FULTON FINANCIAL CORPORATION Second Amended and Restated Rights Agreement

 

 

 

 

 

 

 

 

 

 

 

 

FULTON FINANCIAL CORPORATION

 

and

 

FULTON BANK

 

Rights Agent

 

 

 

_________________

 

Second Amended and Restated

Rights Agreement

Dated as of December 20, 2005

 

 

 

TABLE OF CONTENTS

 

 

Section 1A.

Amendment and Restatement

1

 

Section 1.

Certain Definitions

2

 

Section 2.

Appointment of Rights Agent

5

 

Section 3.

Issuance of Rights Certificates

5

 

Section 4.

Form of Rights Certificates

7

 

Section 5.

Countersignature and Registration

8

 

Section 6.

Transfer, Split Up, Combination and Exchange of Rights

Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates

8

 

Section 7.

Exercise of Rights; Purchase Price; Expiration Date of Rights

9

 

Section 8.

Cancellation and Destruction of Rights Certificates

11

 

Section 9.

Reservation and Availability of Capital Stock

11

 

Section 10.

Common Stock Record Date

12

 

Section 11.

Adjustment of Purchase Price, Number and Kind of Shares and

Number of Rights

13

 

Section 12.

Certificate of Adjusted Purchase Price or Number of Shares

21

 

Section 13.

Consolidation, Merger or Sale or Transfer of Assets or Earning Power

21

 

Section 14.

Fractional Rights and Fractional Shares

23

 

Section 15.

Rights of Action

24

 

Section 16.

Agreement of Rights Holders

24

 

Section 17.

Rights Certificate Holder Not Deemed a Shareholder

25

 

Section 18.

Concerning the Rights Agent

25

 

Section 19.

Merger or Consolidation or Change of Name of Rights Agent

27

 

Section 20.

Duties of Rights Agent

27

 

i

 

 

 

Section 21.

Change of Rights Agent

29

 

Section 22.

Issuance of New Rights Certificates

30

 

Section 23.

Redemption and Termination

30

 

Section 24.

Notice of Certain Events

31

 

Section 25.

Notices

32

 

Section 26.

Supplements and Amendments

32

 

Section 27.

Successors

33

 

Section 28.

Determinations and Actions by the Board of Directors, etc

33

 

Section 29.

Benefits of this Agreement

34

 

Section 30.

Severability

34

 

Section 31.

Governing Law

34

 

Section 32.

Counterparts

34

 

Section 33.

Descriptive Headings

34

 

ii

 

 

EXHIBITS

 

 

EXHIBIT A  FORM OF RIGHTS CERTIFICATE

1

 

EXHIBIT B  FULTON FINANCIAL CORPORATION SUMMARY OF RIGHTS TO

                      PURCHASE COMMON STOCK

9

 

 

 

 

i

 

 

 

 

 

SECOND AMENDED AND RESTATED RIGHTS AGREEMENT

 

SECOND AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of December 20, 2005 (the “Agreement”), between Fulton Financial Corporation, a Pennsylvania corporation (the "Company"), and Fulton Bank, a Pennsylvania banking corporation (the "Rights Agent").

 

BACKGROUND:

 

The Company and the Rights Agent have heretofore entered into a Rights Agreement dated as of June 20, 1989 (the “Original Rights Agreement”).  On June 20, 1989 (the “Rights Dividend Declaration Date”), the Board of Directors of the Company authorized and declared a dividend distribution of one right (an “Original Right”) for each share of common stock, par value $2.50 per share, of the Company (the “Common Stock”) outstanding at the close of business on July 6, 1989 (the “Record Date”), and has authorized the issuance of one Original Right for each share of Common Stock of the Company issued between the Record Date and the Distribution Date, each Original Right initially representing the right to purchase one share of Common Stock of the Company, upon the terms and subject to the conditions set forth in the Original Rights Agreement.

 

The Company and the Rights Agent have amended the Original Rights Agreement pursuant to the terms of the Amended and Restated Rights Agreement dated as of April 27, 1999 (the “Amended Rights Agreement”), which amended the Original Rights in their entirety to, among other things, represent a right (a "Right") to purchase one share of Common Stock of the Company at a price of $90.00 (as the same may be adjusted, the "Purchase Price").  

