FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D.C. 20429
----------
FORM F-10
REGISTRATION FOR ADDITIONAL CLASS OF SECURITIES
OF A BANK UNDER SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------
LAWRENCE SAVINGS BANK
(EXACT NAME OF BANK AS SPECIFIED IN ITS CHARTER)
30 MASSACHUSETTS AVENUE
NORTH ANDOVER. MA 01845
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
----------
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NONE
TITLE OF EACH CLASS OF EQUITY SECURITIES BE REGISTERED UNDER SECTION 12(g) OF
THE ACT:
PREFERRED STOCK PURCHASE RIGHTS
ITEM 1. STOCK TO BE REGISTERED.
Not Applicable.
ITEM 2. DEBT SECURITIES TO BE REGISTERED.
Not Applicable.
ITEM 3. OTHER SECURITIES TO BE REGISTERED.
On December 19, 1996, the Board of Directors (the "Board") of Lawrence
Savings Bank (the "Company") declared a dividend distribution of one preferred
stock purchase right (one "Right") for each outstanding share of common stock,
par value $.10 per share, of the Company (the "Common Stock") to holders of
record of the Common Stock at the close of business on December 29, 1996 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company a unit (a "Unit") consisting of one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $.10 per share, of the Company
(the "Preferred Stock") or, in certain circumstances, to receive cash, property,
Common Stock or other securities of the Company, at a purchase price of $40 per
Unit, subject to adjustment (the "Purchase Price"). The full description and
terms of the Rights are set forth in the Rights Agreement (the "Rights
Agreement"), dated as of December 19, 1996, between the Company and State Street
Bank and Trust Company, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
upon the earlier of (i) 10 business days (subject to extension by the Board)
following a public announcement by the Company that a person or group of
affiliated or associated persons, other than an Exempt Person (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial ownership of
more than 10% of the outstanding shares of Common Stock (the date of such public
announcement being the "Stock Acquisition Date") or (ii) 10 business days
(subject to extension by the Board) following the commencement of a tender offer
or exchange offer that would result in a person or group, other than an Exempt
Person beneficially owning more than 10% of such outstanding shares of Common
Stock (the earlier of (i) and (ii) being the "Distribution Date"). Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued subsequent to the Record
Date will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for
2
outstanding Common Stock will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. Pursuant to
the Rights Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon the exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock will be issued. The term "Exempt Person" includes, among others, the
Company, any subsidiary of the Company and, in certain limited circumstances,
institutional investors.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 19, 2006 unless earlier redeemed,
exchanged, extended or terminated by the Company as described below. At no time
will the Rights have any voting power.
As soon as practicable after the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and thereafter, the Rights will
trade separately and the Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event (a "Section 11(a)(ii) Event") that any person or group
becomes an Acquiring Person (unless the event causing such person or group to
become an Acquiring Person is a tender or exchange offer for all outstanding
shares of the Company, at a price determined by a majority of the outside
directors of the Company who are not representatives, nominees, affiliates or
associates of an Acquiring Person to be fair and otherwise in the best interests
of the Company and its stockholders (a "Fair Offer")), each holder of a Right
will thereafter have the right to receive, upon exercise thereof, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company), having a Current Market Price (as defined in the Rights Agreement)
equal to two times the Purchase Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any Section 11(a)(ii) Event, all Rights
that are, or (under certain circumstances specified in the Rights Agreement)
were, beneficially owned by specified Acquiring Persons (or by certain related
persons) will be null and void. However, Rights are not exercisable following
the occurrence of any Section 11(a)(ii) Event until such time as the Rights are
no longer redeemable by the Company as set forth below.
For example, at an exercise price of $40 per Right, each Right not
owned by a specified Acquiring Person (or by certain related persons) following
a Section 11(a)(ii) Event would entitle its holder to purchase $80 worth of
Common Stock (or other consideration, as noted above) for $40. Assuming that the
Common
3
Stock had a Current Market Price of $8 at such time, the holder of each valid
Right would be entitled to purchase 10 shares of Common Stock for $40.
In the event (a "Section 13 Event") that, at any time on or after the
Stock Acquisition Date, (i) the Company shall take part in a merger or other
business combination transaction (other than certain mergers that follow a Fair
Offer) in which the Company is not the surviving entity or in which the Common
Stock is changed into or exchanged for other securities, cash or any other
property of any other person or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
which previously have been voided, as set forth above) shall thereafter have the
right to receive, upon payment of the exercise price, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right. Section 11(a)(ii) Events and Section 13 Events are collectively referred
to as "Triggering Events."
The Purchase Price payable and the number of Units of Preferred Stock
(or the amount of cash, property or other securities) 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) in the event that holders of the
Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or convertible securities at less than the Current Market Price
of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company may, but is not required to, issue fractional shares of
Preferred Stock upon the exercise of any Right or Rights. In lieu thereof, an
adjustment in cash will be made based on the Current Market Price of the
Preferred Stock.
At any time until 10 business days following the Stock Acquisition
Date (or such later date as the Board may determine before the Rights become
nonredeemable), the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (payable, at the option of the Company, in cash,
Common Stock or such other consideration deemed appropriate by the Board).
Immediately upon the effectiveness of any action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the redemption price of $.01 per Right.
4
At any time after any person becomes an Acquiring Person and prior to
the acquisition by such person or certain related persons of 50% or more of the
outstanding shares of Common Stock, the Board may exchange all or a part of the
then outstanding and exercisable Rights (other than Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by such Acquiring Person or by certain related persons, which Rights shall
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including without limitation the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or cash, property or other securities) of the
Company or for common stock of the acquiring company as set forth above.
The Company may amend the terms of the Rights to increase the Purchase
Price or extend the expiration date of the Rights at any time prior to the
earlier of (1) the Stock Acquisition Date or (2) the date that any person or
group commences a tender or exchange offer if, upon its consummation, such
person or group would become an Acquiring Person. Other terms of the Rights,
except for certain principal economic terms, may be amended by the Company (a)
in any manner prior to the time the Rights separate and are distributed and (b)
in order to (i) cure any ambiguity, (ii) make changes which do not adversely
affect interests of holders of Rights (other than those of an Acquiring Person
and certain related persons) or (iii) shorten or lengthen any time period under
the Rights Agreement after the time the Rights separate and are distributed;
provided, however, that no extension or amendment to adjust the time period for
redemption is permitted after the Rights become nonredeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in certain circumstances. Accordingly, the existence of the Rights may deter
certain acquirors from making takeover proposals or tender offers. However, the
Rights are not intended to prevent a takeover, but rather are designed to
enhance the ability of the Board to negotiate with a potential acquiror on
behalf of all of the stockholders.
The foregoing description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
between the Company and the Rights Agent, which includes as Exhibit B the Form
5
of Rights Certificate and is attached hereto as Exhibit 1 and incorporated
herein by reference.
ITEM 4. EXHIBITS.
1. Rights Agreement, dated as of December 19, 1996, between Lawrence
Savings Bank and State Street Bank and Trust Company, as Rights Agent
(including as Exhibit B thereto the Form of Rights Certificate).
6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the bank has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized.
LAWRENCE SAVINGS BANK
By /s/ Paul A. Miller
-------------------------------------
Name: Paul A. Miller
Title: President
Date: December 20, 1996
7
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 19, 1996, between Lawrence
Savings Bank, a corporation organized under Section 34C of Chapter 168 of the
Massachusetts General Laws (the "Company"), and State Street Bank and Trust
Company, a Massachusetts trust company (the "Rights Agent").
WITNESSETH
WHEREAS, on December 19, 1996 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
distribution of one Right (as hereinafter defined) for each share of Common
Stock (as hereinafter defined) of the Company outstanding at 5:00 pm, Boston
time, on December 29, 1996 (the "Record Date") and authorized the issuance of
one Right (as such number may hereinafter be adjusted pursuant to the provisions
of Section 11(i) hereof) for each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter defined) and under
certain circumstances thereafter, each Right initially representing the right to
purchase one one-hundredth of a share of Preferred Stock (as hereinafter
defined) upon the terms and subject to the conditions hereinafter set forth
(collectively, the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates and Associates (as
hereinafter defined) of such Person, shall be the Beneficial Owner (as
hereinafter defined) of more than 10% of the shares of Common Stock of the
Company then outstanding, but shall not include an Exempt Person (as hereinafter
defined).
