SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report:
(Date of earliest event reported)
June 16, 1999
Summit Bancorp.
(Exact name of registrant as specified in its charter)
NEW JERSEY 1-6451 22-1903313
(State or other juris- (Commission (IRS Employer
diction of incorporation File No.) Identification No.)
or organization)
301 Carnegie Center, P.O. Box 2066,
Princeton, New Jersey 08543-2066
(Address of principal executive offices)
Registrant's telephone number, including area code (609) 987-3200
1
<PAGE>
Item 5 Other Events
On June 16, 1999, the Board of Directors of Summit Bancorp., a New
Jersey corporation (the "Corporation"), declared a dividend distribution of one
Preferred Stock Purchase Right (a "Right") for each outstanding Common Share,
par value $0.80 per share (the "Common Stock"), of the Corporation. The
distribution is payable as of August 16, 1999 to shareholders of record on that
date (the "Record Date"). Each Right entitles the registered holder to purchase
from the Corporation one one-hundredth (1/100) of a preferred share of the
Corporation, designated as Series S Preferred Shares (the "Preferred Stock"), at
a price of $164 per one one-hundredth (1/100) of a share ("Exercise Price"). The
description and terms of the Rights are set forth in a Rights Agreement dated as
of June 16, 1999 (the "Rights Agreement"), between the Corporation and First
Chicago Trust Company of New York, as Rights Agent (the "Rights Agent"). The
Rights will replace the preferred stock purchase rights issued under a rights
agreement between the Corporation (under the former name "UJB Financial Corp.")
and the Rights Agent dated as of August 16, 1989, which rights expire on August
16, 1999.
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to shareholders and the Rights will automatically
trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Corporation (an "Acquiring Person") and (ii) the tenth
business day (or such later date as may be determined by the Board of Directors
prior to such time as any person or group of affiliated or associated persons
becomes an Acquiring Person) after the date of the commencement or announcement
of a person's or group's intention to commence a tender or exchange offer the
consummation of which would result in the ownership of 15% or more of the
Corporation's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights will not be exercisable, will
not be represented by a separate certificate, and will not be transferable apart
from the Corporation's Common Stock, but will instead be evidenced, with respect
to any of the Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificate with a copy of a Summary of Rights attached
thereto. An Acquiring Person shall not include (A) the Corporation, (B) any
subsidiary of the Corporation, (C) any employee benefit plan or employee stock
plan of the Corporation or of any subsidiary of the Corporation, or any trust or
other entity organized, appointed, established or holding voting stock for or
pursuant to the terms of any such plan, or (D) any person or group of affiliated
or associated persons whose ownership of 15% or more of the shares of voting
stock of the Corporation then outstanding results solely from (i) any action or
transaction or transactions approved by the Board of Directors before such
person or group became an Acquiring Person or (ii) a reduction in the number of
issued and outstanding shares of voting stock of the Corporation pursuant to a
transaction or transactions approved by the Board of Directors (provided that
any person or group that does not become an Acquiring Person by reason of clause
(i) or (ii) above shall become an Acquiring Person upon acquisition of an
additional 1% of the Corporation's voting stock unless such acquisition of
additional voting stock results from one or more actions or transactions
approved by the Board of Directors of the Corporation).
2
<PAGE>
Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), new Common Stock certificates issued after the Record
Date will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange or expiration of
the Rights), the surrender for transfer of any of the Common Stock certificates
outstanding as of the Record Date, with or without a copy of the Summary of
Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on August 31, 2009, unless earlier redeemed
by the Corporation as described below.
The Preferred Stock will be nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of preferred
stock, will be subordinate to any other series of the Corporation's preferred
stock. The Preferred Stock may not be issued except upon exercise of Rights.
Each share of Preferred Stock will be entitled to receive when, as and if
declared, a quarterly dividend in an amount equal to the greater of $25 per
share or 100 times the cash dividends declared on the Corporation's Common
Stock. In addition, the holders of the Preferred Stock are entitled to receive
100 times any noncash dividends (other than dividends payable in equity
securities) declared on the Common Stock, in like kind. In the event of the
liquidation of the Corporation, the holders of Preferred Stock will be entitled
to receive, for each share of Preferred Stock, a payment in an amount equal to
the greater of $ 16,400 or 100 times the payment made per share of Common Stock.
Each share of Preferred Stock will have 100 votes, voting together with the
Common Stock. In the event of any merger, consolidation or other transaction in
which Common Stock is exchanged, each share of Preferred Stock will be entitled
to receive 100 times the amount received per share of Common Stock. The rights
of Preferred Stock as to dividends, liquidation and voting will be protected by
anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise of the
Rights and Exercise Price of the Rights are subject to certain adjustments from
time to time in the event of a stock dividend on, or a subdivision or
combination of, the Common Stock. The Exercise Price for the Rights also is
subject to adjustment in the event of extraordinary distributions of cash or
other property to holders of Common Stock.
Unless the Rights are earlier redeemed or exchanged, in the event that,
after the time that a Person becomes an Acquiring Person, the Corporation were
to be acquired in a merger or other business combination (in which any shares of
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Corporation and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right will from and
after such date have the right to receive, upon payment of the Exercise Price,
that number of shares of common stock of the acquiring company having a fair
value at the time of
3
<PAGE>
such transaction determined in accordance with the Rights Agreement equal to
approximately two times the Exercise Price.
In addition, unless the Rights are earlier redeemed, in the event that
a person or group becomes an Acquiring Person, the Rights Agreement provides
that proper provisions will be made so that each holder of record of a Right,
other than the Acquiring Person and certain affiliates, associates and
transferees thereof (whose Rights will thereupon become null and void), will
thereafter have the right to receive, upon payment of the Exercise Price, that
number of shares of the Preferred Stock having a fair value determined in
accordance with the Rights Agreement at the time of the transaction equal to
approximately two times the Exercise Price (such value to be determined with
reference to the market value of the Corporation's Common Stock as provided in
the Rights Agreement).
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding voting stock, the Board of Directors of the Corporation may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share) may, at the election of the
Corporation, be evidenced by depositary receipts. The Corporation may also issue
cash in lieu of fractional shares which are not integral multiples of one
one-hundredth of a share.
At any time prior to the close of business on the tenth day after there
has been a public announcement that a person has become an Acquiring Person, the
Corporation may redeem the Rights in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"). Immediately upon the effective time of the
action of the Board of Directors of the Corporation authorizing redemption of
the Rights, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Corporation may,
except with respect to the Redemption Price, amend the Rights in any manner,
including an amendment to extend the time period in which the Rights may be
redeemed. At any time when the Rights are not then redeemable, the Corporation
may amend the Rights in any manner that does not materially adversely affect the
interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as
a shareholder of the Corporation, including, without limitation, the right to
vote or to receive dividends.
The Rights Agreement between the Corporation and the Rights Agent
specifying the terms of the rights, which includes as Exhibit B the form of
Rights Certificate, is attached hereto as Exhibit 4.1. The foregoing description
of the Rights does not purport to be complete and is qualified in its entirety
by such Exhibit.
4
<PAGE>
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
4.1 Rights Agreement, dated as of June 16, 1999, between Summit
Bancorp. and First Chicago Trust Company of New York
99 (a) Press Release dated June 16, 1999
5
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereto duly authorized.
Date: June 24, 1999 SUMMIT BANCORP.
By: /s/ Richard F. Ober, Jr.
Richard F. Ober, Jr.
Executive Vice President
6
<PAGE>
EXHIBIT INDEX
Ex. No. Description
4.1 Rights Agreement, dated as of June 16, 1999, between Summit
Bancorp. and First Chicago Trust Company of New York
99 (a) Press Release dated June 16, 1999
RIGHTS AGREEMENTS
by and between
SUMMIT BANCORP.
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
as Rights Agent
----------------------
Dated as of
June 16, 1999
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Section Page
<S> <C> <C>
Section 1. Certain Definitions .................................................................................... 1
Section 2. Appointment of Rights Agent ............................................................................ 5
Section 3. Issuance of Right Certificates ......................................................................... 6
Section 4. Form of Right Certificates ............................................................................. 7
Section 5. Countersignature and Registration ...................................................................... 8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates .................................................................................... 8
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights;
Invalidation of Certain Rights ........................................................................ 9
Section 8. Cancellation and Destruction of Right Certificates ..................................................... 11
Section 9. Reservation and Availability of Shares of Preferred Stock .............................................. 11
Section 10. Preferred Stock Record Date ............................................................................ 12
Section 11. Adjustment of Exercise Price or Number of Shares ....................................................... 13
Section 12. Certification of Adjusted Exercise Price or Number of Shares ........................................... 18
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power .......................................................................................... 18
Section 14. Fractional Rights and Fractional Shares ................................................................ 22
Section 15. Rights of Action ....................................................................................... 22
Section 16. Agreement of Right Holders ............................................................................. 23
Section 17. Right Certificate Holder Not Deemed a Stockholder ...................................................... 23
Section 18. Concerning the Rights Agent ............................................................................ 23
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent ........................................................................................... 24
Section 20. Duties of Rights Agent ................................................................................. 24
Section 21. Change of Rights Agent ................................................................................. 26
Section 22. Issuance of New Right Certificates ..................................................................... 27
Section 23. Redemption ............................................................................................. 27
Section 24. Notice of Proposed Actions ............................................................................. 28
i
<PAGE>
TABLE OF CONTENTS
(cont'd.)
