Exhibit 4.1
_______________________________________________________________
SOVEREIGN BANCORP, INC.
AND
MELLON INVESTOR SERVICES LLC
Rights Agent
____________________
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of June 21, 2001
________________________________________________________________
Table of Contents
Section Page
1. Certain Definitions................................ 2
2. Appointment of Rights Agent........................ 6
3. Issue of Rights Certificates....................... 6
4. Form of Rights Certificates........................ 9
5. Countersignature and Registration.................. 10
6. Transfer, Split Up, Combination, or Exchange of
Rights Certificates; Mutilated, Destroyed, Lost,
or Stolen Rights Certificates...................... 11
7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.......................... 12
8. Cancellation and Destruction of Rights
Certificates....................................... 15
9. Reservation and Availability of Capital Stock...... 15
10. Preferred 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................................... 36
16. Agreement of Rights Holders........................ 36
17. Rights Certificate Holder Not Deemed a
Stockholder........................................ 37
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. Exchange........................................... 45
25. Notice of Certain Events........................... 47
26. Notices............................................ 48
27. Supplements and Amendments......................... 49
28. Successors......................................... 49
29. Determinations and Actions by the Board of
Directors; No Waiver............................... 49
30. Benefits of this Agreement......................... 50
31. Severability....................................... 50
32. Governing Law...................................... 51
33. Counterparts....................................... 51
34. Descriptive Headings............................... 51
AMENDED AND RESTATED RIGHTS AGREEMENT
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of
June 21, 2001 (this "Agreement"), between SOVEREIGN BANCORP,
INC., a Pennsylvania business corporation (the "Company"), and
MELLON INVESTOR SERVICES LLC, a New Jersey limited liability
company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on September 19, 1989 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of common stock, par value
$1.00 per share, of the Company (the "Common Stock") outstanding
at the close of business on October 2, 1989 (the "Record Date"),
and authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock issued
between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date, each
Right initially representing the right to purchase one one-
hundredth of a share of Series A Junior Participating Preferred
Stock of the Company having the rights, powers, and preferences
set forth in a Rights Agreement (the "Rights Agreement") dated
September 19, 1989 between the Company and Xxxxxx Trust Company
of New York, upon the terms and subject to the conditions set
forth therein (the "Rights");
WHEREAS, on September 27, 1995, the Board of Directors
of the Company, desiring to modify the terms and conditions of
the Rights, amended the Rights Agreement pursuant to an
Amendment to Rights Agreement (the "First Amendment"), dated as
of September 27, 1995, between the Company and Chemical Bank, as
successor to Xxxxxx Trust Company of New York; and
WHEREAS, on June 21, 2001, the Board of Directors of
the Company, desiring to further modify the terms and conditions
of the Rights, amended the Rights Agreement, as amended pursuant
to the First Amendment, and desire to restate the terms of the
Rights herein as so amended;
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereto,
intending to be legally bound, 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 (i) 9.9% or more of the
shares of Common Stock or (ii) Voting Securities that in the
aggregate represent 9.9% or more of the Total Voting Power, but
shall not include the Company, any Subsidiary of the Company,
any employee stock option plan or other 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) "Adverse Person" shall mean any Person
declared to be an Adverse Person by the Board of Directors upon
a determination that the criteria set forth in
Section 11(a)(ii)(B) apply to such Person.
(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 Exchange Act, as in
effect on September 19, 1989.
(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 offer 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, or (C) securities
issuable upon exercise of Rights from and after the occurrence
of a Triggering Event which Rights were acquired by such Person
or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
hereof (the "Original Rights") or pursuant to Section 11(i)
hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has
the right to vote (without regard to any regulatory restrictions
or restrictions included in the Company's Articles of
Incorporation) or dispose of or has "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 any comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement, or understanding (whether or not in writing), 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;
provided, however, that nothing in this paragraph (c) shall
cause a person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting
until the expiration of forty days after the date of such
acquisition.
(e) "Business Day" shall mean any day other than
a Saturday, Sunday, or a day on which banking institutions in
the Commonwealth of Pennsylvania or the State of New Jersey are
authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall
mean 5:00 P.M., New York time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
New York time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the common stock,
par value $1.00 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 equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(i) "Continuing Director" shall mean (i) any
member of the Board of Directors of the Company on June 21,
2001, while such Person is a member of the Board, who is not an
Acquiring Person, an Adverse Person (or a Person with respect to
whom the Continuing Directors are considering making an Adverse
Person determination pursuant to Section 11(a)(ii)(B) hereof),
or an Affiliate or Associate of any such Person, or a
representative of any such Person, Affiliate, or Associate, 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, an Adverse Person (or a Person with respect to
whom the Continuing Directors are considering making an Adverse
Person determination), or an Affiliate or Associate of any such
Person, or a representative of any such Person, Affiliate or
Associate, if such Person's nomination for election or election
to the Board is recommended or approved by a majority of the
Continuing Directors.
(j) "Current market price" shall have the
meaning set forth in Section 11(d)(i) hereof.
(k) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning
set forth in Section 3(a) hereof.
(m) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(n) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(o) "Final Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(p) "Person" shall mean any individual, firm,
corporation, partnership, or other entity.
(q) "Preferred Stock" shall mean shares of
Series A Junior Participating Preferred Stock, without par
value, of the Company, and, to the extent that there are not a
sufficient number of shares of Series A Junior Participating
Preferred Stock authorized to permit the full exercise of the
Rights, any other series of preferred stock, without par value,
of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
(r) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(s) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(t) "Record Date" shall have the meaning set
forth in the WHEREAS clause in the recital to this Agreement.
(u) "Redemption Price" shall have the meaning
set forth in Section 23(a) hereof.
(v) "Rights" shall have the meaning set forth in
the WHEREAS clause in the recital to this Agreement.
(w) "Rights Certificates" shall have the meaning
set forth in Section 3(a) hereof.
(x) "Rights Dividend Declaration Date" shall
have the meaning set forth in the WHEREAS clause in the recital
to this Agreement.
(y) "Section 11(a)(ii) Event" shall mean any
event described in clauses (A) or (B) of Section 11(a)(ii)
hereof.
(z) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(aa) "Section 13 Event" shall mean any event
described in clauses (x), (y), or (z) of Section 13(a) hereof.
