AMENDED STOCKHOLDER RIGHTS AGREEMENT
APRIL 11, 1996
SOUTHERN JERSEY BANCORP
OF DELAWARE, INC.
and
THE FARMERS AND MERCHANTS
NATIONAL BANK OF BRIDGETON,
the Rights Agent
TABLE OF CONTENTS
Section Page
1. Certain Definitions 1
2. Appointment of Rights Agent 6
3. Issue of Rights Certificates 7
4. Form of Rights Certificates 9
5. Countersignature and Registration 10
6. Transfer, Split-Up, Combination, and
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 14
9. Reservation and Availability of
Capital Stock 14
10. Preferred Stock and 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 29
Section Page
13. Consolidation, Merger, or Sale
or Transfer of Assets or Earning
Power 30
14. Fractional Rights and Fractional
Shares 33
15. Rights of Action 34
16. Agreement of Rights Holders 35
17. Rights Certificate Holder Not Deemed
a Xxxxxxxxxxx 00
00. Concerning the Rights Agent 36
19. Merger, Consolidation, or Change of
Name of Rights Agent 37
20. Duties of Rights Agent 37
21. Change of Rights Agent 40
22. Issuance of New Rights Certificates 41
23. Redemption and Termination 41
24. Exchange
25. Notice of Certain Events 43
26. Notices 44
27. Supplements and Amendments 45
28. Successors 46
29. Determinations and Actions
by the Board of Directors 46
Section Page
30. Benefits of this Agreement 47
31. Severability 47
32. Governing Law 47
33. Counterparts 47
34. Descriptive Headings 47
Exhibit A -- Certificate of Designation, Preferences, and Rights
Exhibit B -- Form of Rights Certificate
Exhibit C -- Summary of Rights
AMENDED STOCKHOLDER RIGHTS AGREEMENT
This Amended Stockholder Rights Agreement, dated as of April 11, 1996
(the "Agreement"), is entered into by and between Southern Jersey Bancorp of
Delaware, Inc., a Delaware corporation (the "Company"), and The Farmers and
Merchants National Bank of Bridgeton, Bridgeton, New Jersey (the "Rights
Agent").
WITNESSETH:
WHEREAS, the Company and the Rights Agent entered into that certain
Stockholder Rights Agreement dated November 30, 1989 (the "Original
Agreement"); and
WHEREAS, on November 30, 1989 the Board of Directors of the Company (the
"Board") authorized and declared a dividend distribution of one right (the
"Rights") for each share of common stock, $1.67 par value, of the Company (the
"Common Stock") outstanding at the close of business on November 30, 1989; and
Whereas, the Board and the Rights Agent have agreed to amend the Original
Agreement in its entirety; and
WHEREAS, on April 11, 1996 (the "Rights Dividend Declaration Date"), the
Board authorized and declared a dividend distribution of one Right for each
share of Common Stock outstanding at the close of business on April 11, 1996
(the "Record Date"), and has authorized the issuance of one Right (as such
number may hereinafter be adjusted pursuant to the provisions of Section 11(p)
below) for each share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's treasury) and
the Distribution Date (as defined in Section 1(p) below), and for each share
of Common Stock issued after the Distribution Date pursuant to the Company's
1987 Stock Option and Stock Appreciation Rights Plan, each such Right
initially representing the right to purchase one one-hundredth of a share of
Preferred Stock (as defined in Section 1(x) below) and, upon the occurrence of
a Triggering Event (as defined in Section 1(oo) below), to purchase Common
Stock or other equity securities, upon the terms and subject to the conditions
of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as defined in Paragraph
(w) below) who or which, together with all Affiliates and Associates (as such
terms are defined in Paragraph (d) below) of such Person, is the Beneficial
Owner (as defined in Paragraph (e) below) of 20% or more of the shares of
Common Stock then outstanding, but shall not include the Company, any
Subsidiary (as defined in Paragraph (11) below) of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
organized, appointed, or established by the Company for or pursuant to the
terms of any such plan, provided, however, that no Person shall be deemed to
be an Acquiring Person if such Person shall become the Beneficial Owner of 20%
or more of the Common Stock then outstanding solely because of an action of
the Company with respect to the Common Stock.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning assigned thereto in
Section 11(a)(ii) below.
(d) "Affiliate" and "Associate" shall have the respective meanings
assigned to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Exchange Act (as defined in Paragraph (r) below) and in
effect on the date of this Agreement.
(e) "Agreement" shall mean this Stockholder Rights Agreement as
originally executed or as it may, from time to time, be supplemented or
amended pursuant to the applicable provisions hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities
(i) that such Person, or any of such Person's Affiliates or
Associates, directly or indirectly has the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement, or understanding (whether or not in writing) or
upon the exercise of conversion rights, exchange rights, rights, warrants, or
options, or otherwise, provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person, or any of such
Person's Affiliates or Associates, until such tendered securities are accepted
for purchase or exchange; (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 where such 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 below (the "Original Rights") or pursuant to
Section 11(i) below in connection with an adjustment made with respect to any
Original Rights;
(ii) that such Person, or any of such Person's Affiliates or
Associates, directly or indirectly has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations promulgated 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 promulgated 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) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such Person) 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 (e)), or
disposing of any voting securities of the Company, provided, however, that
nothing in this Paragraph (e) 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 40 days after
the date of such acquisition.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, no Person shall be deemed to be the "Beneficial Owner" of, or
to "beneficially own," any share of Common Stock of the Company issued
pursuant to an employee stock ownership plan or any other employee benefit
plan or employee compensation arrangement, so long as such plan or arrangement
is or has been approved by the Continuing Directors (as defined in Paragraph
(m) below).
