issuance or sale of shares of Common Stock
following the Distribution Date.
44
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the close of
business on the tenth Business Day following the Stock Acquisition
Date, or (ii) the Final Expiration Date, redeem all but not less
than all the then outstanding Rights at a redemption price of $.01
per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, if the
Board of Directors of the Company authorizes redemption of the
Rights in either of the circumstances set forth in clauses (i) and
(ii) below, then there must be Continuing Directors then in office
and such authorization shall require the concurrence of a majority
of such Continuing Directors: (i) such authorization occurs on or
after the time a Person becomes an Acquiring Person, or (ii) such
authorization occurs on or after the date of a change (resulting
from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation if any
Person who is a participant in such solicitation has stated (or, if
upon the commencement of such solicitation, a majority of the Board
of Directors of the Company has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action which would result in such Person
becoming an Acquiring Person or which would cause the occurrence of
a Triggering Event; provided further, however, that if, following
the occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any
Triggering Event, (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of
Common Stock in one transaction or series of transactions, not
directly or indirectly involving the Company or any of its
Subsidiaries, such that such Person is thereafter a Beneficial
Owner of 10% or less of the outstanding shares of Common Stock, and
(ii) there are no other Persons, immediately following the
occurrence of the event described in clause (i), who are Acquiring
44
Persons, then the right of redemption shall be reinstated and
thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable (i) after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired, or (ii) during
the period in which the Company's right of redemption shall have
been reinstated under Section 30 hereof.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent 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 ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears 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. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall take action, at any time
after the Distribution Date, (i) to pay any dividend payable in
stock of any class to the holders of Common Stock or to take any
other distribution to the holders of Common Stock (other than a
regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of Common
Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class
or any other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification
45
involving only the subdivision of outstanding shares of Common
Stock), or (iv) to effect any consolidation or merger into or with
any other Person, or to effect a statutory share exchange with any
Person, or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons, or
(v) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 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,
statutory share exchange, 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, 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 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
whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) hereof shall occur, then, in any such case, (i) the
Company shall as soon as practicable thereafter give to each holder
of a Rights Certificate, to the extent feasible and in accordance
with Section 25 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, and (ii) all
references in the preceding paragraph to Common Stock shall be
deemed thereafter to refer to other securities, if appropriate.
46
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder
of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Codorus Valley Bancorp, Inc.
0 Xxxxxxxxxx Xxxxxx, X.X. Xxx 00
Xxxx Xxxx, Xxxxxxxxxxxx 00000-0000
Attention: Corporate 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 Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
Peoples Bank of Xxxx Rock
0 Xxxxxxxxxx Xxxxxx, X.X. Xxx 00
Xxxx Xxxx, Xxxxxxxxxxxx 00000-0000
Attention: 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 Rights
Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) 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 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the next-to-last sentence of this
Section 26, the Company and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date and
subject to the next-to-last sentence of this Section 26, the
Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity,
47
(ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein,
or (iii) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which
shall not materially adversely affect the interests of the holders
of Rights Certificates (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, that this
Agreement may not be supplemented or amended to lengthen, pursuant
to this sentence, a time period relating to when the Rights may be
redeemed. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made (1) that changes
the Redemption Price, the Final Expiration Date or the Purchase
Price, or (2) that reduces the number of shares of Common Stock for
which a Right is exercisable. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with
the interests of the holders of Common Stock.
Section 27. 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 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock of
which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board of
Directors of the Company (and, where specifically provided for
herein, the Continuing Directors) shall have the exclusive power
and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board, or the Company
48
(or, where specifically provided for herein, the Continuing
Directors), or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all decisions and determinations deemed
necessary or advisable for the administration of this Agreement
(including without limitation a decision to redeem or not redeem
the Rights or to amend the Agreement and a determination of whether
or not a person is or was an Acquiring Person or beneficially owns
a certain percentage of stock of the Company). All such actions,
calculations, interpretations, decisions and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board (or,
where specifically provided for herein, by the Continuing
Directors) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights
Certificates and all other parties, and (y) not subject the Board
or the Continuing Directors to any liability to the holders of the
Rights.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall he construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock).
Section 30. 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
49
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 this Agreement would adversely affect the purpose or
effect of this 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 business day following the date
of such determination by the Board of Directors.
Section 31. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the Commonwealth of Pennsylvania
and for all purposes shall be governed by and construed in
accordance with the laws of such Commonwealth applicable to
contracts made and to be performed entirely within such
Commonwealth.
