________________________________________________________________
LIBERTY SAVINGS BANK, F.S.B.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as rights agent
_______________
RIGHTS AGREEMENT
Dated as of June 16, 1998
________________________________________________________________
TABLE OF CONTENTS
Section Page
1. Certain Definitions................................ 1
2. Appointment of Rights Agent........................ 5
3. Issue of Rights Certificates....................... 6
4. Form of Rights Certificates........................ 7
5. Countersignature and Registration.................. 8
6. Transfer, Split Up, Combination, or Exchange of
Rights Certificates; Mutilated, Destroyed, Lost,
or Stolen Rights Certificates...................... 9
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights..................................... 10
8. Cancellation and Destruction of Rights
Certificates....................................... 12
9. Reservation and Availability of Capital Stock...... 13
10. Preferred Stock Record Date........................ 14
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights......................... 15
12. Certificate of Adjusted Purchase Price or Number
of Shares.......................................... 26
13. Consolidation, Merger, or Sale or Transfer of
Assets or Earning Power............................ 26
14. Fractional Rights and Fractional Shares............ 29
15. Rights of Action................................... 30
16. Agreement of Rights Holders........................ 30
17. Rights Certificate Holder Not Deemed a Shareholder. 31
18. Concerning the Rights Agent........................ 31
19. Merger or Consolidation or Change of Name of
Rights Agent....................................... 32
20. Duties of Rights Agent............................. 32
21. Change of Rights Agent............................. 35
22. Issuance of New Rights Certificates................ 36
23. Redemption and Termination......................... 36
24. Exchange........................................... 37
25. Notice of Certain Events........................... 38
26. Notices............................................ 39
27. Supplements and Amendments......................... 40
28. Successors......................................... 40
29. Determinations and Actions by the Board of
Directors.......................................... 41
30. Benefits of this Agreement......................... 41
31. Severability....................................... 41
32. Governing Law...................................... 42
33. Counterparts....................................... 42
34. Descriptive Headings............................... 42
Exhibit A - Supplementary Charter Section - Terms of
Series A Junior Participating Preferred Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
PAGE 2
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of June 16, 1998 (the
"Agreement"), between LIBERTY SAVINGS BANK, F.S.B., a Federal
savings bank (the "Bank"), and CHASEMELLON SHAREHOLDER SERVICES,
L.C.C., a New York limited liability company, as rights agent
(the "Rights Agent").
BACKGROUND
On June 16, 1998 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Bank authorized and
declared a dividend distribution of one Right (as hereinafter
defined) for each share of common stock, par value $1.00 per
share, of the Bank (the "Common Stock") outstanding at the close
of business on the Rights Dividend Declaration Date, payable to
shareholders of record as of the close of business on June 30,
1998 (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) hereof) for each share of Common
Stock issued between the Record Date (whether originally issued
or delivered from the Bank's treasury) and the Distribution Date,
each Right initially representing the right to purchase one one-
hundredth of a share of Series A Junior Participating Preferred
Stock of the Bank having the rights, powers, and preferences
herein set forth, upon the terms and subject to the conditions
hereinafter set forth (the "Rights").
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of (i) 14.9% or more of the
shares of Common Stock or (ii) Voting Securities that in the
aggregate represent 14.9% or more of the Total Voting Power, but
shall not include the Bank, any Subsidiary of the Bank, any
employee stock option plan or other employee benefit plan of the
Bank or of any Subsidiary of the Bank, or any Person or entity
organized, appointed, or established by the Bank for or pursuant
to the terms of any such plan.
(b) "Adverse Person" shall mean any Person
declared to be an Adverse Person by the Board of Directors upon a
determination that the criteria set forth in Section 11(a)(ii)(B)
apply to such Person.
(c) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in
effect on the date hereof.
(d) A Person shall be deemed the "Beneficial
Owner", of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such
Person's Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement, or understanding (whether or not
in writing) or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender offer or
exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, or (B) securities
issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable
upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such Person
or any of such Person's Affiliates or Associates prior to
the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made
with respect to any Original Rights;
(ii) which such Person or any of such
Person's Affiliates or Associates, directly or indirectly,
has the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement, or
understanding, whether or not in writing; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement,
or understanding to vote such security if such agreement,
arrangement, or understanding (A) arises solely from a
revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and
Regulations under the Exchange Act and (B) is not also then
reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement, or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the
proviso to subparagraph (ii) of this paragraph (d)), or
disposing of any Voting Securities; provided, however, that
nothing in this paragraph (d) shall cause a person engaged
in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in
good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(e) "Business Day" shall mean any day other than
a Saturday, Sunday, or a day on which banking institutions in the
Commonwealth of Pennsylvania are authorized or obligated by law
or executive order to close.
(f) "Close of business" on any given date shall
mean 5:00 P.M., New York time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00 P.M.,
New York time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the common stock,
par value $1.00 per share, of the Bank, except that "Common
Stock" when used with reference to any Person other than the Bank
shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest
having power to control, or direct the management of, such
Person.
(h) "Common stock equivalents" shall have the
meaning set forth in Section 11(a)(iii) hereof.
(i) "Continuing Director" shall mean (i) any
member of the Board of Directors of the Bank, while such Person
is a member of the Board, who is not an Acquiring Person, an
Adverse Person (or a Person with respect to whom the Continuing
Directors are considering making an Adverse Person determination
pursuant to Section 11(a)(ii)(B) hereof), or an Affiliate or
Associate of any such Person, or a representative of any such
Person, Affiliate, or Associate, and who was a member of the
Board prior to the date of this Agreement, or (ii) any Person who
subsequently becomes a member of the Board, while such Person is
a member of the Board, who is not an Acquiring Person, an Adverse
Person (or a Person with respect to whom the Continuing Directors
are considering making an Adverse Person determination), or an
Affiliate or Associate of any such Person, or a representative of
any such Person, Affiliate or Associate, if such Person's
nomination for election or election to the Board is recommended
or approved by a majority of the Continuing Directors.
(j) "Current market price" shall have the meaning
set forth in Section 11(d)(i) hereof.
(k) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning
set forth in Section 3(a) hereof.
(m) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(n) "Expiration Date" shall have the meaning set
forth in Section 7(a) hereof.
(o) "Final Expiration Date" shall have the
meaning set forth in Section 7(a) hereof.
(p) "OTS Regulations" shall mean the rules and
regulations of the Office of Thrift Supervision and any federal
or state agency which is a successor thereto as the primary
regulatory agency having jurisdiction over the Bank.
(q) "Person" shall mean any individual, firm,
corporation, partnership, or other entity.
(r) "Preferred Stock" shall mean shares of
Series A Junior Participating Preferred Stock, without par value,
of the Bank, and, to the extent that there are not a sufficient
number of shares of Series A Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of preferred stock, without par value, of the Bank
designated for such purpose containing terms substantially
similar to the terms of the Series A Junior Participating
Preferred Stock.
(s) "Principal Party" shall have the meaning set
forth in Section 13(b) hereof.
(t) "Purchase Price" shall have the meaning set
forth in Section 4(a) hereof.
(u) "Record Date" shall have the meaning set
forth in the BACKGROUND clause in the recital to this Agreement.