(g) "Board" shall have the meaning assigned thereto in the preamble
to this Agreement.
(h) "Business Day" shall mean any day other than a Saturday, a Sunday, or
a day on which banking institutions in the State of New Jersey are authorized
or obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00 p.m.,
Bridgeton, New Jersey, time on such date, provided, however, that if such date
is not a Business Day, it shall mean 5:00 p.m., Bridgeton, New Jersey, time on
the next succeeding Business Day.
(j) "Closing Price" shall have the respective meanings assigned
thereto in Section 11(d) and Section 14(a) below.
(k) "Common Stock" shall have the meaning assigned thereto in the
preamble to this Agreement, 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.
(l) "Common Stock Equivalents" shall have the meaning assigned
thereto in Section 11(a)(iii) below.
(m) "Company" shall mean Southern Jersey Bancorp of Delaware, Inc., a
Delaware corporation, or any successor corporation thereto.
(n) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, but only while such Person is a member of the Board,
who is not an Acquiring Person, an Affiliate or Associate of an Acquiring
Person, or a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and was a member of the Board prior to the date of
this Agreement; or (ii) any Person who subsequently becomes a member of the
Board, but only while such Person is a member of the Board, who is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any such 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. Any
reference to a decision, determination, action, consent, approval, or
resolution of the Continuing Directors shall mean, and in all such cases shall
require, at least a majority of such Continuing Directors.
(o) "Current Market Price" shall have the respective meanings assigned
thereto in Section 11(d) and Section 14(a) below.
(p) "Current Value" shall have the meaning assigned thereto in Section
11(a)(iii) below.
(q) "Distribution Date" shall have the meaning assigned thereto in
Section 3(a) below.
(r) "Equivalent Preferred Stock" shall have the meaning assigned
thereto in Section 11(b) below.
(s) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(t) "Expiration Date" shall have the meaning assigned thereto in
Section 7(a) below.
(u) "Final Expiration Date" shall have the meaning assigned thereto
in Section 7(a) below.
(v) "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.
(w) "Original Rights" shall have the meaning assigned thereto in
Paragraph (f)(i) above.
(x) "Person" shall mean any individual, association, corporation,
partnership, limited partnership, joint venture, trust, estate, or other
entity.
(y) "Preferred Stock" shall mean shares of Series A preferred stock,
no par value, of the Company and, to the extent that there are not a
sufficient number of shares of Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock of the Company
designated for such purpose containing terms substantially similar to the
terms of the Preferred Stock.
(z) "Permitted Offer" shall mean a tender offer for all outstanding
Common Stock made in a manner prescribed by Section 14(d) of the Exchange Act
and the rules and regulations promulgated thereunder; provided, however, that
such tender occurs at a time when Continuing Directors are in office and a
majority of the Continuing Directors then in office has determined that the
offer is both adequate and otherwise in the best interests of the Company and
its stockholders (taking into account all factors that such Continuing
Directors deem relevant, including, without limitation, prices that could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value).
(aa) "Principal Party" shall have the meaning assigned thereto in
Section 13(b) below.
(bb) "Purchase Price" shall have the respective meanings assigned
thereto in Section 7(b), Section 11(a)(ii), and Section 13(a) below.
(cc) "Record Date" shall have the meaning assigned thereto in the
preamble to this Agreement.
(dd) "Redemption Price" shall have the meaning assigned thereto in
Section 23(a) below.
(ee) "Right" or "Rights" shall have the meaning assigned thereto in the
preamble to this Agreement.
(ff) "Rights Agent" shall mean The Farmers and Merchants National Bank
of Bridgeton, Bridgeton, New Jersey, or any successor corporation to the
Rights Agent pursuant to Section 19 below.
(gg) "Rights Certificates" shall have the meaning assigned thereto in
Section 3(b) below.
(hh) "Rights Dividend Declaration Date" shall have the meaning assigned
thereto in the preamble of this Agreement.
(ii) "Section 11(a)(ii) Event" shall mean any event described in Clauses
(A), (B), or (C) of Section 11(a)(ii) below.
(jj) "Section 11(a)(ii) Trigger Date" shall have the meaning assigned
thereto in Section 11(a)(iii) below.
(kk) "Section 13 Event" shall mean any event described in Subparagraphs
(i), (ii), or (iii) of Section 13(a) below.
(ll) "Spread" shall have the meaning assigned thereto in Section
11(a)(iii) below.
(mm) "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for the purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Company or a Person that such Person has become an Acquiring
Person.
(nn) "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.