Section 32. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 33. 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.
50
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year
first above written.
CODORUS VALLEY BANCORP, INC.
/s/ Xxxxx X. Xxxxxx
By: ______________________________
Xxxxx X. Xxxxxx, President
(Corporate Seal)
/s/ Xxxx X. Xxxxxx
Attest: ______________________________
Xxxx X. Xxxxxx, Assistant
Secretary
(Corporate Seal)
PEOPLES BANK OF XXXX ROCK
/s/ Xxxxx X. Xxxxxxxx
By: ______________________________
Xxxxx X. Xxxxxxxx, Vice
President
/s/ Xxxxxxx X. Xxxxx
Attest: ______________________________
Xxxxxxx X. Xxxxx, Secretary
51
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER NOVEMBER 4, 2005 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF
SUCH AGREEMENT.]
Rights Certificate
CODORUS VALLEY BANCORP, INC.
This certifies that ________________________________________, or
registered assigns, is the registered owner of the number of Rights
set forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights Agreement,
dated as of November 4, 1995 (the "Rights Agreement"), between
Codorus Valley Bancorp, Inc., a Pennsylvania corporation (the
"Company"), and Peoples Bank of Xxxx Rock, a Pennsylvania bank and
trust company (the "Rights Agent"), to purchase from the Company at
any time prior to 5:00 P.M. (Harrisburg, Pennsylvania time) on
November 4, 2005 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 Common Stock, par value $2.50
per share (the "Common Stock") of the Company, at a purchase price
of $100.00 per share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to
Purchase and related Certificate duly executed. The Purchase Price
shall be paid, at the election of the holder, in cash or shares of
Common Stock of the Company having an equivalent value. The number
of Rights evidenced by this Rights Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the
number and Purchase Price as of November 4, 1995, based on the
Common Stock as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person
1
(as such terms are defined in the Rights Agreement), (ii) a
transferee of any such Acquiring Person, Associate or Affiliate, 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 Triggering Event and the transfer
of such rights may be deemed to be restricted.
This Rights 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 Rights
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 above-mentioned office of the
Rights Agent and are also available upon written request to the
Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of
the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-halves of a share of Common Stock as
the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to
purchase. If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to certain rights of extension and the other
provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a
redemption price of $0.01 per Right at any time prior to the
earlier of the close of business on (i) the tenth business day
following the Stock Acquisition Date (as such time period may be
extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date. Under certain circumstances set forth in the
Rights Agreement, the decision to redeem shall require the
concurrence of a majority of the Continuing Directors. After the
expiration of the redemption period, the Company's right of
redemption may be reinstated if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of
Common Stock in a transaction or series of transactions not
involving the Company.
2
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of
shares of Common Stock or of 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
stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its facsimile corporate seal.
Dated as of _________________________
ATTEST: CODORUS VALLEY BANCORP, INC.
_________________________ By: ______________________________
, Secretary Title:
Countersigned:
______________________________
By: _________________________
Authorized Signature
3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ______________________________________________
hereby sells, assigns and transfers unto ________________________
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _______________________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ________________________
___________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights Certificate
from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _________________________
___________________________________
Signature
Signature Guaranteed:
4
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement
or any change whatsoever.
5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the Rights Certificate)
To: CODORUS VALLEY BANCORP, INC.
The undersigned hereby irrevocably elects to exercise
____________________ Rights represented by this Rights 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 and delivered to:
Please insert social security or other identifying number
_________________________________________________________________
(Please Print Name and Address)
_________________________________________________________________
If such number Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance
of such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying 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 Rights 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
6
Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated: _________________________
___________________________________
Signature
Signature Guaranteed:
7
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
8
EXHIBIT B
CODORUS VALLEY BANCORP, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On November 4, 1995, the Board of Directors of Codorus Valley
Bancorp, Inc. (the "Company") declared a dividend distribution of
one Right for each outstanding share of common stock, par value
$2.50 per share (the "Common Stock"), of the Company to
shareholders of record at the close of business on December 15,
1995 (the "Record Date"). Each Right entitles the registered
holder to purchase from the Company one share of Common Stock at a
price of $100.00 per share (the "Purchase Price"), subject to
adjustment. The Purchase Price shall be paid, at the option of the
holder, in cash or shares of Common Stock having an equivalent
value. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and
Peoples Bank of Xxxx Rock, as Rights Agent.
