SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: May 1, 1997
ARROW FINANCIAL CORPORATION
A New York Corporation
0-12507 22-2448962
Commission File Number I.R.S. Employer
Identification No.
250 Glen Street
GLENS FALLS, NEW YORK 12801
Registrant's telephone number: (518) 745-1000
Item 5. Other Events.
On April 30, 1997, the Board of Directors of Arrow
Financial Corporation, a New York corporation (the
"Company"), declared a dividend payable May 12, 1997 of
one right (a "Right") for each outstanding share of common
stock, par value $1.00 per share ("Common Stock"), of the
Company held of record at the close of business on May 12,
1997 (the "Record Time"), or issued thereafter and prior to
the Separation Time (as hereinafter defined). The Rights
will be issued pursuant to a Shareholder Protection Rights
Agreement, dated as of May 1, 1997 (the "Rights
Agreement"), between the Company and Glens Falls
National Bank and Trust Company, a national banking
organization, as Rights Agent (the "Rights Agent"). Each
Right, when exercisable, entitles its registered holder to
purchase from the Company one one-hundredth of a share
of a new series of non voting preferred stock, designated as
Series I Junior Participating Preferred Stock (the "Preferred
Stock"), at a purchase price of $75.00 (the "Exercise
Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Glens Falls
National Bank and Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and
no separate Rights Certificates will be distributed. The
Rights will separate from the Common Stock upon the
earlier to occur of the following ("Separation Time"): (i) the
day that a public announcement is made that a person or
group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding
shares of Common Stock, or (ii) the tenth day following the
commencement of a tender offer or exchange offer that
would result in a person or a group becoming the beneficial
owners of 20% or more of such outstanding shares of
Common Stock. Until the Separation Time, (i) the Rights
will be evidenced, with respect to any of the Company's
Common Stock certificates outstanding as of and after the
Record Time (other than shares held in the Company's
treasury), by such Common Stock certificates and will be
transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after
the Record Time will contain a notation incorporating the
Rights Agreement by reference, and (iii) the surrender for
transfer of any certificates for Common Stock outstanding
as of and after the Record Time will also constitute the
transfer of the Rights associated with the Common Stock
represented by such certificates.
The Rights are not exercisable until the Separation
Time. The Rights will expire at the close of business on
April 30, 2007, unless earlier redeemed or exchanged by the
Company, as described below.
As soon as practicable following the Separation
Time, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the
Common Stock as of the close of business at the Separation
Time (except for any persons whose Rights have become
void pursuant to the Rights Agreement) and then and
thereafter such separate Rights Certificates alone will
evidence the Rights. Except as otherwise determined by the
Board of Directors, only shares of Common Stock issued
prior to the Separation Time will be issued with Rights.
The Exercise Price payable, and the number of one
one-hundredths of a share of Preferred Stock or other
securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock, or (ii)
upon the issuance or distribution to holders of Common
Stock of any other securities or assets under circumstances
where such an adjustment is appropriate in order to protect
the interests of holders of Rights generally. Upon exercise
of Rights, no fractional shares of Preferred Stock, other
than one one-hundredths of such shares, will be issued and,
in lieu thereof, an adjustment in cash will be made based on
a formula set forth in the Rights Agreement.
In the event that any person shall become an
Acquiring Person as defined in the second paragraph of this
letter (such event being referred to herein as a "Flip-in
Event"), each holder of a Right will thereafter have the right
to receive, upon exercise, in lieu of one one-hundredth of a
share of Preferred Stock, that number of shares of Common
Stock (or, in certain circumstances, property or other
securities of the Company) having a market value equal to
two times the Exercise Price of the Right.
For example, at an exercise price of $75.00 per
Right, each Right following a Flip-in Event would entitle its
holder to purchase $150.00 worth of Common Stock of the
Company (or, under certain circumstances, property or
other securities of the Company) for $75.00. Assuming that
the Common Stock had a per share value of $25.00 at the
time of a Flip-in Event, the holder of each valid Right would
be entitled to purchase six shares of Common Stock for
$75.00.
Notwithstanding the discussion in the two preceding
paragraphs, following the occurrence of any Flip-in Event,
all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by an
Acquiring Person will be null and void, including for
purposes of any subsequent Exchange (as defined below).
If, following a Stock Acquisition Date, (i) the
Company is acquired in a merger or other business
combination transaction in which the Company is not the
surviving corporation, or (ii) 50% or more of the
Company's assets or earning power is sold or transferred (in
one transaction or a series of transactions), or (iii) the
Acquiring Person increases by more than 1% its percentage
beneficial ownership of the Common Stock or any other
class of stock of the Company or engages in certain self-
dealing transactions with the Company (each such event a
"Flip-over Event"), each holder of a Right (except Rights
owned by an Acquiring Person or certain related parties)
shall thereafter have the right to receive, upon the exercise
of the Right and payment of the Exercise Price, common
stock of the surviving or purchasing company or of the
Acquiring Person (or, in certain cases, one of its affiliates)
which at the time of such transaction has a market value
equal to two times the Exercise Price.