(oo) "Substitution Period" shall have the meaning assigned thereto in
Section 11(a) (iii) below.
(pp) "Trading Day" shall have the respective meanings assigned thereto
in Section 11(d) and Section 14(a) below.
(qq) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 below, shall, prior to the Distribution
Date, also be the holders of the Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the 10th
calendar day after the Stock Acquisition Date (or, if the 10th calendar day
after the Stock Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date); or (ii) the Close of Business on the 10th
calendar day after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed, or established by the Company for or pursuant to
the terms of any such plan) is first published, sent, or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act (unless such tender or exchange offer is predicated upon the
redemption of the Rights), if upon consummation thereof, such Person would be
the Beneficial Owner of 30% or more of the shares of Common Stock then
outstanding (the earlier of (i) and (ii) 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 (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).
(b) As soon as is practical after the Rights Agent has been
notified by the Company that the Distribution Date has occurred, 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 certificates representing Rights, 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) below, 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) below) 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.
(c) As soon as is practical after the Record Date, the Company
will send a copy of a descriptive summary of Rights, in substantially the form
attached hereto as Exhibit C, 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.
(d) Rights shall be issued in respect of all shares of Common
Stock that 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. All certificates
for Common Stock issued after the Record Date and before the earlier of the
Distribution Date or the Expiration Date shall bear the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Stockholder Rights Agreement between Southern
Jersey Bancorp of Delaware, Inc. (the "Company") and The Farmers and Merchants
National Bank of Bridgeton, Bridgeton, New Jersey (the "Rights Agent"), dated
as of April 11, 1996 (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, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000, and the Rights Agent, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on the date
of mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any Person who is, was, or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, may become null and void.
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 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 in 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 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 Xxxxxxx 00, Xxxxxxx 00, xxx Xxxxxxxxx (x) below, the Rights
Certificates, whenever distributed, shall be dated as of authentication
thereof and on their face shall entitle the holders thereof to purchase such
number of shares of Preferred Stock as shall be set forth therein at the
Purchase Price (as defined in Section 7(b) below) set forth therein, 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) above or Section 22 below that represents Rights beneficially owned by
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person;
(ii) a transferee of an Acquiring Person (or of any such Associate of
Affiliate) who becomes a transferee after the Acquiring Person becomes such;
or (iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person's becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with
whom such Acquiring Person has any continuing agreement, arrangement, or
understanding regarding the transferred Rights; or (B) a transfer that the
Board has determined is part of a plan, arrangement, or understanding that has
as a primary purpose or effect the avoidance of Section 7(e) below, and any
Rights Certificate issued pursuant to Section 6 or Section 11 below 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
or an Affiliate or Associate of an Acquiring Person (as such terms are defined
in the Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances specified in
Section 7(e) of such Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President, or any 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 manually countersigned
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who signed any of the
Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issued and delivered 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 Certificates, shall be a proper officer of the Company to sign
such Rights Certificates although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent shall
keep or shall cause to be kept, at its principal office or offices designated
as the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued pursuant to this Agreement. 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, and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost, or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b) above and
Section 7(e), Section 9(f), and Section 14 below, 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(s) may be transferred, split
up, combined, or exchanged for another Rights Certificate(s) entitling the
registered holder to purchase a like number of shares 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(s) 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(s) shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate(s)
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(s) until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate(s) and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Section 4(b) above and Section 7(e), Section
9(f), and Section 14 below, countersign and deliver to the Person entitled
thereto a Rights Certificate(s), as the case may be, 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.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction, or
mutilation of a Rights Certificate, and, in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a
new Rights Certificate of like tenor to the Rights Agent for countersignature
and delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed, or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) and Section 9(f) below, 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) below) 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 principal office or offices of the Rights
Agent designated for such purpose, together with payment of the aggregate
Purchase Price (as defined in Paragraph (b) below) with respect to the total
number of shares of Preferred Stock (or Common Stock, 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 earlier of (i) the Close of Business on
April 11, 2006 (the "Final Expiration Date"); or (ii) the time at which the
Rights are redeemed as provided in Section 23 below (the earlier of (i) and
(ii) being herein referred to as the "Expiration Date").
(b) The "Purchase Price" for each one one-hundredth of a
share of Preferred Stock pursuant to the exercise of a Right shall initially
be $90.00, and shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) below and shall be payable in accordance with Paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-hundredth of a share of Preferred
Stock (or Common Stock, other securities, cash, or other assets, as the case
may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(k)
below, 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 shares 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 depository agent,
requisition from the depository agent depositary receipts representing such
number of shares 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 below; (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) below)
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
appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or to 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
below.