(v) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(w) "Rights" shall have the meaning set forth in
the BACKGROUND clause in the recital to this Agreement.
(x) "Rights Certificates" shall have the meaning
set forth in Section 3(a) hereof.
(y) "Rights Dividend Declaration Date" shall have
the meaning set forth in the BACKGROUND clause in the recital to
this Agreement.
(z) "Section 11(a)(ii) Event" shall mean any
event described in clauses (A) or (B) of Section 11(a)(ii)
hereof.
(aa) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii) hereof.
(aa) "Section 13 Event" shall mean any event
described in clauses (x), (y), or (z) of Section 13(a) hereof.
(bb) "Securities Act" shall mean the Securities
Act of 1933, as amended.
(cc) "Spread" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(dd) "Stock Acquisition Date" shall mean the
first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed
pursuant to Section 13(d) under the Exchange Act) by the Bank or
an Acquiring Person that an Acquiring Person has become such.
(ee) "Subsidiary" shall mean, with reference to
any Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the
directors of such corporation is beneficially owned, directly or
indirectly, by such Person, or otherwise controlled by such
Person.
(ff) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(gg) "Total Voting Power" on any given date shall
mean the total number of votes eligible to be cast in a general
election of directors of the Bank.
(hh) "Trading Day" shall have the meaning set
forth in Section 11(d)(i) hereof.
(ii) "Triggering Event" shall mean any Section
11(a)(ii) Event or Section 13 Event.
(jj) "Voting Securities" shall mean any class or
classes of capital stock of the Bank entitled to vote generally
in the election of directors.
Section 2. Appointment of Rights Agent. The Bank
hereby appoints the Rights Agent to act as agent for the Bank in
accordance with the terms and conditions hereof, and the Rights
Agent hereby accepts such appointment. The Bank 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 earliest of (i) the close of
business on the twentieth Business Day after the Stock
Acquisition Date, (ii) the close of business on the twentieth
Business Day (or such later date as may be determined by the
Board of Directors) after the date that a tender offer or
exchange offer by any Person (other than the Bank, any Subsidiary
of the Bank, any employee stock option plan or other employee
benefit plan of the Bank or of any Subsidiary of the Bank, or any
Person or entity organized, appointed, or established by the Bank
for or pursuant to the terms of any such plan) is first published
or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if, upon
consummation thereof, such Person would be the Beneficial Owner
of (x) 14.9% or more of the shares of Common Stock then
outstanding or (y) Voting Securities representing 14.9% or more
of the Total Voting Power, or (iii) the close of business on the
twentieth Business Day after the Board of Directors determines,
pursuant to the criteria set forth in Section 11(a)(ii)(B)
hereof, that a Person is an Adverse Person (the earliest of (i),
(ii), and (iii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the
holders of such Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable
only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Bank). As soon as
practicable after the Distribution Date, the Rights Agent will
send by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown on the
records of the Bank, one or more rights certificates, in
substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(p) hereof, at
the time of distribution of the Rights Certificates, the Bank
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the
Record Date, the Bank will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), by 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 Bank.
(c) Rights shall be issued in respect of all
shares of Common Stock which are issued (whether originally
issued or from the Bank's treasury) after the Record Date but
prior to the earlier of the Distribution Date or the Expiration
Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights, and shall
bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights
Agreement between LIBERTY SAVINGS BANK, F.S.B. (the "Bank")
and ChaseMellon Shareholder Services, L.L.C., as rights
agent (the "Rights Agent"), dated as of June 16, 1998 (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 Bank. 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 Bank or the
Rights Agent will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person, an
Adverse Person, or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or
(ii) the Expiration Date, the Rights associated with the Common
Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any of 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) may have such marks of identification or
designation and such legends, summaries, or endorsements printed
thereon as the Bank 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
Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such
number of one one-hundredths of a share of Preferred
Stock as shall be set forth therein at the price set forth
therein (such exercise price per one one-hundredth of a share,
the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or an Adverse
Person or any Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee after such Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring Person
or an Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom such Acquiring Person or
Adverse Person has any continuing agreement, arrangement, or
understanding regarding the transferred Rights or (B) a transfer
that the Board of Directors of the Bank has determined is part of
a plan, arrangement, or understanding which has as a primary
purpose or effect avoidance of Section 7(e) hereof, and any
Rights Certificate issued pursuant to Section 6 or Section 11
hereof upon transfer, exchange, replacement, or adjustment of any
other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or became an
[Acquiring Person] [Adverse Person] or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void under the
circumstances and with the effect specified in Section 7(e)
of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Bank by its Chairman of the Board, Chief Executive
Officer, President, or any Executive Vice President either
manually or by facsimile signature, and shall have affixed
thereto the Bank's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Bank,
either manually or by facsimile signature. The Rights
Certificates shall be countersigned manually by the Rights Agent
and shall not be valid for any purpose unless so countersigned.
In case any officer of the Bank who shall have signed any of the
Rights Certificates shall cease to be such officer of the Bank
before countersignature by the Rights Agent and issuance and
delivery by the Bank, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued
and delivered by the Bank with the same force and effect as
though the person who signed such Rights Certificates had not
ceased to be such officer of the Bank; and any Rights
Certificates may be signed on behalf of the Bank by any person
who, at the actual date of the execution of such Rights
Certificate, shall be a proper officer of the Bank to sign such
Rights Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal office or
offices designated as the appropriate place for surrender of
Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates
and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination, or
Exchange of Rights Certificates; Mutilated, Destroyed, Lost, or
Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b),
Section 7(e), Section 14, and Section 24 hereof, at any time
after the close of business on the Distribution Date, and at or
prior to the close of business on the Expiration Date, any Rights
Certificate may be transferred, split up, combined, or exchanged
for another Rights Certificate entitling the registered holder to
purchase a like number of one one-hundredths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash, or other assets, as the case may be) as
the Rights Certificate surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine, or
exchange any Rights Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate to be transferred, split up, combined, or
exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the
Bank shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof
as the Bank shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e), and Section 14
hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate as so requested. The Bank 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 Bank 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 Bank
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 Bank will execute and
deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed, or
mutilated.
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability
set forth in Section 9(c), Section 11(a)(iii), and Section 23(a)
hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of
election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price
with respect to the total number of one one-hundredths of a share
(or other securities, cash, or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at or
prior to the earliest of (i) the close of business on June 16,
2008 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the earlier
of (i) and (ii) being herein referred to as the "Expiration
Date"), or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth
of a share of Preferred Stock pursuant to the exercise of a Right
shall initially be Sixty-Three Dollars ($63.00), and shall be
subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance
with paragraph (c) below.