(bb) "Securities Act" shall mean the Securities
Act of 1933, as amended.
(cc) "Spread" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(dd) "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 an Acquiring Person has become such.
(ee) "Subsidiary" shall mean, with reference to
any Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the
directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such
Person.
(ff) "Substitution Period" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(gg) "Total Voting Power" on any given date
shall mean the total number of votes eligible to be cast in a
general election of directors of the Company.
(hh) "Trading Day" shall have the meaning set
forth in Section 11(d)(i) hereof.
(ii) "Triggering Event" shall mean any
Section 11(a)(ii) Event or Section 13 Event.
(jj) "Voting Securities" shall mean any class or
classes of capital stock of the Company entitled to vote
generally in the election of directors.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. Notwithstanding the foregoing, the
Rights Agent shall have no duty to supervise, and in no event
shall be liable for the acts or omissions of any such Co-Rights
Agent.
Section 3. Issue of Rights Certificates.
(a) Until the earliest of (i) the close of
business on the tenth Business Day after the Stock Acquisition
Date, (ii) the close of business on the tenth Business Day (or
such later date as may be determined by the Board of Directors)
after the date that a tender offer or exchange offer by any
Person (other than the Company, any Subsidiary of the Company,
any employee stock option plan or other 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 14d-2(a)
of the General Rules and Regulations under the Exchange Act, if,
upon consummation thereof, such Person would be the Beneficial
Owner of (x) 9.9% or more of the shares of Common Stock then
outstanding or (y) Voting Securities representing 9.9% or more
of the Total Voting Power, or (iii) the close of business on the
tenth Business Day after the Board of Directors determines,
pursuant to the criteria set forth in Section 11(a)(ii)(B)
hereof, that a Person is an Adverse Person (the earliest of (i),
(ii), and (iii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the
holders of such Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and
not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage
prepaid mail, to each 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
rights certificates, in substantially the form of Exhibit B
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(p) 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
Record Date, the Company will send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit C
(the "Summary of Rights"), by first-class, postage prepaid mail,
to each record holder of the Common Stock as of the close of
business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for
shares of Common Stock outstanding as of the Record Date, until
the Distribution Date, the Rights will be evidenced by such
certificates for shares of Common Stock and the registered
holders of shares of Common Stock shall also be the registered
holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, 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.
(c) Rights shall be issued in respect of all
shares of Common Stock which are issued (whether originally
issued or from the Company's treasury) after the Record Date but
prior to the earlier of the Distribution Date or the Expiration
Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights, and 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
Sovereign Bancorp, Inc. (the "Company") and
Mellon Investor Services LLC, as successor to
The Chase Manhattan Bank, as successor to
Chemical Bank (the "Rights Agent"), dated as of
September 19, 1989 as amended (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 or the Rights Agent 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, an Adverse
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.
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 such certificates shall also constitute
the 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 on Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries, or
endorsements printed thereon as the Company may deem appropriate
(but which do not affect the rights, duties or responsibilities
of the Rights Agent) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase such number
of one one-hundredths of a share of Preferred Stock as shall be
set forth therein at the price set forth therein (such exercise
price per one one-hundredth of a share, 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 an Adverse
Person or any Associate or Affiliate of an Acquiring Person or
an Adverse Person, (ii) a transferee of an Acquiring Person or
an Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee after such Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring
Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person or Adverse
Person to holders of equity interests in such Acquiring Person
or Adverse Person or to any Person with whom such Acquiring
Person or Adverse Person has any continuing agreement,
arrangement, or understanding regarding the transferred Rights
or (B) a transfer that the Board of Directors of the Company has
determined is part of an agreement, arrangement, or
understanding which has as a primary purpose or effect avoidance
of Section 7(e) hereof, and provided that the Company shall have
notified the Rights Agent that this Section 4(b) applies, 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 contain (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] [Adverse Person] or an
Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby have become
null and void in the circumstances and with the effect
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, Chief
Executive Officer, President, or any Vice Chairman or Executive
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 facsimile
signature. The Rights Certificates shall be countersigned
manually 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 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 and receipt
by the Rights Agent of all necessary information, the Rights
Agent will keep or cause to be kept, at its office 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, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination, or
Exchange of Rights Certificates; Mutilated, Destroyed, Lost, or
Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e), Section 14, and Section 24 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 may be transferred, split up, combined, or
exchanged for another Rights Certificate entitling the
registered holder to purchase a like number of one one-
hundredths of a share of Preferred Stock (or, following a
Triggering Event, Common Stock, other securities, cash, or other
assets, as the case may be) as the Rights Certificate
surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring
to transfer, split up, combine, or exchange any Rights
Certificate shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate 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
transfer of any such surrendered Rights Certificate until the
registered holder shall have properly 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 or the Rights Agent 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 as so
requested. The Company may require payment 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. The Rights Agent shall have no duty to
take any action under any Section of this Agreement which
requires the payment by a Rights holder of applicable taxes and
governmental charges unless and until the Rights Agent is
satisfied that all such taxes and/or charges have been paid.
(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
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) 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 23(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 Rights Agent at the
office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with respect to the
total number of one-hundredths of a share (or other securities,
cash, or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the
earliest of (i) the close of business on June 30, 2007 (the
"Final Expiration Date"),(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"), or
(iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each one-hundredth of
a share of Preferred Stock pursuant to the exercise of a Right
shall be $40.00, and shall be subject to adjustment from time to
time as provided in Sections 11 and 13(a) 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 on the reverse side thereof duly
executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-hundredth of a
share of Preferred Stock (or other shares, securities, cash, or
other assets, as the case may be) to be purchased as set forth
below and an amount equal to any applicable tax or charge, the
Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights
Agent is the transfer agent for such shares) certificates for
the total number of one one-hundredths of a share of Preferred
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 Preferred Stock issuable upon exercise of
the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such
number of one one-hundredths of a share of Preferred Stock as
are to be purchased (in which case certificates for the shares
of Preferred 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 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 pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified
bank check or bank draft payable to the order of the Company.
In the event that the Company is obligated to issue other
securities (including Common Stock) 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 necessary to
comply with this Agreement. The Company reserves the right to
require prior to the occurrence of a Triggering Event that, upon
any exercise of Rights, a number of Rights be exercised so that
only whole shares of Preferred Stock would be issued.
