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
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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.
3
(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
4
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
5
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
6
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.
7
(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
8
in Section 9(c), Section 11(a)(iii) and
Section 13(a) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect
to the total number of shares of Common Stock (or other securities
or property, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the earlier of (i) the
close of business on April 27, 2009 (the "Final Expiration Date"),
or (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the earlier of (i) and (ii) being herein
referred to as the "Expiration Date").
(b)
The Purchase Price for each share of
Common Stock pursuant to the exercise of a Right shall initially be
$90.00, and shall be subject to adjustment from time to time as
provided in Section 11 hereof and shall be payable in accordance
with paragraph (c) below.
(c)
Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment,
with respect to each Right so exercised, of the Purchase Price per
share of Common Stock (or other shares, securities or property, as
the case may be) to be purchased as set forth below and an amount
equal to any applicable transfer tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly, (i) (A)
requisition from any transfer agent of the shares of Common Stock
(or make available, if the Rights Agent is the transfer agent for
such shares) certificates for the total 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 shall have elected to deposit the total number of shares of
Common Stock issuable upon exercise of the Rights hereunder with a
depositary agent, 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)
requisition from the Company the amount of cash, if any, to be paid
in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of
the registered holder of such Rights Certificate. The payment
of the Purchase Price (as such amount may be reduced (including to
zero) pursuant to Section 11(a)(iii) hereof) may be made in any
combination of (x) cash or certified bank check or bank draft
payable to the order of the Company, or (y) delivery of a
certificate or certificates (with appropriate stock power executed
in blank attached thereto) for whole numbers of shares of Common
Stock, which shall be credited at their current market price (as
determined pursuant to Section 11(d) hereof). If the Company
receives payment from any holder of Rights in a number of whole
shares of Common Stock with a current market price (as determined
pursuant to Section 11(d) hereof) that exceeds the total Purchase
Price due from such holder, the Company may, at its election, (i)
accept only such whole number of shares with a current market price
(as determined pursuant to Section 11(d) hereof) that is less than
the total Purchase Price and require that the balance of the total
Purchase Price be paid under clause (x), above, or (ii) make a cash
refund of the difference between the current market price
(as
9
determined pursuant to Section 11(d)
hereof) of the whole number of shares received and the total
Purchase Price due from such holder. In the event that the
Company is obligated to issue other securities of the Company, pay
cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d)
In case the registered holder of any
Rights Certificate shall exercise less than all the Rights
evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by
the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e)
Notwithstanding anything in this
Agreement to the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, (i) any Rights beneficially owned by an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) any Rights transferred by an Acquiring Person (or any
such Associate or Affiliate) after the Acquiring Person becomes
such, or (iii) any Rights transferred by an Acquiring Person (or
any such Associate or Affiliate) prior to or concurrently with the
Acquiring Person becoming such and if the transferee receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has a primary purpose
or effect the avoidance of this Section 7(e), shall become null and
void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The
Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f)
Notwithstanding anything in this
Agreement to the contrary, neither the Rights Agent nor the Company
shall be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall
have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
Section 8.
Cancellation and Destruction of
Rights Certificates
.
All Rights Certificates surrendered
for the purpose of exercise, transfer, split up, combination or
exchange shall, if surrendered to the Company or any of its agents,
be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and
10
retirement, and the Rights Agent shall so
cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Rights Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
Section 9.
Reservation and Availability of
Capital Stock .
(a)
The Company covenants and agrees that
prior to the occurrence of a Triggering Event it will cause to be
reserved and kept available out of its authorized and unissued
shares of Common Stock, the number of shares of Common Stock that,
except as provided in Section 11 (a)(iii) hereof and without
consideration of the adjustments under Section 11(a)(ii), will be
sufficient to permit the exercise in full of all outstanding
Rights. The Company covenants and agrees that following the
occurrence of a Triggering Event it will cause to be reserved and
kept available out of its authorized and unissued shares of Common
Stock and/or other securities, the number of shares of Common Stock
and/or other securities that, except as provided in Section
11(a)(iii) hereof, will be sufficient to permit the exercise in
full of all outstanding Rights.
(b)
The Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable,
all shares reserved for such issuance to be listed with the
National Association of Securities Dealers, Inc. or on any national
securities exchange on which the Company's Common Stock then trades
upon official notice of issuance upon such exercise.
(c)
The Company shall use its best efforts to
(i) file, as soon as practicable following the earliest date after
the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the
Securities Act of 1933 (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon
as 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) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights.
The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement. Upon any such suspension, the Company
shall issue a public announcement stating, and notify the Rights
Agent, that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction
unless the requisite qualification in such jurisdiction shall have
been obtained.
11
(d)
The Company covenants and agrees that it
will take all such action as may be necessary to ensure that all
Common Stock and/or other securities delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable.
(e)
The Company further covenants and agrees
that it will pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for shares of Common Stock and/or other securities, as
the case may be, upon the exercise of Rights. The Company
shall not, however, be required (i) to pay any transfer tax which
may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of
Common Stock and/or other securities, as the case may be, in
respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or,
(ii) to issue or deliver any certificates for Common Stock and/or
other securities, as the case may be, in a name other than that of
the registered holder upon the exercise of any Rights until such
tax shall have been paid (any such tax being payable by the holder
of such Rights Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax
is due.
Section 10.