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-hundredth of a share
of Preferred Stock (or other shares, securities, cash, or other
assets, as the case may be) to be purchased as set forth below
and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent
is the transfer agent for such shares) certificates for the total
number of one one-hundredths of a share of Preferred Stock to be
purchased and the Bank hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Bank shall
have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent
depositary receipts representing such number of one-hundredths of
a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depositary agent) and the Bank will direct the depositary agent
to comply with such request, (ii) requisition from the Bank the
amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified
bank check or bank draft payable to the order of the Bank. In
the event that the Bank is obligated to issue other securities
(including Common Stock) of the Bank, pay cash, and/or distribute
other property pursuant to Section 11(a) hereof, the Bank 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. The Bank reserves the
right to require prior to the occurrence of a Triggering Event
that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be
issued.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person, an Adverse Person, or an Associate or Affiliate
of an Acquiring Person or an Adverse Person, (ii) a direct or
indirect transferee of an Acquiring Person or an Adverse Person
(or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person or Adverse Person becomes such, or
(iii) a direct or indirect transferee of an Acquiring
Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person or Adverse Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom the Acquiring Person or Adverse
Person has any continuing agreement, arrangement, or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Bank has determined is part
of a plan, arrangement or understanding which has as a primary
purpose or effect the avoidance of this Section 7(e), shall
become null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or
otherwise. The Bank shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) hereof
are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or an
Adverse Person or any of their respective Affiliates, Associates,
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Bank shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
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 Bank 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 Bank 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 Bank 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 Bank otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the
Bank, or shall, at the written request of the Bank, destroy such
cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Bank.
Section 9. Reservation and Availability of Capital
Stock.
(a) The Bank covenants and agrees that it will
cause to be reserved and kept available out of its authorized and
unissued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement, including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) issuable and deliverable upon the
exercise of the Rights may be quoted on any automated quotation
system of the National Association of Securities Dealers, Inc. or
listed on any national securities exchange, the Bank shall use
its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be
so quoted or listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Bank shall use its best efforts to
(i) file, as soon as practicable following the first occurrence
of a Section 11(a)(ii) Event, or, if applicable, as soon as
practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Bank upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, an offering circular on an appropriate form under the OTS
Regulations, with respect to the securities purchasable upon
exercise of the Rights, (ii) cause such offering circular to
become effective as soon as practicable after such filing, and
(iii) cause such offering circular to remain effective until the
earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the
expiration of the Rights. The Bank may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date
set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to
prepare and file such offering circular and permit it to become
effective. Upon any such suspension, the Bank 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 Bank shall determine that an offering circular
is required following the Distribution Date, the Bank may
temporarily suspend the exercisability of the Rights until such
time as an offering circular has been declared effective. The
Bank shall also use its best efforts to take such action as may
be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights.
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, or the exercise thereof shall not be permitted under
applicable law.
(d) The Bank covenants and agrees that it will
take all such action as may be necessary to ensure that all one
one-hundredths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Bank further covenants and agrees that it
will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-hundredths of a share of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) upon the exercise of Rights. The Bank shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of
one one-hundredths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-
hundredths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until
such tax 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 Bank's satisfaction that no
such tax is due.
Section 10. Preferred Stock Record Date. Each person
in whose name any certificate for a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder
of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and all applicable
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 Bank are closed, such Person shall be
deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Bank are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a shareholder
of the Bank with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to
receive dividends, or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Bank, 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 Bank 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 Bank is the continuing or surviving
bank), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the
time of the record date for such dividend or of the
effective date of such subdivision, combination, or
reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall
be entitled to receive, upon payment of the Purchase Price
then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock transfer books
of the Bank were open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. If
an event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this
Agreement, in the event:
(A) any Person shall at any time after
the Rights Dividend Declaration Date become an
Acquiring Person, unless the event causing such Person
to become an Acquiring Person (I) is a
transaction set forth in Section 13(a) hereof, or
(II) is an acquisition of shares of Common Stock and/or
Voting Securities pursuant to a tender offer or an
exchange offer for all outstanding shares of Common
Stock and other Voting Securities, if any, at a price
and on terms determined by at least a majority of the
Continuing Directors who are not representatives,
nominees, Affiliates or Associates of an Acquiring
Person, after receiving advice from one or more
investment banking firms, to be (x) at a price which is
fair to shareholders (taking into account all factors
which the Board of Directors deems relevant including,
without limitation, prices which could reasonably be
achieved if the Bank or its assets were sold on an
orderly basis designed to realize maximum value) and
(y) otherwise in the best interests of the Bank and its
shareholders; or
(B) the Board of Directors of the Bank
shall declare any Person to be an Adverse Person, upon
a determination that such Person, alone or together
with its Affiliates and Associates, has, at any time
after the Rights Dividend Declaration Date, become the
beneficial owner of Voting Securities representing at
least 10% of the Total Voting Power and a
determination, after reasonable inquiry and
investigation, including consultation with such persons
as the Board of Directors shall deem appropriate, that
such beneficial ownership by such Person is
(1) intended to cause the Bank to repurchase the Voting
Securities beneficially owned by such Person or to
cause pressure on the Bank to take action or enter into
a transaction or series of transactions intended to
provide such Person (and not shareholders generally)
with short-term financial gain under circumstances
where the Board of Directors determines that the best
long-term interests of the Bank and its shareholders
would not be served by taking such action or entering
into such transaction or series of transactions at that
time or (2) causing or reasonably likely to cause a
material adverse impact (including, but not limited to,
impairment of relationships with customers, impairment
of the Bank's business reputation or impairment of the
Bank's ability to maintain its competitive position) on
the business or prospects of the Bank; or
(C) any Acquiring person or any
Associate or Affiliate of any Acquiring Person, at any
time after the date of this Agreement, directly or
indirectly, (1) shall merge into the Bank or otherwise
combine with the Bank and the Bank shall be the
continuing or surviving corporation of such merger or
combination and the Voting Securities of the Bank shall
remain outstanding and unchanged, (2) shall, in one
transaction or a series of transactions,
other than in connection with the exercise of the
Rights or the exercise or conversion of securities
exercisable or convertible into capital stock of the
Bank or any of its Subsidiaries, transfer any assets to
the Bank or to any of its Subsidiaries in exchange (in
whole or in part) for shares of Voting Securities, for
shares of other equity securities of the Bank, or for
securities exercisable for or convertible into shares
of equity securities of the Bank (Common Stock or
otherwise) or otherwise obtain from the Bank, with or
without consideration, any additional shares of such
equity securities or securities exercisable for or
convertible into shares of such equity securities
(other than pursuant to a pro rata distribution to all
holders of Common Stock), (3) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer, or
otherwise acquire or dispose of, in one transaction or
a series of transactions, to, from, with, or of (as the
case may be) the Bank or any of its Subsidiaries,
assets on terms and conditions less favorable to the
Bank than the Bank would be able to obtain in arm's-
length negotiation with an unaffiliated third party,
other than pursuant to a transaction set forth in
Section 13(a) hereof, (4) shall receive any
compensation from the Bank or any of the Bank's
Subsidiaries other than compensation for services as a
director or for full-time employment as a regular
employee at rates in accordance with the Bank's (or its
Subsidiaries') past practices, or (5) shall receive the
benefit, directly or indirectly (except proportionately
as a shareholder 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 Bank or any of its
Subsidiaries; or
(D) during such time as there is an
Acquiring Person, there shall be any reclassification
of securities (including any reverse stock split), or
recapitalization of the Bank, or any merger or
consolidation of the Bank with any of its Subsidiaries
