EXHIBIT 4.2
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Westamerica Bancorporation
and
Chemical Trust Company of California
Rights Agent
_______________________
Amended and Restated Rights Agreement
Dated as of March 23, 1995
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TABLE OF CONTENTS
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Section Page
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1. Certain Definitions................................................... 2
2. Appointment of Rights Agent........................................... 4
3. Issue of Rights Certificates.......................................... 4
4. Form of Rights Certificates........................................... 6
5. Countersignature and Registration..................................... 7
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.............. 7
7. Exercise of Rights; Purchase Price; Expiration Date of Rights......... 8
8. Cancellation and Destruction of Rights Certificates................... 10
9. Reservation and Availability of Common Stock.......................... 11
10. Common Stock Record Date.............................................. 12
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights............................................ 12
12. Certificate of Adjusted Purchase Price or Number of
Shares................................................................ 20
13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...................................................... 21
14. Additional Covenants.................................................. 24
15. Fractional Rights and Fractional Shares............................... 24
16. Rights of Action...................................................... 26
17. Agreement of Rights Holders........................................... 26
18. Rights Certificate Holder Not Deemed a Stockholder.................... 27
19. Concerning the Rights Agent........................................... 27
20. Merger or Consolidation or Change of Name of Rights
Agent................................................................. 28
21. Duties of Rights Agent................................................ 28
22. Change of Rights Agent................................................ 31
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23. Issuance of New Rights Certificates................................... 32
24. Redemption, Termination and Exchange.................................. 32
25. Notice of Certain Events.............................................. 35
26. Notices............................................................... 36
27. Supplements and Amendments............................................ 37
28. Determination and Actions by the Board of Directors,
etc. ................................................................. 37
29. Successors............................................................ 38
30. Benefits of This Agreement............................................ 38
31. Severability.......................................................... 38
32. Governing Law......................................................... 38
33. Counterparts.......................................................... 38
34. Descriptive Headings.................................................. 38
Exhibit A -- Form of Rights Certificate....................................... A-1
Exhibit B -- Amended and Restated Summary of Rights to
Purchase Common Stock............................................ B-1
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AMENDED AND RESTATED RIGHTS AGREEMENT
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This Amended and Restated Agreement, dated as of March 23, 1995, between
Westamerica Bancorporation, a California corporation (the "Company"), and
Chemical Trust Company of California (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, the Company and Bank of America, NT&SA (the "Original Rights
Agent") entered into a Rights Agreement dated as of December 18, 1986 (the
"Original Rights Agreement") in connection with which the Company authorized and
declared a dividend distribution of one right for each share of common stock, no
par value, of the Company outstanding on January 20, 1987 (the "Record Date")
(as subsequently adjusted for the stock split on May 15, 1987, "Common Stock"),
and contemplates the issuance of one right (subject to adjustment) for each
share of Common Stock issued between the Record Date and the earlier of the
Distribution Date and the Expiration Date (as such terms are hereafter defined),
each right representing the right to purchase one share of Common Stock (as
adjusted) upon the terms and subject to the conditions set forth in the Original
Rights Agreement (such rights, as their terms are hereinafter amended, being
hereinafter referred to as the "Rights"); and
WHEREAS, Section 27 of the Original Rights Agreement provides that the
Company and the Original Rights Agent may amend the Original Rights Agreement
without approval of any holders of Rights Certificates, prior to the
Distribution Date (as such term is defined in Section 3(a)), in order to change
or supplement the provisions thereunder as the Company deems necessary and
desirable; and
WHEREAS, the Original Rights Agreement was amended and restated on
September, 1989 by the Company and the Original Rights Agent (the "Restated
Rights Agreement"); and
WHEREAS, pursuant to an Appointment and Acceptance Agreement dated May 25,
1992 between the Company and the Rights Agent, the Original Rights Agent was
replaced by the Rights Agent to act as rights agent in accordance with the terms
and conditions of the Restated Rights Agreement; and
WHEREAS, Section 27 of the Restated Rights Agreement provides that the
Company and the Rights Agent may amend the Restated Rights Agreement without
approval of any holders of Rights Certificates, prior to the Distribution Date
(as such term is defined in Section 3(a)), in order to change or supplement the
provisions thereunder as the Company deems necessary and desirable; and
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WHEREAS, the Company deems it desirable to amend and supplement the
Restated Rights Agreement, in accordance with such section;
NOW, THEREFORE, the Restated Rights Agreement is hereby amended and
restated to read, from and after the date hereof, in its entirety as set forth
below:
Section 1. Certain Definitions. For purposes of this Agreement, the
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following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, without the prior approval of the Company, shall
be the Beneficial Owner (as such term is hereinafter defined) of securities
representing 15% or more of the Voting Power (as such term is hereinafter
defined) or who was such a Beneficial Owner at any time after the date
hereof, whether or not such Person continues to be the Beneficial Owner of
securities representing 15% or more of the Voting Power, provided, however,
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that in no event shall a Person who or which, together with all Affiliates
and Associates of such Person, is the Beneficial Owner of less than 15% of
the Company's outstanding shares of Common Stock become an Acquiring Person
solely as a result of a reduction of the number of shares of outstanding
Common Stock, including repurchases of outstanding shares of Common Stock
by the Company, which reduction increases the percentage of outstanding
shares of Common Stock beneficially owned by such Person, and provided
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further that Acquiring Person shall not mean (i) any Person, not otherwise
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an Acquiring Person, who has purchased all shares validly tendered pursuant
to a Permitted Offer (as such term is defined in Section 11(a)(ii)) made by
such Person or (ii) the Company, any subsidiary of the Company (as such
term is hereinafter defined), any employee benefit plan of the Company or
any of its subsidiaries or any entity holding securities of the Company
organized, appointed or established by the Company or any of its
subsidiaries for or pursuant to the terms of any such plan.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
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(c) 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 beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right or obligation to acquire (whether such
right or obligation is exercisable or effective 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 (other than these Rights),
warrants or options, or otherwise; provided, however, that a Person
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shall not be deemed the "Beneficial Owner" of, or to "beneficially
own," securities tendered pursuant to a tender or exchange offer made
by such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B)
the right to vote pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however, that a
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Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this clause (B) if the
agreement, arrangement or understanding to vote such security (1)
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 rules and regulations of the Exchange Act and (2)
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)
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or with which such Person or any of such Person's
Affiliates have otherwise formed a group, for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (B) of subparagraph (ii) of
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this paragraph (c)) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 p.m., San
Francisco, California time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., San Francisco,
California time, on the next succeeding Business Day.