(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 or an Associate or
Affiliate of an Acquiring Person; (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such (a "Part Transferee"); or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person's becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement, or understanding regarding the transferred
Rights; or (B) a transfer that the Continuing Directors have determined is
part of a plan, arrangement, or understanding that has as a primary purpose or
effect the avoidance of this Section 7(e) (a "Prior Transferee"), or (iv) any
subsequent transferee receiving transferred Rights from a Part Transferee or a
Prior Transferee, either directly or through one or more intermediate
transferees, shall become null and void without any further action, and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The
Company shall use all reasonable effort to insure that the provisions of this
Section 7(e), Section 9(f) below, and Section 4(b) above are complied with,
but shall have no liability to any holder of Rights Certificates or other
Person as a result of the Company's failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates, or transferees
hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights
Certificates upon the occurrence of any purported exercise of Rights as set
forth in this Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
exercise; and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer,
split-up, combination, or exchange shall, if surrendered to the Company or any
of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company. 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 Section 11(a)(ii) 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
Section 11(a)(ii) Event, Common Stock and/or other securities) that, as
provided in this Agreement including Section 11(a)(iii) below, 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 Section 11(a)(ii) Event, Common Stock and/or
other securities) issuable and deliverable upon the exercise of the Rights may
be 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 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 is practical 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) below, a registration statement under the Act with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form; (ii) cause such registration statement to become effective as soon as
practical after such filing; and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities; or (B) the date of the expiration of
the Rights. The Company shall also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws and
regulations of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, (x) for a period of time not to
exceed 90 days after the date set forth in Subparagraph (i) of this Section
9(c) in any case in which Paragraph (f) below is not applicable, the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective; or (y) some portion or all of the
Rights for a period of 180 days in the case in which Paragraph (f) below is
applicable. 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 temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared effective.
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 shares of Preferred Stock
(and, following the occurrence of a Section 11(a) (ii) 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 federal and state transfer taxes and
charges that may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of shares 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 transfer tax that 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 shares 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 shares 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 shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
(f) The Company may suspend, for a period not to exceed 180
days after the date set forth in Paragraph (c)(i) above, the exercise of some
portion or all of the Rights with respect to any Person(s) for Preferred
Stock, or following the occurrence of a Triggering Event, Common Stock, if the
issuance of such shares of Preferred Stock or Common Stock to such Person(s)
would result in (i) a "change of control," within the meaning of the Change in
Bank Control Act of 1978, 12 U.S.C. Β§1817(j), with respect to the Company
or any Subsidiary of the Company that is a national bank or a bank insured by
the Federal Deposit Insurance Corporation; or (ii) such Person(s)' becoming a
"bank holding company" within the meaning of the Bank Holding Company Act of
1956, 12 U.S.C. Β§1842(c). Any such Person(s) with respect to whom the
exercise of Rights has been suspended may apply for approval from the
applicable bank regulatory agency for the Company or the affected Subsidiary.
The Company will issue the Preferred Stock or Common Stock to such Person(s)
only after the Company has received written verification that the applicable
regulatory agency has approved such Person(s)' acquisition of the Preferred
Stock or Common Stock. If the Company shall have not received such
verification within the 180-day period set forth in the first sentence of this
Paragraph (f), then all Rights held by such Person(s) with respect to whom the
exercise thereof has been suspended shall become null and void as of the Close
of Business on the day on which such 180-day period ends.
Section 10. Preferred Stock Record Date. Each person in whose name
any certificates for a number of shares 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 shares of Preferred Stock (or Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificates shall be dated
the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made, provided, however, that if the date of such surrender and
payment is a date upon which the 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 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 as a stockholder of the Company with respect to shares for which
the Rights may 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) and Section 9(f) above, 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 of one one-hundredths of a
share of Preferred Stock, or the number of shares of 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, that, 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, he
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) below, 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) below.
(ii) In the event that
(A) any Acquiring Person, or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, (1) shall merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of
such merger or combination and the Common Stock of the Company shall remain
outstanding and unchanged; (2) shall, in one transaction or a series of
transactions, transfer any assets to the Company or to any of its Subsidiaries
in exchange (in whole or in part) for shares of Common Stock, 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, or with (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) below; (4) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer, or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from, or with (as the case may be) the Company or
any of its Subsidiaries (other than incidental to the lines of business, if
any, engaged in as of the date hereof between the Company and such Acquiring
Person or Associate or Affiliate) assets having an aggregate fair market value
of more than $1,000,000, other than pursuant to a transaction set forth in
Section 13(a) below; (5) shall receive any compensation from the Company or
any of its Subsidiaries other than compensation for full-time employment as a
regular employee at rates in accordance with the Company's (or its
Subsidiaries') past practices; or (6) shall receive the benefit, directly or
indirectly (except proportionately as a 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;
(B) any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed, or established by the
Company for or pursuant to the terms of any such plan), alone or together with
its Affiliates or Associates, shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person unless the event causing the
Person to become an Acquiring Person is a transaction set forth in Section
13(a) below, or is an acquisition of shares of Common Stock pursuant to a
tender offer or an exchange offer for all outstanding shares of Common Stock
at a price and on terms determined by the Continuing Directors, after
receiving advice from one or more nationally recognized investment banking
firms, to be (1) at a price that is fair to stockholders (taking into account
all factors that such members of the Board deem relevant including, without
limitation, prices that could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value); and
(2) otherwise in the best interests of the Company and its stockholders; or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock
split), recapitalization of the Company, 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) below
apply (whether or not with or into or otherwise involving an Acquiring Person)
that 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 that is directly or
indirectly beneficially owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, then, promptly following five days after
the date of the occurrence of an event described in Section 11(a)(ii) (B)
above and promptly following the occurrence of any event described in Section
11(a)(ii) (A) or (C) above, each holder of a Right (except as provided below
and in Section 7(e) and Section 9(f) above) 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 shares of Preferred
Stock, such number of validly authorized and issued, fully paid and
non-assessable shares of Common Stock of the Company, not subject to any
liens, encumbrances, rights of first refusal, or other adverse claims, as
shall be 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 (which product shall thereafter be the "Purchase Price" per
Right with respect to the Common Stock); and (y) dividing the product obtained
in Clause (x) above by 50% of the Current Market Price (as determined pursuant
to Paragraph (d) below) per share of Common Stock on the date of such first
occurrence (such number of shares of Common Stock for which a Rights is
exercisable following such first occurrence shall hereinafter be referred to
as the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
that are authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing Subparagraph (ii) of this Section 11(a), the
Company shall (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2)
the Purchase Price (such excess being hereinafter referred to as 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 that the Continuing Directors have
deemed to have the same value as shares of Common Stock (such shares of
preferred stock being hereinafter referred to as "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 Continuing Directors based
upon the advice of a nationally recognized investment banking firm selected by
the Board with the concurrence of the Continuing Directors, provided, however,
that if the Company shall not have made adequate provision to deliver such
consideration pursuant to Clause (B) above within 30 days following the later
of (x) the first occurrence of a Section 11 (a) (ii) Event; or (y) the date on
which the Company's right of redemption pursuant to Section 23(a) below
expires (the later of (x) and (y) being hereinafter referred to 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 Continuing Directors shall
determine in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of the
Rights, the 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 (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) and Section 9(f) above, that such action shall apply uniformly to all
outstanding Rights; and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization
of additional shares and/or to decide the appropriate form of distribution to
be made pursuant to such first sentence and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the value of the Common Stock shall be the Current Market Price (as determined
pursuant to Paragraph (d) below) 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.
(iv) The right to buy Common Stock of the Company pursuant
to Section 11(a)(ii) above shall not arise as a result of any Person becoming
an Acquiring Person through an acquisition of Common Stock pursuant to a
Permitted Offer.
(b) If 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 in Section 11(d) below), the
Purchase Price to be in effect after such 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, Equivalent Preferred Stock, and/or Preferred Stock or
Equivalent Preferred Stock (that would result from the complete conversion of
the convertible securities) to be offered, and the denominator of which shall
be the number of shares of Preferred Stock outstanding on such record date,
plus the number of shares of Preferred Stock, Equivalent Preferred Stock,
and/or Preferred Stock or Equivalent Preferred Stock (that would result from
the complete conversion of the convertible securities) that theoretically
could be purchased, irrespective of whether such shares would actually be
available for purchase, upon the payment of the Current Market Price (rather
than the subscription, exercise, or conversion price). In case such
subscription, exercise, or conversion 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 Continuing
Directors, 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 that
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 (including any stock dividend other than a
dividend of shares of Preferred Stock), or subscription rights or warrants
(excluding those referred to in paragraph (b) above), 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 Paragraph (d) below) per share of Preferred Stock on such record
date, less the fair market value (as determine in good faith by the Continuing
Directors, 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 per share of Preferred Stock. 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 additional
shares of Preferred Stock, 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 and the denominator of which shall be the total number of shares of
Preferred Stock that will be outstanding following the distribution. 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 that 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) above, the "Current
Market Price" per shares of Common Stock on any date shall be deemed to be the
average of the daily Closing Prices (as such term is hereinafter defined) 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) above, 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 prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, after
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination, or reclassification, then, and in each such
case, the "Current Market Price" shall be properly adjusted to take into
account ex-dividend trading so as to include the value of the dividend. 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 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; or, 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 Continuing Directors. 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 shares as determined in
good faith by the Continuing Directors, 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 Subparagraph (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 Subparagraph (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
recapitalization 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
Continuing Directors, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Purchase Price,
provided, however, that any adjustments which by reason of this Paragraph (e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one one-hundredth of a share of
Common Stock or other share or one ten-thousandth of a share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this
Paragraph (e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction
that mandates such adjustment; or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) above or Section 13(a) below, the holder of any Rights
thereafter exercised shall become entitled to receive any shares of capital
stock other than Preferred Stock, then the number of such other shares so
receivable upon exercise of any Rights 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 of Sections 7, 9, 10, 11, 13, and
14 of this Agreement with respect to the Preferred Stock, which 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 Paragraph (i) below, upon each adjustment of the Purchase Price as
a result of the calculations made in Paragraphs (b) and (c) above, each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at such adjusted Purchase Price,
that number of one one-hundredths of a share of Preferred Stock (calculated to
the nearest one ten-thousandth) obtained by (i) multiplying (A) the number of
one one-hundredths of a share of Preferred Stock covered by a Right
immediately prior to such adjustment; by (B) 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
adjustment of the Purchase Price to adjust the number of Rights. In lieu of,
but not in addition to, the adjustment in the number of one one-hundredths of
a share of Preferred Stock made in Paragraph (h) above, the Company may adjust
the number of Rights held by each record holder thereof. Each of the Rights
outstanding after the adjustment of the number of Rights shall thereafter 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 immediately 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 the adjustment of the Purchase Price by the Purchase Price in effect