Initially, the Rights will be evidenced by all Common Stock
certificates representing shares then outstanding, and no separate
Rights certificates will be distributed. The Rights will separate
from the Common Stock and a Distribution Date will occur upon the
earlier of (i) 10 business days following a public announcement
that a person or a group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of
Common Stock (the "Stock Acquisition Date"), or (ii) 10 business
days following the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning 20% or
more of such outstanding shares of Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by such Common
Stock certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock certificates
issued after the Record Date will contain a notation incorporating
the Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Stock outstanding will also
constitute the transfer of the Rights associated with the Common
Stock represented by such certificates. As soon as practicable
following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, such separate Rights
Certificates alone will evidence the rights.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on November 4, 2005, unless
earlier redeemed by the Company as described below.
In the event that (i) the Company is the surviving corporation
in a merger or the acquiring corporation in a statutory share
exchange with an Acquiring Person and its Common Stock is not
changed or exchanged, (ii) an Acquiring Person engages in certain
self-dealing transactions with the Company, (iii) a person (other
than the Company and its affiliates) becomes the beneficial owner
of 20% or more of the then outstanding shares of Common Stock, or
(iv) during a time that there is an Acquiring Person, one or more
specified events occur that result in such Acquiring Person's
ownership interest in the Company being increased by more than 1%,
the Rights Agreement provides that proper provision shall be made
so that each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value
equal to two (2) times the exercise price of the Right.
For example, at an exercise price of $100.00 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties and transferees of the Acquiring Person) following an event
set forth in the preceding paragraph would entitle its holder to
purchase $200.00 worth of Common Stock (or other consideration, as
noted above) for $100.00. Assuming that the Common Stock had a per
share value of $100.00 at such time, the holder of each valid Right
would be entitled to purchase two shares of Common Stock for
$100.00.
In the event that, at any time following the Distribution
Date, (i) the Company is acquired in a merger, statutory share
exchange or other business combination transaction in which the
Company is not the surviving corporation, (ii) the Company engages
in a merger or other business combination transaction with another
person in which the Company is the surviving corporation, but in
which its Common Stock is changed or exchanged, or (iii) 50% or
more of the Company's assets or earning power is sold or
transferred, the Rights Agreement provides that proper provision
shall be made so that each holder of a Right shall thereafter have
the right to receive, upon exercise of the Right, common stock or
other consideration of the acquiring company having a value equal
to two (2) times the exercise price of the Right.
Notwithstanding any of the foregoing, following the occurrence
of any of the events set forth in the preceding paragraph and the
third preceding paragraph (the "Triggering Events"), any Rights
that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person shall
immediately become null and void. Also, under no circumstances may
a Right be exercised following the occurrence of an event set forth
in clause (iii) of the third preceding paragraph prior to
expiration of the Company's right of redemption.
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Common Stock, (ii) upon the
grant to holders of the Common Stock of certain rights or warrants
to subscribe for Common Stock or convertible securities at less
than the then current market price of Common Stock, or (iii) upon
the distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than the Rights).
2
No adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price.
No fractional shares will be issued upon exercise of a Right and,
in lieu thereof, an adjustment in cash will be made based on the
market price of the Common Stock on the last trading date prior to
the date of exercise.
The term "Continuing Directors" means any member of the Board
of Directors of the Company who was a member of the Board prior to
the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors, but shall not
include an Acquiring Person, or any affiliate or associate of an
Acquiring Person, or any representative of an Acquiring Person or
of an affiliate or associate of an Acquiring Person.
At any time until ten (10) business days following the Stock
Acquisition Date, the Board of Directors may cause the Company to
redeem the Rights in whole, but not in part, at a price of $0.01
per Right (the "Redemption Price"); provided, however, if the Board
of Directors of the Company authorizes redemption of the Rights in
either of the circumstances set forth in clauses (i) and (ii)
below, then there must be at least five Continuing Directors then
in office and such authorization requires the concurrence of a
majority of such Continuing Directors: (i) such authorization
occurs on or after the time a person or group acquires beneficial
ownership of 20% or more of the outstanding Common Stock, or (ii)
such authorization occurs on or after the date of a change in a
majority of the directors resulting from a proxy solicitation if
the solicitor (or any participant in the solicitation) indicates an
intention to become an Acquiring Person or to cause a Triggering
Event. Thereafter, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership
to 10% or less of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company and
there is then no other Acquiring Person.
Immediately upon the action of the Board of Directors of the
Company, with, where required, the concurrence of the Continuing
Directors, ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
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.