or any other transaction or series of transactions
involving the Bank or any of its Subsidiaries, other
than a transaction or transactions to which the
provisions of Section 13(a) apply (whether or not with
or into or otherwise involving an Acquiring Person)
which has the effect, directly or indirectly, of
increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity
securities of the Bank or any of its Subsidiaries which
is directly or indirectly beneficially owned by any
Acquiring Person or any Associate or Affiliate of any
Acquiring Person;
then, promptly following the first occurrence of a
Section 11(a)(ii) Event, proper provision shall be made so
that each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in
lieu of a number of one one-hundredths of a share of
Preferred Stock, such number of shares of Common Stock of
the Bank as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then
number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and
(y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this
Agreement) by 50% of the lowest closing price (as determined
pursuant to the second sentence of Section 11(d)(i) hereof)
per share of Common Stock on any Trading Day (as defined in
Section 11(d)(i) hereof) occurring within the twelve-month
period immediately preceding the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that (a) the number of
shares of Common Stock which are authorized by the Bank's
Charter but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not
sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this
Section 11(a), or (b) the quotient (the "Quotient") obtained
by dividing the Purchase Price by the number of Adjustment
Shares issuable upon exercise of a Right is less than the
then par value per share of the Common Stock, the Bank
shall, to the extent permitted by applicable law and
regulation and subject to such limitations as are necessary
to prevent a default under any agreement to which the Bank
is a party: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess,
the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash,
(2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Bank (including, without
limitation, shares, or units of shares, of preferred stock
which the Board of Directors of the Bank has deemed to have
the same value as shares of Common Stock (such shares of
preferred stock, "common stock equivalents")), (4) debt
securities of the Bank, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has
been determined by the Board of Directors of the Bank based
upon the advice of a regionally recognized investment
banking firm selected by the Board of Directors of the Bank;
provided, however, if the Bank shall not have made adequate
provision to deliver value pursuant to clause (B)
above within 30 days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Bank's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Bank shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to
the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Bank shall
determine in good faith that it is likely that
(a) sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights
or (b) a reduction in the par value per share of Common
Stock to an amount that is equal to or less than the
Quotient could be authorized, the 30 day period set forth
above may be extended to the extent necessary, but not more
than 90 days after the Section 11(a)(ii) Trigger Date, in
order that the Bank may seek shareholder approval for the
authorization of such additional shares or for the reduction
of such par value, as the case may be (such period, as it
may be extended, the "Substitution Period"). To the extent
that the Bank determines that some action need be taken
pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Bank (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares or reduction in par value and/or to decide
the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In
the event of any such suspension, the Bank shall issue a
public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value
of the Common Stock shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of
the Common Stock on the Section 11(a)(ii) Trigger Date and
the value of any "common stock equivalent" shall be deemed
to have the same value as the Common Stock on such date.
(b) In case the Bank shall fix a record date for
the issuance of rights, options, or warrants to all holders of
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within 45 calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("equivalent
preferred stock")) or securities convertible into Preferred Stock
or equivalent preferred stock at a price per share of Preferred
Stock or per share of equivalent preferred stock (or having a
conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less
than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator
of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Bank,
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 Bank shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed, and in
the event that such rights or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Bank 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 Bank is the continuing bank) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Bank), assets
(other than a dividend payable in Preferred Stock, but including
any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in
Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of
the Bank, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets,
or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such
current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred Stock. Such adjustments shall be
made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the "current market price" per
share of Common Stock on any date shall be deemed to be the
average of the daily closing price per share of such Common
Stock for each of the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date,
and for purposes of computations made pursuant to
Section 11(a)(iii) hereof, the "current market price" per
share of Common Stock on any date shall be deemed to be the
average of the daily closing price per share of such Common
Stock for each of the 10 consecutive Trading Days
immediately following such date; provided, however, that in
the event that the current market price per share of the
Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a
dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into
shares of such Common Stock (other than the Rights), or
(B) any subdivision, combination, or reclassification of
such Common Stock, and the ex-dividend date for such
dividend or distribution, or the record date for such
subdivision, combination or reclassification shall not have
occurred prior to the commencement of the requisite
30 Trading Day or 10 Trading Day period, as set forth above,
then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the
average of the high bid and low asked prices in the over-
the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any
such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Common Stock selected by the Board of
Directors of the Bank. If on any such date no market maker
is making a market in the Common Stock, the fair value of
such shares on such date as determined in good faith by the
Board of Directors of the Bank shall be used. The term
"Trading Day" shall mean a Business Day. If the Common
Stock is not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value
per share as determined in good faith by the Board of
Directors of the Bank, whose determination shall be
described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation
hereunder, the "current market price" per share of Preferred
Stock shall be determined in the same manner as
set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If
the current market price per share of Preferred Stock cannot
be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in
a manner described in clause (i) of this Section 11(d), the
"current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 100 (as such
number may be appropriately adjusted for such events as
stock splits, stock dividends, and recapitalizations with
respect to the Common Stock occurring after the date of this
Agreement) multiplied by the current market price per share
of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded,
current market price" per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Bank, whose determination
shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the "current market price" of
one one-hundredth of a share of Preferred Stock shall be
equal to the "current market price" of one share of
Preferred Stock divided by 100.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are
not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock or other share
or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive any
shares of capital stock other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k), and (m), and the provisions of Sections 7, 9,
10, 13, and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Bank
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 Bank shall have exercised its
election as provided in Section 11(i), upon each adjustment of
the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Bank may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one one-
hundredths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the
number of one one-hundredths of a share of Preferred Stock for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment
of the number of Rights shall become that number of Rights
(calculated to the nearest one-ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Bank
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase
price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Bank shall, as
promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Bank, 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 Bank, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed
shall be issued, executed, and countersigned in the manner
provided for herein (and may bear, at the option of the Bank, the
adjusted Purchase Price) and shall be registered in the names of
the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a share
of Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-hundredth of a
share and the number of one one-hundredths of a share which were
expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
value, if any, of the number of one one-hundredths of a share of
Preferred Stock issuable upon exercise of the Rights, the Bank
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Bank may validly and
legally issue fully paid and nonassessable such number of one
one-hundredths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the Bank 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 one one-hundredths of a share of Preferred Stock and
other capital stock or securities of the Bank, if any, issuable
upon such exercise over and above the number of one one-
hundredths of a share of Preferred Stock and other capital stock
or securities of the Bank, if any, issuable upon such exercise on
the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Bank 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 Bank shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent that in their good faith judgment the Board of Directors
of the Bank shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at
less than the current market price, (iii) issuance wholly for
cash of shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends, or (v) issuance of rights,
options, or warrants referred to in this Section 11, hereafter
made by the Bank to holders of its Preferred Stock
shall not be taxable to such stockholders.
