EXHIBIT 4.4
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On October 28, 2002, the Board of Directors of NORTH BAY BANCORP
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, no par value (the "Common
Shares"), of the Company. The dividend is payable on November 15, 2002 (the
"Record Date") to the shareholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one one-hundredth of a share
(a "Unit") of Series A Preferred Stock, no par value (the Preferred "Stock") of
the Company, at a price of $90.00 per Unit Share (the "Purchase 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 Registrar and
Transfer Company as Rights Agent (the "Rights Agent").
Until the earliest to occur of (a) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership or record ownership of 10% or more of the outstanding Common Shares;
(b) 10 days following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which would result in
the beneficial ownership or record ownership by a person or group of 10% or more
of such outstanding Common Shares; or (c) the date a person or group of
affiliated or associated persons is or becomes the beneficial or record owner of
10% or more of the outstanding Common Shares and (i) the actions such person
proposes to take are likely to have a material adverse impact on the business or
prospects of the Company; (ii) such person intends to cause the Company to
repurchase the Common Shares owned by such person; (iii) such person exercises
or attempts to exercise a controlling influence over the Company; or (iv) such
person transfers all or a portion of such Common Shares in a manner that results
in a person owning 9.9% or more of the Common Shares (an "Adverse Person") (the
earliest of such dates being called the "Distribution Date"), the Rights will be
evidenced, with respect to any of the Common Share certificates outstanding as
of the Record Date, by such Common Share certificate with a copy of this Summary
of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date, upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares, outstanding as of the Record Date, even without such notation or
a copy of this Summary of Rights being attached thereto, will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of
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record of the Common Shares as of the close of business on the Distribution Date
and such separate Right Certificates alone will evidence the Rights.
Because of the nature of the dividend, liquidation and voting
rights, the value of each Unit of Preferred Stock purchasable upon exercise of
the Rights should approximate the value of one Common Share.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on October 28, 2012 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed by
the Company, in each case, as described below.
The Purchase Price payable, and the number of Units 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, combination or reclassification of, the
Preferred Stock, (ii) upon the grant to holders of the Units of Preferred Stock
of certain rights or warrants to subscribe for or purchase Preferred Stock at a
price, or securities convertible into Preferred Stock with a conversion price,
less than the then current market price of the Preferred Stock or (iii) upon the
distribution to holders of the Units of Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends paid out of
earnings or retained earnings or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power are sold, each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction will have a market value of two times the exercise
price of the Right. In the event that any Person becomes an Acquiring Person or
an Adverse Person, each holder of a Right, other than Rights beneficially owned
by the Acquiring Person or Adverse Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of Units of
Preferred Stock having a market value of two times the exercise price of the
Right, but in no event will the purchase price per share be less than the par
value of the Preferred Stock.
At any time after the date an Acquiring Person obtains 10% or more
of the Company's Common Shares and prior to the acquisition by the Acquiring
Person of 50% of the outstanding Common Shares, the Company's Board of Directors
may exchange the Rights (other than Rights owned by the Acquiring Person or its
affiliates), in whole or in part, for Common Shares at an exchange ratio of one
Common Share per Right (subject to adjustment for stock splits, stock dividends
and or similar transactions which occur after the date of the Rights Agreement).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Units of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth) will be issued and
in lieu thereof, an adjustment in cash will be made based on the market price of
the Units of Preferred Stock on the last trading day prior to the date of
exercise.
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At any time prior to the date a Person becomes an Acquiring Person
or an Adverse Person, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.001 per Right (the "Redemption
Price"). Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights, including an
amendment to extend the Final Expiration Date and, provided there is no
Acquiring Person or Adverse Person, to extend the period during which the Rights
may be redeemed, except that from and after such time as any person becomes an
Acquiring Person or an Adverse Person no such amendment may adversely affect the
interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the, Company's Board of Directors, except pursuant to
an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors because the Rights may be redeemed by the
Company at the Redemption Price prior to the occurrence of a Distribution Date.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated October __, 2002. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
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