(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 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, any Rights beneficially owned by (i) an
Acquiring Person, an Adverse Person, or an Associate or
Affiliate of an Acquiring Person or an Adverse Person, (ii) a
direct or indirect transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person or Adverse
Person becomes such, or (iii) a direct or indirect transferee of
an Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person
becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring
Person or Adverse Person to holders of equity interests in such
Acquiring Person or Adverse Person or to any Person with whom
the Acquiring Person or Adverse 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 an agreement,
arrangement or understanding which has as 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 notify the Rights Agent when this Section 7(e)
applies and shall use all reasonable efforts to insure 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 an Adverse Person or any of their respective 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) duly and properly completed and signed the
certificate contained in the form of election to purchase set
forth on the reverse side of the Rights 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 or the
Rights Agent 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 it
will cause to be reserved and kept available out of its
authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in
its treasury), the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) that, as provided in this Agreement,
including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) issuable and deliverable upon the
exercise of the Rights may be quoted on any automated quotation
system of the National Association of Securities Dealers, Inc.
or listed on any national securities exchange, 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 so quoted or listed on such exchange 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 first occurrence
of a Section 11(a)(ii) Event, or, if applicable, 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, a registration statement on an
appropriate form under the Securities Act, with respect to the
securities purchasable upon exercise of the Rights, (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 Securities Act) until the
earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) 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 and file such registration statement
and permit it to become effective. Upon 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. In addition, if the Company shall
determine that a registration statement is required following
the Distribution Date, the Company may by issuing a public
announcement temporarily suspend (and shall give the Rights
Agent prompt notice thereof) the exercisability of the Rights
until such time as a registration statement has been declared
effective. The Company shall promptly provide the Rights Agent
with copies of such announcements. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained,
the exercise thereof shall not be permitted under applicable
law, or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it
will take all such action as may be necessary to ensure that all
one one-hundredths of a share of Preferred Stock (and, following
the occurrence of a Triggering Event, 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 taxes and
governmental charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any tax or charge 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 a number of one one-hundredths of a share of Preferred Stock
(or 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 to issue or deliver any certificates for a number of
one one-hundredths of a share of Preferred Stock (or 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 or charge shall have been paid (any
such tax or charge 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 or
charge is due.
Section 10. Preferred Stock Record Date. Each Person
in whose name any certificate for a number of one one-hundredths
of a share of Preferred Stock (or 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 fractional shares of Preferred Stock
(or Common Stock and/or other securities, as the case may be)
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 taxes and charges) was made; provided, however, that
if the date of such surrender and payment is a date upon which
the Preferred Stock (or Common Stock and/or other securities, as
the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the
case may be) 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 or 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 Preferred Stock payable in shares of Preferred Stock,
(B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification
of the Preferred 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 of the effective date of such subdivision,
combination, or reclassification, and the number and kind of
shares of Preferred 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 Preferred
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 Preferred Stock transfer books of the Company were
open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination, or reclassification. If an event occurs that 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) Subject to Section 24 of this
Agreement, in the event:
(A) any Person shall at any time
after the Rights Dividend Declaration Date become an Acquiring
Person, unless the event causing such Person to become an
Acquiring Person (I) is a transaction set forth in Section 13(a)
hereof, or (II) is an acquisition of shares of Common Stock
and/or Voting Securities pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock and
other Voting Securities, if any, at a price and on terms
determined by at least a majority of the Continuing Directors
who are not representatives, nominees, Affiliates or Associates
of an Acquiring Person, after receiving advice from one or more
investment banking firms, to be (x) at a price which is fair to
stockholders (taking into account all factors which the Board of
Directors deems relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to realize maximum value)
and (y) otherwise in the best interests of the Company and its
stockholders; or
(B) the Board of Directors of the
Company shall declare any Person to be an Adverse Person, upon a
determination that such Person, alone or together with its
Affiliates and Associates, has, at any time after the Rights
Dividend Declaration Date, become the beneficial owner of Voting
Securities representing at least 4.9% of the Total Voting Power
and a determination, after reasonable inquiry and investigation,
including consultation with such persons as the Board of
Directors shall deem appropriate, that such beneficial ownership
by such Person is intended to cause the Company to repurchase
the Voting Securities beneficially owned by such Person or to
cause pressure on the Company to take action or enter into a
transaction or series of transactions intended to provide such
Person (and not stockholders generally) with short-term
financial gain under circumstances where the Board of Directors
determines that the best long-term interests of the Company and
its stockholders would not be served by taking such action or
entering into such transaction or series of transactions at that
time; or
(C) 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 Voting
Securities of the Company shall remain outstanding and
unchanged, (2) shall, in one transaction or a series of
transactions, other than in connection with the exercise of the
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 to any of
its Subsidiaries in exchange (in whole or in part) for shares of
Voting Securities, for shares of other equity securities of the
Company, or for securities exercisable for or convertible into
shares of equity securities of the Company (Common Stock or
otherwise) or otherwise obtain from the Company, with or without
consideration, any additional shares of such equity securities
or securities exercisable for or convertible into shares of such
equity securities (other than pursuant to a pro rata
distribution to all holders of Common Stock), (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer, or
otherwise acquire or dispose of, in one transaction or a series
of transactions, to, from, with, or of (as the case may be) the
Company or any of its Subsidiaries, assets on terms and
conditions less favorable to the Company than the Company would
be able to obtain in arm's-length negotiation with an
unaffiliated third party, other than pursuant to a transaction
set forth in Section 13(a) hereof, (4) 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 at rates in
accordance with the Company's (or its Subsidiaries') past
practices, or (5) shall receive the benefit, directly or
indirectly (except proportionately as a stockholder and except
if resulting from a requirement of law or governmental
regulation), 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
(D) 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 of its Subsidiaries, other than a transaction or
transactions to which the provisions of Section 13(a) apply
(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 of the
Company or any of its Subsidiaries which is directly or
indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person;
then, promptly following the first occurrence of a
Section 11(a)(ii) Event, proper provision shall be made 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 a number
of one one-hundredths of a share of Preferred Stock, 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 one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and
(y) 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
50% of the lowest closing price (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) per share of Common
Stock on any Trading Day (as defined in Section 11(d)(i) hereof)
occurring within the twelve-month period immediately preceding
the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) In the event that (a) 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 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), or (b) the quotient (the "Quotient") obtained by
dividing the Purchase Price by the number of Adjustment Shares
issuable upon exercise of a Right is less than the then par
value per share of the Common Stock, the Company shall, to the
extent permitted by applicable law and regulation and subject to
such limitations as are necessary to prevent a default under any
agreement to which the Company is a party: (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 a nationally recognized 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 30 days
following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later
of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company shall
determine in good faith that it is likely that (a) sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights or (b) a reduction
in the par value per share of Common Stock to an amount that is
equal to or less than the Quotient could be authorized, the
30 day period set forth above may be extended to the extent
necessary, but not more than 90 days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares or for
the reduction of such par value, as the case may be (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 or
reduction in par value 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
Section 11(a)(ii) Trigger Date and the value of any "common
stock equivalent" shall be deemed to have the same value as the
Common Stock 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 Preferred Stock entitling them to subscribe for or purchase
(for a period expiring within 45 calendar days after such record