At any time after the occurrence of a Flip-In Event,
the Company may elect to effect a full or partial exchange
(an "Exchange") of shares of its Common Stock for Rights
(other than Rights owned by an Acquiring Person which
have become void), at an initial exchange ratio of one share
of Common Stock for each Right owned, subject to
adjustment. Alternatively, the Company may elect to effect
such an Exchange using shares of its Preferred Stock
instead of Common Stock, at an initial exchange ratio of
one one-hundredth of a share of Preferred Stock for each
Right owned, subject to adjustment, or other securities of
the Company or assets having an equivalent value.
At any time prior to a Stock Acquisition Date, the
Company may elect to redeem the Rights in whole, but not
in part, at a price of $.01 per Right (payable in cash,
Common Stock or other consideration deemed appropriate
by the Board of Directors). Immediately upon the action of
the Board of Directors electing to redeem the Rights, the
Rights will terminate and the only right of the holders of
Rights will be to receive the $.01 redemption price.
The Preferred Stock purchasable upon exercise of
the Rights or issuable upon an Exchange will be
nonredeemable and junior to any other series of preferred
stock the Company may issue (unless otherwise provided by
law or in the terms of such stock). Each one one-hundredth
of a share of Preferred Stock will have a preferential
quarterly dividend in an amount equal to the greater of $.01
or any quarterly dividend for such quarter declared on each
share of Common Stock. In the event of liquidation, each
one one-hundredth of a share of Preferred Stock will
receive a preferred liquidation payment equal to the greater
of $1.00 or the payment made per each share of Common
Stock. Shares of Preferred Stock will have no voting rights
(other than such as are required by law), except that, in the
event the Company is in arrears on the payment of at least
three quarterly dividend payments, the holders of Preferred
Stock will have the right to elect a majority of the Board of
Directors until all accrued but unpaid dividends are paid.
The rights of the Preferred Stock are protected by
customary anti-dilution provisions. Fractions of shares of
Preferred Stock in integral multiples of one one-hundredth
of a share will be issuable; however, the Company may elect
to distribute depository receipts in lieu of such fractions of
shares. In lieu of fractional shares of Preferred Stock other
than integral multiples of one one-hundredth of a share, an
adjustment in cash will be made based on one hundred times
the market price of the Common Stock on the last trading
date prior to the date of exercise.
Until a Right is exercised or exchanged, the holder
thereof, as such, will have no rights as a shareholder of the
Company, including, without limitation, the right to receive
dividends.
While the distribution of the Rights will not be
taxable to shareholders or to the Company, shareholders
may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for
Common Stock (or other consideration) of the Company or
for common stock of an acquiring company as set forth
above, or are exchanged as provided above.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the
Rights Agreement may be amended by the Board of
Directors of the Company prior to the Separation Time.
After the Separation Time, the provisions of the Rights
Agreement may be amended by the Board in order to cure
any ambiguity or to make changes which do not adversely
affect the interests of holders of Rights generally.
The Rights will not prevent a takeover of the
Company. The Rights, however, may have certain anti-
takeover effects. The Rights may cause substantial dilution
to a person or group that acquires 20% or more of the
Common Stock unless the Rights are first redeemed by the
Board of Directors of the Company. Nevertheless, the
Rights should not interfere with a transaction that is in the
best interests of the Company and its shareholders prior to
the Flip-in date, because the Rights can be redeemed before
the consummation of such transaction.
As of May 15, 1997 there were 5,590,875 shares of
Common Stock issued and outstanding. As long as the
Rights are attached to the Common Stock, the Company
will issue one Right with each new share of Common Stock
so that all such shares will have Rights attached.
The Rights Agreement (which includes as Exhibit A
the forms of Rights Certificate and Election to Exercise) is
attached hereto as an exhibit and is incorporated herein by
reference. The foregoing description of the Rights is
qualified in its entirety by reference to the Rights Agreement
and such exhibits thereto.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements - not applicable
(b) Pro Forma Financial Information - not
applicable
(c) Exhibits. The following exhibits are filed
with this report:
Exhibit No. Document
The following exhibit is incorporated by reference herein:
EX-4 Form of Shareholder
Protection Rights Agreement,
dated as of May 1, 1997,
between Arrow Financial
Corporation and Glens Falls
National Bank and Trust
Company, Rights Agent,
which includes as Exhibit A
thereto the Form of Preferred
Stock Rights Certificate,
incorporated by reference
herein from the Registrant's
Form 8-A filed May 16, 1997
and amended on May 19,
1997.
The following exhibit is submitted herewith:
EX-99 Press Release, dated May 13,
1997, issued by the
Registrant.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: May 20, 1997
ARROW FINANCIAL CORPORATION
By: /s/Thomas L. Hoy
Thomas L. Hoy,
President and Chief Executive Officer
EXHIBIT INDEX
Exhibit
Number Description
The following exhibit is incorporated by reference herein:
EX-4 Form of Shareholder Protection Rights Agreement, dated
as of May 1, 1997, between Arrow Financial Corporation
and Glens Falls National Bank and Trust Company,
Rights Agent, which includes as Exhibit A thereto the
Form of Preferred Stock Rights Certificate, incorporated
by reference herein from the Registrant's Form 8-A filed
May 16, 1997 and amended on May 19, 1997.
The following exhibit is submitted herewith:
EX-99 Press Release, dated May 13, 1997, issued by the
Registrant.