(f) "Common Stock" shall mean the Common Stock, no par value, of the
Company, except that "Common Stock" when used with reference to stock
issued by any Person other than the Company shall mean the capital stock
with the greatest aggregate voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person or, if such Person is a subsidiary of another Person, of the Person
which ultimately controls such first-mentioned Person and which has issued
and outstanding such capital stock, equity securities or equity interests.
(g) "Person" shall mean any individual, firm, corporation, partnership
or other entity.
(h) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(i) A "subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or voting interests is owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
(j) "Voting Power" shall mean the voting power of all securities of
the Company then outstanding generally entitled to vote for the election of
directors of the Company.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents
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as it may deem necessary or desirable. In the event the Company appoints one or
more Co-Rights Agents, the respective duties of the Rights Agents and any Co-
Rights Agents shall be as the Company shall determine.
Section 3. Issue of Rights Certificates.
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(a) Until the earlier of (i) the Stock Acquisition Date or (ii) the tenth
day after the date of the commencement of, or first public announcement of the
intent of any Person (other than the Company, any subsidiary of the Company, or
any employee benefit plan of the Company or any of its subsidiaries) to commence
(which intention to commence remains in effect for five Business Days after such
announcement), a tender or exchange offer which would result in such Person
becoming an Acquiring Person, unless such date is extended by the Board of
Director's of the Company (but no later than the Stock Acquisition Date) (the
earlier of such dates 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 Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock shall be deemed
also to be certificates for Rights) and not by separate certificates, and (y)
the Rights (and the right to receive certificates therefor) will be transferable
only in connection with the transfer of the underlying shares of Common Stock.
As soon as practicable after the Distribution Date, the Rights Agent will send
by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a certificate for
Rights, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held. As
of and after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
With respect to certificates for the Common Stock outstanding as of the
date hereof, until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the Rights will be evidenced by such certificates
for the Common Stock and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights. Until the Distribution Date
(or earlier redemption, expiration or termination of the Rights), the surrender
for transfer of any of the certificates for the Common Stock outstanding on the
date hereof shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
(b) Certificates issued for Common Stock (including, without limitation,
certificates issued upon transfer or exchange of Common Stock) after the date
hereof, but prior to the earlier of the Distribution Date or the Expiration Date
(as such term is hereinafter defined), shall be deemed also to be
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certificates for Rights, and shall have impressed, printed, stamped, written or
otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Amended and Restated Rights Agreement
between Westamerica Bancorporation and Chemical Trust Company of California
(the "Rights Agent") dated as of March 23, 1995 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of Westamerica Bancorporation.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may expire, or may be evidenced by separate
certificates and will no longer be evidenced by this certificate.
Westamerica Bancorporation will mail to the holder of this certificate a
copy of the Rights Agreement without charge within five days after receipt
of a written request therefor. Under certain circumstances, Rights issued
to Acquiring Persons (as defined in the Rights Agreement) or certain
related persons and any subsequent holder of such Rights may become null
and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
Section 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit A hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of 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 23 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 shares of Common Stock as shall be set forth therein
at the price per share set forth therein (the "Purchase Price"),
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but the number of such shares and the Purchase Price shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) hereof that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Rights Certificate issued at any time upon the
transfer of any Rights to such an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and
any Rights Certificate issued pursuant to Section 6 or Section 11 upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain the following legend:
The Rights represented by this Rights Certificate were issued to a Person
who was an Acquiring Person or an Affiliate or an Associate of an Acquiring
Person, as such terms are defined in the Rights Agreement. This Rights
Certificate and the Rights represented hereby may become void under the
circumstances specified in Section 7(e) of the Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights Certificate.
Section 5. Countersignature and Registration. The Rights Certificates
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shall be executed on behalf of the Company by its Chairman of the Board, any
Vice Chairman of the Board, any President or any Vice President, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal or
a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by the Rights Agent, either manually or by
facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on behalf of
the Company by any person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purpose, books for registration and
transfer of the Rights Certificates
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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 and Exchange of Rights
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Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. Subject
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to the provisions of Section 15 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Rights
Certificates, entitling the registered holder to purchase a like number of
shares of Common Stock as the Rights Certificate or Rights Certificates
surrendered then entitled such holder 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 or Rights Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent. Thereupon
the Rights Agent shall countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment 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.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will execute and deliver a new Rights Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Rights Certificates so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) The registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon presentation of the Rights
Certificate, with the appropriate form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the principal office of the
Rights Agent, together with payment of the Purchase Price for each share of
Common Stock (or such other number of shares or other securities) as to which
the Rights are exercised, at or prior to the earliest of (i) the close of
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business on December 31, 1999 (the "Final Expiration Date"), or (ii) the time at
which the Rights are redeemed as provided in Section 24(a) hereof, (iii) the
consummation of a transaction contemplated by Section 13(f) hereof or (iv) the
time at which the Rights are exchanged as provided in Section 24(c) hereof (such
earliest time being herein referred to as the "Expiration Date").
Notwithstanding any other provision of this Agreement, any Person who prior to
the Distribution Date becomes and remains a record holder of shares of Common
Stock may exercise all of the rights of a registered holder of a Rights
Certificate with respect to the Rights associated with such shares of Common
Stock in accordance with and subject to the provisions of this Agreement,
including the provisions of Section 7(e) hereof, as of the date such Person
becomes a record holder of shares of Common Stock.