Section Page
Section 25. Notices ................................................................................................ 29
Section 26. Supplements and Amendments ............................................................................. 30
Section 27. Exchange ............................................................................................... 30
Section 28. Successors ............................................................................................. 31
Section 29. Benefits of this Agreement ............................................................................. 31
Section 30. New Jersey Contract .................................................................................... 31
Section 31. Counterparts ........................................................................................... 32
Section 32. Descriptive Headings ................................................................................... 32
Section 33. Severability ........................................................................................... 32
Section 34. Determinations and Actions by the Board of Directors ................................................... 32
Exhibit A - Summary of Rights
Exhibit B - Form of Right Certificate
Exhibit C - Form of Certificate of Amendment of the Restated Certificate of Incorporation
</TABLE>
ii
<PAGE>
RIGHTS AGREEMENT
Rights Agreement (this "Agreement"), dated as of June 16, 1999, by
and between Summit Bancorp., a New Jersey corporation (the "Corporation"), and
First Chicago Trust Company of New York, a limited trust company incorporated
in the State of New York (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on June 16, 1999, the Board of Directors of the Corporation,
authorized the issuance of, and declared, a dividend payable in one right (a
"Right") for each Common Share, $0.80 par value per share ("Common Stock"), of
the Corporation outstanding as of close of business on August 16, 1999 (the
"Record Date"), each such Right representing the right to purchase one
one-hundredth of a Series S Preferred Share of the Corporation ("Preferred
Stock") having the rights and preferences set forth in the form of Certificate
of Amendment of the Restated Certificate of Incorporation of the Corporation
attached hereto as Exhibit C duly adopted by the Board of Directors on June
16, 1999, upon the terms and subject to the conditions hereinafter set forth;
and
WHEREAS, the Board of Directors of the Corporation further authorized
the issuance of one Right (subject to adjustment) with respect to each share
of Common Stock which may be issued between the Record Date and the earliest
to occur of the Distribution Date, the Expiration Date or the Final Expiration
Date (as such terms are hereinafter defined); provided, however, that Rights
may be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the Expiration Date in
accordance with Section 22 hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings provided by this Section 1, any
capitalized term defined in this Section 1 and used in the following
definitions having the meaning provided by this Section 1:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the Voting Stock of the
Corporation then outstanding; provided, however, that an Acquiring
Person shall not include (i) an Exempt Person or any Affiliate or
Associate of an Exempt Person or (ii) any Person who or which,
together with all Affiliates and Associates of such Person, would be
an Acquiring Person solely by reason of (A) being the Beneficial Owner
of shares of Voting Stock of the Corporation, the Beneficial Ownership
of which was acquired by such Person (together with all Affiliates and
Associates of such Person) pursuant to any action or transaction or
series of related actions or transactions approved by the Board of
Directors before such Person (together with all Affiliates and
Associates of such Person) otherwise became an Acquiring Person or (B)
a reduction in the number of issued and outstanding shares of Voting
Stock of the Corporation pursuant to a
1
<PAGE>
transaction or a series of related transactions approved by the Board
of Directors of the Corporation; provided, further, that in the event
a Person described in this clause (ii) does not become an Acquiring
Person by reason of subclause (A) or (B) of this clause (ii), such
Person nonetheless shall become an Acquiring Person in the event such
Person (together with all Affiliates and Associates of such Person)
thereafter acquires Beneficial Ownership of an additional 1% of the
Voting Stock of the Corporation, unless the acquisition of such
additional Voting Stock results from one or more actions or
transactions approved by the Board of Directors of the Corporation.
Notwithstanding the foregoing, if the Board of Directors of the
Corporation determines in good faith that a Person who would otherwise
be an "Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a) has become such inadvertently, and
such Person divests as promptly as practicable (as determined in good
faith by the Board of Directors) a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed an "Acquiring
Person" for any purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in
Rule 12b2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), as in effect on the
date of this Agreement.
(c) "Associate" of a Person shall mean (i) with respect to a
corporation, any officer or director thereof or any Associate of any
Subsidiary thereof, or any Beneficial Owner of 10% or more of any
class of equity security thereof, (ii) with respect to an association,
any officer or director thereof or any Associate of a Subsidiary
thereof, (iii) with respect to a partnership, any general partner
thereof or any limited partner thereof who is, directly or indirectly,
the Beneficial Owner of a 10% ownership interest therein, and any
Associate of any Subsidiary thereof, (iv) with respect to a limited
liability company, any manager or managing member thereof and any
Beneficial Owner of 10% or more or any class of membership interest
therein or other equity security thereof, and any Associate of any
Subsidiary thereof, (v) with respect to a business trust, any officer
or trustee thereof or any Associate of any Subsidiary thereof, (vi)
with respect to any other trust or an estate, any trustee, executor or
similar fiduciary and any Person who has a 15% or greater interest as
a beneficiary in the income from or principal of such trust or estate,
(vii) with respect to a natural person, the parents and children
thereof and any spouse or relative thereof, or any relative of such
spouse, who has the same home as such person, and (viii) any Affiliate
of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities (and correlative terms shall have
correlative meanings):
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly,
for purposes of Section 13(d) of the Exchange Act and
Regulations 13D and 13G thereunder (or any comparable or
successor law or regulation), in each case as in effect
on the date hereof; or
2
<PAGE>
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or the
fulfillment of a condition or both) pursuant to any agreement,
arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, other rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own", securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange or (B) the right to vote, alone
or in concert with others, 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 securities if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to a
proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act
and (2) is not at the time reportable by such Person on a
Schedule 13D report under the Exchange Act (or any comparable or
successor report), other than by reference to a proxy or consent
solicitation being conducted by such Person; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person 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 as described in clause (B) of
subparagraph (ii) of this paragraph (d)) or disposing of any
securities of the Corporation; provided, however, that for
purposes of determining Beneficial Ownership of securities under
this Agreement, officers and directors of the Corporation solely
by reason of their status as such shall not constitute a group
(notwithstanding that they may be Associates of one another or
may be deemed to constitute a group for purposes of Section 13(d)
the Exchange Act) and shall not be deemed to own shares owned by
another officer or director of the Corporation.
Notwithstanding anything in this paragraph (d) to the
contrary, a Person engaged in the business of underwriting securities
shall not be deemed the "Beneficial Owner" of, or to "Beneficially
Own," any securities acquired or otherwise beneficially owned in good
faith in a firm commitment underwriting until the expiration of forty
days after the date of the sale of securities to the public pursuant
to such firm commitment underwriting.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
New York City time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., New York City time, on
the next succeeding Business Day.
3
<PAGE>
(g) "Common Stock" when used with reference to the Corporation
shall collectively mean the Common Stock of the Corporation as defined
in the first recital hereof and any other common stock of the
Corporation into or for which it is changed, converted or exchanged.
"Common Stock" when used with reference to any Person other than the
Corporation which shall be organized in corporate form shall mean the
capital shares or other equity security having of all classes of
capital shares or equity securities of such corporation the greatest
aggregate voting power in the election of directors. "Common Stock"
when used with reference to any Person which shall not be organized in
corporate form shall mean units of beneficial interest in the profits
or losses of such Person or other equity security of such Person
having of all classes of equity securities of such Person the greatest
aggregate voting power in the election of the directors, trustees,
managers or other Persons performing like governance functions for
such Person.
(h) "Corporation" shall have the meaning provided at the
beginning hereof; provided, however, that "Corporation" shall also
include any successors to the Corporation as provided by Section 28
hereof and shall mean a Principal Party as provided by Section 13(a)
hereof.
(i) "Distribution Date" shall have the meaning set forth in
Section 3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in Section
1(b) hereof.
(k) "Exempt Person" shall mean (i) the Corporation, (ii) any
Subsidiary of the Corporation, or (iii) any employee benefit plan or
employee stock plan of the Corporation or any Subsidiary of the
Corporation, or any trust or other entity organized, appointed,
established or holding Voting Stock for or pursuant to the terms of
any such plan.