date) Preferred Stock (or shares having the same rights,
privileges and preferences as the shares of Preferred Stock
("equivalent preferred stock")) or securities convertible into
Preferred Stock or equivalent preferred stock at a price per
share of Preferred Stock or per share of equivalent preferred
stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock)
less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such
record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock and/or
equivalent preferred 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
Preferred Stock outstanding on such record date, plus the number
of additional shares of Preferred Stock and/or equivalent
preferred 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 Preferred 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 Preferred Stock (including
any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences 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 Preferred
Stock, but including any dividend payable in stock other than
Preferred 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 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 Preferred 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 Preferred Stock and
the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of
Preferred 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) (i) 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
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 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 the
ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification shall not have occurred prior to the
commencement of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above, 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 as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of Common Stock are not listed
or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-
the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ")
or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Common 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 national securities exchange on 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 listed or admitted to trading on any national securities
exchange, 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.
(ii) For the purpose of any computation
hereunder, the "current market price" per share of Preferred
Stock shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the current market price
per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to 100
(as such number may be appropriately adjusted for such events as
stock splits, stock dividends, and recapitalizations with
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share of
the Common Stock. If neither the Common Stock nor the Preferred
Stock is publicly held or so listed or traded, "current market
price" per share of the Preferred Stock 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. For all purposes of this
Agreement, the "current market price" of one one-hundredth of a
share of Preferred Stock shall be equal to the "current market
price" of one share of Preferred Stock divided by 100.
(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 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 or one-millionth of a share of
Preferred Stock, 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) 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 thereafter exercised shall become entitled
to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and 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 Preferred Stock contained in Sections 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
Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one one-hundredths of a share of
Preferred 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 one one-hundredths of a share of Preferred Stock (calculated
to the nearest one-millionth) obtained by (i) multiplying
(x) the number of one one-hundredths of a share 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 one one-
hundredths of a share of Preferred 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 one one-hundredths of a share of Preferred 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 Rights shall become that number of Rights
(calculated to the nearest one-ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The 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, and shall promptly give the Rights Agent a copy of such
announcement. 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 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 one one-hundredths of a
share of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-
hundredth of a share and the number of one one-hundredths of a
share which were expressed in the initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
value, if any, of the number of one one-hundredths of a share of
Preferred 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 such
number of one one-hundredths of a share of Preferred 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 (and shall give prompt written notice of such
election to the Rights Agent) until the occurrence of such event
the issuance to the holder of any Right exercised after such
record date the number of one one-hundredths of a share of
Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
number of one one-hundredths of a share of Preferred 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 holder's 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 their 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 Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock
at less than the current market price, (iii) issuance wholly for
cash of shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of
Preferred 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 Preferred Stock
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it
shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a Subsidiary
of the Company in a transaction which complies with
Section 11(o) hereof), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or
earning power aggregating 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 (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, 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 or (y) prior to, simultaneously with, or
immediately after such consolidation, merger, or sale, the
stockholders of the Person who constitutes, or would constitute,
the "Principal Party" for purposes of Section 13(a) hereof shall
have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall
be proportionately adjusted so that the number of Rights
thereafter associated with each share of Common Stock following
any such event shall equal the result obtained by multiplying
the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
(q) The failure by the Board of Directors to
declare a Person to be an Adverse Person following such Person
becoming the Beneficial Owner of Voting Securities representing
4.9% or more of the Total Voting Power shall not imply that such
Person is not an Adverse Person or limit the Board of Directors'
right at any time in the future to declare such Person to be an
Adverse Person.
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 computations and facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with
each transfer agent for the Preferred Stock and 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 shares of Common Stock) in accordance with
Section 26 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein
contained and shall have no duty with respect to, and shall not
be deemed to have any knowledge of, such adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger, or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation
or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof) 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 Voting Securities shall be changed into or
exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Company shall sell 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 (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof);
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision 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 one one-hundredths
of a share of Preferred 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 one one-hundredths of a share for which a Right was
exercisable immediately prior to the first occurrence of a
Section 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 a 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)(i)
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 Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its
shares of Common 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 (x) or (y) of the first
sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are
converted in such merger or consolidation 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 described in the foregoing clause (i) or (ii) of this
Section 13(b), (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding
12 month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another
Person the Common 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 Common Stock 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 Common Stock
having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale, or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and 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 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 Securities 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 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 sales or other
transfers. In the event that a Section 13 Event shall occur at
any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement
to the contrary, Section 13 shall not be applicable to a
transaction described in subparagraphs (x) and (y) of
Section 13(a) if (i) such transaction is consummated with a
Person or Persons (or a wholly-owned subsidiary of any such
Person or Persons) who acquired shares of Common Stock pursuant
to a tender offer or exchange offer for all outstanding shares
of Common Stock at a price and on terms determined to be in
accordance with Section 11(a)(ii)(A) hereof, (ii) the price per
share of Common Stock offered in such transaction is not less
than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer, and (iii) the form of
consideration being offered to the remaining holders of shares
of Common Stock pursuant to such transaction is the same as the
form of consideration paid pursuant to such tender offer or
exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractional Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates that 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 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 sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to Securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading, or if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then
in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of the
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
fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred 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
one-hundredth of a share of Preferred Stock. For purposes of
this Section 14(b), the current market value of one one-
hundredth of a share of Preferred Stock shall be one one-
hundredth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading
Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering
Event, the Company shall not be required to issue fractional
shares of Common Stock upon exercise of the Rights or to
distribute certificates that 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(c), the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock
(as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) 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.