immediately after the adjustment of the Purchase Price. The Company shall
make a public announcement of its intention to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least 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 Paragraph (i), the
Company shall, as promptly as practical, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 below, 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 in Section 5(a) above 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 shares 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 of Preferred Stock that 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 shares of Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action that
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue such number of fully paid and nonassessable shares
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 until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of shares of Preferred Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and above the number
of shares 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, but is not required, 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 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 that
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 will not, at
any time after the Distribution Date, (i) consolidate with or merge with or
into any other Person (other than a subsidiary of the Company in a transaction
that complies with Section 11(o) herein); or (ii) sell or transfer (or permit
any Subsidiary to sell or transfer), in one transaction or a series of
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and all of 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 (A) at the time of or immediately after such consolidation,
merger, or sale there would be any rights, warrants, or other instruments or
securities outstanding or agreements in effect that would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights; or (B) prior to, simultaneously with, or immediately after such
consolidation, merger, or sale, the stockholders of the Person who constitute,
or would constitute, the "Principal Party" for purposes of Section 13(a) below
would otherwise receive 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 23, Section 24,
or Section 27 below, 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.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 above or
Section 13 below, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for such
adjustment; (b) promptly file with the Rights Agent, and with each transfer
agent for the 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 25
below. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained.
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, (i) the Company shall consolidate with, or merge
with or into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), and the Company shall
not be the continuing or surviving corporation of such consolidation or
merger; (ii) any Person (other than a Subsidiary of the Company in a
transaction that 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 Common
Stock shall be changed into or exchanged for stock or other securities of any
other Person or cash or any other property; or (iii) 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 transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and all of 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 Paragraph (d) below), proper provision shall
be made so that (A) each holder of a Right, except as provided in Section 7(e)
and Section 9(f) above, 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, in lieu of shares of Preferred Stock, such number of
validly authorized and issued, fully paid, non-assessable, 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 obtained by (1) multiplying the
Purchase Price by the 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 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 (2)
dividing that product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" per Right with respect to
the Common Stock of the Principal Party) by 50% of the Current Market Price
(determined pursuant to Section 11(d) above) per share of the Common Stock of
such Principal Party on the date of consummation of such Section 13 Event; (B)
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; (C) the term "Company" shall thereafter be deemed
to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 above shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (D) 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 relating to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (E) the provisions of Section 11(a)(ii) above
shall be of no effect following the first occurrence of any Section 13 Event
(b) "Principal Party" shall mean either of the following:
(i) in the case of any transaction described in
Subparagraph (i) or (ii) of Section 13(a) above, 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
Subparagraph (iii) of Section 13(a) above, 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, (A) 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 (B) in
case such Person is a Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale, statutory share exchange, or transfer unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock that 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 is practical 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 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 is
practical 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) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under any
blue sky laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act; and
(iv) use its best efforts if the Common Stock of the
Principal Party shall become listed on a national securities exchange to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Stock of
the Principal Party shall not be listed on a national securities exchange to
cause the Rights and the securities purchasable upon exercise of the Rights to
be reported by NASDAQ or such other system then in use; and
(v) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, statutory share exchanges, 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 that have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) above.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
Subparagraphs (i) and (ii) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a Permitted Offer or a cash tender offer for all outstanding
shares of Common Stock that complies with the provisions of Section 11(a)(ii)
(B) above (or a wholly-owned subsidiary of any such Person or Persons); (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 Permitted Offer or
such cash tender 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 Permitted Offer
or such cash tender offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
(e) If, for any reason, the Rights cannot be exercised for
Common Stock of such Principal Party as provided in Section 13(a), then each
holder of Rights shall have the right to exchange its Rights for cash from
such Principal Party in an amount equal to the number of shares of Common
Stock that it would otherwise be entitled to purchase times 50% of the current
per share market price, as determined pursuant to Section 11(d) hereof, of
such Common Stock of such Principal Party. If, for any reason, the foregoing
formulation cannot be applied to determine the cash amount into which the
Rights are exchangeable, then the Board of Directors, based upon the advice of
one or more nationally recognized investment banking firms, and based upon the
total value of the Company, shall determine such amount reasonably and with
good faith to the holders of Rights. Any such determination shall be final
and binding on the Rights Agent.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(p)
above, 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. For purposes of this
Section 14, 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; or, 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 Continuing Directors.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock upon exercise of the Rights (other than the integral
multiples of one one-hundredth of a share) or to distribute certificates that
evidence fractional shares of Preferred Stock (other than integral multiples
of one one-hundredth of a share). In lieu of fractional shares 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 share of Preferred
Stock. For purposes of this Section 14(b), the "Current Market Value" of one
share of Preferred Stock shall be the Closing Price of a share of Preferred
Stock (as determined pursuant to Section 11(d) (ii) above) 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 fractions of 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) above) 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.