(l) "Exercise Price" shall have the meaning set forth in Section
4 hereof.
(m) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(n) "Fair Market Value" of any property shall mean the fair
market value of such property as determined in accordance with Section
11(b) hereof.
(o) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(p) "Person" shall mean any individual, company, firm,
corporation or other entity.
(q) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(r) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(s) "Right Certificate" shall have the meaning set forth in
Section 3(d) hereof.
4
<PAGE>
(t) "Stock Acquisition Date" shall mean the first date on which
there shall be a public announcement by the Corporation or an
Acquiring Person that an Acquiring Person has become such (which, for
purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) or such
earlier date as a majority of the Board of Directors of the
Corporation shall become aware of the existence of an Acquiring Person
as confirmed by action of the Board of Directors of the Corporation
taken by the affirmative vote of a majority of the Board of Directors.
(u) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having voting
power sufficient to elect a majority of the board of directors or
other persons performing similar functions are beneficially owned,
directly or indirectly, by such Person or by any corporation or other
entity that is otherwise controlled by such Person.
(v) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(w) "Trading Day" shall have the meaning set forth in Section
11(b) hereof.
(x) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or
regulatory authority in respect of any transfer of any security,
instrument or right, including the Rights, shares of the Common Stock
and shares of the Preferred Stock.
(y) "Voting Stock" shall mean (i) the Common Stock of the
Corporation and (ii) any other shares of capital stock of the
Corporation entitled to vote generally in the election of directors or
entitled generally to vote together with the Common Stock in respect
of a merger, consolidation, sale of all or substantially all of the
Corporation's assets, liquidation, dissolution or winding up. For
purposes of this Agreement, a stated percentage of the Voting Stock
shall mean a number of shares of the Voting Stock as shall equal in
voting power that stated percentage of the total voting power of the
then outstanding shares of Voting Stock in the election of a majority
of the Board of Directors of the Corporation or in respect of a
merger, consolidation, sale of all or substantially all of the
Corporation's assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board of Directors of the
Corporation for purposes of applying the definitions contained in this
Section 1 shall be made by a majority of the Board of Directors in its
good faith judgment, which determination shall be binding on the
Rights Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Corporation hereby
appoints the Rights Agent to act as agent for the Corporation and the holders
of the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date be the holders of Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Corporation may from time to time appoint such Co-Rights Agents as it may
deem necessary or desirable, upon ten (10) days prior written notice to the
Rights Agent. The
5
<PAGE>
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.
Section 3. Issuance of Right Certificates.
(a) On the Record Date (or as soon as practicable thereafter),
the Corporation or the Rights Agent shall send a copy of a Summary of Rights,
in substantially the form attached hereto as Exhibit A (the "Summary of
Rights"), by first class mail, postage prepaid, to each record holder of the
Common Stock as of the Record Date, at the address of such holder shown on the
records of the Corporation.
(b) Until the close of business on the day which is the earlier
of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than an Exempt Person)
of, or the first public announcement of the intent of any Person (other than
an Exempt Person) to commence, a tender or exchange offer upon the successful
consummation of which such Person would be the Beneficial Owner of 15% or more
of the then outstanding shares of Voting Stock of the Corporation (including
any such date which is after the date of this Agreement and prior to the
issuance of the Rights; the earlier of such dates being herein referred to as
the "Distribution Date"), (x) the Rights shall be evidenced by the
certificates for Common Stock registered in the names of the holders of Common
Stock (together with, in the case of certificates for Common Stock outstanding
as of the Record Date, the Summary of Rights) and not by separate Right
certificates and the record holders of such certificates for Common Stock
shall be the record holders of the Rights represented thereby and (y) each
Right shall be transferable only simultaneously and together with the transfer
of a share of Common Stock (subject to adjustment as hereinafter provided).
Until the Distribution Date (or, if earlier, the Expiration Date or Final
Expiration Date), the surrender for transfer of any certificate for Common
Stock shall constitute the surrender for transfer of the Right or Rights
associated with the Common Stock evidenced thereby, whether or not accompanied
by a copy of the Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earliest
of the Distribution Date, the Expiration Date or the Final Expiration Date.
Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Corporation's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date, or the Final
Expiration Date shall have impressed, printed, written or stamped thereon or
otherwise affixed thereto the following legend:
This certificate also evidences and entitles the holder
hereof to the same number of Rights (subject to
adjustment) as the number of shares of Common Stock
represented by this certificate, such Rights being on
the terms provided under the Rights Agreement between
Summit Bancorp. and First Chicago Trust Company of New
York (the "Rights Agent"), dated as of June 16, 1999, as
it may be amended from time to time (the "Agreement"),
the terms of which
6
<PAGE>
are incorporated herein by reference and a copy of which
is on file at the principal executive offices of Summit
Bancorp. Under certain circumstances, as set forth in
the Agreement, such Rights shall be evidenced by
separate certificates and shall no longer be evidenced
by this certificate. Summit Bancorp. shall mail to the
registered holder of this certificate a copy of the
Agreement without charge within five days after receipt
of a written request therefor. As provided in Section
7(e) of the Agreement, Rights issued to or Beneficially
Owned by Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Agreement)
or any subsequent holder of such Rights shall be null
and void and may not be exercised by or transferred to
any Person.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Corporation purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Corporation shall not be entitled to exercise
any Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not affect
the enforceability of any part of this Agreement or the rights of any holder of
the Rights.
(d) As soon as practicable after the Distribution Date, the
Corporation will prepare and execute, the Rights Agent will countersign, and the
Corporation will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class mail, postage prepaid, to each record holder of
the Common Stock as of the close of business on the Distribution Date, as shown
by the records of the Corporation, at the address of such holder shown on such
records, a certificate in the form provided by Section 4 hereof (a "Right
Certificate"), evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. As of and after the Distribution Date,
the Rights shall be evidenced solely by Right Certificates and may be
transferred by the transfer of the Right Certificate as permitted hereby,
separately and apart from any transfer of one or more shares of Common Stock.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares, certificate and assignment to be printed
on the reverse thereof), when, as and if issued, shall 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 may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Common
Stock or the Rights may from time to time be listed or as the Corporation may
deem appropriate to conform to usage or otherwise and as are not inconsistent
with the provisions of this Agreement. Subject to the provisions of Section 22
hereof, Right Certificates evidencing Rights whenever issued, (i) shall be dated
as of the date of issuance of the Rights they represent and (ii) subject to
adjustment from time to time as provided herein, on their face shall entitle the
holders thereof to purchase such number of one onehundredths of a share
(including fractional shares which are integral multiples of
7
<PAGE>
one-hundredth of a share) of Preferred Stock as shall be set forth thereon at
the price per one onehundredth of a share of Preferred Stock payable upon
exercise of a Right provided by Section 7(b) hereof, as the same may from time
to time be adjusted as provided herein (the "Exercise Price").
Section 5. Countersignature and Registration.
(a) Each Right Certificate shall be executed on behalf of the
Corporation by its Chairman of the Board, President or any Vice President,
either manually or by facsimile signature, and have affixed thereto the
Corporation's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Corporation, either manually or by
facsimile signature. Each Right Certificate shall be countersigned by the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. In case any officer of the Corporation who
shall have signed any Right Certificate shall cease to be such officer of the
Corporation before countersignature by the Rights Agent and issuance and
delivery of the certificate by the Corporation, such Right Certificate,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Corporation. Any Right
Certificate may be signed on behalf of the Corporation by any person who, on the
date of the execution of such Right Certificate, shall be a proper officer of
the Corporation to sign such Right Certificate, although at the date of the
execution of this 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 one or more offices designated
as the appropriate place for surrender of Right Certificates upon exercise or
transfer, and in such other locations as may be required by law, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 7(e), 7(f) and 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 earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate, may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock as the Right Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
surrender the Right Certificate at the office of the Rights Agent designated for
the surrender of Right Certificates with the form of certificate and assignment
on the reverse side thereof duly endorsed (or enclose with such Right
Certificate a written instrument of transfer in form satisfactory to the
Corporation and the Rights Agent), duly executed by the registered holder
thereof or his attorney duly authorized in writing, and with such signature duly
guaranteed. Any
8
<PAGE>
registered holder desiring to split up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate to be split up, combined or exchanged
at the office of the Rights Agent designated therefor. Thereupon, the Rights
Agent shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Corporation may require payment of a sum sufficient to cover any Transfer Tax
that may be imposed in connection with any transfer, split up, combination or
exchange of any Right Certificates.
(b) Subject to the provisions of Section 7(e), 7(f) and 14
hereof, at any time after the Distribution Date and prior to the Expiration
Date, upon receipt by the Corporation and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Corporation,
reimbursement to the Corporation and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Corporation shall cause a new Right
Certificate of like tenor to be issued and delivered to the registered owner in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights; Invalidation of Certain Rights.