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Section 335.102 of the Rules and Regulations
of the FDIC (as hereinafter defined).
(e) "Agreement" means this Rights Agreement as originally
executed or as it may from time to time be supplemented, amended, renewed or
extended pursuant to the applicable provisions hereof.
(f) 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, owns or 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 or
on behalf of 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, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering Event which Rights
are Original Rights (as hereinafter defined) or securities issued pursuant
to Section 11(i) hereof in connection with an adjustment made with respect
to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or
2
dispose of or has "beneficial ownership" of (as determined pursuant to
Section 335.403 of the Rules and Regulations of the FDIC 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 (whether or not in writing) to vote
such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the Rules and Regulations of the FDIC and (B) is
not also then reportable by such Person on Form F-11 under the Rules and
Regulations of the FDIC (or any comparable or successor statement); 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 clause (A) of the proviso to subparagraph (ii) of
this paragraph (f)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (f) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of, or to be deemed to "beneficially own," any securities acquired or which that
Person has the right to acquire through such Person's participation in good
faith in a firm commitment underwriting until the expiration of 40 days after
the date of such acquisition.
(g) "Board" means the Board of Directors of the Company.
3
(h) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00 P.M.,
Boston time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 P.M., Boston time, on the next succeeding
Business Day.
(j) "Common Stock" when used in reference to the Company shall
mean the Common Stock, par value $.10 per share, of the Company or any other
shares of capital stock of the Company into which such stock shall be
reclassified or changed. "Common Stock" when used with reference to any Person
other than the Company organized in corporate form shall mean (i) the capital
stock or other equity securities or interest of such Person with the greatest
voting power, (ii) the equity securities or other equity interest having power
to control or direct the management of such Person or (iii) if such Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person and which have issued any such outstanding capital
stock, equity securities or equity interest. "Common Stock" when used with
reference to any Person not organized in corporate form shall mean units of
beneficial interest which (x) shall represent the right to participate generally
in the profits and losses of such Person {including, without limitation, any
flow-through tax benefits resulting from an ownership interest in such Person)
and (y) shall be entitled to exercise the greatest voting power of such Person
or, in the case of a limited partnership, shall have the power to remove the
general partner or partners.
(k) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a) (iii) hereof.
(l) "Company" shall mean the Person named as the "Company" in the
first paragraph of this Agreement until a successor corporation or entity shall
have become such, or until a Principal Party (as hereinafter defined) shall
assume, and thereafter be liable for, all obligations and duties of the Company
hereunder pursuant to the
4
applicable provisions of this Agreement, and thereafter, "Company" shall mean
such successor or Principal Party, respectively.
(m) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(n) "Current Value" shall have the meaning set forth in Section
11(a) (iii) hereof.
(o) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(p) "Equivalent Preferred Stock" shall have the meaning set forth
in Section 11(b) hereof.
(q) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(r) "Exchange Ratio" shall have the meaning set forth in Section
29(a) hereof.
(s) "Exempt Person" shall mean: (i) the Company; (ii) any
Subsidiary of the Company; (iii) any employee benefit or employee stock plan of
the Company or of any Subsidiary of the Company; (iv) any Person or entity
organized, appointed, established or holding Common Stock of the Company by, for
or pursuant to the terms of any such plan; (v) any Person who becomes an
Acquiring Person solely as a result of a reduction in the number of shares of
Common Stock of the Company outstanding due to the repurchase of shares of such
Common Stock by the Company, unless and until any such Person referred to in
this clause (v) shall purchase or otherwise become the Beneficial Owner of
additional shares of Common Stock of the Company constituting one percent or
more of the then outstanding shares of Common Stock of the Company; or (vi) any
Person who (A) is the Beneficial Owner of less then 15% of the Common Stock of
the Company then outstanding and has reported such ownership on Form F-11A under
the Rules and Regulations of the FDIC (or any comparable or successor report) or
on Form F-11 under the Rules and Regulations of the FDIC (or any comparable or
successor report) which Form F-11 does not state any intention to or reserve the
right to control or influence the management or policies of the Company or
engage in any of the actions specified in Item 4 of such Schedule
5
(other than the disposition of Common Stock of the Company), (B) within 10
Business Days of being requested by the Company to advise the Company regarding
its intentions, certifies to the Company that such Person acquired such shares
of Common Stock of the Company in excess of 10% inadvertently or without
knowledge of the terms of the Rights, (C) the Company determines acquired of the
outstanding Common Stock of the Company in excess of 10% inadvertently or
without knowledge of the terms of the Rights and (D) together with its
Affiliates and Associates, thereafter does not acquire any additional shares of
Common Stock of the Company while the Beneficial Owner of more than 10% of the
shares of Common Stock of the Company then outstanding.
(t) "Expiration Date" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, (iii) the time at which the Rights expire pursuant to Section
13(d) hereof and (iv) the time at which all Rights are exchanged as provided in
Section 29 hereof.
(u) "FDIC" shall mean the Federal Deposit Insurance Corporation.
(v) "Final Expiration Date" shall mean the Close of Business on
December 19, 2006.
(w) "Original Rights" shall mean Rights acquired by such Person
or any of such Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Section 22 hereof.
(x) "Outside Directors" shall mean members of the Board who are
not officers of the Company or any of its Subsidiaries and who are not Acquiring
Persons or representatives, nominees, Affiliates or Associates of Acquiring
Persons.
(y) "Person" shall mean any individual, firm, corporation,
partnership, trust or other entity and includes without limitation an
unincorporated group of persons who, by formal or informal agreement, whether or
not in writing, have embarked on a common purpose or act.
6
(z) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.10 per share, of the Company, having
the rights, powers and preferences set forth in Exhibit A hereto.
(aa) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(bb) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(cc) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(dd) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(ee) "Rights" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(ff) "Rights Agent" shall mean the Person named as the "Rights
Agent" in the first paragraph of this Agreement until a successor Rights Agent
shall have become such pursuant to the applicable provisions hereof, and
thereafter, "Rights Agent" shall mean such successor Rights Agent. If at any
time there is more than one Person appointed by the Company as Rights Agent
pursuant to the applicable provisions of this Agreement, "Rights Agent" shall
mean and include each such Person.
(gg) "Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(hh) "Rights Dividend Declaration Date" shall have the meaning
set forth in the WHEREAS clause at the beginning of this Agreement.
(ii) "Section 11(a)(ii) Event" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(jj) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
7
(kk) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(ll) "Spread" shall have the meaning set forth in Section 11(a)
(iii) hereof.
(mm) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company that an Acquiring Person has become such.
(nn) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership interest
having ordinary voting power sufficient, in the absence of contingencies, to
elect a majority of the board of directors or other persons performing similar
functions of such corporation or other entity are at the time directly or
indirectly beneficially owned, or otherwise controlled, by such Person and any
Affiliate or Associate of such Person.
(oo) "Substitution Period" shall have the meaning set forth in
Section 11(a) (iii) hereof.
(pp) "Trading Day" shall have the meaning set forth in Section
11(d)(ii) hereof.