(e) Whenever a payment for fractional Rights or
fractional shares is to be made by the Rights Agent, the
Corporation shall (i) promptly prepare and deliver to the Rights
Agent a certificate setting forth in reasonable detail the facts
related to such payments and the prices and/or formulas utilized
in calculating such payments, and (ii) provide sufficient monies
to the Rights Agent in the form of fully collected funds to make
such payments. The Rights Agent shall be fully protected in
relying upon such a certificate and shall have no duty with
respect to, and shall not be deemed to have knowledge of, any
payment for fractional Rights or fractional shares under any
Section of this Agreement relating to the payment of fractional
Rights or fractional shares unless and until the Rights Agent
shall have received such a certificate and sufficient monies.
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);
and any registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the 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 the 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 proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) 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; and
(d) notwithstanding anything in this Agreement
to the contrary, neither the Company nor the Rights Agent shall
have any liability to any holder of a Right or other Person as 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 (whether interlocutory or final) 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 number of one one-hundredths of a
share of Preferred Stock or any other securities of the Company
which may at any time be issuable upon the exercise of 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 25 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 preparation, execution,
delivery, amendment, administration and execution of this
Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights
Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith, or
willful misconduct on the part of the Rights Agent (each as
determined by a final, non-appealable order, judgment, decree or
ruling of a court of competent jurisdiction) for any action
taken, suffered or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
including, without limitation, the costs and expenses of
defending against any claim of liability in the premises. The
costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. The provisions of
this Section 18 and Section 20 below shall survive the
termination of this Agreement, the exercise or expiration of the
Rights and the resignation or removal of the Rights Agent.
(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,
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, or otherwise upon the advice of counsel as set forth
in Section 20. The Rights Agent shall not be deemed to have
knowledge of any event of which it was supposed to receive
notice thereof hereunder, and the Rights Agent shall be fully
protected and shall incur no liability for failing to take any
action in connection therewith unless and until it has received
such notice in writing.
Section 19. Merger or Consolidation or Change of Name
of Rights Agent.
(a) Any Person into which the Rights Agent or
any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the 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
Person 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 only the duties and obligations imposed by this
Agreement (and no implied duties or obligations) 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
advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent, and the Rights
Agent shall incur no liability for, or in respect of, any action
taken, suffered or omitted by it and in accordance with such
advice or 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 or Adverse
Person and the determination of "current market price") be
proved or established by the Company prior to taking, suffering
or omitting to take 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 Vice Chairman or Executive Vice
President, the Chief Financial Officer, or the Secretary of the
Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action
taken, suffered or omitted to be taken by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own gross negligence, bad faith, or willful
misconduct (each as determined by a final, non-appealable order,
judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, punitive,
indirect, consequential or incidental loss or damage of any
kinds whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the likelihood of
such loss or damage. Any liability of the Rights Agent under
this Rights Agreement will be limited to the amount of fees paid
by the Company to the Rights Agent.
(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 or have any liability in respect of the validity
of this Agreement or the execution and delivery hereof (except
the due execution and delivery hereof by the Rights Agent) or in
respect of the validity or execution of any 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 change in the
exercisability of the Rights (including the Rights becoming null
and void pursuant to Section 7(e)) or 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 Preferred Stock to be issued pursuant to this Agreement or
any Rights Certificate or as to whether any shares of Common
Stock or Preferred Stock 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 Vice Chairman or Executive Vice President, the
Chief Financial Officer, or the Secretary of the Company, and to
apply to such officers for advice or instructions in connection
with its duties, and such instructions shall be full
authorization and protection to the Rights Agent and it shall
not be liable for any action taken, suffered or omitted to be
taken by it in accordance with instructions of any such officer
or for any delay in acting while waiting for such instructions.
(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
absent gross negligence, bad faith or willful misconduct (each
as determined by a final, non-appealable order, judgment, or
decree of a court of competent jurisdiction) 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 adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Rights 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 or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days' notice in writing
mailed to the Company, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and
to the holders, if any, of the Rights Certificates by first-
class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 10 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 and Preferred
Stock, by registered or certified 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 10 days after giving notice of such removal,
or within a period of 30 days 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), as the case may be,
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 or
other entity organized and doing business under the laws of the
United States or of any state of the United States so long as
such corporation or entity is either (i) authorized under such
laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state
authority, and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least
$50,000,000 or the performance of which is guaranteed by a
corporation with a combined capital and surplus of at least
$50,000,000 or (ii) an affiliate of such corporation or entity.
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. The Company shall also notify
the registered holders of the Rights Certificates of such
appointment by any reasonable means, including without
limitation, by means of including information on such
appointment in a filing under the Exchange Act. 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, 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, in connection with
the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of
the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, granted or
awarded on or prior to the Distribution Date, or upon the
exercise, conversion, or exchange of securities hereinafter
issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be
issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person
to whom such Rights Certificate would be issued, and (ii) no
such Rights Certificate shall be issued if, and to the extent
that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company, by
the affirmative vote of at least a majority of the Continuing
Directors in addition to any other vote required by law or by
the articles of incorporation or bylaws 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 notice to the Board
of Directors of the occurrence of the Stock Acquisition Date (or
such later date as may be determined by a majority of the
Continuing Directors; provided, however, that such date shall
not be extended at such time as the Rights are not then
redeemable), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption
price of $.001 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, that if, following the occurrence of the
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 or Voting
Securities representing 10% or less of Total Voting Power, and
(ii) there are not other Persons, immediately following the
occurrence of the event described in clause (i), who are
Acquiring Persons, then the right of redemption shall be
reinstated and thereafter be subject to the provisions of this
Section 23. Notwithstanding the foregoing, the Board of
Directors may not redeem any Rights following a determination
pursuant to Section 11(a)(ii)(B) that any Person is an Adverse
Person. Notwithstanding anything contained in this Agreement to
the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as
the Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the "current market price", as
defined in Section 11(d)(i) hereof, of the Common Stock at the
time of redemption), or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
(by the affirmative vote of at least a majority of the
Continuing Directors), 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.