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, in 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 capital 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 may otherwise act in respect
of, his right to exercise the Rights in the manner provided 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 to all of the following:
(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) above, 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) above, 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 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 shares of
Preferred Stock or any other securities of the Company that may at any time be
issuable on 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 below),
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 of this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time on demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expenses incurred without negligence, bad faith, or willful misconduct on the
part of the Rights Agent for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises.
(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.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on
the part of any of the parties hereto, provided, however, that such
corporation must be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 below. 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 will have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of "Current Market Price") be proved or established by
the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary, or any
Assistant Secretary of the Company and delivered to the Rights Agent. Such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 above or be responsible for
the manner, method, or amount of any such adjustment or the ascertainment 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 President, the
Secretary, any Assistant Secretary, the Treasurer, or any Assistant Treasurer
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of
any such officer.
(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 the Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect, or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect, or misconduct, provided that reasonable care
was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Rights Certificates 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 of such Rights Certificate, the Rights Agent shall not take any
further action with respect to such requested exercise of transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 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 of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 days' notice in writing mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock and
Preferred Stock by registered or certified mail and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation in
good standing organized and doing business under the laws of the United States
or of any state that is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $ 100,000,000 or (b) an Affiliate of
a corporation described in clause (a) of this sentence. After appointment,
the successor Rights Agent shall be vested with the same powers, rights,
duties, and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time
held by it hereunder, and shall execute and deliver any further assurance,
conveyance, act, or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by the Board to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, 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, 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, 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 may, at its option, at any time prior to the
earlier of (i) the Close of Business on the 10th calendar day following the
Stock Acquisition Date or such later date as may be determined by action of a
majority of Continuing Directors then in office and publicly announced by the
Company, (or, if the Stock Acquisition Date shall have occurred prior to the
Record Date, the Close of Business on the 10th calendar day following the
Record Date or such later date as may be determined by action of a majority of
Continuing Directors then in office and publicly announced by the Company); or
(ii) the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at redemption price of $0.01 per Right in cash, or by
delivery of or exchange for shares of Common Stock (including fractional
shares) or other consideration (including, but not limited to, depository
units representing shares of Common Stock or fractions thereof) deemed in good
faith to have a fair market value equal to $0.01 per Right by the Board, as
such amount may be appropriately adjusted to reflect any stock split, stock
dividend, or similar transaction occurring after the date of this Agreement
(such redemption price being hereinafter referred to as the "Redemption
Price"), provided, however, if the Board authorizes redemption of the Rights
and (x) such authorization occurs on or after the time a Person becomes an
Acquiring Person; or (y) such authorization occurs on or after the date of a
change (resulting from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation if any Person who
is a participant in such solicitation has stated (or, if upon the commencement
of such solicitation, a majority of the Board has determined in good faith)
that such Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action that would result in such Person becoming an
Acquiring Person or that would cause the occurrence of a Triggering Event,
then there must be at least one Continuing Director then in office and such
authorization shall require the concurrence of a majority of the
then-remaining Continuing Directors, provided further, however, that if,
following the occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any Triggering
Event, (1) 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, that did not result in the occurrence of a Triggering
Event such that such Person is thereafter a Beneficial Owner of 10% or less of
the outstanding shares of Common Stock; and (2) there is no other Person or
Persons, immediately following the occurrence of the event described in Clause
(1), who are Acquiring Person(s), then the right of redemption shall be
reinstated and thereafter be subject to the provisions of this Section 23.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable 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 of the Common Stock,
as defined in Section 11(d) above, at the time of redemption), or any other
form of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate, and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right so
held. Promptly after the action of the Board ordering the redemption of the
Rights, the Company shall give notice of such redemption to the Rights Agent
and the holders of the then outstanding Rights by mailing such notice to all
such holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Stock. Any notice that 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.
(c) Notwithstanding the foregoing, if no Continuing
Directors are then in office, any action requiring concurrence of the
Continuing Directors shall nevertheless be, and be deemed to be, duly approved
if such action is approved (at a meeting of stockholders duly called and held
upon at least 30 days' prior written notice to the stockholders) by the
affirmative votes of a majority of the outstanding Common Stock of the
Company, including, if at such time there is an Acquiring Person, the
affirmative votes of the holders of at least 80% of all outstanding Common
Stock of the Company held as of the record date for such meeting by persons
other than such Acquiring Person.
Section 24. Exchange.