(qq) "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 the holders of the Common Stock of the Company) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable and shall give prompt notice of such
appointment to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such Co-Rights Agent. In the event that the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agent and any Co-Rights
Agents shall be as the Company shall determine, and any actions which may be
taken by the Rights Agent
8
pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
Business Day (or such specified or unspecified date as may be determined by the
Board before the occurrence of a Distribution Date) after the Stock Acquisition
Date (or, if the tenth Business Day after the Stock Acquisition Date occurs
before the Record Date, the Close of Business on the Record Date) or (ii) the
Close of Business on the tenth Business Day (or such specified or unspecified
later date as may be determined by the Board before the occurrence of a
Distribution Date) after the date that a tender or exchange offer by any Person
(other than an Exempt Person) is first published or sent or given within the
meaning of Section 335.502 of the Rules and Regulations of the FDIC, if upon
consummation thereof, such Person would be the Beneficial Owner of more than 10%
of the Common Stock of the Company then outstanding (the earlier of (i) and (ii)
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraphs (b) and (c) of this Section
3) by the certificates for the Common Stock of the Company registered in the
names of the holders of the Common Stock of the Company either with the Summary
of Rights attached or bearing the legend set forth in Section 3(c) hereof (which
certificates for Common Stock of the Company shall be deemed also to be
certificates for Rights) and not by separate certificates and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock of the Company (including a transfer to the Company). As
soon as practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock of the Company 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
rights certificates substantially in the form attached hereto as Exhibit B (the
"Rights Certificates") evidencing one Right for each share of Common Stock of
the Company so held, subject to adjustment as provided herein. In the event that
an adjustment in the number of Rights per share of Common Stock of the Company
has been made pursuant to Section 11(i) hereof, at the time of
9
distribution of the Rights Certificates, the Company shall not be required to
issue Rights Certificates evidencing fractional Rights, but may, in lieu
thereof, 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 promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, substantially in the form
attached hereto as Exhibit C, by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock of the Company as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for the Common Stock of the Company
outstanding as of the Record Date, until the earlier of the Distribution Date or
the Expiration Date, the Rights will be evidenced by such certificates for the
Common Stock of the Company with or without a copy of the Summary of Rights
attached, and the registered holders of the Common Stock of the Company shall
also be the registered holders of the associated Rights. Until the earlier of
the Distribution Date or the Expiration Date, the transfer of any certificates
representing shares of Common Stock of the Company in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock of the Company.
(c) Rights shall be issued in respect of all shares of Common
Stock of the Company which are issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date, and to the extent provided in Section
22 hereof, in respect of shares of Common Stock of the Company issued after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock of the Company shall also be deemed to be
certificates for Rights, and shall, as promptly as practicable following the
Record Date, bear the following legend:
10
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Lawrence
Savings Bank (the "Company") and State Street Bank and Trust Company (the
"Rights Agent"), dated as of December 19, 1996, as the same may be amended,
restated, renewed or extended 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 beneficially owned
(as such term is defined in the Rights Agreement) 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. The Rights shall not be exercisable, and shall be void so long as
held, by a holder in any jurisdiction where the requisite qualification to
the issuance to such holder, or the exercise by such holder, of the Rights
in such jurisdiction shall not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights associated
with the Common Stock of the Company represented by such certificates shall be
evidenced by such certificates alone, and registered holders of Common Stock of
the Company 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 of the Company represented by such
certificates.
11
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and the form of assignment and the certificates contained therein to be
printed on the reverse thereof) shall each be substantially in the form set
forth in Exhibit B 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
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 and on their face shall entitle the holders thereof to purchase such number
of one one-hundredths of a share of Preferred Stock as shall be set forth
therein at the exercise price set forth therein (such exercise price per one
one-hundredth of a share, as adjusted from time to time hereunder, the "Purchase
Price"), but the amount and type of securities purchasable upon the 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 or 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 (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board 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
12
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 contain (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.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed under seal on
behalf of the Company by its Chairman of the Board, its President or any Vice
President and by the Treasurer or any Assistant Treasurer, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
an authorized signatory of 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 an authorized signatory of the Rights
Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be counter signed by an authorized signatory of 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.
(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
13
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, the number of Rights evidenced on
its face by each 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 Rights Certificates may be transferred, split up, combined
or exchanged for another Rights Certificate or Rights Certificates, entitling
the registered holder to purchase a like number of one one-hundredths of a share
of Preferred Stock (or, following the occurrence of a Triggering Event, Common
Stock, other securities, cash or other assets of the Company, as the case may
be) as the Rights Certificate or Rights Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing delivered
to the Rights Agent and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged with the forms
of assignment and certificate contained therein appropriately executed 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 or exchange of any such surrendered
Rights Certificate or Rights Certificates 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 or Rights Certificates 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
14
or Rights Certificates, as the case may be, as so requested. The Company may
require payment 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 valid Rights Certificate and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to the Company, 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) 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 in Section 9(c), Section 11(a) (iii), Section 23(a) and
Section 29 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 contained therein 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 one one-hundredths of a share of Preferred Stock (or, following the
occurrence of a Triggering Event, Common Stock, other securities, cash or other
assets of the Company, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earliest of (i) the Final Expiration
Date, (ii) the time at which all outstanding Rights are redeemed as provided in
Section 23 hereof, (iii) the time at which the Rights expire pursuant to Section
13(d) hereof and (iv) the time at which such Rights are exchanged as provided in
Section 29 hereof.
15
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $40 and
shall be subject to adjustment from time to time as provided in Sections 11 and
13(a) 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 contained
therein duly executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price, as such amount may be reduced pursuant to
Section 11(a)(iii) hereof, per one one-hundredth of a share of Preferred Stock
(or following a Triggering Event, for Common Stock, other securities, cash or
other assets of the Company, 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 Sections 7(f) and 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one one-hundredths of a share of Preferred
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 Preferred Stock issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one one-hundredths of a
share of Preferred Stock as are to be purchased (in which case certificates for
the shares of Preferred 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
pursuant to Section 11(a)(iii) hereof)
16
shall be made in cash or by certified check, cashier's check or bank draft
payable to the order of the Company. In the event that the Company is obligated
to issue other securities (including Common Stock) of the Company, pay cash or
distribute other property pursuant to Section 11(a)(iii) hereof, the Company
will make all arrangements necessary so that such other securities, cash or
other property are available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of Rights, a number of Rights be
exercised so that only whole shares of Preferred Stock would be issued.
(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, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person which the Board in its sole discretion determines is or was
involved in or caused or facilitated, directly or indirectly (including through
any change in the Board), such Section 11(a)(ii) Event, (ii) a transferee of any
such Acquiring. Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of any
such Acquiring Person (or of any such Associate or 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 such 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 (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a
primary
17
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 the Company and the Rights Agent shall have no liability to any holder
of Rights Certificates or other Person as a result of the Company's 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 of any Rights Certificates upon the
occurrence of any purported assignment or 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 assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
assignment or 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 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.
18
Section 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock of the Company or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock, other securities, cash or other assets of the Company, as the case may
be) that, as provided in this Agreement (including Section 11(a)(iii) hereof),
will be sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock, other securities, cash or other
assets of the Company, as the case may be) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use all reasonable efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use all reasonable efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, or
as soon as required by law following the Distribution Date, as the case may be,
a registration statement under the Act on an appropriate form with respect to
the securities purchasable upon exercise of the Rights, (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 Expiration Date. 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 and other jurisdictions in connection with
the exercisability of the Rights. The Company may, acting by
19
resolution of its Board, temporarily suspend, for a period of time not to exceed
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 (A) prepare and file
such registration statement and permit it to become effective and (B) gain
approval for the issuance of Preferred Stock from the Commissioner of Banks of
the Commonwealth of Massachusetts, if required. 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 and a public
announcement at such time as the suspension is no longer in effect. In addition,
if the Company shall determine that a registration statement is required in
other circumstances following the Distribution Date, the Company may similarly
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the requisite qualification in such jurisdiction shall
not have been obtained, the exercise thereof shall not otherwise be permitted
under applicable law or a registration statement shall not have been declared
effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, all shares
of Common Stock or other securities of the Company, as the case may be)
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, except as set
forth in this Section 9(e) and Section 6(a) hereof, 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 a number of one one-hundredths of a share of Preferred
Stock (or shares of Common Stock or other securities of the Company, as the case
may be) upon the exercise of Rights. The Company shall not, however, be
20
required 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 a number of one one-hundredths of a share of Preferred Stock (or
shares of Common Stock or other securities of the Company, 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, nor shall the Company
be required to issue or deliver any certificates for a number of one
one-hundredths of a share of Preferred Stock (or Common Stock or other
securities of the Company, 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. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
shares of Common Stock or other securities of the Company, 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 fractional shares of Preferred Stock (or
shares of Common Stock or other securities of the Company, as the case may be)
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 Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
transfer books for the Preferred Stock (or Common Stock or other securities of
the Company, as the case may be) 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
transfer books for the Preferred Stock (or Common Stock or other securities of
the Company, as the case may be) are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company (or the Principal Party)
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or
21
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company (or the
Principal Party), except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares, or
fractions thereof, purchasable upon the exercise of 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 Preferred Stock payable in
shares of Preferred Stock, (B) subdivide or split the outstanding Preferred
Stock, (C) combine or consolidate the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
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 of the
effective date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of Preferred Stock (or
other 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 Preferred Stock
(or other capital stock, as the case may be) which, if such Right had been
exercised immediately prior to such date, whether or not such Right was
then exercisable, and at a time when the transfer books for the Preferred
Stock (or other capital stock, as the case may be) of the Company were
open, he would have owned upon such exercise and been entitled to receive
by virtue of such
22
dividend, subdivision, split, combination, consolidation or
reclassification. 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 "Section 11(a)(ii) Event") that any Person
(other than an Exempt Person) alone or together with its Affiliates or
Associates, shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such Person to become
an Acquiring Person is a Section 13(a) Event, or is an acquisition of
shares of Common Stock of the Company pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock of the Company at
a price and on terms determined by at least a majority of the Outside
Directors, after receiving advice from one or more investment banking
firms, to be (a) at a price that is fair to stockholders (taking into
account all factors which such Outside Directors deem relevant including,
without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize
maximum value) and (b) otherwise in the best interests of the Company and
its stockholders, then promptly after the date of the occurrence of such a
Section 11(a)(ii) Event, proper provision shall be made 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 a number of one one-hundredths of a share of Preferred Stock, 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 one one-hundredths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first
23
occurrence of a Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and (y) 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 50% of the Current
Market Price per share of Common Stock of the Company on the date of such
first occurrence (such number of shares being referred to as the
"Adjustment Shares").