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth and intending to be legally bound, the parties hereby agree as follows:

 

Section 1A.

Amendment and Restatement.  Pursuant to Section 26 of the Amended Rights Agreement, the parties hereto hereby amend and restate the Amended Rights Agreement to read in its entirety in the form hereof.  The Board of Directors of the Company has approved the amendment and restatement such that, as of December 20, 2005, each Right shall be deemed to have the rights assigned to it pursuant to this Agreement.  As used herein the term "adoption of this Agreement" shall refer to the adoption of this Second Amended and Restated Rights Agreement, and the term "the date of this Agreement" or "the date hereof" shall mean December 20, 2005.  

 

Section 1.

Certain Definitions.  For purposes of this Agreement, the following terms have the meanings indicated:

 

(a)

"Acquiring Person" shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 20% or more of the shares of Common Stock then outstanding, but shall not include the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or

 

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any person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan.

 

(b)

"Adjustment Shares" shall have the meaning set forth in Section 11(a)(ii).

 

(c)

"Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in effect on the date of this Agreement.

 

(d)

A Person shall be deemed the "Beneficial Owner" of, and shall be deemed to "beneficially own," any securities:

 

(i)

which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities tendered pursuant to a tender or exchange offer made by such Person or any of such Person's Affiliates or Associates until such tendered securities are accepted for purchase or exchange, or (B) securities issuable upon exercise of Rights at any time prior to the occurrence of a Triggering Event;

 

(ii)

which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to vote or direct the voting of or to dispose of or direct the disposition of or "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement), including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own," any security under this subparagraph (ii) as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (A) arises solely from a revocable proxy given in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable provisions of the General Rules and Regulations under the Exchange Act, and (B) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or on any comparable or successor report); or

 

(iii)

which are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associate thereof) with which such Person (or any of such Person's Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in the

 

2

 

 

proviso to subparagraph (ii) of this paragraph (d)) or disposing of any voting securities of the Company.

 

(e)

"Business Day" shall mean any day other than a Saturday, Sunday or a day on which banking institutions in the Commonwealth of Pennsylvania are authorized or obligated by law or executive order to close.

 

(f)

"Close of Business" on any given date shall mean 5:00 P.M., New York City time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.

 

(g)

"Common Stock" shall mean the common stock, par value $2.50 per share, of the Company, except that "Common Stock" when used with reference to any Person other than the Company shall mean the capital stock of such Person with the greatest voting power or the equity securities or other equity interest having power to control or direct the management of such Person.

 

(h)

"Common stock equivalent" shall have the meaning set forth in Section 11(a)(iii).

 

(i)

"Current market price" shall have the meaning set forth in Section 11(d).

 

(j)

"Current Value" shall have the meaning set forth in Section 11(a)(iii).

 

(k)

"Distribution Date" shall mean the earlier of (i) the close of business on the tenth business day after the Stock Acquisition Date, or (ii) the close of business on the tenth business day after the date that a tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or pursuant to the terms of any such plan) is first published or sent or given within the meaning of Rule 14e-2(a) of the General Rules and Regulations under the Exchange Act, if upon consummation thereof, such Person would be the Beneficial Owner of 25% or more of the shares of Common Stock then outstanding.

 

(l)

"Equivalent common stock" shall have the meaning set forth in Section 11(b).

 

(m)

"Expiration Date" and "Final Expiration Date" shall have the meanings set forth in Section 7(a).

 

(n)

“Outstanding Certificates” shall mean certificates representing shares of Common Stock in respect of which Rights have been issued which were issued after the Record Date and prior to the date of this Agreement and which were outstanding as of the date of this Agreement.

 

 

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(o)

"Person" shall mean any individual, firm, corporation, partnership or other entity.

 

(p)

"Principal Party" shall have the meaning set forth in Section 13(b).

 

(q)

"Purchase Price" shall have the meaning set forth in Section 4, as the same may be adjusted from time to time pursuant to the provisions of this Agreement.