(b) The Purchase Price for each share of Common Stock to be purchased
pursuant to the exercise of a Right shall initially be $65, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights,
with the appropriate form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares (or other securities or property)
to be purchased and an amount equal to any applicable transfer tax (as
determined by the Rights Agent) in cash, or by certified check or bank draft
payable to the order of the Company, the Rights Agent shall, subject to Section
21(k), thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Common Stock (or make available, if the Rights Agent is the transfer
agent) certificates for the number of shares of Common Stock to be purchased,
and the Company hereby irrevocably authorizes its transfer agent to comply with
all such requests, or (B) if the Company, in its sole discretion, shall have
elected to deposit the shares of Common Stock issuable upon exercise of the
Rights hereunder into a depositary, requisition from the depositary agent
depositary receipts representing such number of shares of Common Stock as are to
be purchased (in which case certificates for the shares of Common Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) when appropriate, requisition from the Company the
amount of cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 15, (iii) promptly 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) when appropriate, after receipt
promptly deliver such cash to or upon the order of the registered holder of such
Rights Certificate. In the event that
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the Company is obligated to issue other securities of the Company, and/or
distribute other property pursuant to Section 11(a), the Company will make all
arrangements necessary so that such other securities and/or property are
available for distribution by the Rights Agent, if and when appropriate. In
addition, in the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii), the Rights Agent shall return such Rights Certificate to the
registered holder thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Rights Certificate no longer include
the rights provided by Section 11(a)(ii) of the Rights Agreement and if less
than all the Rights represented by such Rights Certificate were so exercised,
the Rights Agent shall indicate on the Rights Certificate the number of Rights
represented thereby which continue to include the rights provided by Section
11(a)(ii).
(d) In case the registered holder of any Rights Certificate shall exercise
(except pursuant to Section 11(a)(ii)) 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 the
registered holder of such Rights Certificate or to his duly authorized assigns,
subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, if there
occurs any of the events set forth in Section 11(a)(ii) or Section 13(a) then
any Rights that are or were on or after the earlier of the Distribution Date or
the Stock Acquisition Date beneficially owned by an Acquiring Person or any
Associate or Affiliate of an Acquiring Person shall become null and void,
without any further action, and any holder of such Rights shall thereafter have
no rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless the certificate contained in the appropriate
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise shall have been properly completed and
duly executed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
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Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be
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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 Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Rights Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock. The Company
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covenants and agrees that it will cause to be reserved and kept available out of
its authorized and unissued shares of Common Stock, or any authorized and issued
shares of Common Stock held in its treasury, the number of shares of Common
Stock that will be sufficient to permit the exercise in full of all outstanding
Rights and, after the occurrence of an event specified in Sections 11 and 13,
shall so reserve and keep available a sufficient number of shares of Common
Stock (and/or other securities) which may be required to permit the exercise in
full of the Rights pursuant to this Agreement.
So long as the shares of Common Stock (and, after the occurrence of an
event specified in Sections 11 and 13, any other securities) issuable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares (or other securities) reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all shares of Common Stock and/or other securities
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares or other securities (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares or securities.
The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of
any certificates for shares of Common Stock and/or other securities upon the
exercise of Rights. The Company 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 in respect of the issuance or
delivery of the shares of Common Stock and/or other securities in a name other
than that of, the registered holder of the Rights Certificates
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evidencing Rights surrendered for exercise or to issue or deliver any
certificates for shares of Common Stock, and/or other securities in a name other
than that of the registered holder upon the exercise of any Rights until such
tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
The Company shall use its best efforts to (i) file, as soon as practicable
following the Distribution Date, a registration statement on an appropriate form
under the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act and the rules and regulations
thereunder) until the expiration of the Rights. The Company will also take such
action as may be appropriate under the blue sky laws of the various states.
Section 10. Common Stock Record Date. Each person in whose name any
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certificate for shares of Common Stock (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the shares of Common Stock (or other securities) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly presented and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
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that if the date of such presentation and payment is a date upon which the
Common Stock (or other securities) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the Common Stock (or other securities) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
----------------------------------------------------------
Number of Rights. The Purchase Price, the number of shares covered by each
----------------
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a
-12-
dividend on the Common Stock payable in shares of Common Stock, (B)
subdivide the outstanding Common Stock, (C) combine the outstanding Common
Stock into a smaller number of shares or (D) issue any shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) 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 capital stock issuable on such date, shall, except as
otherwise provided in this Section 11(a) and in Section 7(e), be
proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive the aggregate number and kind of
shares of capital stock and other securities which, if such Right had been
exercised immediately prior to such date and at a time when the Common
Stock transfer books of the Company were open, the 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 which
would require an adjustment under both Section 11(a)(i) and Section
11(a)(ii), 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).
(ii) Subject to Section 24(c) of this Agreement, in the event that
any Person (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company or any of its subsidiaries or any
entity holding securities of the Company organized, appointed or
established by the Company or any of its subsidiaries for or pursuant to
the terms of any such plan), alone or together with its Affiliates and
Associates, shall become an Acquiring Person (except pursuant to a tender
or exchange offer for all outstanding shares of Common Stock at a price and
on terms determined by at least a majority of the members of the Board of
Directors who are not officers of the Company to be both adequate and
otherwise in the best interests of the Company and its shareholders (other
than the Person or an Affiliate or Associate thereof on whose behalf the
offer is being made) (a "Permitted Offer")), then proper provision shall be
made so that each holder of a Right, except as provided in Section 7(e)
hereof, shall, for a period of 60 days after the later of the occurrence of
any such event and the effective date of an appropriate registration
statement pursuant to Section 9, have a right to receive, upon exercise
thereof at the then current
-13-
Purchase Price in accordance with the terms of this Agreement such number
of shares of Common Stock of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then number of
shares of Common Stock for which a Right is then exercisable and (y)
dividing that product by 50% of the current market price per one share of
Common Stock (determined pursuant to Section 11(d)) on the date of the
occurrence of the event set forth in this subparagraph (ii) (such number of
shares being referred to as the "number of Adjustment Shares"); provided,
---------
however, that if the transaction that would otherwise give rise to the
-------
foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this section 11(a)(ii).