(n) The Bank covenants and agrees that it shall
not, at any time after the Distribution Date, (i) consolidate
with any other Person (other than a Subsidiary of the Bank in a
transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Bank in a transaction which complies with Section 11(o) hereof),
or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Bank and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Bank and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger, or sale
there are any rights, warrants, or, other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to,
simultaneously with, or immediately after such consolidation,
merger, or sale, the shareholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Bank covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 27
hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate
the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Bank shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with
each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
(q) The failure by the Board of Directors to
declare a Person to be an Adverse Person following such Person
becoming the Beneficial Owner of Voting Securities representing
10% or more of the Total Voting Power shall not imply that such
Person is not an Adverse Person or limit the Board of Directors'
right at any time in the future to declare such Person to be an
Adverse Person.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 and Section 13 hereof, the Bank 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 26 hereof. 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, (x) the Bank shall
consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Bank in a transaction which complies
with Section 11(o) hereof), and the Bank shall not be the
continuing or surviving bank of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Bank in a
transaction which complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Bank, and the Bank
shall be the continuing or surviving bank of such consolidation
or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Voting Securities shall
be changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Bank shall
sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series
of related transactions, assets or earning power aggregating more
than 50% of the assets or earning power of the Bank and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Bank or any Subsidiary of the Bank in one or more
transactions each of which complies with Section 11(o) hereof);
then, and in each such case (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable, and freely
tradeable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal, or other adverse
claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of
one one-hundredths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of
a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying
the number of such one one-hundredths of a share for which a
Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that
product (which, following the first occurrence of a Section 13
Event, shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by (2) 50% of the
current market price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on
the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume,
by virtue of such Section 13 Event, all the obligations and
duties of the Bank pursuant to this Agreement; (iii) the term
"Bank" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean (i) in the case
of any transaction described in clause (x) or (y) of the first
sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock are converted in
such merger or consolidation and if no securities are so issued,
the Person that is the other party to such merger or
consolidation and (ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12 month period registered
under Section 12 of the Exchange Act, and such Person is a direct
or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, "Principal Party" shall
refer to such other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the
Common Stock of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Bank shall not consummate any such
consolidation, merger, sale, or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Bank and such
Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in
paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration
statement under the Securities Act, with respect to the
Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts
to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration
Date; and
(ii) will deliver to holders of the Rights
historical financial statements for the Principal Party and
each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to
the contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if
(i) such transaction is consummated with a Person or Persons (or
a wholly-owned subsidiary of any such Person or Persons) who
acquired shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common Stock at a
price and on terms determined to be in accordance with Section
11(a)(ii)(A) hereof, (ii) the price per share of Common Stock
offered in such transaction is not less than the price per share
of Common Stock paid to all holders of shares of Common Stock
whose shares were purchased pursuant to such tender offer or
exchange offer, and (iii) the form of consideration being offered
to the remaining holders of shares of Common Stock pursuant to
such transaction is the same as the form of consideration paid
pursuant to such tender offer or exchange offer. Upon
consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Bank shall not be required to issue
fractional Rights, except prior to the Distribution Date as
provided in Section 11(p) hereof, or to distribute Rights
Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last quoted
price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board of Directors of the Bank. If on any such date no
such market maker is making a market in the Rights the fair value
of the Rights on such date as determined in good faith by the
Board of Directors of the Bank shall be used.
(b) The Bank shall not be required to issue
fractional shares of Preferred Stock (other than fractions which
are integral multiples of one one-hundredth of a share of
Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
one-hundredth of a share of Preferred Stock, the Bank may pay to
the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one one-
hundredth of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-hundredth of a
share of Preferred Stock shall be one one-hundredth of the
closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering
Event, the Bank shall not be required to issue fractional shares
of Common Stock upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Common Stock. In
lieu of fractional shares of Common Stock, the Bank may pay to
the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one
share of Common Stock. For purposes of this Section 14(c), the
current market value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of
the Rights expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action, or proceeding
against the Bank to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and shall
be entitled to specific performance of the obligations hereunder
and injunctive relief against actual or threatened violations of
the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every
holder of a Right by accepting the same consents and agrees with
the Bank and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
Common Stock;
(b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the principal office or offices of
the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f)
hereof, the Bank 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 Bank or
the Rights Agent) for all purposes whatsoever, and neither the
Bank nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to
the contrary, neither the Bank 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 Bank 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
Shareholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends, or be deemed for any
purpose the holder of the number of one one-hundredths of a share
of Preferred Stock or any other securities of the Bank which may
at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
shareholder of the Bank or any right to vote for the election of
directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Bank 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 Bank shall indemnify the Rights Agent for, and
hold it harmless against, any loss, liability, claim or expense
(the "Loss"), arising out of or in connection with its duties
under this Agreement, including the costs and expenses of
defending itself against any Loss, unless such Loss shall have
been determined by a court of competent jurisdiction to be a
result of the Rights Agent's gross negligence or
intentional misconduct. The obligations of the Bank under this
section shall survive the termination of this Agreement.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered, or omitted by it in connection with its administration
of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Bank,
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 would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name
of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of
which the Bank 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 Bank), 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 or Adverse Person and the
determination of "current market price") be proved or established
by the Bank prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of
the Board, the President, any Executive Vice President, or the
Secretary of the Bank and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder
only for its own gross negligence, bad faith, or willful
misconduct; provided, however, that in no case will the Rights
Agent be liable for special, indirect, incidental or
consequential loss or damages of any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has
been advised of the possibility of such damages. Any liability
of the Rights Agent will be limited to the amount of fees paid by
the Bank hereunder.
(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 Bank 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 and
delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Bank of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner,
method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or
reservation of any shares of Common Stock or 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 Bank agrees that it will perform,
execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further and other
acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the
President, any Executive Vice President, or the Secretary of the
Bank, 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 shareholder,
director, officer, or employee of the Rights Agent may buy, sell,
or deal in any of the Rights or other securities of the Bank or
become pecuniarily interested in any transaction in which the
Bank may be interested, or contract with or lend money to the
Bank or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Bank
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 Bank resulting from any such act,
default, neglect, or misconduct; provided, however, 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 Certificate
surrendered to the Rights Agent for exercise or transfer, the
certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer
without first consulting with the Bank.
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 Bank, and to each transfer agent of the Common
Stock and Preferred Stock, by registered or certified mail, and
to the holders, if any, of the Rights Certificates by first-class
mail. The Bank may remove the Rights Agent or any successor
Rights Agent upon 10 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, 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 Bank shall appoint a successor to the Rights Agent.
If the Bank shall fail to make such appointment within a period
of 10 days after giving notice of such removal, or within a
period of 30 days after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Bank), as the case may be, then any registered holder of any
Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Bank or by such
a court, shall be either (a) a corporation organized and doing
business under the laws of the United States or of any state of
the United States so long as such corporation 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 $50,000,000 or (b) an
affiliate of such corporation. After appointment, the successor
Rights Agent shall be vested with the same powers, rights,
duties, and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute
and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of
any such appointment, the Bank 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 Bank may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number, kind, or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the Bank
(a) shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded on or prior to
the Distribution Date, or upon the exercise, conversion, or
exchange of securities hereinafter issued by the Bank, and
(b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Bank, 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 Bank
shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Bank
or the Person to whom such Rights Certificate would be issued,
and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Bank may, at
its option, at any time prior to the earlier of (i) the close of
business on the twentieth Business Day following the Stock
Acquisition Date (or such later date as may be determined by a
majority of the Continuing Directors; provided, however, that
such date shall not be extended at such time if the Rights are
not then redeemable), or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a
redemption price of $.001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock
dividend, or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Price"); provided, however, that if, following the
occurrence of the Stock Acquisition Date and following the
expiration of the right of redemption hereunder but prior to any
Triggering Event, (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of
Common Stock in one transaction or series of transactions, not
directly or indirectly involving the Bank or any of its
Subsidiaries, such that such Person is thereafter a Beneficial
Owner of less than 10% of the outstanding shares of Common Stock
or Voting Securities representing less than 10% of Total Voting
Power, and (ii) there are no other Persons, immediately following
the occurrence of the event described in clause (i), who are
Acquiring Persons, then the right of redemption shall be
reinstated and thereafter be subject to the provisions
of this Section 23. Notwithstanding the foregoing, the Board of
Directors may not redeem any Rights following a determination
pursuant to Section 11(a)(ii)(B) that any Person is an Adverse
Person. Notwithstanding anything contained in this Agreement to
the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Bank's right of redemption hereunder has expired. The Bank may,
at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the "current market price", as defined in
Section 11(d)(i) hereof, of the Common Stock at the time of
redemption), or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of
Directors of the Bank ordering the redemption of the Rights, and
without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price
for each Right so held. The Bank shall promptly give public
notice of such redemption and notice to the Rights Agent;
provided, however, the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Bank shall mail a
notice to all holders of the then outstanding Rights at each
holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. Exchange.