(iii) In lieu of issuing any shares of Common Stock of the
Company in accordance with Section 11(a)(ii) hereof, the Company, acting by
resolution of the Board, may, and in the event that the number of shares of
Common Stock of the Company which are authorized by the Company's Amended
and Restated Articles of Organization but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii) of this Section 11(a), the Company, acting
by resolution of the Board, 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 attributable to each Right
(such excess being referred to as the "Spread"), and (B) with respect to
all or a portion of each Right (subject to Section 7(e) hereof), 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) equity securities of the Company other than Common Stock
(including without limitation shares, or units of shares, of preferred
stock of the Company which the Board has deemed to have the same value as
shares of Common Stock of the Company (such shares of preferred stock being
referred to as "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing which,
when added to any shares of Common Stock of the Company issued upon such
exercise, has an aggregate value
24
equal to the Current Value, where such aggregate value has been determined
by the Board based upon the advice of a nationally recognized investment
banking firm selected by the Board; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B)
above within 30 days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) hereof, as such date may be delayed
pursuant to Section 23(a) hereof or otherwise amended pursuant to Section
26 hereof, expires (the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), then the Company 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 of the
Company (to the extent available) and then, if necessary, cash, which
shares or cash have an aggregate value equal to the Spread. If the Board
shall determine in good faith that it is likely that sufficient additional
shares of Common Stock of the Company could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder 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 need be taken pursuant to the
first 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 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
25
a public announcement stating that the exercisability of the Rights has
been temporarily suspended and 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 of the Company shall be the Current
Market Price per share of the Common Stock of the Company on the Section
11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall
be deemed to have the same value as the Common Stock of the Company on such
date.
(b) In case the Company shall at any time after the date of this
Agreement fix a record date for the issuance of rights, options or warrants to
all holders of Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within 45 calendar days after such record date) Preferred
Stock (or shares having the same rights, privileges and preferences as the
shares of Preferred Stock ("Equivalent Preferred Stock")) or securities
convertible into Preferred Stock or Equivalent Preferred Stock at a price per
share of Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security convertible into Preferred Stock or
Equivalent Preferred Stock) less than the Current Market Price per share of
Preferred Stock on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock or Equivalent Preferred Stock
which the aggregate subscription or purchase price of the total number of shares
of Preferred Stock or Equivalent Preferred Stock so to be offered (or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock or
Equivalent Preferred Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part or
all of which may be in a form
26
other than cash, the value of such consideration shall be as determined in good
faith by the Board, which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. Shares of
Preferred Stock owned by or held for the account of the Company shall not be
deemed outstanding For the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Current Market
Price per share of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board, which determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to a
share of Preferred Stock and the denominator of which shall be such Current
Market Price per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be the
Purchase Price which would have been in effect if such record date had not been
fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the
27
Current Market Price per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common
Stock for the 30 consecutive Trading Days immediately prior to such date,
and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the 10 consecutive Trading Days immediately following
such date; provided, however, that in the event that the Current Market
Price per share of the Common Stock is determined during a period following
the announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the
Rights) or (B) any subdivision, combination, consolidation, reverse stock
split or reclassification of such Common Stock, and prior to the expiration
of the requisite period of 30 Trading Days or 10 Trading Days, as set forth
above, after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination, consolidation, reverse stock
split or reclassification, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange, or
if the shares of Common Stock are not listed or traded on the New York
Stock Exchange, as reported on the principal consolidated transaction
reporting system with respect to the securities listed on the principal
national securities exchange on which the shares of Common Stock are listed
or admitted to trading, or if the shares of Common Stock are not listed or
28
admitted to trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the Nasdaq National
Market or the Nasdaq Stock Market or any other quotation system then in
use, or if on any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board. If on any such date the Common Stock is not
publicly held or not so listed, admitted to trading or quoted and no market
maker is making a market in such Common Stock, "Current Market Price" shall
mean the fair value of such shares on such date as determined in good faith
by the Board, which determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per share of Preferred Stock shall be determined in the same
manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the Current Market
Price per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or
admitted to trading or quoted in a manner described in clause (i) of this
Section 11(d), the "Current Market Price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock occurring
after the date of this Agreement) multiplied by the Current Market Price
per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or admitted to trading or
quoted, "Current Market Price" per share of the Preferred Stock shall mean
the fair value per share as determined in good
29
faith by the Board, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For
all purposes of this Agreement, the "Current Market Price" of one
one-hundredth of a share of Preferred Stock shall be equal to the Current
Market Price of one share of Preferred Stock divided by 100. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business, or if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, a Business Day.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease in the Purchase Price of at least one percent;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest one cent or to the nearest one one-hundredth of a share of Common
Stock or other share or ten-thousandth of a share of Preferred Stock, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates such
adjustments or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof (or the number of Rights)
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred
Stock contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m) hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock
30
shall apply on like terms to any such other shares; provided, however, that the
Company shall not be liable for its inability to reserve and keep available for
issuance upon exercise of the Rights pursuant to Section 11(a)(ii) hereof a
number of shares of Common Stock greater than the number then authorized by the
Company's Amended and Restated Articles of Organization but not outstanding or
reserved for any other purpose.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a share of Preferred Stock (calculated to the nearest one
ten-thousandth of a share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-hundredths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth of a Right) obtained by dividing
the Purchase Price in effect
31
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter but, if the Rights
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i) hereof, the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a share which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-hundredths of a share of Preferred Stock issuable upon exercise of
the Rights, the Company shall use all reasonable
32
efforts to take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue, fully paid
and nonassessable, such number of one one-hundredths of a share of Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one-hundredths of a share of Preferred Stock or other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such adjustments in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less
than the Current Market Price, (iii) issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this Section 11 hereafter made by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any
33
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company or any of its Subsidiaries in
one or more transactions each of which complies with Section 11 (o) hereof) if
(x) at the time of or immediately after such consolidation, merger, sale or
transfer there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger,
sale or transfer, the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Common Stock of the Company payable in shares of
Common Stock of the Company, (ii) subdivide the outstanding shares of Common
Stock of the Company in a manner not covered by clause (i) of this Section 11(p)
or (iii) combine or consolidate the outstanding shares of Common Stock of the
Company into a smaller number of shares, the number of Rights associated with
each share of Common Stock of the Company then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
34
each share of the Common Stock of the Company following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each share of Common Stock of the Company immediately prior to such event by a
fraction, the numerator of which shall be the total number of shares of Common
Stock of the Company outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of shares of Common
Stock of the Company outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11(p) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs which would require
an adjustment under Section 11(a)(ii) hereof and this Section 11(p), the
adjustments provided for in this Section 11(p) shall be in addition and prior to
any adjustment required pursuant to Section 11(a)(ii) hereof.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 and Section 13
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock of the Company, a copy of such certificate
and (c) mail a brief summary thereof to each record holder of a Rights
Certificate (or if prior to the Distribution Date, to each record holder of a
certificate representing shares of Common Stock of the Company) in accordance
with Section 25 hereof. Notwithstanding the foregoing sentence, the failure of
the Company to prepare such certificate or statement or make such filings or
mailings shall not affect the validity of, or the force or effect of, the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
35
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event (a "Section 13 Event") that, on or after the
Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate or otherwise combine with, or merge with or into, any other Person
or Persons {other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) and the Company shall not be the continuing
or surviving corporation of such consolidation, combination or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate or otherwise combine with,
or merge with or into, the Company and the Company shall be the continuing or
surviving corporation of such consolidation, combination or merger and, in
connection with such consolidation, combination or merger, all or part of the
outstanding shares of Common Stock of the Company shall be changed into or
exchanged for stock or other securities of any other Person or Persons or cash
or any other property or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole and calculated on the basis of the Company's most
recent regularly prepared financial statements) to any Person or Persons (other
than the Company or any Subsidiary of the Company in one or more transactions
each of which complies with Section 11(o) hereof); provided, however, that this
clause (z) of Section 13(a) hereof shall not apply to the pro rata distribution
by the Company of assets (including securities) of the Company or any of its
Subsidiaries to all holders of the Common Stock of the Company; then, and in
each such case (except as may be contemplated by Section 13(d) hereof), proper