(iii) In the event that there shall not be sufficient treasury shares
or authorized but unissued shares of Common Stock to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) and
the Rights become so exercisable, notwithstanding any other provision of
this Agreement, to the extent necessary and permitted by applicable law and
any agreements in effect on the date hereof to which it is a party, each
Right shall thereafter represent the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of
this Agreement, a number of shares, or units of shares, of (x) Common Stock
(up to the maximum number of shares of Common Stock which may permissibly
be issued using the allocation procedure specified in the second sentence
of Section 11(k)) and (y) preferred stock (or other equity securities) of
the Company equal in the aggregate to the number of Adjustment Shares where
the Board of Directors of the Company shall have deemed such shares or
units, other than the shares of Common Stock, to have at least the same
economic value and voting rights as the Common Stock (a "common stock
equivalent"); provided, however, if there are unavailable sufficient shares
-----------------
(or fractions of shares) of Common Stock and/or common stock equivalents,
then the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock or common stock equivalents for
issuance upon exercise of the Rights, including the calling of a meeting of
shareholders; and provided, further, that the Company shall issue no common
---------------------
stock equivalent upon exercise of the Rights until the Company has first
issued all authorized and unreserved shares of Common Stock; and provided,
-------------
further, that if the Company is unable to cause sufficient shares of Common
-------
-14-
Stock and/or common stock equivalents to be available for issuance upon
exercise in full of the Rights, then each Right shall thereafter represent
the right to receive the Adjusted Number of Common Shares upon exercise at
the Adjusted Purchase Price (as such terms are hereinafter defined). As
used herein, the term Adjusted Number of Common Shares shall be equal to
that number of shares (or fractions of shares) of Common Stock (and/or
shares or units of common stock equivalents) equal to the product of (x)
the number of Adjustment Shares and (y) a fraction, the numerator of which
is the number of shares of Common Stock (and/or shares or units of common
stock equivalents) available for issuance upon exercise of the Rights and
the denominator of which is the aggregate number of Adjustment Shares
otherwise issuable upon exercise in full of all Rights (assuming there were
sufficient shares of Common Stock available) (such fraction being referred
to as the "Proration Factor"). The Adjusted Purchase Price shall mean the
product of the Purchase Price and the Proration Factor. The Board of
Directors may, but shall not be required to, establish procedures to
allocate the right to receive Common Stock and common stock equivalents
upon exercise of the Rights among holders of Rights.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Common Stock entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Common Stock (or shares having the same or more favorable rights,
privileges and preferences as the Common Stock ("equivalent common stock")) or
securities convertible into Common Stock or equivalent common stock at a price
per share of Common Stock or per share of equivalent common stock (or having a
conversion price per share, if a security convertible into Common Stock or
equivalent common stock) less than the current market price (as defined in
Section 11(d)) per share of Common 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 Common Stock outstanding
on such record date, plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock and/or
equivalent common stock to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of shares
of Common Stock outstanding on such record date, plus the number of additional
shares of Common Stock and/or equivalent common stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a
-15-
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be determined reasonably and with good faith to the
holders of Rights by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent. Shares of Common Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a distribution
to all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Common Stock, but including any dividend
payable in stock other than Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(b)), 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 defined in Section
11(d)) per share of Common Stock on such record date, less the fair market value
(as determined reasonably and with good faith to the holders of Rights by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent)
of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants distributable in respect
of one share of Common Stock and the denominator of which shall be the current
market price (as defined in Section 11(d)) per share of the Common Stock. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would be in effect if such
record date had not been fixed.
(d) For the purpose of any computation hereunder, other than in Section
11(a)(iii), the "current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of such
Common Stock for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in the event
-----------------
that the current per share market price 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
-16-
of such Common Stock or securities convertible into shares of such Common Stock
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of 30 Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the shares
of Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the Nasdaq National Market, the Nasdaq Stock Market or such other system then in
use, or, if on any such date the shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Common Stock selected by
the Board of Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
as determined reasonably and with good faith by the Board of Directors of the
Company shall be used and shall be binding on the Rights Agent. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to trading
is open for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, "current market price" per share shall mean the fair value per share
determined reasonably and with good faith to the holders of Rights by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent.
(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,
as the
-17-
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) one year from the date of the transaction which mandates such adjustment
or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a), the holder of any
Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Common Stock, thereafter the number of
such other shares so receivable upon exercise of any Right 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 shares contained in Section
11(a) through (c), inclusive, and the provisions of Sections 7, 9, 10, 13 and 15
hereof with respect to the Common Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the
number of shares of Common Stock covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of shares of Common Stock for
which a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment,
-18-
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 15 hereof, the additional
Rights to which such holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be distributed to such holders
of record in substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Rights Certificates
so to be distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the adjusted
Purchase Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per share and the number of shares which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the shares of Common Stock
or other securities issuable upon exercise of the Rights, the Company shall take
any corporate action which, in the opinion of its counsel, may be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock or other securities at such adjusted
Purchase Price. If upon any exercise of the Rights, a holder is to receive a
combination of Common Stock and common stock equivalents, a portion of the
consideration paid upon such exercise, equal to at least the then par value of a
share of Common Stock of the Company, shall be allocated as the payment for each
share of Common Stock of the Company so received.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date the shares
of Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the shares of Common Stock and other
capital stock or securities of
-19-
the Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that the Company
-----------------
shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11 notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Common Stock, issuance wholly
for cash of any shares of Common Stock at less than the current market price,
issuance wholly for cash of shares of Common Stock or securities which by their
terms are convertible into or exchangeable for shares of Common Stock, stock
dividends or issuance of rights, options or warrants referred to hereinabove in
this Section 11, hereafter made by the Company to holders of its Common Stock
shall not be taxable to such stockholders.