(a) The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Section 7(e) and 27(b) hereof). Except as otherwise provided herein, the Rights
may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the designated office
of the Rights Agent , at 525 Washington Boulevard, Jersey City, New Jersey 07310
(as such address may from time to time be changed), together with payment of the
Exercise Price for each Right exercised (as the same may have been adjusted as
hereinafter provided), at or prior to the Close of Business on the earlier of
(i) August 31, 2009 (the "Final Expiration Date") or (ii) the date on which the
Rights are redeemed as provided in Section 23 hereof or the date on which the
Rights are exchanged as provided in Section 27 hereof (such earlier date being
herein referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $164 for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of one one-hundredth of a
share of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof. The Exercise Price shall be payable in lawful
money of the United States of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights with the form of election to
purchase and certificate duly executed, accompanied by payment by certified
check, cashier's check, bank draft or money order payable to the Corporation or
the Rights Agent of the Exercise Price for the shares of Preferred Stock to be
9
<PAGE>
purchased and an amount equal to any applicable Transfer Tax required to be paid
by the holder of the Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Preferred Stock of the Corporation one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Corporation hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) as provided in Section 14(b), at the election of the
Corporation, cause depositary receipts to be issued in lieu of fractional shares
of Preferred Stock, (iii) if the election provided for in the immediately
preceding clause (ii) has not been made, requisition from the Corporation the
amount of cash to be paid in lieu of the issuance of fractional shares (other
than fractions that are integral multiples of one one-hundredth of a share) in
accordance with Section 14(b) hereof, (iv) after receipt of such Preferred Stock
certificates and, if applicable, depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (v) when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities other than Preferred
Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly take the
appropriate actions corresponding in such case to that referred to in the
foregoing clauses (i) through (v) of this Section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Corporation may suspend the
issuance of shares of Preferred Stock and other securities upon exercise of a
Right for a reasonable period, not in excess of 90 days, during which the
Corporation seeks to register under the Securities Act of 1933, as amended (the
"Act"), and any applicable securities law of any other jurisdiction, the shares
of Preferred Stock or other securities to be issued pursuant to the Rights;
provided, however, that nothing contained in this Section 7(c) shall relieve the
Corporation of its obligations under Section 9(d) hereof. Upon any such
suspension, the Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or his
assign, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Agreement to the
contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the invalidation time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person (or any such Associate or Affiliate) to
holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 7(e), and subsequent transferees of such Persons
referred to in clause (y) and (z) above, shall be null and void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement. No
Right
10
<PAGE>
Certificate shall be issued pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person or any Affiliate or Associate thereof
whose Rights would be null and void pursuant to the provisions of this Section
7(e); no Right Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person (or an Affiliate or Associate of such Acquiring
Person) whose Rights would be null and void pursuant to the provisions of this
Section 7(e) or any Associate or Affiliate thereof or to any nominee of such
Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person (or an Associate or
Affiliate of such Acquiring Person) whose Rights would be void pursuant to the
provisions of this Section 7(e) shall be cancelled. The Corporation shall use
all reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or any other Person as a result of its failure to make any determination 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 Corporation shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate following the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Corporation shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Corporation or to 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
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Corporation shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any Right Certificate purchased or acquired by the Corporation
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Corporation, or shall, at the written
request of the Corporation, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the Corporation.
Section 9. Reservation and Availability of Shares of Preferred Stock.
(a) The Corporation covenants and agrees that it will cause to be
reserved and kept available out of the authorized and unissued shares of
preferred stock of the Corporation or out of authorized and issued shares of
Preferred Stock held in its treasury, such number of shares of Preferred Stock
as will from time to time be sufficient to permit the exercise in full of all
outstanding Rights.
(b) The Corporation shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance in accordance with this Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
11
<PAGE>
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities Dealers'
Automated Quotation System or any successor thereto or other comparable
quotation system.
(c) The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Corporation shall use its best efforts to (i) file, as
soon as practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (a) the date as of which the
Rights are no longer exercisable for Preferred Stock and (b) the earlier of the
Expiration Date and the Final Expiration Date. The Corporation may temporarily
suspend, for a period of time not to exceed ninety days, the issuance of shares
of Preferred Stock upon exercise of a Right in order to prepare and file a
registration statement under the Act and permit it to become effective. The
Corporation will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Act (if required)
shall have been declared effective.
(e) The Corporation covenants and agrees that it will pay when
due and payable any and all federal and state Transfer Taxes which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock issued or delivered upon the exercise of Rights.
The Corporation shall not, however, be required to pay any Transfer Tax which
may be payable in respect of any transfer or delivery of a Right Certificate to
a Person other than, or the issuance or delivery of certificates for Preferred
Stock upon exercise of Rights in a name other than that of, the registered
holder of the Right Certificate, and the Corporation shall not be required to
issue or deliver a Right Certificate or certificate for Preferred Stock to a
Person other than such registered holder until any such Transfer Tax shall have
been paid (any such Transfer Tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Corporation's satisfaction that no such Transfer Tax is due.
(f) The requirements of this Section 9 shall apply to shares of
Common Stock of the Corporation if the Corporation has elected in accordance
with Section 11(a)(iii) hereof to substitute shares of Common Stock for shares
of Preferred Stock that otherwise may be purchased upon the exercise of Rights.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes
12
<PAGE>
be deemed to have become the holder of record of the Preferred Stock represented
thereby on, and such certificate shall be dated as of, the date upon which the
Right Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price (and any applicable Transfer Taxes) was made; provided, however,
that, if the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Corporation are closed, such Person shall
be deemed to have become the record holder of such shares on, and such
certificate shall be dated as of, the next succeeding Business Day on which the
Preferred Stock transfer books of the Corporation are open.
Section 11. Adjustment of Exercise Price or Number of Shares. The
Exercise Price and the number of shares of Preferred Stock which may be
purchased upon exercise of a Right are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after the
date of this Agreement (A) declare or pay any dividend on Common
Stock payable in shares of Common Stock, (B) subdivide or split
the outstanding shares of Common Stock into a greater number of
shares or (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a reverse
split of the outstanding shares of Common Stock, then and in each
such event the number of one one-hundredths of a share of
Preferred Stock issuable upon the Exercise of a Right after the
record date for such event (if one shall have been established
or, if not, after the date of such event) shall be the number of
one one-hundredths of a share of Preferred Stock issuable
immediately prior to such event multiplied by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately prior to such event and the denominator
of which is the number of shares of Common Stock outstanding
immediately after such event and the Exercise Price to be in
effect after the record date for such event (if one shall have
been established or, if not, after the date of such event) shall
be determined by multiplying the Exercise Price in effect
immediately prior to such event by such fraction. 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).
(ii) Subject to Section 27 of this Agreement, in the event that
any Person shall become an Acquiring Person, then, except as
otherwise provided in this Section 11, each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have
the right to receive upon exercise of such Right in accordance
with the terms of this Agreement and payment of the Exercise
Price, such number of one one-hundredths of a share of Preferred
Stock as shall equal the result obtained by (1) multiplying the
then current Exercise Price by the number of one one-hundredths
of a share of Preferred Stock for which a Right would, absent
adjustment pursuant to this Section 11(a)(ii), be then
exercisable and dividing the product by (2) 50% of the
proportionate Fair Market Value of one one-hundredth of a share
of the Preferred Stock (determined pursuant to Section 11(b)
hereof) on the Stock Acquisition Date in respect of such event.
13
<PAGE>
(iii) In the event that the Corporation does not have available
sufficient authorized but unissued Preferred Stock to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Corporation shall take all such action as
may be necessary to authorize and reserve for issuance such
number of additional shares of Preferred Stock as may from time
to time be required to be issued upon the exercise in full of all
Rights from time to time outstanding and, if necessary, shall use
its best efforts to obtain stockholder approval thereof. In lieu
of issuing shares of Preferred Stock in accordance with the
foregoing subparagraph (ii), the Corporation may, if the Board of
Directors determines that such action is necessary or
appropriate, elect to issue or pay, upon the exercise of the
Rights, cash, property, shares of Preferred Stock or Common
Stock, or any combination thereof, having an aggregate Fair
Market Value equal to the Fair Market Value of the shares of
Preferred Stock which otherwise would have been issuable pursuant
to Section 11(a)(ii) hereof as of the date the Board of Directors
of the Corporation makes such election (which Fair Market Value
shall be determined as provided by Section 11(b) hereof). Subject
to Section 23 hereof, any such election by the Board of Directors
of the Corporation must be made and publicly announced within
thirty (30) days after the date on which the event described in
Section 11(a)(ii) occurs and shall be applicable with respect to
all Rights exercised after such public announcement. Notice of
such election shall promptly be given to the Rights Agent.