The Company shall promptly give public notice of such redemption
and prompt written notice to the Rights Agent; provided,
however, the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Within
10 days after such action of the Board of Directors ordering the
redemption of the Rights, the Company shall mail a notice to all
holders of the then outstanding Rights 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. Exchange.
(a) The Board of Directors of the Company may,
at its option, at any time and from time to time after the first
occurrence of a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for shares of Common Stock or common
stock equivalents (as defined in Section 11(a)(iii) hereof), or
any combination thereof, at an exchange ratio of one share of
Common Stock, or such number of common stock equivalents or
units representing fractions thereof as would be deemed to have
the same value as one share of Common Stock, per Right,
appropriately adjusted to reflect any stock split, stock
dividend, or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the
"Exchange Ratio").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares
of Common Stock and/or common stock equivalents equal to the
number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state
the method by which the exchange of the shares of Common Stock
and/or common stock equivalents for Rights will be effected and,
in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro
rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) 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
purposes other than upon exercise of the Rights are not
sufficient to permit an exchange of Rights as contemplated in
accordance with this Section 24, the Company may, at its option,
take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue
fractional shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of
such fractional shares of Common Stock, the Company shall pay to
the registered holders of Rights with regard to which such
fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the value of a
whole share of Common Stock. For purposes of this Section 24,
the value of a whole share of Common Stock shall be the closing
price (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24, and the value of
any common stock equivalent shall be deemed to have the same
value as the Common Stock on such date.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any
time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock
or to make any other distribution to the holders of Preferred
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 Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of
its Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), 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
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution, or
winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate in accordance
with Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the shares of Preferred 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 20 days prior to
the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of
any such other action, at least 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 Preferred Stock
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall
occur, then, (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 26 hereof, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate,
other securities.
Section 26. Notices. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by
the holder of any 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) or by facsimile transmission as
follows:
Sovereign Bancorp, Inc.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Corporate Secretary
Facsimile No.: (000) 000-0000
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) or by facsimile transmission as follows:
Mellon Investor Services LLC
Xxx Xxxxxx Xxxxxx
Xxxxx 0000
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
with a copy to:
Mellon Investor Services
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Facsimile No.: (000) 000-0000
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 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the last sentence of this
Section 27, the Company, by the affirmative vote of at least a
majority of the Continuing Directors in addition to any other
vote required by law or by the articles of incorporation or
bylaws of the Company, may, and the Rights Agent shall, if the
Company so directs but subject to the other provisions of this
Section, 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 last sentence of this Section 27, the
Company, by the affirmative vote of at least a majority of the
Continuing Directors in addition to any other vote required by
law or by the articles of incorporation or bylaws of the
Company, and, the Rights Agent shall, if the Company so directs
but subject to the other provisions of this Section, supplement
or amend this Agreement without the approval of any holders of
Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein,
or (iii) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of
Rights Certificates. 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 27, and provided such supplement or amendment
does not change or increase the Rights Agent's rights, duties,
liabilities or obligations, the Rights Agent shall execute such
supplement or amendment.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the
Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board
of Directors; No Waiver. For all purposes of this Agreement,
any calculation of the number of shares of Voting Securities
outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares
of Voting Securities 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 as in effect on the date hereof. The Board of
Directors of the Company (with, where specifically provided for
herein, the concurrence of 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 (with, where specifically provided for herein, the
concurrence of the Continuing Directors) or to the Company, or
as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make
all determinations deemed necessary or advisable for the
administration of this Agreement (including (i) a determination
as to the identity of the Affiliates and Associates of any
person, (ii) a determination as to the extent of the Beneficial
Ownership of any Person, and (iii) a determination to redeem or
not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations, and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board
(with, where specifically provided for herein, the concurrence
of the Continuing Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject
the Board (or the Continuing Directors) to any liability to the
holders of the Rights. Nothing contained herein shall be deemed
to waive or abrogate the provisions of any statute, regulation
or other provision of law applicable to the Company. The Rights
Agent shall always be entitled to assume that the Company's
Board of Directors acted in good faith and shall be fully
protected and incur no liability in reliance thereon.
Section 30. Benefits of this Agreement. Nothing in
this Agreement shall be 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 31. Severability. If any term, provision,
covenant, or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void,
or unenforceable, the remainder of the terms, provisions,
covenants, and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired,
or invalidated; provided, however, that notwithstanding anything
in this Agreement to the contrary, if any such term, provision,
covenant or restriction is held by such court or authority to be
invalid, void, or unenforceable and the Board of Directors of
the Company determines in its good faith judgment that severing
the invalid language from 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 day following
the date of such determination by the Board of Directors.
Without limiting the foregoing, if any provision requiring that
a determination be made by less than the entire Board is held by
a court of competent jurisdiction or other authority to be
invalid, void, or unenforceable, such determination shall then
be made by the entire Board.
Section 32. 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 the Commonwealth
applicable to contracts made and to be performed entirely within
the Commonwealth; provided, however, that all provisions
regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws
of the State of New York applicable to contracts made and to be
performed entirely within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 34. 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.
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.
SOVEREIGN BANCORP, INC.
By/s/Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Attest:/s/Xxxx X. Xxxxx
Xxxx X. Xxxxx
XXXXXX INVESTOR SERVICES LLC
By/s/Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
Attest:/s/Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Exhibit A
TERMS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
SOVEREIGN BANCORP, INC.
RESOLVED that, pursuant to the authority vested in the
Board of Directors of the Corporation by the Articles of
Incorporation, the Board of Directors does hereby provide for
the issue of a series of Preferred Stock, without par value, of
the Corporation, to be designated "Series A Junior Participating
Preferred Stock" (hereinafter referred to as the "Series A
Preferred Stock" or "this Series"), initially consisting of
25,000 shares, and to the extent that the designations, powers,
preferences and relative and other special rights and the
qualifications, limitations and restrictions of the Series A
Preferred Stock are not stated and expressed in the Articles of
Incorporation, does hereby fix and herein state and express such
designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions
thereof, as follows (all terms used herein which are defined in
the Articles of Incorporation shall be deemed to have the
meanings provided therein):
1. Designation and Amount. The designation of the series
of Preferred Stock created by this resolution shall be "Series A
Junior Participating Preferred Stock" and the number of shares
constituting such Series is Twenty-Five Thousand (25,000). Such
number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number
less than the number of shares then outstanding plus the number
of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding securities of the Corporation convertible into
shares of this Series.