(n) The exercise of Rights under Section 11(a)(ii) shall only result in the
loss of rights under Section 11(a)(ii) to the extent so exercised and shall not
otherwise affect the rights represented by the Rights under this Rights
Agreement, including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder of
Rights 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, (w) the Company shall consolidate with, or merge with and into, any
other Person, (x) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger, (y) any subsidiary bank of the Company shall
consolidate with, or merge with and into any other Person or any Person shall
consolidate with, or merge with and into, any subsidiary bank of the Company
(other than, in the case of any transaction described in (w), (x) or (y), a
merger or consolidation which would result in all of the Voting Power
-20-
represented by the securities of the Company or subsidiary bank outstanding
immediately prior thereto continuing to represent, directly or indirectly
(either by remaining outstanding or by being converted into securities of the
surviving entity), all of the Voting Power represented by the securities of the
Company, subsidiary bank or such surviving entity outstanding immediately after
such merger or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation), or (z) the Company shall
sell, mortgage or otherwise transfer (or one or more of its subsidiaries shall
sell, mortgage or otherwise transfer), in one or more transactions, assets or
earnings power aggregating more than 50% of the assets or earning power of the
Company and its subsidiaries (taken as a whole) to any other Person (other than
to the Company or any of its subsidiaries), then, and in each such case, proper
provision shall be made so that (i) following the Distribution Date, each holder
of a Right (other than as provided in Section 7(e) hereof) shall 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 shares of freely
tradeable Common Stock of the Principal Party (as hereinafter defined), free and
clear of liens, rights of call or first refusal, encumbrances or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of shares of Common Stock for which a Right
is then exercisable and (2) dividing that product by 50% of the current market
price per share of the Common Stock of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply to such Principal Party; and (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 accordance with Section 9
hereof) in connection with such consummation 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.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (w) or (x) of the
first sentence of this Section 13, the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to the merger or consolidation;
-21-
(ii) in the case of any transaction described in (y) of the first sentence
of this Section 13, the surviving or resulting Person in such merger or
consolidation; and
(iii) in the case of any transaction described in (z) of the first
sentence in this Section 13, 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 or Affiliate of one or more other Persons,
"Principal Party" shall refer to any such other Person the Common Stock of which
is and has been so registered, unless the Common Stocks of two or more of such
other Persons are and have been so registered, in which case "Principal Party"
shall refer to whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value, (2) if the Common Stock of such
Person is and has not been so registered and such Person is a direct or indirect
subsidiary or Affiliate of one or more other Persons, the Common Stocks of none
of which are and have been so registered, "Principal Party" shall refer to the
senior such Person having outstanding Common Stock, and (3) in case such Person
is owned, directly or indirectly, by a joint venture or partnership formed by
two or more Persons that are not owned, directly or indirectly, by the same
Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture or partnership as
if such party were a "Subsidiary" of both or all of such joint venturers or
partners and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate, nor will it permit any subsidiary
bank to consummate, any such consolidation, merger, sale or transfer unless
prior thereto the Company, the subsidiary bank, if appropriate, and each
Principal Party and each other Person who may become a Principal Party as a
result of such consolidation, merger, sale or transfer 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, sale
or transfer of assets mentioned in paragraph (a) of this Section 13, the
Principal Party at its own expense will:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, will use its best efforts to cause such
registration
-22-
statement to become effective as soon as practicable after such filing and
will use its best efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the blue sky laws
of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all material respects with the requirements for registration on Form 10
under the Exchange Act.
(d) The provisions of this Section 13 are intended to provide to the
holders of Rights a significant continuing equity interest in the business of
the Company following the consummation of any transaction of the types described
in paragraph (a) of this Section 13, and any attempt by any Acquiring Person or
Principal Party to avoid the provisions of this Section 13 or to limit the
impact thereof shall not be given any effect.
(e) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. The Company will cause
its subsidiary bank or banks to adhere to the terms and provisions of this
Agreement, to the extent applicable to such subsidiary bank. The rights under
this Section 13 shall be in addition to the rights to exercise Rights and
adjustments under Section 11(a)(ii) and shall survive any exercise thereunder.
(f) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (w), (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired shares of Common Stock pursuant to a Permitted Offer (or a
wholly owned subsidiary of any such Person or Persons), (ii) the price per share
of Common Stock offered in such transaction is not less than the price per share
of Common Stock paid to all holders of Common Stock whose shares were purchased
pursuant to such Permitted Offer and (iii) the form of consideration being
offered to the remaining holders of Common Stock pursuant to such transaction is
the same as the form of consideration paid pursuant to such Permitted Offer.
Upon consummation of any such transaction contemplated by this subsection (d),
all Rights hereunder shall expire.
Section 14. Additional Covenants.
--------------------
-23-
(a) After the Stock Acquisition Date, the Company covenants and agrees that
it shall not (i) consolidate with, (ii) merge with or into, or (iii) sell or
transfer to, in one or more transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company and its subsidiaries
taken as a whole, any other Person if at the time of or after such
consolidation, merger or sale there are any charter or by-law provisions or any
rights, warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights. The Company shall not consummate any such consolidation, merger
or sale unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 24 hereof, take any action the
purpose or effect of which is to diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 15(a), the current
market value of a whole Right shall be the closing price per Right of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the Nasdaq National Market, the Nasdaq Stock Market 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
-24-
Rights selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined reasonably and with good faith to the holders
of Rights by the Board of Directors of the Company shall be used and shall be
binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock the Company may pay to the registered holders of Right 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 shares of Common Stock. For
purposes of this Section 15(b), the current market value of one share of Common
Stock shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) Following the occurrence of one of the transactions or events specified
in Section 11 or Section 13 giving rise to the right to receive common stock
equivalents (other than Common Stock) or other securities upon the exercise of a
Right, the Company shall not be required to issue fractions of shares or units
of such common stock equivalents or other securities upon exercise of the Rights
or to distribute certificates which evidence fractional shares of such common
stock equivalents or other securities. In lieu of fractional shares or units of
such common stock equivalents or other securities, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of a share or unit of such common stock equivalent or other
securities. For purposes of this Section 15(c), the current market value shall
be determined in the manner set forth in Section 11(d) hereof for the Trading
Day immediately prior to the date of such exercise and, if such common stock
equivalent is not traded, each such common stock equivalent shall have the value
of one share of Common Stock.
(d) Except as otherwise expressly provided herein, 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.
Section 16. 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
-25-
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.
Section 17. Agreement of Rights Holders. Every holder of a Right by
---------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in whose
name a Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Rights Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary.
Section 18. Rights Certificate Holder Not Deemed a Stockholder. No
--------------------------------------------------
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the shares of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive
-26-
notice of meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions thereof.
Section 19. Concerning the Rights Agent. The Company agrees to pay to the
---------------------------
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom, directly
or indirectly.
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
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 that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22 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 the
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
-27-
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 in this Agreement.
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 21. Duties of Rights Agent. The Rights Agent undertakes the
----------------------
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman of the Board, any Vice Chairman of the
Board, any President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own negligence,
bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except as to the fact that it has countersigned the Rights
Certificates) or be required to verify the same, but all such statements and
-28-
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
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 be
responsible for any determination by the Board of Directors of the Company of
the current market value of the Rights or Common Stock pursuant to the
provisions of Section 15 hereof; nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any shares of Common Stock or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common Stock
or other securities will, when so issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the Chairman of the
Board, any Vice Chairman of the Board, any President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and is authorized 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
instruction of any such officer.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall
-29-
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company or to the holders of the
Rights resulting from any such act, omission, default, neglect or misconduct,
provided 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 of transfer without first consulting with the Company.