 

(r)

"Record Date" shall have the meaning set forth in the "Background" section of this Agreement.

 

(s)

"Redemption Price" shall have the meaning set forth in Section 23.

 

(t)

"Rights Dividend Declaration Date" shall have the meaning set forth in the "Background" section  of this Agreement.

 

(u)

"Section 11(a)(ii) Event" shall mean any event described in Section 11(a)(ii)(A), (B) or (C) hereof.

 

(v)

"Section 13 Event" shall mean any event described in clauses (w), (x), (y) or (z) of Section 13(a) hereof.

 

(w)

"Spread" shall have the meaning set forth in Section 11(a)(iii).

 

(x)

"Stock Acquisition Date" shall mean the first date of public announcement (which, for purposes of this definition, shall include, without limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that a Person has become an Acquiring Person.

 

(y)

"Subsidiary" shall mean, with reference to any Person, any corporation or other entity of which an amount of voting securities sufficient to elect a majority of the directors or Persons having similar authority of such corporation or other entity is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person.

 

(z)

"Substitution Period" shall have the meaning set forth in Section 11(a)(iii).

 

(aa)

"Trading Day" shall have the meaning set forth in Section 11(d).

 

(bb)

"Triggering Event" shall mean any Section 11(a)(ii) Event or any Section 13 Event.

 

Section 2.

Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall, prior to the Distribution Date, also be holders of Common Stock) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such

 

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appointment. The Company may from time to time appoint such Co-Rights Agents as it may deem necessary or appropriate.

 

Section 3.

Issuance of Rights Certificates.

 

(a)

Until the Distribution Date, (i) the Rights will be evidenced (subject to the provisions of paragraph (b), (c) and (d) of this Section 3) by the certificates for the Common Stock registered in the names of the holders of the Common Stock (which certificates for Common Stock shall be deemed also to be certificates for Rights) and not by separate certificates, and (ii) the Rights will be transferable only in connection with the transfer of the underlying shares of Common Stock (including a transfer to the Company). As soon as practicable after the Distribution Date, the Rights Agent will send by first-class, postage prepaid mail, to each such record holder of the Common Stock as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, one or more right certificates, in substantially the form of Exhibit A hereto (the "Rights Certificates"), evidencing one Right for each share of Common Stock so held, subject to adjustment as provided herein.  In the event that an adjustment in the number of Rights per share of Common Stock has been made pursuant to Section 11(i) hereof, at the time of distribution of the Rights Certificates the Company shall make the necessary and appropriate rounding adjustments (in accordance with Section 14(a) hereof) so that Rights Certificates representing only whole numbers of Rights are distributed and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights Certificates.

 

(b)

As soon as practicable after the date of this Agreement, the Company shall file with the Securities and Exchange Commission the full text of this Agreement and a revised summary thereof, which revised summary shall be in substantially the form of Exhibit B hereto (the "Revised Summary of Rights"). The Summary of Rights mailed to each record holder of Common Stock as of the close of business on the Record Date shall be deemed amended and restated from and after the date hereof by the Revised Summary of Rights.  With respect to certificates for the Common Stock outstanding as of the date hereof, until the Distribution Date, the Rights will be evidenced by such certificates for the Common Stock and the registered holders of such Common Stock shall also be the registered holders of the associated Rights. Until the earlier of the Distribution Date or the Expiration Date (as such term is defined in Section 7 hereof), the transfer of any certificates representing shares of Common Stock in respect of which Rights have been issued shall also constitute the transfer of the Rights associated with such shares of Common Stock.

 

(c)

Rights have been, and shall be, issued in respect of all shares of Common Stock which are issued after the Record Date but prior to the earlier of the Distribution Date or the Expiration Date, unless the Board of Directors provides to the contrary by resolution adopted at or before the time of the issuance. Certificates representing such shares of subsequently issued Common Stock shall also be deemed to be certificates for Rights.