2. Dividends.
(A) Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of this Series with
respect to dividends, the holders of shares of this Series shall
be entitled to receive, when and as declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on April 1, July 1,
October 1, and January 1 of each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of this
Series, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $10.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable
in Common Stock or a subdivision of the outstanding Common Stock
(by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date,
or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of
this Series. In the event the Company shall at any time after
September 19, 1989 (the "Rights Declaration Date") declare any
dividend on the Common Stock payable in Common Stock, subdivide
the outstanding Common Stock, or combine the outstanding Common
Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of this Series were
entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of Common
Stock outstanding immediately after such event and the
denominator of which is the number of Common Stock that were
outstanding immediately prior to such event.
(B) The Company shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in Common Stock); provided that, in the event
no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $10.00 per share on Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date
of issue of such shares of this Series, unless the date of issue
of such shares is prior to the record date for the first
Quarterly Dividend Payment Date in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of this Series entitled to
receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of this Series in an
amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of this Series entitled
to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than days prior to
the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the shareholders of the Corporation. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect
a subdivision or combination or consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment
of a dividend in Common Stock) into a greater or lesser number
of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which
is the number of Common Stock outstanding immediately after such
event and the denominator of which is the number of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
resolutions creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred
Stock and the holders of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall have
no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A Preferred
Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after
the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set
forth herein, in the Articles of Incorporation, or in any other
resolutions creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (A) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed per
share to holders of Common Stock, or (B) to the holders of
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the Series
A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect
a subdivision or combination or consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment
of a dividend in Common Stock) into a greater or lesser number
of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the proviso in
clause (A) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of Common Stock outstanding immediately after such
event and the denominator of which is the number of Common Stock
that were outstanding immediately prior to such event.
7. Consolidation, Merger, Etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the Common Shares are exchanged for or
changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series A Preferred
Stock shall at the same time be similarly exchanged or changed
into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or
for which each Common Stock is changed or exchanged. In the
event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in Common Stock, or effect
a subdivision or combination or consolidation of the outstanding
Common Stock (by reclassification or otherwise than by payment
of a dividend in Common Stock) into a greater or lesser number
of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is
the number of Common Stock outstanding immediately after such
event and the denominator of which is the number of Common Stock
that were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the
Corporation's Preferred Stock.
10. Amendment. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
Exhibit B
[Form of Rights Certificate)
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER ____________, ____, OR EARLIER IF REDEEMED
OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS
OR BECAME AN (ACQUIRING) (ADVERSE) PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN (ACQUIRING) (ADVERSE) PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
AND VOID UNDER THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF
SUCH AGREEMENT.](1)
Rights Certificate
SOVEREIGN 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
Amended and Restated Rights Agreement, dated as of June 21, 2001
(the "Rights Agreement"), between Sovereign Bancorp, Inc., a
Pennsylvania corporation (the "Company"), and Mellon Investor
Services LLC, a New Jersey limited liability company (the
"Rights Agent ), to purchase from the Company at any time prior
to 5:00 P.M. (New York City time) on June 30, 2007, at the
office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of
a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $80.00 per one one-hundredth of
________________
(1) The portion of the legend in brackets shall be inserted
only if applicable and shall replace the preceding
sentence.
a 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 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 June 21, 2001, based on the Preferred
Stock as constituted at such date. The Company reserves the
right to require prior to the occurrence of a Triggering Event
(as defined in the Rights Agreement) that a number of Rights be
exercised so that only whole shares of Preferred Stock will be
issued.
Upon the occurrence of a Section 11(a)(ii) Event (as
defined in the Rights Agreement), if the Rights evidenced by
this Rights Certificate are beneficially owned by (i) an
Acquiring Person, an Adverse Person, or an Affiliate or
Associate of any such Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring
Person, Adverse 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, an Adverse Person, or an Affiliate or
Associate of any such Person, such Rights shall become null and
void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Preferred Stock or
other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain
events, including a Triggering Event.
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 office 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-hundredths of a share of Preferred
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 the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may (unless the Board
of Directors shall have made a determination pursuant to
Section 11(a)(ii)(B) of the Rights Agreement that a Person is an
Adverse Person) be redeemed by the Company at its option at a
redemption price of $.001 per Right at any time prior to the
earlier of the close of business on (a) the tenth business day
following notice to the Board of Directors of the occurrence of
the Stock Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement), and (b) the Final Expiration
Date.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of shares of Preferred 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 shareholder of the Company or any right
to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice
of meetings or other actions affecting shareholders (except as
provided in 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 corporate seal.
Dated as of ____________, 20__
SOVEREIGN BANCORP, INC.
By________________________________
Title:
Attest:___________________________
Secretary
Countersigned:
___________________________
By_________________________
Authorized Signature
[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:___________________, 20__
___________________________________
Signature
Signature Guaranteed: _____________________________
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or
correspondent in the United States.
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, an Adverse Person, or an
Affiliate or Associate of any such 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 subsequently became an Acquiring Person, an Adverse Person,
or an Affiliate or Associate of any such Person.
Dated: ____________, 20__ _________________________________
Signature
Signature Guaranteed:
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.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: SOVEREIGN BANCORP, INC.:
The undersigned hereby irrevocably elects to exercise
______________ Rights represented by this Rights Certificate to
purchase the shares of Preferred 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 of 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: ________________, 20__
__________________________________
Signature
Signature Guaranteed: __________________________
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or
correspondent in the United States.
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, an Adverse Person
or an Affiliate or Associate of any such 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, an Adverse Person or an Affiliate
or Associate of any such Person.
Dated: _____________, 20__ ______________________________
Signature
Signature Guaranteed:
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.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On September 19, 1989, the Board of Directors of
Sovereign Bancorp, Inc. (the "Company") declared a dividend
distribution of one Right for each outstanding share of the
Company's Common Stock, par value $1.00 per share (the "Common
Stock"), to shareholders of record at the close of business on
October 2, 1989. The Board of Directors amended the terms and
conditions of the Rights on September 27, 1995, and on June 21,
2001. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred
Stock"), at a Purchase Price of $40.00, subject to adjustment.