(a) The Board of Directors of the Bank may, at
its option, at any time and from time to time after the first
occurrence of a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for shares of Common Stock or common
stock equivalents (as defined in Section 11(a)(iii) hereof), or
any combination thereof, at an exchange ratio of one share of
Common Stock, or such number of common stock equivalents or units
representing fractions thereof as would be deemed to have the
same value as one share of Common Stock, per Right, appropriately
adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of
Directors of the Bank ordering the exchange of any Rights
pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of shares
of Common Stock and/or common stock equivalents equal to the
number of such Rights held by such holder multiplied by the
Exchange Ratio. The Bank shall promptly give public notice of
any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of
such exchange. The Bank promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by
which the exchange of the shares of Common Stock and/or common
stock equivalents for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In the event that the number of shares of
Common Stock which are authorized by the Bank's Charter but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit an exchange
of Rights as contemplated in accordance with this Section 24, the
Bank may, at its option, take all such action as may be necessary
to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(d) The Bank shall not be required to issue
fractional shares of Common Stock or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of
such fractional shares of Common Stock, the Bank shall pay to the
registered holders of Rights with regard to which such fractional
shares of Common Stock would otherwise be issuable an amount in
cash equal to the same fraction of the value of a whole share of
Common Stock. For purposes of this Section 24, the value of a
whole share of Common Stock shall be the closing price (as
determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24, and the value of any common
stock equivalent shall be deemed to have the same value as the
Common Stock on such date.
Section 25. Notice of Certain Events.
(a) In case the Bank 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 Bank), or (ii) to offer to the holders
of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Bank in a transaction which
complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one transaction or a
series of related transactions of more than 50% of the assets or
earning power of the Bank and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Bank and/or any of
its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution, or winding up of the Bank, then, in
each such case, the Bank shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Preferred Stock for purposes
of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the
shares of Preferred Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall
occur, then, (i) the Bank shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 26 hereof, a notice of
the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter
to refer to Common Stock and/or, if appropriate, other
securities.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on the Bank shall be
sufficiently given or made if sent by United States mail, postage
prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Liberty Savings Bank, F.S.B.
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx,
Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Bank or
by the holder of any Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by United States
mail, postage prepaid, addressed (until another address is filed
in writing with the Bank) as follows:
ChaseMellon Shareholder Services
Overpeck Centre
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
Assistant Vice President
Notices or demands authorized by this Agreement to be
given or made by the Bank 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 United States
mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Bank.
Section 27. Supplements and Amendments. Prior to the
Distribution Date and subject to the penultimate sentence of this
Section 27, the Bank and the Rights Agent shall, if the Bank so
directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date and
subject to the penultimate sentence of this Section 27, the Bank
and the Rights Agent shall, if the Bank 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 which may be
defective or inconsistent with any other provisions herein, or
(iii) to change or supplement the provisions hereunder in any
manner which the Bank may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Rights
Certificates. Upon the delivery of a certificate from an
appropriate officer of the Bank which 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.
Section 28. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Bank 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 calculation
of the number of shares of Voting Securities outstanding at any
particular time, including for purposes of determining the
particular percentage of such outstanding shares of Voting
Securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act as in
effect on the date hereof. The Board of Directors of the Bank
(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 Bank, or as may be necessary or
advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this
Agreement (including (i) a determination as to the identity of
the Affiliates and Associates of any person, (ii) a determination
as to the extent of the Beneficial Ownership of any Person, and
(iii) a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations,
interpretations, and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors)
in good faith, shall (x) be final, conclusive and binding on the
Bank, 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 Bank, 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 Bank, the
Rights Agent, and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term, provision,
covenant, or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants,
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired, or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant,
or restriction is held by such court or authority to be invalid,
void, or unenforceable and the Board of Directors of the Bank
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the
date of such determination by the Board of Directors. Without
limiting the foregoing, if any provision requiring that a
determination be made by less than the entire Board of Directors
is held by a court of competent jurisdiction or other authority
to be invalid, void, or unenforceable, such determination shall
then be made by the entire Board of Directors.
Section 32. Governing Law. This Agreement, each Right
and each Rights Certificate issued hereunder shall be deemed to
be a contract made under the laws of the Commonwealth of
Pennsylvania and Federal law and for all purposes shall be
governed by and construed in accordance with the laws of the
Commonwealth and Federal law applicable to contracts made and to
be performed entirely within the Commonwealth by federally
chartered savings banks, but not the respective laws of the
Commonwealth and the United States governing conflicts of law;
provided, however, that all provisions regarding the rights,
duties and obligations of the Rights Agent shall be governed by
and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely
within such State.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
LIBERTY SAVINGS BANK, F.S.B.
By/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chief Executive Officer
CHASEMELLON SHAREHOLDER SERVICES,
L.L.C.
By/s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
PAGE 42
Exhibit A
Supplementary Charter Section
TERMS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
LIBERTY SAVINGS BANK, F.S.B.
RESOLVED that, pursuant to the authority vested in the
Board of Directors of Liberty Savings Bank, F.S.B. (the "Bank")
by its Charter, the Board of Directors does hereby provide for
the issue of a series of Preferred Stock, without par value, of
the Bank, to be designated "Series A Junior Participating
Preferred Stock" (hereinafter referred to as the "Series A
Preferred Stock" or "this Series"), initially consisting of
10,000 shares, and to the extent that the designations, powers,
preferences and relative and other special rights and the
qualifications, limitations and restrictions of the Series A
Preferred Stock are not stated and expressed in the Charter, does
hereby fix and herein state and express such designations,
powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions thereof, as follows:
1. Designation and Amount. The designation of the
series of Preferred Stock created by this resolution shall be
Series A Junior Participating Preferred Stock and the number of
shares constituting such Series is Ten Thousand (10,000). Such
number of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding securities of the Bank convertible into shares of
this Series.