Section 22. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Stock by registered or certified mail, and to holders of the
Rights by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock by registered or certified mail, and to the holders of the
Rights by first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right (who shall,
with such notice, submit his Rights Certificate (if any) for inspection by the
Company), then the registered holder of any Rights may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized
-30-
and doing business under the laws of the United States or of the State of
California or the State of New York (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of California or the State of New York), in good
standing, having a principal office in the State of California or the State of
New York, which is authorized under such laws to exercise corporate trust powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a corporation described
in clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Rights. Failure to give any notice provided for in this Section 22,
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 23. Issuance of New Rights Certificates. Notwithstanding any of
-----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or otherwise under any employee plan or arrangement,
which plan or arrangement is existing as of the Distribution Date, or upon the
exercise, conversion or exchange of any other securities issued by the Company
on or prior to the Distribution Date, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors of the Company, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificates
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences
-31-
to the Company or the Person to whom such Rights Certificates would be issued,
and (ii) no such Rights Certificates shall be issued if, and to the extent that
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 24. Redemption, Termination and Exchange.
------------------------------------
(a)(i) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the time that any person becomes an Acquiring
Person without the prior consent of the Company or (y) 5:00 P.M., San Francisco,
California time, on the Final Expiration Date, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.05 per Right,
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").
(ii) In addition, and notwithstanding the provisions of Section 24(a)(i),
the Board of Directors of the Company may redeem all but not less than all of
the then outstanding Rights at the Redemption Price following the occurrence of
a Stock Acquisition Date but prior to any event described in Section 13(a),
either (x) following the occurrence of an event set forth in, and the expiration
of any period during which the holder of Rights may exercise the rights under,
Section 11(a)(ii) if and for as long as the Acquiring Person is not thereafter
the Beneficial Owner of securities representing 15% or more of the outstanding
shares of the Voting Power, and at the time of redemption there are no other
persons who are Acquiring Persons or (y) in connection with any event specified
in Section 13(a) not involving an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or any other Person in which such Acquiring Person,
Affiliate or Associate has any interest, or any other Person acting directly or
indirectly on behalf of or in association with any such Acquiring Person,
Affiliate or Associate.
(b) In the case of a redemption permitted under Section 24(a)(i),
immediately upon the action of the Board of Directors of the Company 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.
In the case of a redemption permitted only under Section 24(a)(ii), the right to
exercise the Rights will terminate and represent only the right to receive the
Redemption Price only after the giving of notice of such redemption to the
holder of such Rights if no event set forth in Section 11(a)(ii) shall have
occurred, upon the later of ten Business Days following the giving of such
notice or the expiration of any period during which the rights under Section
11(a)(ii) may be exercised. After the action of the Board of Directors ordering
any such redemption of the Rights, the Company shall promptly give notice of
such
-32-
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to the Rights Agent and to all such holders at their last
addresses as they appear 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.
In the case of a redemption permitted under Section 24(a)(i) or (ii), the
Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the
Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent, or, prior to the Distribution Date, on the registry
books of the Transfer Agent of the Common Stock, and upon such action, all
outstanding Rights Certificates shall be null and void without any further
action by the Company.
(c) (i) Subject to the limitations of applicable law, the Board of
Directors of the Company may, at its option, at any time after any Person
becomes an Acquiring Person, 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 (A) shares of Common
Stock at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the "Exchange Shares") or (B) Substitute
Consideration (as that term is defined below). The Board of Directors may
determine, in its sole discretion, whether to deliver Exchange Shares or
Substitute Consideration. Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any subsidiary of the Company, any employee benefit
plan of the Company or any such subsidiary, or any entity holding Common Stock
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(ii) In the event the Board of Directors shall determine to deliver
Substitute Consideration in exchange for Rights, the Company shall (1) determine
the value of the Exchange Shares (the "Exchange Value"), and (2) with respect to
each Right to be exchanged, make adequate provision to substitute for Exchange
Shares the following (the "Substitute Consideration"): (v) cash, (w) Common
Stock or common stock equivalents (as that term is defined in Section 11(a)(iii)
hereof), (x) debt securities of the Company, (y) other assets, or (z) any
combination of the
-33-
foregoing, having an aggregate value equal to the Exchange Value, where such
aggregate value has been determined by the Board of Directors of the Company
based upon the advice of a nationally recognized investment banking firm
selected by the Board of Directors of the Company. For purposes of this Section
24(c), the value of a share of Common Stock shall be the current market price
(as determined pursuant to Section 11(d) hereof) per share of Common Stock on
the day that is the later of (x) the first occurrence of an event described in
Section 11(a)(ii) hereof and (y) the date on which the Company's right of
redemption pursuant to Section 24(a) expires; and the value of any common stock
equivalent shall be deemed to have the same value as the Common Stock on such
date.
(iii) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to this Section 24(c), 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 Exchange Shares or Substitute Consideration for each Right
exchanged by such holder. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Common Stock 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.
(iv) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24(c), the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(v) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Rights Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this Section 24(c)(v), the current
market value of a whole share of Common Stock shall be the closing price of a
-34-
share of Common Stock (as determined pursuant to Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24(c).
Section 25. Notice of Certain Events. In case the Company shall propose
------------------------
(a) to pay any dividend payable in stock of any class to the holders of Common
Stock or to make any other distribution to the holders of Common Stock (other
than a regular quarterly cash dividend out of earnings or retained earnings of
the Company) or (b) to offer to the holders of Common Stock rights or warrants
to subscribe for or to purchase any additional shares of Common Stock or shares
of stock of any class or any other securities, rights or options, or (c) to
effect any reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common Stock), or (d) to
effect any consolidation or merger into or with, 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 or more transactions, of more than 50% of the assets or
earning power of the Company and its subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each holder of a
Rights Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Common Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the shares of Common Stock for purposes of such action,
and in the case of any such other action, at least 20 days prior to the date of
the taking of such proposed action or the date of participation therein by the
holders of the shares of Common Stock whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) or 13(a) of this
Agreement shall occur, then, in any such case, the Company or the Principal
Party, as the case may be, shall as soon as practicable thereafter give to each
holder of a Rights Certificate, 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) or 13(a)
hereof, as the case may be.