(b) For the purpose of this Agreement, the "Fair Market Value" of
any share of Preferred Stock, Common Stock or any other stock or any Right or
other security or any other property on any date shall be determined as
provided in this Section 11(b). In the case of a publicly traded stock or
other security, the Fair Market Value thereof on any date shall be deemed to
be the average of the daily closing prices per share of such stock or per unit
of such other security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that
in the event that the Fair Market Value of any share of Common Stock is to be
determined as of a date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on the Common Stock payable in
shares of Common Stock or securities convertible into shares of Common Stock
or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of the Common Stock,
then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Corporation to take into account
such dividend, distribution, subdivision, split, combination, consolidation,
reverse stock split or reclassification. The closing price for any 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 applicable transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange), or, if the securities are not listed or admitted to trading on the
New York Stock Exchange, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange (which, if approved by the Board of Directors of the Corporation, may
be a securities exchange of a country other than the United States of America)
on which such security is listed or admitted to trading; or, if not listed or
admitted to trading on any such 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 National Association of
14
<PAGE>
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
quotation reporting system then in use in the United States of America; or, if
no bids for such security are so quoted, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
such security selected by the Board of Directors of the Corporation. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for
the transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day. For purposes of
this Section 11(b), a stock or other security shall be considered "publicly
traded" only (i) if registered under Section 12 of the Exchange Act or exempt
from such registration pursuant to Section 12(g)(2)(B), (C) or (G) of the
Exchange Act or (ii) if traded on a national securities exchange of a country
other than the United States of America approved by the Board of Directors of
the Corporation or (iii) if, in the judgment of the Board of Directors of the
Corporation, there is sufficient active trading in such stock or other
security that reported trading transactions therein fairly reflect the fair
market value thereof. If a security is not publicly held or not so listed or
traded, "Fair Market Value" shall mean the fair value per share of stock or
per other unit of such other security, as determined by an independent
investment banking firm experienced in the valuation of securities selected in
good faith by the Board of Directors of the Corporation, or, if no such
investment banking firm is, in the good faith judgment of the Board of
Directors, available to make such determination, as determined in good faith
by the Board of Directors of the Corporation; provided, however, that for
purposes of making the adjustment provided for by Section 11(a)(ii) hereof,
the Fair Market Value of a share of Preferred Stock, unless the Preferred
Stock shall at the time be publicly traded (in which case its Fair Market
Value shall be determined pursuant to the foregoing provisions of this Section
11(b)), shall be 102% of the product of the Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock (as defined in Subarticle 3.A. of
the Restated Certificate of Incorporation of the Corporation relating to the
Preferred Stock); provided, however, that the Board of Directors of the
Corporation may, by resolution, determine that the Fair Market Value of a
share of Preferred Stock shall be more or less than such amount but not less
than 100% or more than 110% of the product of the then Fair Market Value of a
share of Common Stock multiplied by the higher of the then Dividend Multiple
or Vote Multiple applicable to the Preferred Stock. In the case of property
other than securities, the "Fair Market Value" thereof shall be determined in
good faith by the Board of Directors of the Corporation based upon such
appraisals or valuation reports of such independent experts as the Board of
Directors of the Corporation shall in good faith determine to be appropriate
in accordance with good business practices and fair to the interests of the
holders of Rights. Any determination made by the Board of Directors of the
Corporation as provided for by this Section 11(b) shall be described in a
statement filed by the Corporation with the Rights Agent, shall be effective
thereupon and only thereupon and shall be binding upon the Rights Agent and,
as provided by Section 34 hereof, all holders of Rights.
(c) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Stock or securities
convertible into Common Stock at a price per share (or having a conversion
price per share, if a security convertible into Common Stock) less than the
then current per share Fair Market Value of the Common Stock on such record
date, the Exercise Price to be in effect after
15
<PAGE>
such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such record
date plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current Fair Market Value and the denominator
of which shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common 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 in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Corporation, whose determination shall be
described in a statement filed with the Rights Agent. Shares of Common Stock
owned by or held for the account of the Corporation 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 Exercise Price shall
be adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(d) In case the Corporation shall fix a record date for the
making of a distribution to all holders of the Common Stock (including any
such distribution made in connection with a consolidation or merger in which
the Corporation is the continuing or surviving corporation) of evidences of
indebtedness of the Corporation or any of its Subsidiaries, cash (other than a
regular quarterly cash dividend not in excess of 300% of the previous regular
quarterly cash dividend), other assets (other than a dividend payable in
shares of Common Stock) or options, rights or warrants to subscribe for shares
of the Corporation or any Subsidiary (excluding those referred to in Section
11(c) hereof), the Exercise Price to be in effect after such record date shall
be determined by multiplying the Exercise Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Fair
Market Value of the shares of Common Stock on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a statement filed with
the Rights Agent) of the portion of the assets or evidences of indebtedness or
options, rights or warrants so to be distributed in respect of one share of
Common Stock, and the denominator of which shall be such current Fair Market
Value of the shares of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed, and, in the event that such
distribution is not so made notwithstanding the setting of a record date
therefor, the Exercise Price shall again be adjusted to be the Exercise Price
which would then be in effect if such record date had not been fixed.
(e) Unless the Corporation shall have exercised its election as
provided in Section 11(f), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(c) and (d), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of one one-hundredths of a share of Preferred Stock obtained by
(i) multiplying (x) the number of one one-hundredths of a share of Preferred
Stock that could be purchased upon exercise of a Right immediately prior to
the adjustment pursuant to this Section 11(e) by (y) the Exercise Price in
effect immediately prior to such adjustment of the Exercise Price and (ii)
dividing the product so
16
<PAGE>
obtained by the Exercise Price in effect immediately after such adjustment of
the Exercise Price.
(f) The Corporation may elect on or after the date of any
adjustment of the Exercise Price pursuant to Section 11(c) and 11(d) to adjust
the number of Rights in substitution for any adjustment pursuant to Section
11(e) 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
such adjustment of 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 obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect immediately
after adjustment of the Exercise Price. The Corporation 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 Exercise
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If the Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(e), the Corporation shall,
as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights, if any, to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Corporation, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the Corporation, new Right Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Right Certificates so to
be distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(g) All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-hundredth of a share, as the case may
be.
(h) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be issued
upon exercise of the Rights as in the initial Right Certificates issued
hereunder but, nevertheless, shall represent the Rights as so adjusted.
(i) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon exercise
of the Rights below the then
par value, if any, of the shares of Preferred Stock, the Corporation shall use
its best efforts to take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and legally
issue fully paid and non-assessable shares of such Preferred Stock at such
adjusted purchase price per share.
(j) Anything in this Section 11 to the contrary notwithstanding,
in the event of any reclassification of stock of the Corporation or any
recapitalization, reorganization or partial
17
<PAGE>
liquidation of the Corporation or similar transaction, the Corporation shall
be entitled to make such further adjustments in the number of shares of
Preferred Stock which may be acquired upon exercise of the Rights, and such
adjustments in the Exercise Price therefor, in addition to those adjustments
expressly required by the other paragraphs of this Section 11, as the Board of
Directors of the Corporation shall determine to be necessary or appropriate in
order for the holders of the Rights in such event to be treated equitably and
in accordance with the purpose and intent of this Agreement or in order that
any such event shall not, but for such adjustment, in the opinion of counsel
to the Corporation, result in the stockholders of the Corporation being
subject to any United States federal income tax liability by reason thereof.
(k) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Corporation other than
the Preferred Stock, thereafter the Exercise Price and the number of such
other shares so receivable upon exercise of a Right 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), 11(c), 11(e), 11(f) and 11(j) hereof, as applicable, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Stock shall apply on like terms to any such other shares.
Section 12. Certification of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11, 13, 23 or
27, the Corporation shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts giving rise to such
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with
Section 25. Notwithstanding the foregoing sentence, the failure of the
Corporation to make such certification or give such notice shall not affect
the validity of or the force or effect of the requirement for such adjustment.