 

(d)

Any Outstanding Certificates (and any certificates issued by the Company after the date of this Agreement bearing the same legend as the Outstanding Certificates) shall be deemed to bear, and, except as set forth in the previous clause, any certificates issued by the

 

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Company after the date of this Agreement, that represent shares of Common Stock in respect of which Rights have been issued shall bear, the following legend:

 

This certificate also evidences and entitles the holder hereof to certain Rights as set forth in the Second Amended and Restated Rights Agreement between Fulton Financial Corporation (the "Company") and Fulton Bank (the "Rights Agent") dated as of April 27, 1999 (as such Rights Agreement may be amended from time to time, the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal offices of the Company. Under certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced by separate certificates and will no longer be evidenced by this certificate.  The Company will mail to the holder of this certificate a copy of the Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor.  Under certain circumstances set forth in the Rights Agreement, Rights issued to, or held by, any Person who is, was or becomes an Acquiring Person or any Affiliate or Associate thereof (as such terms are defined in the Rights Agreement), whether currently held by or on behalf of such Person or by any subsequent holder, may become null and void, and the transfer of such Rights may be deemed to be restricted.

 

With respect to such certificates containing the foregoing legend (or deemed to contain such legend), until the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated with the Common Stock represented by such certificates shall be evidenced by such certificates alone and registered holders of Common Stock shall also be the registered holders of the associated Rights, and the transfer of any of such certificates shall also constitute the transfer of the Rights associated with the Common Stock represented by such certificates.

 

Notwithstanding this paragraph (d), the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights.

 

Section 4.

Form of Rights Certificates.

 

(a)

The Rights Certificates (and the forms of election to purchase and of assignment to be printed on the reverse thereof) shall each be substantially in the form set forth in Exhibit A hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of the National Association of Securities Dealers, Inc. or any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall be dated as of the Record Date (or in the case of Rights issued in respect of Common Stock issued by the Company after the Record Date, as of the date of issuance of such Common Stock), shall note the date of issuance, and on their face shall entitle the holders thereof to purchase such number of shares of Common Stock as shall be set forth therein at the price set forth therein (such exercise price per share being referred to herein as the "Purchase Price"), but the amount and type of securities purchasable upon the

 

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exercise of each Right and the Purchase Price thereof shall be subject to adjustment as provided herein.

 

(b)

Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate of Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom such Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect avoidance of Section 7(e) hereof, and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall bear (to the extent feasible) the following legend:

 

The Rights represented by this Rights Certificate are or were beneficially owned by a Person who was or became an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement).  Accordingly, this Rights Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 7(e) of such Agreement, and the transfer of such Rights may be deemed to be restricted.  

 

Section 5.

Countersignature and Registration

 

(a)

The Rights Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President or any Executive Vice President or Vice President, either manually or by facsimile signature, and shall have affixed thereto the Company's seal or a facsimile thereof which shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by a facsimile signature.  The Rights Certificates shall be countersigned by an authorized signatory of the Rights Agent but it shall not be necessary for the same signatory to countersign all of the Rights Certificates issued hereunder. The Rights Certificates shall be manually countersigned by the Rights Agent and shall not be valid for any purpose unless so countersigned.  In case any officer of the Company who shall have signed any of the Rights Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Rights Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the person who 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.  

 

 

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(b)

Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or offices designated as the appropriate place for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer of the Rights Certificates issued hereunder.  Such books shall show the names and addresses of the respective holders of the Rights Certificates and the date of each of the Rights Certificates.

 

Section 6.

Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.

 

(a)

Subject to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any time after the close of business on the Distribution Date, and at or prior to the close of business on the Expiration Date, any Rights Certificate or Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or Certificates, entitling the registered holder to purchase a like number of shares of Common Stock (or, following a Triggering Event, other securities, cash or other assets, as the case may be) as the Rights Certificate or Certificates surrendered then entitled such holder (or former holder in the case of transfer) to purchase.  Any registered holder desiring to transfer, split up, combine or exchange any Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent designated for such purpose.  Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Rights Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.  Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The Company may require payment from the holder of the Rights of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Rights Certificates.  

 

(b)

Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.  

 

Section 7.

Exercise of Rights; Purchase Price; Expiration Date of Rights.

 

(a)

Subject to Section 7(e) and the last sentence of Section 23(a) hereof, the registered holder of any Rights Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein including, without limitation, the restrictions on exercisability set forth