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WARRANT TO PURCHASE COMMON
STOCK
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR
OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT
RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT OR SUCH LAWS. THIS INSTRUMENT IS ISSUED SUBJECT TO THE
RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS OF A SECURITIES
PURCHASE AGREEMENT BETWEEN THE ISSUER OF THESE SECURITIES AND THE
INVESTOR REFERRED TO THEREIN, A COPY OF WHICH IS ON FILE WITH THE
ISSUER. THE SECURITIES REPRESENTED BY THIS INSTRUMENT MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SAID
AGREEMENT. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SAID
AGREEMENT WILL BE VOID.
WARRANT
to purchase
121,387
Shares of Common Stock
of Fidelity Bancorp, Inc.
Issue Date: December 12, 2008
1.
Definitions
. Unless the context otherwise requires, when used herein the
following terms shall have the meanings indicated.
“ Affiliate ” has the meaning
ascribed to it in the Purchase Agreement.
“ Appraisal Procedure ” means a
procedure whereby two independent appraisers, one chosen by the
Company and one by the Original Warrantholder, shall mutually agree
upon the determinations then the subject of appraisal. Each party
shall deliver a notice to the other appointing its appraiser within
15 days after the Appraisal Procedure is invoked. If within 30 days
after appointment of the two appraisers they are unable to agree
upon the amount in question, a third independent appraiser shall be
chosen within 10 days thereafter by the mutual consent of such
first two appraisers. The decision of the third appraiser so
appointed and chosen shall be given within 30 days after the
selection of such third appraiser. If three appraisers shall be
appointed and the determination of one appraiser is disparate from
the middle determination by more than twice the amount by which the
other determination is disparate from the middle determination,
then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average
shall be binding and conclusive upon the Company and the Original
Warrantholder; otherwise, the average of all three determinations
shall be binding upon the Company
UST Seq. No. 261
and the Original Warrantholder. The costs of
conducting any Appraisal Procedure shall be borne by the
Company.
“ Board of Directors ” means the
board of directors of the Company, including any duly authorized
committee thereof.
“Business Combination” means a merger, consolidation, statutory share exchange or
similar transaction that requires the approval of the
Company’s stockholders.
“ business day ” means any day except
Saturday, Sunday and any day on which banking institutions in the
State of New York generally are authorized or required by law or
other governmental actions to close.
“ Capital Stock ” means (A) with
respect to any Person that is a corporation or company, any and all
shares, interests, participations or other equivalents (however
designated) of capital or capital stock of such Person and (B) with
respect to any Person that is not a corporation or company, any and
all partnership or other equity interests of such Person.
“ Charter ” means, with respect to
any Person, its certificate or articles of incorporation, articles
of association, or similar organizational document.
“ Common Stock ” has the meaning
ascribed to it in the Purchase Agreement.
“ Company ” means the Person whose
name, corporate or other organizational form and jurisdiction of
organization is set forth in Item 1 of Schedule A hereto.
“ conversion ” has the meaning set
forth in Section 13(B).
“ convertible securities ” has the
meaning set forth in Section 13(B).
“ CPP ” has the meaning ascribed to
it in the Purchase Agreement.
“ Exchange Act ” means the Securities
Exchange Act of 1934, as amended, or any successor statute, and the
rules and regulations promulgated thereunder.
“Exercise Price ” means the amount
set forth in Item 2 of Schedule A hereto.
“ Expiration Time ” has the meaning
set forth in Section 3.
“ Fair Market Value ” means, with
respect to any security or other property, the fair market value of
such security or other property as determined by the Board of
Directors, acting in good faith or, with respect to Section 14, as
determined by the Original Warrantholder acting in good faith. For
so long as the Original Warrantholder holds this Warrant or any
portion thereof, it may object in writing to the Board of
Director’s calculation of fair market value within 10
days of receipt of written notice thereof. If the Original
Warrantholder and the Company are unable to agree on fair market
value during the 10-day period following the delivery of the
Original Warrantholder’s objection, the Appraisal
Procedure may be invoked by either party to determine Fair Market
Value by delivering written notification thereof not later than the
30 th day after
delivery of the Original Warrantholder’s
objection.
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“ Governmental Entities
” has the meaning ascribed to it in the Purchase
Agreement.
“ Initial Number ” has the meaning
set forth in Section 13(B).
“Issue Date” means the
date set forth in Item 3 of Schedule A hereto.