Any adjustment to be made pursuant to Section 11, 13 or 23(c) of this
Agreement shall be effective as of the date of the event giving rise to 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 adjustment unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, at any time after the time that any Person
becomes an Acquiring Person, (x) the Corporation shall, directly or
indirectly, consolidate with, or merge with and into, any other Person or
Persons and the Corporation shall not be the surviving or continuing
corporation of such consolidation or merger, or (y) any Person or Persons
shall, directly or indirectly, consolidate with, or merge with and into, the
Corporation, and the Corporation shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed or converted into or exchanged for stock or other securities
of any other Person or of the Corporation or cash or any other property, or
(z) the Corporation or one or more of its Subsidiaries shall, directly or
indirectly, sell or otherwise transfer to any other Person in one or more
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Corporation and its Subsidiaries (taken as a whole),
then, on the
18
<PAGE>
first occurrence of any such event, proper provision shall be made so that (i)
each holder of record of a Right, except as provided in Section 7(e) hereof,
shall thereafter have the right to receive, upon the exercise thereof at a
price equal to the then current Exercise Price multiplied by the number of one
one-hundredths of a share of Preferred Stock for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock, such number of shares of validly issued, fully
paid, nonassessable and freely tradeable Common Stock of the Principal Party
(as defined in Section 13(b) hereof), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall equal the result
obtained by (1) multiplying the then current Exercise Price by the number of
one one-hundredths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (2) 50% of the then per share Fair
Market Value of the Common Stock of the Principal Party on the date of the
consummation, merger, sale or transfer; provided, however, that the Exercise
Price (as adjusted) and the number of shares of Common Stock of such Principal
Party so receivable upon exercise of a Right shall be subject to further
adjustment as appropriate in accordance with Section 11 hereof to reflect any
events occurring in respect of the Common Stock of such Principal Party after
the occurrence of such consolidation, merger, sale or transfer; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such consolidation, merger, sale or transfer, all the obligations and duties
of the Corporation pursuant to this Agreement; (iii) the term "Corporation"
for all purposes of this Agreement shall thereafter be deemed to refer to such
Principal Party; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
Common Stock in accordance with the provisions of Section 9 hereof applicable
to the reservation of Preferred Stock) in connection with such consummation 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; provided,
however, that, upon the subsequent occurrence of any merger, consolidation,
sale of all or substantially all of the assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction
in respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Exercise
Price, such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had it, at the time of such
transaction, owned the shares of Common Stock of the Principal Party
purchasable upon the exercise of a Right, and such Principal Party shall take
such steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares, rights, warrants and other
property; and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in clause (x), (y) or
(z) above of this Section 13(a).
(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 the
securities into which shares of Common Stock of the
Corporation are changed or otherwise exchanged or
converted in such merger or consolidation, or, if there
is more than one such issuer, the issuer of the Common
Stock of which has the greatest market value or (B) if
no securities are so issued, (I) the
19
<PAGE>
Person that is the other party to the merger or
consolidation and that survives such merger or
consolidation, or, if there is more than one such
Person, the Person the Common Stock of which has the
greatest market value or (II) if the Person that is the
other party to the merger or consolidation does not
survive the merger or consolidation, the Person that
does survive the merger or consolidation (including the
Corporation if it survives); and
(ii) in the case of any transaction described in clause
(z) of the first sentence in Section 13(a), 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 market value of
shares outstanding;
provided, however, that in any such case, if the Common Stock of such Person is
not at such time and has not been continuously over the preceding 12month period
registered under Section 12 of the Exchange Act, then (1) if such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest market value of shares
outstanding, or (3) if 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 clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.
(c) The Corporation shall not consummate any consolidation,
merger or sale or transfer of assets or earning power referred to in Section
13(a) unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock that have not been issued or reserved for issuance to
permit exercise in full of all Rights in accordance with this Section 13 and
unless prior thereto the Corporation and the Principal Party involved therein
shall have executed and delivered to the Rights Agent an agreement confirming
that the Principal Party shall, upon consummation of such consolidation, merger
or sale or transfer of assets or earning power, assume this Agreement in
accordance with Section 13(a) hereof and that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock of the
Principal Party upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Principal Party under this
Agreement, and further providing that, as soon as practicable after the date of
any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, the Principal Party will:
20
<PAGE>
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such
registration statement to become effective as soon as
practicable after such filing and use its best efforts
to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements
of the Act) until the date of expiration of the Rights,
and similarly comply with applicable state securities
laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable
upon exercise of the Rights on a national securities
exchange or to meet the eligibility requirements for
quotation on NASDAQ;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which
comply in all respects with the requirements for
registration on Form 10 (or any successor form) under
the Exchange Act. In the event that any of the
transactions described in Section 13(a) hereof shall
occur at any time after the occurrence of a transaction
described in Section 11(a)(ii) hereof, the Rights which
have not theretofore been exercised shall, subject to
the provisions of Section 7(e) hereof, thereafter be
exercisable in the manner described in Section 13(a);
and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or Bylaws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special tax or similar payment in connection with
the issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the
Corporation shall not consummate any such transaction unless prior thereto the
Corporation and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Corporation covenants and agrees that it shall not, at
any time after any Person becomes an Acquiring Person, enter into any
transaction of the type described in clauses (x) through (z) of the first
sentence of Section 13(a) hereof if (i) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction there are any rights,
warrants
21
<PAGE>
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, (ii) prior to, simultaneously with or immediately after
such consolidation, merger, sale, transfer or other transaction, 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 or Associates or
(iii) the form or nature of organization of the Principal Party would preclude
or limit the exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights
(i.e., Rights to acquire less than one one-hundredth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to in
Section 11(a)(i) or 11(f) hereof. If the Corporation shall determine not to
issue such fractional Rights, then, in lieu of such fractional Rights, there
shall be paid to the holders of record of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole Right.
(b) The Corporation shall not be required to issue fractions of
shares of Preferred Stock (other than fractions that are integral multiples of
one one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions that are
integral multiples of one onehundredth of a share). In lieu of issuing fractions
of shares of Preferred Stock, the Corporation may, at its election, issue
depositary receipts evidencing fractions of shares pursuant to an appropriate
agreement between the Corporation and a depositary selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all of the rights, privileges and preferences to which they would be
entitled as owners of the Preferred Stock. With respect to fractional shares
that are not integral multiples of one one-hundredth of a share, if the
Corporation does not issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Right Certificates at
the time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the Fair Market Value of a share of Preferred
Stock.
(c) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent in Section 18
hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock), and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such
22
<PAGE>
Right 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 will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Each holder of a Right, by
accepting the same, consents and agrees with the Corporation and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be evidenced
by the certificates for Common Stock registered in the name of the holders of
Common Stock (together, as applicable, with the Summary of Rights), which
certificates for Common Stock shall also constitute certificates for Rights, and
not by separate Right Certificates, and each Right shall be transferable only
simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Corporation and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Corporation or the Rights Agent) for
all purposes whatsoever, and neither the Corporation nor the Rights Agent shall
be affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock or any
other securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder or other securityholder of the
Corporation or of a securityholder of any other Person 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
securityholder action, or to receive notice of meetings or other actions
affecting stockholders or securityholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or otherwise, except in
any such case the rights, if any, in respect thereof provided by this Agreement,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof for such stock or other
security.
Section 18. Concerning the Rights Agent.
(a) The Corporation 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,
23
<PAGE>
its reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Corporation 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 to be done by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the cost and expenses of defending against any claim of liability relating to
the Rights or this Agreement.
(b) The Rights Agent shall be protected against, and shall incur
no liability for or in respect of, any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon any
Right Certificate or certificate for Preferred Stock or for other securities of
the Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document 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 of, or Change in Name of, the
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 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 that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case 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 the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; in all such cases such Right Certificates shall have the
full force provided in the Right 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
24
<PAGE>
the Corporation and the holders of Right Certificates by their acceptance
thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
an employee of or outside legal counsel for the Corporation or the Rights
Agent), 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.
(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 be proved or established by the Corporation 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 or any Vice President and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary of the Corporation and delivered to
the Rights Agent. Any 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
gross negligence, bad faith or willful misconduct. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage.
(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
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Corporation 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 Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Corporation of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or 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
Right Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock or other security to be delivered pursuant to the exercise of
any Right or as to whether any shares of Preferred Stock or other security will,
when issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Corporation 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 the Agreement.
25
<PAGE>
(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 or any Vice President or the Secretary or
the Treasurer of the Corporation, 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 or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Corporation may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than three Business Days after the
date any officer of the Corporation actually receives such application unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Corporation 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 Corporation resulting from any such act,
default, neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
(j) 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 the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), a Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Corporation.
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 Corporation and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified
mail. The Corporation may remove the Rights Agent or any successor Rights Agent
(with or without cause) 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 and the Preferred Stock by registered or certified mail. If
the Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Corporation shall
26
<PAGE>
appoint a successor to the Rights Agent. If the Corporation shall fail to make
such appointment within a period of 30 days after 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 Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the
Corporation), then the incumbent Rights Agent or the holder of record of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation 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 thereof, in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination in the
conduct of its corporate trust or stock transfer business by federal or state
authorities and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate
controlled by or under common control with one or more corporations 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 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 Corporation shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Right 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.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Corporation shall have the authority to
act as the Rights Agent until a successor Rights Agent shall have assumed the
duties of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Right Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Voting Stock following the
Distribution Date and prior to the Expiration Date, the Corporation may with
respect to shares of Voting Stock so issued or sold pursuant to (i) the exercise
of stock options, (ii) under any employee plan or arrangement, (iii) upon the
exercise, conversion or exchange of securities, notes or debentures issued by
the Corporation or (iv) a contractual obligation of the Corporation, in each
case existing prior to the Distribution Date, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale.