2. Dividends.
(A) Subject to the prior and superior rights of
the holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of this Series with
respect to dividends, the holders of shares of this Series shall
be entitled to receive, when and as declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on April 1, July 1,
October 1, and January 1 of each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of this Series,
in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $10.00 or (b) subject to the provision
for adjustment hereinafter set forth, 100 times the aggregate per
share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a
share of this Series. In the event the Bank shall at any time
after May 26, 1998 (the "Rights Declaration Date") declare any
dividend on the Common Stock payable in shares of Common Stock,
subdivide the outstanding shares of Common Stock, or combine the
outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which holders of
shares of this Series were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Bank shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $10.00 per share on Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of this Series, unless the date of issue of
such shares is prior to the record date for the first Quarterly
Dividend Payment Date in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or
is a date after the record date for the determination of holders
of shares of this Series entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
the shares of this Series in an amount less than the total amount
of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
this Series entitled to receive payment of a dividend
or distribution declared thereon, which record date shall be no
more than sixty (60) days prior to the date fixed for the payment
thereof.
3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock
shall entitle the holder thereof to 100 votes on all matters
submitted to a vote of the shareholders of the Bank. In the
event the Bank shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any
other resolutions creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Series A
Preferred Stock and the holders of Common Stock and any other
capital stock of the Bank having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Bank.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series A Preferred Stock shall have
no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate
action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other
dividends or distributions payable on the Series A Preferred
Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Bank shall not:
(i) declare or pay dividends, or make any
other distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock, provided that
the Bank may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for
shares of any stock of the Bank ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to
the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire
for consideration any shares of Series A Preferred Stock, or
any shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Bank shall not permit any subsidiary of the
Bank to purchase or otherwise acquire for consideration any
shares of stock of the Bank unless the Bank could, under
paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Bank in
any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred
Stock subject to the conditions and restrictions on issuance set
forth herein, in the Charter, or in any other resolutions
creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the Bank, no
distribution shall be made (A) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100.00 per share, plus an
amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount
per share, subject to the provision for adjustment hereinafter
set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, or (B) to the
holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding
up. In the event the Bank shall at any time declare or pay any
dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (A)
of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
7. Consolidation, Merger, Etc. In case the Bank
shall enter into any consolidation, merger, combination or other
transaction in which the outstanding shares of Common Stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount of stock, securities, cash and/or
any other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is changed or
exchanged. In the event the Bank shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable.
9. Rank. The Series A Preferred Stock shall rank,
with respect to the payment of dividends and the distribution of
assets, junior to all series of any other class of the Bank's
Preferred Stock.
10. Amendment. The Charter of the Bank shall not be
amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding shares
of Series A Preferred Stock, voting together as a single class.
PAGE A6
Exhibit B
[Form of Rights Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER JUNE 16, 2008, OR EARLIER IF REDEEMED OR
EXCHANGED BY LIBERTY SAVINGS BANK, F.S.B. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF LIBERTY SAVINGS BANK, F.S.B., AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN (ACQUIRING) (ADVERSE) PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN (ACQUIRING) (ADVERSE) PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID UNDER THE CIRCUMSTANCES AND WITH THE EFFECT SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.](1)
Rights Certificate
LIBERTY SAVINGS BANK, F.S.B.
This certifies that _____________________, or
registered assigns, is the registered owner of the number of
Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights
Agreement, dated as of June 16, 1998 (the "Rights Agreement"),
between LIBERTY SAVINGS BANK, F.S.B., a Federal savings bank (the
"Bank"), and CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New York
limited liability company, as rights agent (the "Rights Agent),
to purchase from the Bank at any time prior to 5:00 p.m. (New
York City time) on June 16, 2008, at the office or offices of the
Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-hundredth of a fully paid, nonassessable
share of Series A Junior Participating Preferred Stock (the
"Preferred Stock") of the Bank, at a purchase price of
Sixty-Three Dollars ($63.00) per one one-hundredth of a share
(the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number
and Purchase Price as of June 30, 1998, based on the Preferred
_______________
(1) The portion of the legend in brackets shall be inserted only
if applicable and shall replace the preceding sentence.
PAGE B1
Stock as constituted at such date. The Bank reserves the right
to require prior to the occurrence of a Triggering Event (as
defined in the Rights Agreement) that a number of Rights be
exercised so that only whole shares of Preferred Stock will be
issued.
Upon the occurrence of a Section 11(a)(ii) Event (as
defined in the Rights Agreement), if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring
Person, an Adverse Person, or an Affiliate or Associate of any
such Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Adverse Person,
Associate, or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, an Adverse
Person, or an Affiliate or Associate of any such Person, such
Rights shall become null and void and no holder hereof shall have
any right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price
and the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including a
Triggering Event.
This Rights Certificate is subject to all of the terms,
provisions, and conditions of the Rights Agreement, which terms,
provisions, and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties, and immunities
hereunder of the Rights Agent, the Bank, and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices
of the Rights Agent designated for such purpose, may be exchanged
for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase
a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (i) may (unless the Board of
Directors shall have made a determination pursuant to
Section 11(a)(ii)(B) of the Rights Agreement that a Person is an
Adverse Person) be redeemed by the Bank at its option at a
redemption price of $.001 per Right at any time prior to the
earlier of the close of business on (a) the twentieth business
day following the Stock Acquisition Date (as such time period may
be extended pursuant to the Rights Agreement), and (b) the Final
Expiration Date.
No fractional shares of Preferred Stock will be issued
upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock, which may, at the election of the
Bank, be evidenced by depositary receipts), but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled
to vote or receive dividends or be deemed for any purpose the
holder of shares of Preferred Stock or of any other securities of
the Bank which may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such,
any of the rights of a shareholder of the Bank or any right to
vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of
meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned
by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Bank and its corporate seal.
Dated as of _________________, ____
LIBERTY SAVINGS BANK, F.S.B.
By________________________________
Title:
Attest:___________________________
Secretary
Countersigned:
____________________,
as rights agent
By________________________
Authorized Signature
PAGE B4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________________________________
hereby sells, assigns and transfers unto _______________________
________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ________________________ Attorney, to transfer the within
Rights
Certificate on the books of the within-named Bank, with full
power of substitution.
Dated: _______________, _____
__________________________________
Signature
Signature Guaranteed: ______________________________
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
PAGE B5
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that
(1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person, an Adverse Person, or an Affiliate or
Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person, an Adverse Person, or an
Affiliate or Associate of any such Person.
Dated: _______________, _____ __________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
PAGE B6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: LIBERTY SAVINGS BANK, F.S.B.
The undersigned hereby irrevocably elects to exercise
______________ Rights represented by this Rights Certificate to
purchase the shares of Preferred Stock issuable upon the exercise
of the Rights (or such other securities of the Bank or of any
other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________
(Please print name and address)
________________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security
or other identifying number
________________________________________________________________
(Please print name and address)
________________________________________________________________
________________________________________________________________
Dated: ___________________, _____
__________________________________
Signature
Signature Guaranteed: ____________________________
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
PAGE B7
Certificate
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person, an Adverse Person or an
Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or became
an Acquiring Person, an Adverse Person or an Affiliate or
Associate of any such Person.
Dated: ______________, ____ __________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
PAGE B8
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On June 16, 1998, the Board of Directors of LIBERTY
SAVINGS BANK, F.S.B. (the "Bank") declared a dividend
distribution of one Right for each outstanding share of the
Common Stock, par value $1.00 per share (the "Common Stock"), of
the Bank, to shareholders of record at the close of business on
June 30, 1998. Each Right entitles the registered holder to
purchase from the Bank one one-hundredth of a share of Series A
Junior Participating Preferred Stock, without par value (the
"Preferred Stock"), at a Purchase Price of $63.00, subject to
adjustment.