provision shall be made so that: (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall, on or after the later of (A) the date of the
first occurrence of any such Section 13 Event or (B) the date of the expiration
of the period within which the Rights may be redeemed pursuant to Section 23
hereof (as the same may be amended as provided in Section 26 hereof), have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the
36
terms of this Agreement, such number of validly authorized and issued, fully
paid, nonassessable and freely tradeable shares of Common Stock of the Principal
Party, not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a) (ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying the number of
one one-hundredths of a share for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price
in effect immediately prior to such first occurrence), and (2) dividing that
product (which, following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price per share of the Common Stock of
such Principal Party on the date of consummation of such Section 13 Event; (ii)
the shares of Common Stock of such Principal Party received by each holder of a
Right upon exercise of that Right pursuant to this Section 13 shall be fully
paid and nonassessable; (iii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (iv) the term Company
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply only
to such Principal Party following the first occurrence of a Section 13 Event;
(v) such Principal Party shall take such steps (including without limitation the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; and (vi) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
37
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a) hereof, (A) the Person that
is the issuer of any securities into which shares of Common Stock of the
Company are converted, changed or exchanged in such merger, consolidation
or combination, or if there is more than one such issuer, the issuer of the
Common Stock of which has the greatest aggregate market value or (B) if no
securities are so issued, the Person that is the other party to such merger
(and survives the merger), consolidation or combination (or, if there is
more than one such Person, the Person the Common Stock of which has the
greatest aggregate market value), or if the other party to the merger does
not survive the merger, the Person that does survive the merger (including
the Company, if it survives); and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a) hereof, the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot be determined,
whichever of such Persons as is the issuer of Common Stock having the
greatest aggregate market value;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding 12 month
period registered under Section 12 of the Exchange Act or comparable federal
laws then applicable to such Person, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, Principal Party shall refer to such other Person; (2) if the Common
Stock of such Person is not and has not been so registered and such Person is a
Subsidiary,
38
directly or indirectly, of more than one Person, the Common Stocks of two or
more of which are and have been so registered, Principal Party shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
aggregate market value; and (3) if the Common Stock of such Person is not and
has not been so registered and such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such party were a Subsidiary of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized shares of its
Common Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that the
requirements of Section 13(a) and Section 13(b) hereof shall promptly be
performed in accordance with their terms and that such Section 13 Event shall
not result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Section 13(a) and
Section 13(b) hereof and further providing that, as soon as practicable after
the date of such Section 13 Event, the Principal Party will:
(i) prepare and file a registration statement under the Act
or such comparable federal laws then applicable to such Person with respect
to the Rights and the securities purchasable upon exercise of the Rights on
an appropriate form and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration
39
Date and to similarly comply with applicable state securities laws;
(ii) use its best efforts to list or obtain quotation of (or
continue the listing or quotation of) the Rights and the securities
purchasable upon exercise of the Rights on a national securities exchange
or by an automated quotation service;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
(iv) use its best efforts to obtain waivers of any rights of
first refusal or preemptive rights in respect of the shares of Common Stock
of the Principal Party subject to purchase upon exercise of outstanding
Rights.
The provisions of this Section 13 hereof shall similarly apply to successive
mergers, consolidations, combinations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a)
hereof.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 hereof shall not be applicable to a transaction described in
subparagraph (x) or (y) of Section 13(a) hereof if (i) such transaction is
consummated with a Person or Persons (or a wholly owned subsidiary of any such
Person or Persons) who acquired shares of Common Stock of the Company pursuant
to a tender offer or exchange offer for all outstanding shares of Common Stock
of the Company which complies with the exception provided for in Section
11(a)(ii) hereof, (ii) the price per share of Common Stock of the Company
offered in such transaction is not less than the price per share of Common Stock
of the Company paid to all holders of shares of Common Stock of the Company
whose shares were purchased pursuant to such tender offer or exchange offer and
(iii) the form of consideration being offered
40
to the remaining holders of shares of Common Stock of the Company pursuant to
such transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(i)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of any such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any Trading Day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange, or if the shares of Common Stock of the
Company are not listed or traded on the New York Stock Exchange, as reported on
the principal consolidated transaction reporting system with respect to the
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading, or if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq National Market or the Nasdaq
Stock Market or such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board. If on any such date no such market maker is making
a market in the
41
Rights, the fair value of the Rights on such date as determined in good faith by
the Board shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be one one-hundredth of
the closing price of a share of Preferred Stock, or if unavailable, the
appropriate alternative price (in each case as determined pursuant to Section
11(d)(i) hereof), for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of
Common Stock of the Company. In lieu of fractional shares of Common Stock of the
Company, the Company may pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one share of Common Stock of
the Company. For purposes of this Section 14 (c), the current market value of
one share of Common Stock of the Company shall be the closing price of one share
of Common Stock of the Company or, if unavailable, the appropriate alternative
price (in each case, as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of that Right
expressly waives his right to receive
42
any fractional Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent in Section 18
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock of the Company); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Stock of the
Company), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common Stock of
the Company), may, in the holder's own behalf and for the holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, the holder's right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock of
the Company;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
43
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name a Rights
Certificate {or, prior to the Distribution Date, the associated certificate for
Common Stock of the Company) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated certificate for Common
Stock of the Company made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use all
reasonable efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 24 hereof), or to
44
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
good faith in connection with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common Stock of the Company or
for other securities of the Company or upon any instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document reasonably believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stock transfer business of the Rights Agent or any
successor
45
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. If at the time such successor Rights Agent shall succeed to
the agency created by this Agreement, any of the Rights Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and if at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign, such Rights Certificates either in the name of the predecessor or
in the name of the successor Rights Agent; and in all such cases, such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) If at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
46
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of the Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, the Treasurer or
any Assistant Treasurer of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates, nor shall it be required to verify the same (except as to
its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereon); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible' for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate describing any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation
47
or warranty as to the authorization or reservation of any shares of Common Stock
of the Company or Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock of the Company or
Preferred Stock will, when so issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be answerable
or accountable for any act, default, neglect or misconduct of any such attorneys
or agents or for any loss to the Company resulting from any
48
such act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such funds
or adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 or clause 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing, mailed to the Company and to each transfer
agent of the Common Stock of the Company and Preferred Stock, by registered or
certified mail and to the holders of the Rights Certificates, if any, by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock of the Company and Preferred Stock by registered or certified mail
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
49
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. If no successor Rights Agent shall have been appointed
within 30 days from effectiveness of such removal or resignation, and no
registered holders of any Rights Certificates have applied pursuant to this
Agreement for the appointment of a new Rights Agent, the Company shall be
automatically designated as successor Rights Agent. Any successor Rights Agent
appointed by the Company or by such a court shall be (a) a corporation organized
and doing business under the laws of the United States or of any state of the
United States so long as such corporation is authorized to do business as a
banking institution in such state, is in good standing, is authorized under such
laws to exercise corporate trust powers, is subject to supervision or
examination by federal or state authority and has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $100,000,000 or (b)
an Affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder and shall execute and deliver any further assurance, conveyance,
act or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock of the
Company and the Preferred Stock and shall mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights Certificates to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares
50
or other securities or property purchasable under the Rights Certificates made
in accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock of the Company following the
Distribution Date and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of its Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if and to
the extent that the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if and to the extent that appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified date as may be determined by the Board before the
Rights cease being redeemable) following the Stock Acquisition Date (or, if the
Stock Acquisition Date shall have occurred prior to the Record Date, the Close
of Business on the tenth Business Day following the Record Date), or (ii) the
Final Expiration Date, direct the Company to, and if directed, the Company
shall, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter referred to as
the "Redemption Price"), and the Company may, at its option, pay the Redemption
Price in shares of Common Stock of the Company (based on the Current Market
Price of the Common Stock of the Company at the time of redemption), cash or
any other form of consideration deemed appropriate by the Board. Notwithstanding
anything contained
51
in this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired.