Section 23. Redemption.
(a) The Corporation may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than all of the then
outstanding Rights at any time
27
<PAGE>
prior to the Close of Business on the tenth day following the Stock Acquisition
Date at a redemption price of $.01 per Right, subject to adjustment as provided
in Section 23(c) hereof (the "Redemption Price"). The redemption of the Rights
by the Board of Directors may be made effective at such time after the Board's
action to redeem the Rights on such basis and subject to such conditions, as the
Board of Directors in its discretion may establish.
(b) Without any further action and without any notice, the right
to exercise the Rights will terminate effective at the time so designated by
action of the Board of Directors ordering the redemption of the Rights and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 days after the effective time of the action of the
Board of Directors ordering the redemption of the Rights, the Corporation shall
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders 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. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each notice of redemption will state the
method by which the payment of the Redemption Price will be made. At the option
of the Board of Directors, the Redemption Price may be paid in cash to each
Rights holder or by the issuance of shares (and, at the Corporation's election
pursuant to Section 14(b) hereof, cash or depositary receipts in lieu of
fractions of shares other than fractions which are integral multiples of one
one-hundredth of a share) of Preferred Stock or Common Stock having a Fair
Market Value equal to such cash payment.
(c) In the event the Corporation shall at any time after the date
of this Agreement but before the Distribution Date (A) pay any dividend on
Common Stock in shares of Common Stock, (B) subdivide or split the outstanding
shares of Common Stock into a greater number of shares or (C) combine or
consolidate the outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Common Stock and
as a consequence thereof the number of Rights outstanding shall change, then,
and in each such event, the Redemption Price may, by action of the Board of
Directors of the Corporation in its discretion, be appropriately adjusted in
respect of such transaction so as to maintain the aggregate Redemption Price of
all Rights after such transaction at the same amount, insofar as practicable, as
before the transaction.
Section 24. Notice of Proposed Actions.
(a) In case the Corporation, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its shares of Common Stock
payable in shares of capital stock of any class or to make any other
distribution to the holders of record of its Common Stock (other than a regular
periodic cash dividend at a rate not in excess of 150% of the rate of the last
cash dividend theretofore paid), or (ii) to offer to the holders of record of
its Common Stock options, warrants, or other rights to subscribe for or to
purchase shares of Common Stock (including any security convertible into or
exchangeable for Common Stock) or shares of stock of any class or any other
securities, options, warrants, convertible or exchangeable securities or other
rights, or (iii) to effect any reclassification of its Preferred Stock or Common
Stock or any recapitalization or
28
<PAGE>
reorganization of the Corporation, or (iv) to effect any consolidation or merger
with or into, 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 or more
transactions, of more than 50% of the assets or earning power of the Corporation
and its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v)
to effect the liquidation, dissolution or winding up of the Corporation, then,
in each such case, the Corporation shall give to each holder of record of a
Right Certificate, in accordance with Section 25, notice of such proposed
action, which shall specify the record date for the purposes of such transaction
referred to in Section 11(a)(i) or such dividend or distribution, or the date on
which such reclassification, recapitalization, reorganization, consolidation,
merger, sale or transfer of assets, liquidation, dissolution, or winding up is
to take place and the record date for determining participation therein by the
holders of record of Common Stock or 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 10 days prior to the record date for
determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of record of Common Stock or Preferred Stock, whichever shall be
the earlier. The failure to give notice required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Corporation or the vote upon any such action.
(b) In case the event referred to in Section 11(a)(ii) shall
occur, then the Corporation shall as soon as practicable thereafter, in
accordance with Section 25 hereof, give to each holder of a Right notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on the Corporation shall be in writing and shall be
considered given upon receipt or seven Business Days after being sent by
first-class mail, postage prepaid, in any case addressed (until another address
is filed in writing with the Rights Agent) as follows:
SUMMIT BANCORP.
301 Carnegie Center
P.O. Box 2066
Princeton, New Jersey 08540-2066
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation or by the holder of record of
any Right Certificate or Right to or on the Rights Agent shall be in writing and
shall be considered given upon receipt or seven Business Days after being sent
by first-class mail, postage prepaid, in any case addressed (until another
address is filed in writing with the Corporation) as follows:
First Chicago Trust Company of New York
525 Washington Boulevard
Jersey City, New Jersey 07310
29
<PAGE>
Attn: Tenders & Exchange Administration
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of record of any Right Certificate
or Right shall be in writing and shall be considered given upon receipt or seven
Business Days after being sent by first-class mail, postage prepaid, addressed
to such holder at the address of such holder as shown on the registry books of
the Corporation.
Section 26. Supplements and Amendments. For as long as the Rights are
then redeemable and except as provided in the last sentence of this Section 26,
the Corporation may, in its sole and absolute discretion, and the Rights Agent
shall if the Corporation so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights. At any time when
the Rights are not then redeemable and except as provided in the last sentence
of this Section 26, the Corporation may, and the Rights Agent shall if the
Corporation so directs, supplement or amend this Agreement without the approval
of any holders of Right Certificates (i) to cure any ambiguity, (ii) to correct
or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (iii) to change or supplement
the provisions hereunder in any manner which the Corporation may deem necessary
or desirable, provided that no such supplement or amendment pursuant to this
clause (iii) shall materially adversely affect the interest of the holders of
Right Certificates. Upon the delivery of a certificate from an appropriate
officer of the Corporation 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; it being understood that an adjustment of
the Redemption Price in accordance with Section 23 shall not be considered a
supplement or amendment of this Agreement.
Section 27. Exchange.
(a) The Board of Directors of the Corporation may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock at an exchange ratio of one share 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 of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Stock then outstanding. From and after the occurrence of an
event specified in Section 13(a) hereof, any Rights that theretofore have not
been exchanged pursuant to this Section 27(a) shall thereafter be exercisable
only in accordance with Section 13 and may not be exchanged pursuant to this
Section 27(a).
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the
30
<PAGE>
only right thereafter of a holder of such Rights shall be to receive that number
of shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Corporation shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange. The
Corporation 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. 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 for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the
Corporation shall substitute to the extent of such insufficiency, for each share
of Common Stock that would otherwise be issuable upon exchange of a Right, a
number of shares of Preferred Stock or fractions thereof having an aggregate
Fair Market Value equal to the Fair Market Value of one share of Common Stock as
of the date any Person becomes an Acquiring Person.
(d) The Corporation shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares. In lieu of such fractional shares, the Corporation shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock for the Trading Day immediately prior to the date of exchange pursuant to
this Section 27.
Section 28. Successors. All of the covenants and provisions of this
Agreement by or for the benefit of the Corporation or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Corporation,
the Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the holders of Common Stock in their capacity as
holders of the Rights) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Corporation, the Rights Agent and the holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights).
Section 30. New Jersey Contract. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey and for all purposes shall be governed by and
construed and enforced in accordance with the laws of
31
<PAGE>
such state applicable to contracts to be made and performed entirely within such
state.
Section 31. 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 32. 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 33. 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.
Section 34. Determinations and Actions by the Board of Directors. The
Board of Directors of the Corporation shall have the exclusive power and
authority to administer, interpret and apply this Agreement and to exercise the
rights and powers specifically granted to the Board of Directors of the
Corporation or to the Corporation by this Agreement or by law and may take such
action as may be necessary or advisable in the administration of this Agreement
or to amend or supplement this Agreement in accordance with its terms,
including, without limitation, the right and power (i) to make all
determinations deemed necessary or advisable for the administration of this
Agreement, (ii) to decide to redeem the Rights and (iii) to decide to amend or
supplement this Agreement. All such actions, calculations, interpretations and
determinations (including any decision not to take any action) done or made by
the Board of Directors of the Corporation in good faith shall (x) be final,
conclusive and binding on the Corporation, the Rights Agent, the holders of the
Rights, as such, and all other Persons and (y) not subject any member of the
Board of Directors to any liability to the holders of Rights.
32
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
SUMMIT BANCORP.
By: /s/ Richard F. Ober, Jr.
Name: Richard F. Ober, Jr.