Section 26. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
-35-
Westamerica Bancorporation
0000 0xx Xxxxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
President and Chief Executive
Officer
Subject to the provisions of Section 22, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Chemical Trust Company of California
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company and the Rights Agent
--------------------------
may from time to time supplement or amend this Agreement without approval of any
holders of Right 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, (iii) prior to the Distribution
Date, to change or supplement the provisions hereunder which the Company may
deem necessary or desirable or (iv) following the Distribution Date, to change
or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment would adversely
affect its interests under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 28. Determination and Actions by the Board of Directors, etc. For
---------------------------------------------------------
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
or any other securities of which any Person is the
-36-
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 of this Agreement. The Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors,
or the Company, or as may be necessary or advisable in the administration of
this Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend 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 in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights Certificates and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights Certificates.
Section 29. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, 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.
Section 32. Governing Law. This Agreement, each Right and each Rights
-------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of California and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and to be performed entirely within such State.
-37-
Section 33. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
--------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: WESTAMERICA BANCORPORATION
[Seal]
/s/ XXXXX X. XXXXXX /s/ XXXXX X. XXXXX
________________________________ By ___________________________
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
Title: Executive Vice President Title: President and Chief
& Chief Financial Officer Executive Officer
Attest: CHEMICAL TRUST COMPANY OF CALIFORNIA
[Seal]
/s/ XXXX XXXXXXX /s/ XXXXXXX X. XXXXXXXX
_______________________________ By ___________________________
Name: Xxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxxx
Title: Assistant Vice President Title: Vice President
-38-
Exhibit A
---------
[Form of Rights Certificate]
Certificate No R- _____________ Rights
NOT EXERCISABLE AFTER DECEMBER 31, 1999 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.05 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR
AN ASSOCIATE OF AN ACQUIRING PERSON, AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT. THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME VOID UNDER THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT.]/*/
Rights Certificate
Westamerica Bancorporation
This certifies that ____________________________, or registered assigns, is
the registered owner of the number of ____ Rights set forth above, each of which
entitles the owner ____________ thereof, subject to the terms, provisions and
conditions of the Amended and Restated Rights Agreement dated as of March 23,
1995 (the "Rights Agreement") between Westamerica Bancorporation, a California
corporation (the "Company"), and Chemical Trust Company of California, (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(San Francisco, California time) on December 31, 1999 at the office of the
Rights Agent designated for such purpose, one fully paid, nonassessable share of
Common Stock (the "Common Stock") of the Company, at a purchase price of $65 per
share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the appropriate Form of Election to Purchase and 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 set forth above, are the number and Purchase Price
as of March 23, 1995, based on the Common Stock as constituted at such date.
--------------------
/*/ The portion of the legend in brackets shall be inserted only if applicable.
A-1
As provided in the Rights Agreement, the Purchase Price and the number of
shares of Common 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.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised (other than pursuant
to Section 11(a)(ii) of the Rights Agreement) 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. If this Rights
Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this Rights
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $.05 per Right. Subject to the provisions of the Rights Agreement, the
Company, at its option, may elect to mail payment of the redemption price to the
registered holder of the Right at the time of redemption, in which event this
certificate may become void without any further action by the Company.
The Company is not obligated to issue fractional shares of Common Stock
upon the exercise of any Right or Rights evidenced hereby, but in lieu thereof a
cash payment may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
A-2
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal. Dated as of _________, 19__.
ATTEST: WESTAMERICA BANCORPORATION
_____________________________ By __________________________
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
Title: Executive Vice President Title: President and Chief
& Chief Financial Officer Executive Officer
Countersigned:
CHEMICAL TRUST COMPANY OF CALIFORNIA
_____________________________
Authorized Signature
A-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ___________________________________________________________
hereby sells, assigns and transfers unto _____________________________________
______________________________________________________________________________
(Please print name and address of transferee)
______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated: _______________, 19___
____________________________
Signature
Signature Guaranteed:
A-4
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in 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 or an
Affiliate or Associate of an Acquiring Person.
Dated: _______________, 19__ ___________________________
Signature
NOTICE
------
The signature to the foregoing Assignment 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.
A-5
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To WESTAMERICA BANCORPORATION:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
(or such other securities of the Company) issuable upon the exercise of the
Rights and requests that certificates for such shares be issued in the name of:
_______________________________________________________________________________
(Please insert social security or other identifying number)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such Rights which
may still be exercised pursuant to Section 11(a)(ii) of the Rights Agreement
shall be returned to the undersigned unless such Person requests that the Rights
Certificate be registered in the name of and delivered to:
________________________________________________________________________________
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ____________, 19__.
__________________________________
Signature
Signature Guaranteed:
A-6
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(3) 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 or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________, 19__.
__________________________________
Signature
NOTICE
------
The signature to the foregoing Election to Purchase 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.
A-7
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To WESTAMERICA BANCORPORATION:
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock (or such other securities of the Company or any other Person) issuable
upon the exercise of the Rights and requests that certificates for such shares
be issued in the name of:
_______________________________________________________________________________
(Please insert social security or other identifying number)
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised pursuant to Section 11(a)(ii) of the Rights
Agreement shall be returned to the undersigned unless such Person requests that
the Rights Certificate be registered in the name of and delivered to:
________________________________________________________________________________
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ____________, 19__.
__________________________________
Signature
Signature Guaranteed:
A-8
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(3) 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 or an Affiliate or
Associate of an Acquiring Person.
Dated: ____________, 19__.
__________________________________
Signature
NOTICE
------
The signature to the foregoing Election to Purchase 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.
A-9
Exhibit B
---------
AMENDED AND RESTATED SUMMARY OF RIGHTS
TO PURCHASE COMMON STOCK
On December 18, 1986, the Board of Directors of Westamerica
Bancorporation (the "Company") declared a dividend distribution of one Right for
each outstanding share of common stock, no par value (the "Common Stock"), of
the Company to shareholders of record at the close of business on January 20,
1987 (the "Record Date").