(a) Subject to applicable laws, rules, and regulations, and
subject to subsection (c) below, the Company may, at its option, by majority
vote of the Board and a majority vote of the Continuing Directors, at any time
after the occurrence of a Section 11(a) (ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one (1) 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 "Ratio of Exchange"). Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company, or any such Subsidiary, or any
entity holding Common Stock for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
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 equal
to the number of such Rights held by such holder multiplied by the Ratio of
Exchange. The Company shall 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 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 Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of
Rights that 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 there shall not be sufficient shares of
Common Stock issued but not outstanding, or authorized but unissued, to permit
any exchange of Rights as contemplated in accordance with Section 24(a), the
Company shall either take such action as may be necessary to authorize
additional Common Stock for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board, with respect to each
Right (i) pay cash in an amount equal to the Current Value (as hereinafter
defined), in lieu of issuing Common Stock in exchange therefor, or (ii) issue
debt or equity securities or a combination thereof, having a value equal to
the Current Value (as defined below), in lieu of issuing Common Stock in
exchange for each such Right, where the value of such securities shall be
determined by a nationally recognized investment banking firm selected by the
Board by majority vote of the Board, or (iii) deliver any combination of cash,
property, Common Stock and/or other securities having a value equal to the
Current Value in exchange for each Right. For purposes of this Section 24(c)
only, the Current Value shall mean the product of the current per share market
price of Common Stock (determined pursuant to Section 11(d) on the date of the
occurrence of the event described above in subparagraph (a)) multiplied by the
number of shares of Common Stock for which the Right otherwise would be
exchangeable if there were sufficient shares available. To the extent that
the Company determines that some action need be taken pursuant to clauses (i),
(ii), or (iii) of this Section 24(c), the Board may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 24(a) shall have occurred, in
order to seek any authorization of additional shares of Common Stock and/or to
decide the appropriate form of distribution to be made pursuant to the above
provision 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.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock,
there shall be paid to the registered holders of the Rights Certificates 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 current per
share market value of a whole share of Common Stock (as determined pursuant to
the second sentence of Section 11(d) hereof).
(e) The Company may, at its option, by majority vote of the
Board, at any time before any Person has become an Acquiring Person, exchange
all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board,
based upon the advice of one or more nationally recognized investment banking
firms.
(f) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (e) 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 rights in exchange therefor as has
been determined by the Board in accordance with subsection (e) above. The
Company shall 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 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 transfer agent for the Common Stock of
the Company. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Rights
will be effected.
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); (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; (iii) to effect any reclassification of
the Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock); (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction that complies with Section 11(o) above), 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 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) above); or (v) to
effect the liquidation, dissolution, or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Rights Certificate,
to the extent feasible and in accordance with Section 26 below, 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 Subparagraph (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 of the events set forth in Section
11(a)(ii) or Section 13(a) above shall occur, then, in any such case, (i) the
Company shall as soon as practical thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 below, 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) or
Section 13(a) above; 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 pre-paid, addressed (until another address
is filed in writing with the Rights Agent) as follows:
Southern Jersey Bancorp
of Delaware, Inc.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Subject to the provisions of Section 21 above, 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 pre-paid, addressed (until another
address is filed in writing with the Company) as follows:
The Farmers and Merchants
National Bank of Bridgeton
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Trust Department
Notices or demand 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 the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of
any holders of certificates representing shares of Common Stock. From and
after the Distribution Date the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order (i) to cure any ambiguity; (ii) to
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provisions herein; (iii) to shorten or lengthen
any time period hereunder (which lengthening or shortening, following the
occurrence of an event set forth in Subparagraphs (i) and (ii) of the first
proviso to Section 23(a) above, shall be effective only if there are
Continuing Directors and shall require the concurrence of a majority of such
Continuing Directors); or (iv) to change or supplement the provisions
hereunder in any manner that the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to Subparagraph (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable; or (B) any other time period
unless such lengthening is for the purpose of protecting, enhancing, or
clarifying the rights of, and/or the benefits to, the holders of Rights. Upon
the delivery of a certificate from an appropriate officer of the Company that
states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 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.
For all purposes of this Agreement, any recalculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common
Stock of which any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13-3(d) (l) (i), or any successor provision
thereof, of the General Rules and Regulations under the Exchange Act. The
Board (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 a determination to redeem
or not redeem the Rights or to amend this Agreement). All such actions,
calculations, interpretations, and determinations (including, for purposes of
Subparagraph (y) below, all omissions with respect to the foregoing) that 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.
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
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect the purpose of
this Agreement, the right of redemption set forth in Section 23 above shall be
reinstated and shall not expire until the Close of Business on the 10th day
following the date of such determination by the 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 State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts made and to be performed entirely within such state, except that the
rights and obligations of the Rights Agent shall be governed by the laws of
the United States or, if the Rights Agent is not a national bank, the State of
Delaware.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall be for all purposes
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 hereunder affixed
and attested, all as of the day and year first above written.
Attest: SOUTHERN JERSEY BANCORP
OF DELAWARE, INC.
By:/s/ Xxxxx X. Xxxxxxx By:/s/Xxxxxxxx X. XxXxxxxxx
Name: Xxxxx X. Xxxxxxx Name: Xxxxxxxx X. XxXxxxxxx
Title: Secretary Title: Chairman of the Board,
Chief Executive
Officer, and President
[CORPORATE SEAL]
Attest: THE FARMERS AND MERCHANTS
NATIONAL BANK OF BRIDGETON
By:/s/Xxxxx X. Xxxxxx By:/s/Xxxxxxxx X. XxXxxxxxx
Name: Xxxxx X. Xxxxxx Name: Xxxxxxxx X. XxXxxxxxx
Title: Cashier Title: Chairman of the Board and
Chief Executive Officer,
[CORPORATE SEAL]