“ Market Price ” means, with respect
to a particular security, on any given day, the last reported sale
price regular way or, in case no such reported sale takes place on
such day, the average of the last closing bid and ask prices
regular way, in either case on the principal national securities
exchange on which the applicable securities are listed or admitted
to trading, or if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and ask prices
as furnished by two members of the Financial Industry Regulatory
Authority, Inc. selected from time to time by the Company for that
purpose. “Market Price” shall be determined
without reference to after hours or extended hours trading. If such
security is not listed and traded in a manner that the quotations
referred to above are available for the period required hereunder,
the Market Price per share of Common Stock shall be deemed to be
(i) in the event that any portion of the Warrant is held by the
Original Warrantholder, the fair market value per share of such
security as determined in good faith by the Original Warrantholder
or (ii) in all other circumstances, the fair market value per share
of such security as determined in good faith by the Board of
Directors in reliance on an opinion of a nationally recognized
independent investment banking corporation retained by the Company
for this purpose and certified in a resolution to the
Warrantholder. For the purposes of determining the Market Price of
the Common Stock on the “trading day”
preceding, on or following the occurrence of an event, (i) that
trading day shall be deemed to commence immediately after the
regular scheduled closing time of trading on the New York Stock
Exchange or, if trading is closed at an earlier time, such earlier
time and (ii) that trading day shall end at the next regular
scheduled closing time, or if trading is closed at an earlier time,
such earlier time (for the avoidance of doubt, and as an example,
if the Market Price is to be determined as of the last trading day
preceding a specified event and the closing time of trading on a
particular day is 4:00 p.m. and the specified event occurs at 5:00
p.m. on that day, the Market Price would be determined by reference
to such 4:00 p.m. closing price).
“ Ordinary Cash Dividends ” means a
regular quarterly cash dividend on shares of Common Stock out of
surplus or net profits legally available therefor (determined in
accordance with generally accepted accounting principles in effect
from time to time), provided
that Ordinary Cash Dividends shall not include any
cash dividends paid subsequent to the Issue Date to the extent the
aggregate per share dividends paid on the outstanding Common Stock
in any quarter exceed the amount set forth in Item 4 of Schedule A
hereto, as adjusted for any stock split, stock dividend, reverse
stock split, reclassification or similar transaction.
“ Original Warrantholder ” means the
United States Department of the Treasury. Any actions specified to
be taken by the Original Warrantholder hereunder may only be taken
by such Person and not by any other Warrantholder.
“ Permitted Transactions ” has the
meaning set forth in Section 13(B).
“ Person ” has the meaning given to
it in Section 3(a)(9) of the Exchange Act and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act.
“ Per Share Fair Market Value ” has
the meaning set forth in Section 13(C).
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“Preferred Shares ”
means the perpetual preferred stock issued to the Original
Warrantholder on the Issue Date pursuant to the Purchase
Agreement.
“ Pro Rata Repurchases ” means any
purchase of shares of Common Stock by the Company or any Affiliate
thereof pursuant to (A) any tender offer or exchange offer subject
to Section 13(e) or 14(e) of the Exchange Act or Regulation 14E
promulgated thereunder or (B) any other offer available to
substantially all holders of Common Stock, in the case of both (A)
or (B), whether for cash, shares of Capital Stock of the Company,
other securities of the Company, evidences of indebtedness of the
Company or any other Person or any other property (including,
without limitation, shares of Capital Stock, other securities or
evidences of indebtedness of a subsidiary), or any combination
thereof, effected while this Warrant is outstanding. The
“ Effective Date ” of a Pro Rata
Repurchase shall mean the date of acceptance of shares for purchase
or exchange by the Company under any tender or exchange offer which
is a Pro Rata Repurchase or the date of purchase with respect to
any Pro Rata Repurchase that is not a tender or exchange offer.
“ Purchase Agreement ” means the
Securities Purchase Agreement – Standard Terms
incorporated into the Letter Agreement, dated as of the date set
forth in Item 5 of Schedule A hereto, as amended from time to time,
between the Company and the United States Department of the
Treasury (the “ Letter Agreement ”),
including all annexes and schedules thereto.
“ Qualified Equity Offering ” has the
meaning ascribed to it in the Purchase Agreement.
“ Regulatory Approvals ” with respect
to the Warrantholder, means, to the extent applicable and required
to permit the Warrantholder to exercise this Warrant for shares of
Common Stock and to own such Common Stock without the Warrantholder
being in violation of applicable law, rule or regulation, the
receipt of any necessary approvals and authorizations of, filings
and registrations with, notifications to, or expiration or
termination of any applicable waiting period under, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations thereunder.
“ SEC ” means the U.S. Securities and
Exchange Commission.
“ Securities Act ” means the
Securities Act of 1933, as amended, or any successor statute, and
the rules and regulations promulgated thereunder.
“ Shares ” has the meaning set forth
in Section 2.
“trading day” means
(A) if the shares of Common Stock are not traded on any national or
regional securities exchange or association or over-the-counter
market, a business day or (B) if the shares of Common Stock are
traded on any national or regional securities exchange or
association or over-the-counter market, a business day on which
such relevant exchange or quotation system is scheduled to be open
for business and on which the shares of Common Stock (i) are not
suspended from trading on any national or regional securities
exchange or association or over-the-counter market for any period
or periods aggregating one half hour or longer; and (ii) have
traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the shares of Common
Stock.
“ U.S. GAAP ” means United States
generally accepted accounting principles.
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“ Warrantholder ” has
the meaning set forth in Section 2.
“ Warrant ” means this Warrant,
issued pursuant to the Purchase Agreement.