The Rights Agreement, which provides the description and terms of the
Rights, was previously amended and restated on September 28, 1989 and on May 25,
1992 the current Rights Agent, Chemical Trust Company of California, replaced
the original Rights Agent. On March 23, 1995, the Company and Chemical Trust
Company of California as Rights Agent, amended and restated the Rights Agreement
(referred to herein, as amended and restated, as the "Amended and Restated
Rights Agreement"). A summary of the Amended and Restated Rights Agreement is
set forth below.
Except as set forth below, each Right, when exercisable, entitles the
registered holder to purchase from the Company one share of Common Stock, at a
price of $65 per share (the "Purchase Price"), subject to adjustment. The
Rights are not exercisable until the Distribution Date (as defined below).
The Rights are currently attached to all Common Stock certificates
representing shares outstanding, and no separate Right Certificates will be
distributed until the earlier to occur of (i) a public announcement that,
without the prior consent of the Company, a Person or group of affiliated or
associated Persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of securities having 15% or more of the voting
power of all outstanding voting securities of the Company, or (ii) ten days
(unless such date is extended by the Board of Directors) following the
commencement of (or a public announcement of an intention to make) a tender
offer or exchange offer which would result in any Person or group and related
Persons becoming an Acquiring Person (the earlier of such dates being called the
"Distribution Date"). Until the Distribution Date the Rights will be evidenced,
with respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with this Amended and
Restated Summary of Rights. The Amended and Restated Rights Agreement provides
that, until the Distribution Date, the Rights will be transferred with and only
with Common Stock certificates.
From as soon as practicable after the Record Date and until the
Distribution Date (or earlier redemption or expiration of
B-1
the Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of the Common Stock will contain a notation
incorporating the Amended and Restated Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Stock outstanding as of
the Record Date (with or without this Amended and Restated Summary of Rights
attached) will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and the separate Rights Certificates
alone will evidence the Rights.
The Rights will expire on the earliest of (i) December 31, 1999 (ii)
consummation of a merger transaction with a Person or group who acquired Common
Stock pursuant to a Permitted Offer (as defined below), and is offering in the
merger the same price per share and form of consideration paid in the Permitted
Offer, or (iii) redemption by the Company as described below.
The Purchase Price payable, and the number of shares of the Common
Stock or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of the
Common Stock, (ii) upon the grant to holders of the Common Stock of certain
rights or warrants to subscribe for Common Stock, certain convertible securities
or securities having the same or more favorable rights, privileges and
preferences as the Common Stock at less than the current market price of the
Common Stock or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular quarterly cash dividends
out of earnings or retained earnings and dividends payable in Common Stock) or
of subscription rights or warrants (other than those referred to above).
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, (i) the
Company is acquired in a merger or other business combination transaction in
which the Common Stock is exchanged or changed, (ii) any bank subsidiary of the
Company is involved in a merger or other business combination transaction or
(iii) 50% or more of its assets or earning power are sold (in one transaction or
a series of transactions), proper provision shall be made so that each holder of
a Right (other than such Acquiring Person) shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the surviving or resulting
Person in the merger or business combination transaction or the Person acquiring
the greatest portion of the assets, as appropriate, or, in either case, its
publicly traded parent company or
B-2
affiliate, which at the time of such transaction would have a market value of
two times the exercise price of the Right (such right being called the "Merger
Right").
In the event that a Person becomes the beneficial owner of securities
having 15% or more of the voting power of all then outstanding voting securities
of the Company (unless pursuant to a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Board of Directors who are not officers
of the Company to be both adequate and otherwise in the best interests of the
Company and its stockholders (a "Permitted Offer")), proper provision shall be
made so that each holder of a Right will for a 60-day period thereafter have the
right to receive upon exercise that number of shares of Common Stock having a
market value of two times the exercise price of the Right, to the extent
available, and then (after all authorized and unreserved shares of Common Stock
have been issued) a common stock equivalent (such as Preferred Stock or another
equity security with at least the same economic value as the Common Stock)
having a market value of two times the exercise price of the Right, with Common
Stock to the extent available being issued first (such right being called the
"Subscription Right"). The holder of a Right will continue to have the Merger
Right whether or not such holder exercises the Subscription Right. Upon the
occurrence of any of the events giving rise to the exercisability of the Merger
Right or the Subscription Right, any Rights that are or were at any time after
the Distribution Date owned by an Acquiring Person shall immediately become null
and void.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractions of shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
At any time prior to the earlier to occur of (i) a Person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.05 per Right (the
"Redemption Price"), which redemption shall be effective upon the action of the
Board of Directors. Additionally, the Company may thereafter redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price (i)
provided that such redemption is incidental to a merger or other business
combination transaction or series of transactions involving the Company but not
involving an Acquiring Person or certain related Persons or (ii) following an
event giving rise to, and the expiration of the exercise period for, the
Subscription Right if and for as long as an Acquiring Person beneficially owns
securities representing less than 15% of the voting power of the Company's
voting securities and at the time of redemption there are no other persons who
are
B-3
Acquiring Persons. The redemption of Rights described in the preceding sentence
shall be effective only as of such time when the Subscription Right is not
exercisable, and in any event, only after 10 Business Days' prior notice.
Subject to applicable law, the Board of Directors, at its option, may
at any time after a Person becomes an Acquiring Person (but not after the
acquisition by such Person of 50% or more of the outstanding Common Stock),
exchange all or part of the then outstanding and exercisable rights (except for
Rights which have become void) for shares of Common Stock equivalent to one
share of Common Stock per Right or, alternatively, for substitute consideration
consisting of cash, securities of the Company or other assets (or any
combination thereof).
Fractional shares of Common Stock will be issuable; however, the
Company may elect to distribute depositary receipts in lieu of such fractional
shares. In lieu of fractional shares an adjustment in cash may be made based on
the market price of the Common Stock on the last trading date prior to the date
of exercise.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Amended and Restated Rights Agreement has been filed
with the Securities and Exchange Commission as an Exhibit to a Form 8-A/A
Amendment to a Registration Statement on Form 8-A. A copy of the Amended and
Restated Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Amended and Restated Rights
Agreement, which is incorporated herein by reference.
B-4