The description and terms of the Rights are set forth in the
Amended and Restated Rights Agreement (the "Rights Agreement")
between the Company and Mellon Investor Services LLC, as Rights
Agent.
Initially, the Rights will be evidenced by 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 group of affiliated or
associated persons (an "Acquiring Person") has acquired, or
obtained the right to acquire, 9.9% or more of the outstanding
shares of Common Stock or voting securities representing 9.9% or
more of the total voting power of the Company (the "Stock
Acquisition Date"), (ii) 10 business days (or such later date as
the Board of Directors shall determine) following the
commencement of a tender offer or exchange offer that would
result in a person or group acquiring 9.9% or more of such
outstanding shares of Common Stock or total voting power, or
(iii) 10 business days following the determination by the Board
of Directors, after reasonable inquiry and investigation,
including consultation with such persons as such directors shall
deem appropriate, that, with respect to any person who has,
alone or together with his affiliates or associates, acquired
4.9% or more of such outstanding shares of Common Stock or total
voting power of the Company, such beneficial ownership by such
person is intended to cause the Company to repurchase the voting
securities beneficially owned by such person or to cause
pressure on the Company to take action or enter into a
transaction or series of transactions intended to provide such
person with short-term financial gain under circumstances where
the Board determines that the best long-term interests of the
Company and its shareholders would not be served by taking such
action or entering into such transaction or transactions at that
time (any such person being referred to herein and in the Rights
Agreement as an "Adverse Person").
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after October 2, 1989,
will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any
certificate for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on June 30, 2001,
unless earlier redeemed as described below. Pursuant to the
Rights Agreement, the Company reserves the right to require
prior to the occurrence of a Triggering Event (as defined below)
that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock will be
issued.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution
Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise provided in the
Rights Agreement or determined by the Board of Directors, only
shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that (i) a person becomes an Acquiring
Person (except pursuant to an offer for all outstanding shares
of the Company's voting securities which at least a majority of
the Continuing Directors determines to be fair to and otherwise
in the best interests of the Company and its shareholders),
(ii) an Acquiring Person engages in one or more "self-dealing"
transactions as defined in the Rights Agreement, (iii) the
Company is the surviving corporation in a merger with an
Acquiring Person, (iv) during such time that there exists an
Acquiring Person, a recapitalization or reverse stock split
occurs which results in such Acquiring Person's proportionate
ownership interest being increased by more than 1%, or (v) any
person is determined to be an Adverse Person (any of the
foregoing, a "Flip-in Event"), 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 (based on the lowest
closing price of the Common Stock during the twelve-month period
preceding the Flip-in Event) equal to two times the exercise
price of the Right. Notwithstanding the foregoing, following
the occurrence of a Flip-in Event, all Rights that are, or
(under certain circumstances specified in the Rights Agreement)
were, beneficially owned by any Acquiring Person or an Adverse
Person (or by certain related parties) will be null and void.
Rights are not exercisable following the occurrence of a Flip-in
Event, however, until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at an exercise price of $40.00 per Right,
each Right not owned by an Acquiring Person or an Adverse Person
(or by certain related parties) following a Flip-in Event would
entitle its holder to purchase $80.00 worth of Common Stock
based on the lowest closing price of the Common Stock during the
twelve-month period preceding the Flip-in Event (or other
consideration, as noted above) for $40.00. Assuming that the
lowest closing price of the Common Stock during such period was
$20.00, the holder of each valid Right would be entitled to
purchase four shares of Common Stock for $40.00.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation (other than a merger which follows
an offer for all outstanding voting securities of the Company,
which at least a majority of the Continuing Directors determines
to be fair to and otherwise in the best interests of the Company
and its shareholders, and the merger price is not less than, and
the form of consideration is the same as, that paid in the
tender or exchange offer) or (ii) 50% or more of the Company's
assets or earning power is sold or transferred, each holder of a
Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value
equal to two times the exercise price of the Right. The events
set forth in this paragraph and in the second preceding
paragraph are referred to as "Triggering Events."
The Purchase Price payable and the amount of Preferred
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 Preferred
Stock, (ii) if holders of the Preferred Stock are granted
certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of
the Preferred Stock, or (iii) upon the distribution to holders
of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional shares of
Preferred Stock will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading date prior to the date of
exercise.
At any time until ten business days following notice
to the Board of Directors of the occurrence of the Stock
Acquisition Date, the Company may redeem the Rights in whole,
but not in part, at a price of $.001 per Right (payable in cash,
Common Stock, or other consideration deemed appropriate as
determined by the Board of Directors). At any time prior to the
date the Rights would otherwise become nonredeemable, a majority
of the Continuing Directors may extend the period for
redemption. The Company's right of redemption may be reinstated
if an Acquiring Person reduces such Person's beneficial
ownership to 10% or less of the outstanding shares of Common
Stock or total voting power 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 ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will
be to receive the $.001 redemption price. Notwithstanding the
foregoing, the Board of Directors may not redeem the Rights
following a determination that any person is an Adverse Person.
The term "Continuing Directors" means any member of
the Board of Directors of the Company who was a member of the
Board on June 21, 2001, while such person is a member of the
Board, 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,
an Adverse Person, or an affiliate or associate of an Acquiring
Person or Adverse Person, or any representative of the foregoing
entities.
At any time after the occurrence of a Flip-in Event,
the Board of Directors may exchange the Rights (other than
Rights owned by an Acquiring Person or an Adverse person or an
affiliate or an associate of any such person, which have become
void), in whole or in part, at an exchange ratio of one share of
Common Stock, and/or other equity securities deemed to have the
equivalent value, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Company,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to shareholders or to the Company, shareholders may,
depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock
(or other consideration) of the Company or for common stock of
the acquiring company as set forth above, or are exchanged as
provided in the preceding paragraph.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the
Rights Agreement may be amended by the Board of Directors of the
Company prior to the Distribution Date. After the Distribution
Date, the provisions of the Rights Agreement may be amended by
the Board in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse
Person or an affiliate or associate of any such person), or to
shorten or lengthen any time period under the Rights Agreement;
however, no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to the
Company's Amendment No. 2 to its Current Report on Form 8-K
dated [July 3], 2001. A copy of the Rights Agreement is
available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