2. Number of
Shares; Exercise Price . This certifies that, for value
received, the United States Department of the Treasury or its
permitted assigns (the “ Warrantholder
”) is entitled, upon the terms and subject to the
conditions hereinafter set forth, to acquire from the Company, in
whole or in part, after the receipt of all applicable Regulatory
Approvals, if any, up to an aggregate of the number of fully paid
and nonassessable shares of Common Stock set forth in Item 6 of
Schedule A hereto, at a purchase price per share of Common Stock
equal to the Exercise Price. The number of shares of Common Stock
(the “ Shares ”) and the Exercise Price
are subject to adjustment as provided herein, and all references to
“Common Stock,” “Shares”
and “Exercise Price” herein shall be deemed to
include any such adjustment or series of adjustments.
3. Exercise
of Warrant; Term . Subject to Section 2, to the extent
permitted by applicable laws and regulations, the right to purchase
the Shares represented by this Warrant is exercisable, in whole or
in part by the Warrantholder, at any time or from time to time
after the execution and delivery of this Warrant by the Company on
the date hereof, but in no event later than 5:00 p.m., New York
City time on the tenth anniversary of the Issue Date (the
“ Expiration Time ”), by (A) the
surrender of this Warrant and Notice of Exercise annexed hereto,
duly completed and executed on behalf of the Warrantholder, at the
principal executive office of the Company located at the address
set forth in Item 7 of Schedule A hereto (or such other office or
agency of the Company in the United States as it may designate by
notice in writing to the Warrantholder at the address of the
Warrantholder appearing on the books of the Company), and (B)
payment of the Exercise Price for the Shares thereby purchased:
(i) by having the Company withhold, from the shares of Common
Stock that would otherwise be delivered to the Warrantholder upon
such exercise, shares of Common stock issuable upon exercise of the
Warrant equal in value to the aggregate Exercise Price as to which
this Warrant is so exercised based on the Market Price of the
Common Stock on the trading day on which this Warrant is exercised
and the Notice of Exercise is delivered to the Company pursuant to
this Section 3, or
(ii) with the consent of both the Company and the Warrantholder,
by tendering in cash, by certified or cashier’s check
payable to the order of the Company, or by wire transfer of
immediately available funds to an account designated by the
Company.
If the Warrantholder does not exercise this Warrant in its
entirety, the Warrantholder will be entitled to receive from the
Company within a reasonable time, and in any event not exceeding
three business days, a new warrant in substantially identical form
for the purchase of that number of Shares equal to the difference
between the number of Shares subject to this Warrant and the number
of Shares as to which this Warrant is so exercised. Notwithstanding
anything in this Warrant to the contrary, the Warrantholder hereby
acknowledges and agrees that its exercise of this Warrant for
Shares is subject to the condition that the Warrantholder will have
first received any applicable Regulatory Approvals.
4. Issuance
of Shares; Authorization; Listing . Certificates for Shares
issued upon exercise of this Warrant will be issued in such name or
names as the Warrantholder may designate and will be delivered to
such named Person or Persons within a reasonable time, not to
exceed three
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business days after the date on which this
Warrant has been duly exercised in accordance with the terms of
this Warrant. The Company hereby represents and warrants that any
Shares issued upon the exercise of this Warrant in accordance with
the provisions of Section 3 will be duly and validly authorized and
issued, fully paid and nonassessable and free from all taxes, liens
and charges (other than liens or charges created by the
Warrantholder, income and franchise taxes incurred in connection
with the exercise of the Warrant or taxes in respect of any
transfer occurring contemporaneously therewith). The Company agrees
that the Shares so issued will be deemed to have been issued to the
Warrantholder as of the close of business on the date on which this
Warrant and payment of the Exercise Price are delivered to the
Company in accordance with the terms of this Warrant,
notwithstanding that the stock transfer books of the Company may
then be closed or certificates representing such Shares may not be
actually delivered on such date. The Company will at all times
reserve and keep available, out of its authorized but unissued
Common Stock, solely for the purpose of providing for the exercise
of this Warrant, the aggregate number of shares of Common Stock
then issuable upon exercise of this Warrant at any time. The
Company will (A) procure, at its sole expense, the listing of the
Shares issuable upon exercise of this Warrant at any time, subject
to issuance or notice of issuance, on all principal stock exchanges
on which the Common Stock is then listed or traded and (B) maintain
such listings of such Shares at all times after issuance. The
Company will use reasonable best efforts to ensure that the Shares
may be issued without violation of any applicable law or regulation
or of any requirement of any securities exchange on which the
Shares are listed or traded.
5. No
Fractional Shares or Scrip . No fractional Shares or scrip
representing fractional Shares shall be issued upon any exercise of
this Warrant. In lieu of any fractional Share to which the
Warrantholder would otherwise be entitled, the Warrantholder shall
be entitled to receive a cash payment equal to the Market Price of
the Common Stock on the last trading day preceding the date of
exercise less the pro-rated Exercise Price for such fractional
share.
6. No Rights
as Stockholders; Transfer Books . This Warrant does not entitle
the Warrantholder to any voting rights or other rights as a
stockholder of the Company prior to the date of exercise hereof.
The Company will at no time close its transfer books against
transfer of this Warrant in any manner which interferes with the
timely exercise of this Warrant.
7. Charges,
Taxes and Expenses . Issuance of certificates for Shares to the
Warrantholder upon the ex
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