(b) Immediately upon the action of the Board directing the
Company to make the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board directing the Company
to make the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to each record holder of the Common Stock of the Company at
the address of such holder shown on the records of the Company. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular periodic cash dividend out of earnings or
retained earnings of the Company), (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or split of
outstanding shares of Preferred Stock), (iv) to effect any consolidation,
combination or merger into or with any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one transaction or a series of related
transactions, of more
52
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company or any
of its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof) or (v) to effect the liquidation, dissolution or winding
up of the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
combination, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the shares
of Preferred Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 20
days prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier.
(b) In case any Section 11(a) (ii) Event hereof shall occur,
then, in any such case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a) (ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to Common Stock
of the Company or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
53
Lawrence Savings Bank
30 Massachusetts Avenue
North Andover, MA 01845
Attention: Robert P. Perreault
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Boston EquiServe L.P.
Client Administration
Mail Stop 45-02-62
150 Royall Street
Canton, MA 02021
Attention: John Riccio
Subject to the provisions in Section 21 hereof, notices or demands authorized by
this Agreement to be given or made by the Company or the Rights Agent to the
holder of any Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock of the Company) shall
be sufficiently given or made if sent by first-class mail, insured, postage
prepaid, to each record holder of the Common Stock of the Company at the address
of such holder shown on the records of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26 hereof, the Company
and the Rights Agent shall, if the Board so directs, supplement or amend any
provision of this Agreement (including, without limitation, any extension of the
period in which the Rights may be redeemed) without the approval of any holders
of certificates representing shares of Common Stock of the Company. From and
after the Distribution Date and subject to the penultimate sentence of this
Section 26, the Company and the Rights Agent shall, if the Board so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions
54
herein, (iii) to shorten or lengthen any time period hereunder or (iv) to change
or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this sentence
(A) a time period relating to when the Rights may be redeemed or to modify the
ability (or inability) of the Board to redeem the Rights, in either case at such
time as the Rights are not then redeemable or (B) any other time periods unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, or the benefits to, the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of any such Person). Upon the delivery of a
certificate from an appropriate officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price or the number of one
one-hundredths of a share of Preferred Stock for which a Right is exercisable;
provided, however, that at any time prior to the earlier of (x) the existence of
an Acquiring Person or (y) the date that a tender or exchange offer by any
Person (other than an Exempt Person) is first published or sent or given within
the meaning of Section 335.502 of the Rules and Regulations of the FDIC if upon
consummation of thereof such Person would be the Beneficial Owner of more than
10% of the Common Stock of the Company then outstanding, the Board may amend
this Agreement to increase the Purchase Price or extend the Final Expiration
Date. Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Stock of
the Company.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
55
Section 28. Determinations and Actions by the Board, etc. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock of the Company outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Common
Stock of the Company of which any Person is the Beneficial Owner, shall be made
in accordance with the last sentence of Section 334.403(d)(1)(i) of the Rules
and Regulations of the FDIC. The Board shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement including, without limitation,
the right and power to (i) interpret the provisions of this Agreement and (ii)
make all determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the Rights or
to amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board or the Company in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board or the Outside Directors to any liability to the holders of
the Rights.
Section 29. Exchange. (a) The Board may, at its option, at any time
after any Person becomes an Acquiring Person, direct the Company to, and if so
directed, the Company shall, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provision of Section 7(e) hereof) for shares of Common Stock of
the Company at an exchange ratio of one share of Common Stock of the Company per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board shall not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person) becomes the Beneficial Owner of 50% or more
of the shares of Common Stock of the Company then outstanding.
56
(b) Immediately upon the action of the Board directing the
Company to exchange any Rights pursuant to subsection (a) of this Section 29 and
without any further action and without notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock of the Company equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shal1 not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock of the Company. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
shares of Common Stock of the Company for Rights will be affected and, in the
event of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be affected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section 7(e)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 29, the Company, at
its option, may substitute Preferred Stock (or Equivalent Preferred Stock, as
such term is defined in Section 11(b) hereof) for shares of Common Stock of the
Company exchangeable for Rights, at the initial rate of one one-hundredth of a
share of Preferred Stock (or Equivalent Preferred Stock) for each share of such
Common Stock, as appropriately adjusted to reflect adjustment in the voting
rights of the Preferred Stock pursuant to Section 3(a) of Exhibit A hereto, so
that the fraction of a share of Preferred Stock delivered in lieu of each share
of Common Stock of the Company shall have the same voting rights as one share of
Common Stock of the Company.
(d) In the event that there shall not be sufficient shares of
Common Stock of the Company issued but not outstanding or authorized but
unissued to permit
57
any exchange of Rights as contemplated in accordance with this Section 29, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock of the Company for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock of the Company or to distribute certificates which
evidence fractional shares of Common Stock of the Company. In lieu of such
fractional shares of Common Stock of the Company, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional shares of Common Stock of the Company would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of such Common Stock. For the purposes of this subsection (e), the current
market value of one whole share of Common Stock of the Company shall be the
closing price of one such share of Common Stock or, if unavailable, the
appropriate alternative price (in each case as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 29.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock of the Company) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock of the Company).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or
58
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth Business Day following the date of such determination by the Board.
Without limiting the foregoing, if any provision of this Agreement requiring
that a determination be made by the Outside Directors is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
such determination shall then be made by the Board in accordance with applicable
law and the Company's Amended and Restated Articles of Organization and By-Laws.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Massachusetts, and the law of the Commonwealth of
Massachusetts shall govern the rights and duties of the Rights Agent hereunder,
and for all purposes this Agreement shall be governed by and construed in
accordance with the laws of such Commonwealth applicable to contracts made and
to be performed entirely within such Commonwealth.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts, and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 35. Pronouns and Conjunctions. Unless otherwise indicated
herein or the context otherwise requires, the masculine pronoun shall include
the feminine and the neuter, and the singular shall include the plural. The word
"or" shall not be deemed exclusive.
59
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed under seal as of December 19, 1996.