The description and terms of the Rights are set forth
in a Rights Agreement dated June 16, 1998 (the "Rights
Agreement") between the Bank and ChaseMellon Shareholder
Services, L.L.C., as rights agent, which is incorporated herein
by reference.
Initially, the Rights will not be exercisable and no
separate certificates evidencing the Rights ("Rights
Certificates") will be distributed. The Rights will be evidenced
by Common Stock certificates representing shares then outstanding
and will automatically trade with the Common Stock. The Rights
will separate from the Common Stock on a "Distribution Date." A
"Distribution Date" will occur upon the earlier of
(i) 20 business days following a public announcement that a
person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to
acquire, 14.9% or more of the outstanding shares of Common Stock
or voting securities representing 14.9% or more of the total
voting power of the Bank (the "Stock Acquisition Date"),
(ii) 20 business days (or such later date as the Board of
Directors shall determine) following the commencement of a tender
offer or exchange offer that would result in a person or group
acquiring 14.9% or more of such outstanding shares of Common
Stock or total voting power, or (iii) 20 business days following
the determination by the Board of Directors, after reasonable
inquiry and investigation, including consultation with such
persons as such directors shall deem appropriate, that, with
respect to any person who has, along or together with his
affiliates or associates, acquired 10% or more of such
outstanding shares of Common Stock or total voting power of the
Bank (a) such beneficial ownership by such person is intended to
cause the Bank to repurchase the voting securities beneficially
owned by such person or to cause pressure on the Bank to take
action or enter into a transaction or series of transactions
intended to provide such person with short-term financial gain
under circumstances where the Board determines that the best
long-term interests of the Bank and its shareholders would not be
served by taking such action or entering into such transaction or
transactions at that time or (b) such ownership is
causing or is likely to cause a material adverse impact on the
business or prospects of the Bank (any such person being referred
to herein and in the Rights Agreement as an "Adverse Person").
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after June 30, 1998
will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any
certificate for Common Stock outstanding will also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on June 16, 2008,
unless earlier redeemed as described below. Pursuant to the
Rights Agreement, the Bank reserves the right to require prior to
the occurrence of a Triggering Event (as defined below) that,
upon any exercise of Rights, a number of Rights be exercised so
that only whole share of Preferred Stock will be issued.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date
and, thereafter, the separate Rights Certificate alone will
represent the Rights. Except as otherwise provided in the Rights
Agreement or determined by the Board of Directors, only shares of
Common Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that (i) a person becomes an Acquiring
Person (except pursuant to an offer for all outstanding shares of
the Bank's voting securities which at least a majority of the
Continuing Directors (as defined below) determines to be fair to
and otherwise in the best interests of the Bank and its
shareholders), (ii) an Acquiring Person engages in one or more
"self-dealing" transactions as defined in the Rights Agreement,
(iii) the Bank is the surviving corporation in a merger with an
Acquiring Person, (iv) during such time that there exists an
Acquiring Person, a recapitalization or reverse stock split
occurs which results in such Acquiring Person's proportionate
ownership interest being increased by more than 1%, or (v) any
person is determined to be an Adverse Person (any of the
foregoing, a "Flip-in Event"), each holder of a Right will
thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property, or other
securities of the Bank) having a value (based on the lowest
closing price of the Common Stock during the twelve-month period
preceding the Flip-in Event) equal to two times the exercise
price of the Right. Notwithstanding the foregoing, following the
occurrence of a Flip-in Event, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or an Adverse Person
(or by certain related parties) will be null and void.
Rights are not exercisable following the occurrence of a Flip-in
Event, however, until such time as the Rights are no longer
redeemable by the Bank as set forth below.
For example, at an exercise price of $50.00 per Right,
each Right not owned by an Acquiring Person or an Adverse Person
(or by certain related parties) following a Flip-in Event would
entitle its holder to purchase $100.00 worth of Common Stock
based on the lowest closing price of the Common Stock during the
twelve-month period preceding the Flip-in Event (or other
consideration, as noted above) for $50.00. Assuming that the
lowest closing price of the Common Stock during such period was
$12.50, the holder of each valid Right would be entitled to
purchase eight shares of Common Stock for $50.00.
The term "Continuing Directors" means any member of the
Board of Directors of the Bank who was a member of the Board
prior to the date of the Rights Agreement, and any person who is
subsequently elected to the Board if such person is recommended
or approved by a majority of the Continuing Directors, but shall
not include an Acquiring Person, an Adverse Person, or an
affiliate or associate of an Acquiring Person or Adverse Person,
or any representative of the foregoing entities.
In the event that, at any time following the Stock
Acquisition Date, (i) the Bank is acquired in a merger or other
business combination transaction in which the Bank is not the
surviving corporation (other than a merger which follows an offer
for all outstanding voting securities of the Bank, which at least
a majority of the Continuing Directors determines to be fair to
and otherwise in the best interests of the Bank and its
shareholders, and the merger price is not less than, and the form
of consideration is the same as, that paid in the tender or
exchange offer) or (ii) 50% or more of the Bank's assets or
earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth
above) shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two
times the exercise price of the Right. The events set forth in
this paragraph and in the second preceding paragraph are referred
to as "Triggering Events."
The Purchase Price payable and the amount of Preferred
Stock or other securities or property issuable upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision, combination, or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of
the Preferred Stock, or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional shares of
Preferred Stock will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading date prior to the date of
exercise.
At any time during the twenty business days following
the Stock Acquisition Date, the Bank may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (payable in
cash, Common Stock, or other consideration deemed appropriate as
determined by the Board of Directors). At any time prior to the
date the Rights would otherwise become nonredeemable, a majority
of the Continuing Directors may extend the period for redemption.
The Bank's right of redemption may be reinstated if an Acquiring
Person reduces such Person's beneficial or total voting power
ownership to less than 10% of the outstanding shares of Common
Stock or total voting power in a transaction or series of
transactions not involving the Bank and there is then no other
Acquiring Person. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to
receive the $.001 redemption price. Notwithstanding the
foregoing, the Board of Directors may not redeem the Rights
following a determination that any person is an Adverse Person.
At any time after the occurrence of a Flip-in Event,
the Board of Directors may exchange the Rights (other than Rights
owned by an Acquiring Person or an Adverse Person or an affiliate
or an associate of any such person, which have become void), in
whole or in part, at an exchange ratio of one share of Common
Stock, and/or other equity securities deemed to have the
equivalent value, per Right, subject to adjustment.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of the Bank,
including, without limitation, the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to shareholders or to the Bank, shareholders may,
depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Stock (or
other consideration) of the Bank or for common stock of the
acquiring company as set forth above, or are exchanged as
provided in the preceding paragraph.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors of the Bank
prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse
Person or an affiliate or associate of any such person), or to
shorten or lengthen any time period under the Rights Agreement;
however, no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement is available free of
charge from the Rights Agent. This summary description of the
Rights does not purport to be complete and is qualified in its
entirety by reference to the Rights Agreement.