Common Stock Record Date
. Each person in whose name any certificate for
shares of Common Stock and/or other securities, as the case may be,
is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of such shares
represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the total Purchase Price therefor
(and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which
the applicable stock transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the applicable
stock transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a shareholder 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 and Number of Rights . The
Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)
(i)
In the event the Company shall at any
time after the date of this Agreement (A) declare a dividend on the
Common Stock payable in shares of Common Stock, (B) subdivide or
split 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
12
Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a)
and Section 7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or at the time of the
effective date of such subdivision, combination or
reclassification, and/or the number and kind of shares of Common
Stock or capital stock, as the case may be, issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number
and kind of shares of Common Stock or capital stock, as the case
may be, which, if such Right had been exercised immediately prior
to such date and at a time when the Common Stock transfer books of
the Company were open, he would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in the
case of a dividend on the Common Stock payable in shares of Common
Stock as referenced in clause (A) of this Section 11(a)(i), where
the record date of such dividend is prior to the Distribution Date
and where each share of Common Stock issued pursuant to such
dividend is issued Rights under Section 3(c) hereof, then in such
case the Purchase Price shall be reduced (and no other adjustment
shall be made pursuant to this Section 11(a)(i)) on the record date
of such dividend to a number which is equal to the result obtained
by multiplying the Purchase Price then in effect by a fraction, the
numerator of which is the number of Rights outstanding prior to
such dividend and the denominator of which is the number of Rights
outstanding immediately following such dividend. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
(ii)
In the event:
(A)
any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date of
this Agreement, directly or indirectly, (1) shall merge into the
Company or otherwise combine with the Company and the Company shall
be the continuing or surviving corporation of such merger or
combination and the Common Stock of the Company shall remain
outstanding and unchanged, (2) shall effect a statutory share
exchange with the Company, after which the Company is not a
Subsidiary of any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, (3) shall, in one or more transactions, other
than in connection with the exercise of Rights or the exercise or
conversion of securities exercisable or convertible into capital
stock of the Company or any of its Subsidiaries, transfer any
assets to the Company or any of its Subsidiaries in exchange (in
whole or in part) for shares of any class of capital stock of the
Company or any of its Subsidiaries or for securities exercisable
for or convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries
13
or otherwise obtain from the Company or
any of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company or
any of its Subsidiaries or securities exercisable for or
convertible into shares of any class of capital stock of the
Company or any of its Subsidiaries (other than as part of a pro
rata distribution to all holders of Common Shares), (4) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise
dispose (in one or more transactions), to, from, with or of, as the
case may be, the Company or any of its Subsidiaries, assets,
including securities, on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length
negotiation with an affiliated third party, (5) shall receive any
compensation from the Company or any of the Company's Subsidiaries
other than compensation for services as a director or for full-time
employment as a regular employee, in either case at rates in
accordance with the Company's (or its Subsidiaries') past
practices, or (6) shall receive the benefit, directly or indirectly
(except proportionately as a shareholder), of any loans, advances,
guarantees, pledges, or other financial assistance or any tax
credits or other tax advantage provided by the Company or any of
its Subsidiaries, or
(B)
any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant
to the terms of any such plan), alone or together with its
Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner of 25% or
more of the shares of Common Stock then outstanding, other than
pursuant to any transaction set forth in Section 13(a)
hereof,
(C)
during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of the
Company, or any merger or consolidation of the Company with any of
its Subsidiaries or any other transaction or series of transactions
involving the Company or any subsidiary of the Company (whether or
not with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more than
1% the proportionate share of the outstanding shares of any class
of equity securities or of securities exercisable for or
convertible into securities of the Company or any of its
Subsidiaries that is directly or indirectly owned by any Acquiring
Person or any Associate or Affiliate of any Acquiring Person, then
within five (5) days after the date of the occurrence of an event
described in Section 11(a)(ii)(B) hereof and
14
promptly following the occurrence of any
event described in Section 11 (a)(ii)(A) or (C) hereof, proper
provision shall he made by the Company so that each holder of a
Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at the
then current Purchase Price in accordance with the terms of this
Agreement, in lieu of the number of shares of Common Stock for
which the Rights were theretofore exercisable, 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 was
exercisable immediately prior to the first occurrence of a Section
11 (a)(ii) Event and dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by
(y) 50% of the current market price (determined pursuant to Section
11(d) hereof) per share of Common Stock on the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii)
In the event that the number of shares of
Common Stock which are authorized by the Company's articles of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), and subject to
such limitations as are necessary to prevent a default under any
agreement for money borrowed as presently constituted to which the
Company is a part and subject to any limitations contained in
Section 1551 of the Pennsylvania Business Corporation Law of 1988,
as amended, the Company shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction
in the Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares, or units of
shares, of preferred stock which the Board of Directors of the
Company has deemed to have the same value as shares of Common Stock
(such shares of preferred stock, "common stock equivalents")), (4)
debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined
by the Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however if the Company
shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the first
occurrence of a Section 11(a)(ii) Event, then the
Company
15
shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of
the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which in the aggregate
equal in value to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days following the first occurrence
of a Section 11(a)(ii) Event, in order that the Company may seek
shareholder approval for the authorization of such additional
shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some
action needs to be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the
current market price (as determined pursuant to Section 11(d)
hereof) per share of the Common Stock on the date of the first
occurrence of a Section 11(a)(ii) Event and the value of any
"common stock equivalent" shall be deemed to have the same value as
the Common Stock on such date.
(b)
In case the Company shall fix a record
date for the issuance of rights, options or warrants to all holders
of Common Stock entitling them to subscribe for or purchase (for a
period expiring within forty-five (45) calendar days after such
record date) Common Stock (or shares having the same rights,
privileges and preferences as the shares of 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 determined purs