Attest: LAWRENCE SAVINGS BANK
By /s/ Robert P. Perreault By /s/ Paul A. Miller
---------------------------------- -------------------------------------
Name: Robert P. Perreault Name: Paul A. Miller
Title: Clerk Title: President
Attest: STATE STREET BANK AND
TRUST COMPANY, as Rights Agent
By /s/ Stephen Cesso By /s/ David M. Elwood
---------------------------------- -------------------------------------
Name: Stephen Cesso Name: David M. Elwood
Title: Vice President and Title: Vice President
Associate Counsel and Senior Counsel
60
Exhibit A
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING A SERIES OF
A CLASS OF STOCK
Massachusetts General Laws, Chapter 172, Section 24
We, Paul A. Miller, President and Robert P. Perreault, Clerk, of
Lawrence Savings Bank, located at 30 Massachusetts Ave., North Andover,
Massachusetts 01845, do hereby certify that at a meeting of the Board of
Directors of the corporation held on December 19, 1996, the following vote
establishing and designating a series of a class of stock and determining the
relative rights and preferences thereof was duly adopted:
VOTED, that pursuant to the authority vested in the Board of Directors
(the "Board") of Lawrence Savings Bank (the "Corporation") and in accordance
with the provisions of the Amended and Restated Articles of Organization, the
Board hereby establishes a series of preferred stock of the Corporation and
hereby states the designation and amount thereof, and fixes the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" ("Series A
Preferred Stock") and the number of shares constituting such series shall be
200,000.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any
shares of any series of preferred stock ranking prior and superior to the shares
of Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$10.00 or (b) subject to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock, par
value $.10 per share, of the Corporation (the "Common Stock") or a subdivision
of the outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first
2
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time after December 19, 1996 (the "Rights Dividend Declaration
Date") (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Paragraph (a) above immediately after it
declares any dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $10.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the most recent Quarterly Dividend
Payment Date preceding the date of issue of such shares of Series A Preferred
Stock, unless the date of issue of such shares is prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or unless
the date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events, such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not
3
bear interest. Dividends paid on shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares of Series A Preferred Stock shall be allocated pro rata on a
share-by-share basis among all such shares of Series A Preferred Stock at the
time outstanding. The Board may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event that the Corporation shall at any time after the Rights Dividend
Declaration Date (i) declare any dividend on the Common Stock payable in shares
of Common Stock, (ii) subdivide the Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such
case, the number of votes per share to which holders of the Series A Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of Common Stock shall vote
together as one class on all matters submitted to a vote of stockholders of the
Corporation.
4
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions on
shares of Series A Preferred Stock outstanding, whether or not declared, shall
have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on
or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
with
5
the Series A Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors
of the Corporation (the "Board")) to all holders of such shares upon such
terms as the Board, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under Paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of the Series A Preferred
Stock redeemed, exchanged, purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Series A Preferred Stock and may be reissued
as part of a new series of Series A Preferred Stock to be created by resolution
or resolutions of the Board, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
$100.00 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Liquidation Preference"). Following the payment of the full amount of the
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series A Preferred Stock unless, prior thereto, the holders
6
of shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Liquidation
Preference by (ii) 100 (as appropriately adjusted as set forth in Paragraph (c)
below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Preferred Stock and Common Stock, respectively, holders of
shares of Series A Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Series A Preferred Stock and Common Stock, on a per share basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Liquidation Preference and the
liquidation preferences of all other series of stock, if any, which rank on a
parity (as to rights, privileges and preferences) with the Series A Preferred
Stock, then such remaining assets shall be distributed ratably to the holders of
Series A Preferred Stock and such parity shares in proportion to their
respective liquidation preferences. In the event, however, that there are not
sufficient assets available to permit payment in full of the Common Adjustment
after payment in full of the Liquidation Preference and the liquidation
preferences of all other series of Series A Preferred Stock, if any, which rank
on a parity with the Series A Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of Common Stock.
(c) In the event that the Corporation shall at any time after the
Rights Dividend Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
7
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case, the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to the Adjustment Number in effect immediately
prior to such transaction times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged.
Section 8. Redemption. The outstanding shares of Series A Preferred
Stock may be redeemed at the option of the Board as a whole, but not in part, at
any time, at a cash price per share equal to (i) the product of the Adjustment
Number and the Average Market Value (as such term is hereinafter defined) of the
Common Stock, plus (ii) all dividends which on the redemption date have accrued
on the shares to be redeemed and have not been paid or declared, and the Board
shall set apart a sum sufficient for the payment thereof, without interest. The
"Average Market Value" is the average per share closing sale prices of the
Common Stock during the 30 day period immediately preceding the date before the
redemption date on the principal United States securities exchange registered
under the Securities Exchange Act of 1934, as amended, on which such stock is
listed, or, if such stock is not listed on any such exchange, the average of the
closing sale prices with respect to a share of Common Stock during the 30 day
period, as quoted on the Nasdaq National Market or any other quotation service
then in use or if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, or if on any such date no such quotations
are available, the fair market value of the Common Stock as determined by the
Board in good faith.
Section 9. Ranking. The Series A Preferred Stock shall rank on a
parity with all other series of the Corporation's preferred stock as to the
payment of dividends
8
and the distribution of assets, unless the terms of any such series shall
provide otherwise.
Section 10. Amendment. The Amended and Restated Articles of
Organization of the Corporation, shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding shares
of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. The Board may, at its discretion, but
shall not be required to, issue Series A Preferred Stock in fractions of a share
which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Preferred Stock.
9
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have
executed and subscribed this Certificate and do affirm the foregoing as true
under the penalties of perjury this ______ day of December, 1996.
----------------------------------------
Name: Paul A. Miller
Title: President
----------------------------------------
Name: Robert P. Perreault
Title: Clerk
10
Exhibit B
[Form of Rights Certificate]
Certificate No. R- _________ _________ Rights
NOT EXERCISABLE AFTER DECEMBER 19, 2006 OR EARLIER REDEMPTION OR EXCHANGE BY THE
COMPANY OR EXPIRATION PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT
TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT, AND ARE SUBJECT
TO EXCHANGE AT THE OPTION OF THE COMPANY ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. THE RIGHTS EVIDENCED BY THIS RIGHTS CERTIFICATE SHALL NOT BE
EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION
WHERE THE REQUISITE QUALIFICATION FOR THE ISSUANCE TO SUCH HOLDER, OR THE
EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN
OBTAINED OR BE OBTAINABLE. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [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.](l)
Rights Certificate
LAWRENCE SAVINGS BANK
This certifies that _______________, or registered assigns, is the
registered owner of the
- ----------
(1) The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement dated as
of December 19, 1996 (the "Rights Agreement") between Lawrence Savings Bank, a
corporation organized under Section 34C of Chapter 168 of the Massachusetts
General Laws (the "Company"), and State Street Bank and Trust Company (the
"Rights Agent") to purchase from the Company at any time prior to 5:00 P.M.
(Boston time), on December 19, 2006, subject to extension (the "Final Expiration
Date"), at the office or offices of the Rights Agent or its successor as Rights
Agent designated for such purpose, one one-hundredth of a fully paid,
nonassessable share of Series A Junior Participating Preferred Stock of the
Company (the "Preferred Stock") at a purchase price of $40 per one one-hundredth
of a share (the "Purchase Price"), upon presentation- and surrender of this
Rights Certificate with the Election to Purchase and included Certificate duly
completed and executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above and the Purchase Price per share set forth above are
the number and Purchase Price as of December 19, 1996, based on the Preferred
Stock as constituted at such date, subject to adjustment as set forth in the
Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or any Affiliate
or Associate of any such Acquiring Person (as such terms are defined in the
Rights Agreement) which the Board of Directors of the Company in its sole
discretion determines is or was involved in or caused or facilitated, directly
or indirectly (including through any change in the Board of the Directors of the
Company), such 11(a)(ii) Event, (ii) a transferee of any such Acquiring Person
or Affiliate or Associate or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void, and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event. In addition, the Rights evidenced by this Rights Certificate
shall not be exercisable, and
2
shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or
obtainable.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events (as defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof. Reference is
hereby made to the Rights Agreement for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Company.
This Rights Certificate, upon surrender at the principal office or
offices of the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
one one-hundredths of a share of Preferred Stock as the Rights evidenced by this
Rights Certificate shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of (i) the
close of business on the tenth business day
3
following the Stock Acquisition Date (as such time period may be extended
pursuant to the Rights Agreement), (ii) the date the Rights expire pursuant to
Section 13(d) of the Rights Agreement; (iii) the Final Expiration Date and (iv)
the time at which such Rights are exchanged as provided in Section 29 of the
Rights Agreement.
Subject to the provisions of the Rights Agreement, the Company may, at
its option, at any time after an Acquiring Person becomes such and prior to the
time that any person, other than an Exempt Person becomes the Beneficial Owner
of 50% or more of the shares of Common Stock (as such terms are defined in the
Rights Agreement) then outstanding, exchange all or part of the Rights evidenced
by this Certificate for Common Stock or securities equivalent to Common Stock at
an exchange ratio of one share of Common Stock (or its equivalent) per Right,
subject to adjustment.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (unless the Company determines,
in its discretion, to issue fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
4
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
5
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of , .
------------ ----
ATTEST: LAWRENCE SAVINGS BANK
By By
---------------------------------- -------------------------------------
Name: Robert P. Perreault Name: Paul A. Miller
Title: Clerk Title: President
Countersigned:
STATE STREET BANK AND TRUST COMPANY
By
----------------------------------
Authorized Signature
6
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED ____________________________________________________________
hereby sells, assigns and transfers unto ______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ,
--------------- ---
----------------------------------------
Signature
Signature Guaranteed:
---------------
7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [_____] is [_____] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[_____] did [_____] did not acquire the Rights evidenced by this Rights
Certificate from' any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ,
--------------- ---
----------------------------------------
Signature
Signature Guaranteed:
---------------
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
8
ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to exercise
Rights represented by this Rights Certificate.)
To: LAWRENCE SAVINGS BANK
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number ______________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number ______________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: ,
--------------- ---
----------------------------------------
Signature
Signature Guaranteed:
---------------
9
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [_____] are
[_____] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[_____] did [_____] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,
--------------- ---
----------------------------------------
Signature
Signature Guaranteed:
---------------
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
10
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On December 19, 1996, the Board of Directors (the "Board") of Lawrence
Savings Bank (the "Company") declared a dividend distribution of one preferred
stock purchase right (one "Right") for each outstanding share of common stock,
par value $.10 per share, of the Company (the "Common Stock") to holders of
record of the Common Stock at 5:00 pm, Boston time, on December 29, 1996 (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Company a unit (a "Unit") consisting of one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $.10 per share, of the Company
(the "Preferred Stock") or, in certain circumstances, to receive cash, property,
Common Stock or other securities of the Company, at a purchase price of $40 per
Unit, subject to adjustment (the "Purchase Price"). The full description and
terms of the Rights are set forth in the Rights Agreement (the "Rights
Agreement"), dated as of December 19, 1996, between the Company and State Street
Bank and Trust Company, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
upon the earlier of (i) 10 business days (subject to extension by the Board)
following a public announcement by the Company that a person or group of
affiliated or associated persons, other than an Exempt Person (an "Acquiring
Person"), has acquired, or obtained the right to acquire, beneficial ownership
of more than 10% of the outstanding shares of Common Stock (the date of such
public announcement being the "Stock Acquisition Date") or (ii) 10 business days
(subject to extension by the Board) following the commencement of a tender offer
or exchange offer that would result in a person or group, other than an Exempt
Person, beneficially owning more than 10% of such outstanding shares of Common
Stock (the earlier of (i) and (ii) being the "Distribution Date"). Until the
Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock
certificates issued subsequent to the Record Date will contain a notation
incorporating the Rights Agreement by-reference and (iii) the surrender for
transfer of any certificates for outstanding Common Stock will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificates. Pursuant to the Rights Agreement, the Company reserves the right
to require prior to the occurrence of a Triggering Event (as defined below)
that, upon the exercise of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued. The term "Exempt Person"
includes, among others, the Company, any subsidiary of the Company and, in
certain limited circumstances, institutional investors.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 19, 2006 unless earlier redeemed,
exchanged, extended or terminated by the Company as described below. At no time
will the Rights have any voting power.
As soon as practicable after the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and thereafter, the Rights will
trade separately and the Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event (a "Section 11(a)(ii) Event") that any person or group
becomes an Acquiring Person (unless the event causing such person or group to
become an Acquiring Person is a tender or exchange offer for all outstanding
shares of the Company, at a price determined by a majority of the outside
directors of the Company who are not representatives, nominees, affiliates or
associates of an Acquiring Person to be fair and otherwise in the best interests
of the Company and its stockholders (a "Fair Offer")), each holder of a Right
will thereafter have the right to receive, upon exercise thereof, Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a Current Market Price (as defined in the Rights Agreement)
equal to two times the Purchase Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any Section
2
11(a)(ii) Event, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by specified Acquiring Persons
(or by certain related persons) will be null and void. However, Rights are not
exercisable following the occurrence of any Section 11(a)(ii) Event until such
time as the Rights are no longer redeemable by the Company as set forth below.
For example, at an exercise price of $40 per Right, each Right not
owned by a specified Acquiring Person (or by certain related persons) following
a Section 11(a)(ii) Event would entitle its holder to purchase $80 worth of
Common Stock (or other consideration, as noted above) for $40. Assuming that the
Common Stock had a Current Market Price of $8 at such time, the holder of each
valid Right would be entitled to purchase 10 shares of Common Stock for $40.
In the event (a "Section 13 Event") that, at any time on or after the
Stock Acquisition Date, (i) the Company shall take part in a merger or other
business combination transaction (other than certain mergers that follow a Fair
Offer) in which the Company is not the surviving entity or in which the Common
Stock is changed into or exchanged for other securities, cash or any other
property of any other person or (ii) 50% or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
which previously have been voided, as set forth above) shall thereafter have the
right to receive, upon payment of the exercise price, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right. Section 11(a)(ii) Events and Section 13 Events are collectively referred
to as "Triggering Events."
The Purchase Price payable and the number of Units of Preferred Stock
(or the amount of cash, property or other securities) 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) in the event that holders of the
Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or convertible securities at less than the Current Market Price
of the Preferred Stock or (iii) upon the distribution to holders of the
Preferred Stock of evidences of indebtedness or assets (excluding
3
regular quarterly cash dividends) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company may, but is not required to, issue fractional shares of
Preferred Stock upon the exercise of any Right or Rights. In lieu thereof, an
adjustment in cash will be made based on the Current Market Price of the
Preferred Stock.
At any time until 10 business days following the Stock Acquisition
Date (or such later date as the Board may determine before the Rights become
nonredeemable), the Company may redeem the Rights in whole, but not in part, at
a price of $.01 per Right (payable, at the option of the Company, in cash,
Common Stock or such other consideration deemed appropriate by the Board).
Immediately upon the effectiveness of any action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the redemption price of $.01 per Right.
At any time after any person becomes an Acquiring Person and prior to
the acquisition by such person or certain related persons of 50% or more of the
outstanding shares of Common Stock, the Board may exchange all or a part of the
then outstanding and exercisable Rights (other than Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by such Acquiring Person or by certain related persons, which Rights shall
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including without limitation the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or cash, property or other securities) of the
Company or for common stock of the acquiring company as set forth above.
4
The Company may amend the terms of the Rights to increase the Purchase
Price or extend the expiration date of the Rights at any time prior to the
earlier of (1) the Stock Acquisition Date or (2) the date that any person or
group commences a tender or exchange offer if, upon its consummation, such
person or group would become an Acquiring Person. Other terms of the Rights,
except for certain principal economic terms, may be amended by the Company (a)
in any manner prior to the time the Rights separate and are distributed and (b)
in order to (i) cure any ambiguity, (ii) make changes which do not adversely
affect interests of holders of Rights (other than those of an Acquiring Person
and certain related persons) or (iii) shorten or lengthen any time period under
the Rights Agreement after the time the Rights separate and are distributed;
provided, however, that no extension or amendment to adjust the time period for
redemption is permitted after the Rights become nonredeemable.
A copy of the "Rights Agreement is being filed with the Federal
Deposit Insurance Corporation as an Exhibit to a Registration Statement on Form
F-10. A copy of the Rights Agreement is available free of charge from the
Company or the Rights Agent. 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 incorporated herein by reference.
5