Title: Executive Vice President
FIRST CHICAGO TRUST COMPANY
OF NEW YORK,
as Rights Agent
By: /s/ John Bambach
Name: John Bambach
Title: Vice President
33
<PAGE>
EXHIBIT A
AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED
TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT
BE EXERCISED OR TRANSFERRED TO ANY PERSON.
SUMMIT BANCORP.
SUMMARY OF RIGHTS TO PURCHASE
SERIES S PREFERRED SHARES
On June 16, 1999, the Board of Directors of Summit Bancorp., a
New Jersey corporation (the "Corporation"), declared a dividend distribution of
one Preferred Stock Purchase Right for each outstanding Common Share, par value
$0.80 per share (the "Common Stock"), of the Corporation. The distribution was
made payable as of August 16, 1999 to shareholders of record on that date (the
"Record Date"). Each Right entitles the registered holder to purchase from the
Corporation one one-hundredth (1/100) of a preferred share of the Corporation,
designated as Series S Preferred Shares (the "Preferred Stock"), at a price of
$164 per one one-hundredth (1/100) of a share ("Exercise Price"). The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Corporation and First Chicago Trust Company of
New York, as Rights Agent (the "Rights Agent").
As discussed below, initially the Rights will not be
exercisable, certificates will not be sent to stockholders and the Rights will
automatically trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Corporation (an "Acquiring Person") and (ii)
the tenth business day (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) after the date of the commencement or
announcement of a person's or group's intention to commence a tender or exchange
offer the consummation of which would result in the ownership of 15% or more of
the Corporation's outstanding voting stock (even if no shares are actually
purchased pursuant to such offer); prior thereto, the Rights will not be
exercisable, will not be represented by a separate certificate, and will not be
transferable apart from the Corporation's Common Stock, but will
<PAGE>
instead be evidenced, with respect to any of the Common Stock certificates
outstanding as of the Record Date, by such Common Stock certificate with a copy
of this Summary of Rights attached thereto. An Acquiring Person does not include
(A) the Corporation, (B) any subsidiary of the Corporation, (C) any employee
benefit plan or employee stock plan of the Corporation or of any subsidiary of
the Corporation, or any trust or other entity organized, appointed, established
or holding voting stock for or pursuant to the terms of any such plan, or (D)
any person or group of affiliated or associated persons whose ownership of 15%
or more of the shares of voting stock of the Corporation then outstanding
results solely from (i) any action or transaction or transactions approved by
the Board of Directors before such person or group became an Acquiring Person or
(ii) a reduction in the number of issued and outstanding shares of voting stock
of the Corporation pursuant to a transaction or transactions approved by the
Board of Directors (provided that any person or group that does not become an
Acquiring Person by reason of clause (i) or (ii) above shall become an Acquiring
Person upon acquisition of an additional 1% of the Corporation's voting stock
unless such acquisition of additional voting stock results from one or more
actions or transactions approved by the Board of Directors of the Corporation).
Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), new Common Stock certificates issued after the
Record Date will contain a legend incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the surrender for transfer of any of the Common Stock
certificates outstanding as of the Record Date, with or without a copy of this
Summary of Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on August 31, 2009, unless
earlier redeemed by the Corporation as described below.
The Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of preferred
stock, is subordinate to any other series of the Corporation's preferred stock.
The Preferred Stock may not be issued except upon exercise of Rights. Each share
of Preferred Stock will be entitled to receive when, as and if declared, a
quarterly dividend in an amount equal to the greater of $25 per share or 100
times the cash dividends declared on the Corporation's Common Stock. In
addition, the holders of the Preferred Stock are entitled to receive 100 times
any noncash dividends (other than dividends payable in equity securities)
declared on the Common Stock, in like kind. In the event of the liquidation of
the Corporation, the holders of Preferred Stock will be entitled to receive, for
each share of Preferred Stock, a payment in an amount equal to the greater of
$16,400 or 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with the Common Stock. In
the event of any merger, consolidation or other transaction in which Common
Stock is exchanged, each share of Preferred Stock will be entitled to receive
100 times the amount received per share of Common Stock. The rights of Preferred
Stock as to dividends, liquidation and voting are protected by anti-dilution
provisions.
2
<PAGE>
The number of shares of Preferred Stock issuable upon exercise
of the Rights and Exercise Price of the Rights are subject to certain
adjustments from time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise Price for the
Rights also is subject to adjustment in the event of extraordinary distributions
of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed or exchanged, in the
event that, after the time that a Person becomes an Acquiring Person, the
Corporation were to be acquired in a merger or other business combination (in
which any shares of Common Stock are changed into or exchanged for other
securities or assets) or more than 50% of the assets or earning power of the
Corporation and its subsidiaries (taken as a whole) were to be sold or
transferred in one or a series of related transactions, the Rights Agreement
provides that proper provision will be made so that each holder of record of a
Right will from and after such date have the right to receive, upon payment of
the Exercise Price, that number of shares of common stock of the acquiring
company having a fair value at the time of such transaction determined in
accordance with the Rights Agreement equal to approximately two times the
Exercise Price.
In addition, unless the Rights are earlier redeemed, in the
event that a person or group becomes an Acquiring Person, the Rights Agreement
provides that proper provisions will be made so that each holder of record of a
Right, other than the Acquiring Person and certain affiliates, associates and
transferees thereof (whose Rights will thereupon become null and void), will
thereafter have the right to receive, upon payment of the Exercise Price, that
number of shares of the Preferred Stock having a fair value determined in
accordance with the Rights Agreement at the time of the transaction equal to
approximately two times the Exercise Price (such value to be determined with
reference to the market value of the Corporation's Common Stock as provided in
the Rights Agreement).
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding voting stock, the Board of Directors of the Corporation may
exchange the Rights (other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share) may, at the
election of the Corporation, be evidenced by depositary receipts. The
Corporation may also issue cash in lieu of fractional shares which are not
integral multiples of one one-hundredth of a share.
At any time prior to the close of business on the tenth day
after there has been a public announcement that a person has become an Acquiring
Person, the Corporation may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). Immediately upon the effective
time of the action of the Board of Directors of the Corporation authorizing
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
3
<PAGE>
For as long as the Rights are then redeemable, the Corporation
may, except with respect to the Redemption Price, amend the Rights in any
manner, including an amendment to extend the time period in which the Rights may
be redeemed. At any time when the Rights are not then redeemable, the
Corporation may amend the Rights in any manner that does not materially
adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no
rights as a shareholder of the Corporation, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K
dated June 16, 1999. A copy of the Rights Agreement is available free of charge
from the Corporation. 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 in this summary description herein by reference.
4
<PAGE>
EXHIBIT B
[Form of Right Certificate]
Certificate No. W ______ Rights
NOT EXERCISABLE AFTER AUGUST 31, 2009 OR EARLIER IF EXCHANGED OR
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
CORPORATION AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.01 PER RIGHT
(SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE
RIGHTS AGREEMENT. AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO
BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
THEIR AFFILIATES OR ASSOCIATES OR TRANSFEREES THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE EXERCISED OR TRANSFERRED
TO ANY PERSON.
Right Certificate
This certifies that _______, or registered assigns, is the
registered owner of the 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 June 16, 1999 (the "Rights Agreement") by and between
Summit Bancorp., a New Jersey corporation (the "Corporation"), and First Chicago
Trust Company of New York, a New York banking corporation, as Rights Agent, or
its successor in interest as Rights Agent (the "Rights Agent"), to purchase from
the Corporation at any time after the Distribution Date (as such term is defined
in the Rights Agreement) and prior to 5:00 P.M. (Eastern time) on August 31,
2009 at the office of the Rights Agent designated in the Rights Agreement for
such purpose, one one-hundredth (1/100) of a fully paid and nonassessable share
of the Series S Preferred Shares (the "Preferred Stock") of the Corporation, or
other securities or property in lieu thereof as provided by the Rights
Agreement, at a purchase price of $164, as the same may from time to time be
adjusted in accordance with the Rights Agreement (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Rights
<PAGE>
Agent, the Corporation and the holders of record of Right Certificates. Copies
of the Rights Agreement are on file at the principal executive office of the
Corporation.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent designated in the
Rights Agreement for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder of record to purchase a like aggregate number of shares of
Preferred Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof, another Right Certificate or Right 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 Corporation at its option
or under certain other circumstances at a redemption price of $.01 per Right.
No fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-hundredth (1/100) of a share) are
required to be issued upon the exercise of any Right or Rights evidenced hereby,
and in lieu thereof the Corporation may cause depositary receipts to be issued
and/or a cash payment may be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Preferred Stock or of any other securities of the Corporation 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 Corporation or any right to vote
for the election of directors or upon any matter submitted to stockholders at
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 Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
2
<PAGE>
WITNESS the facsimile signature of the proper officers of the Corporation and
its corporate seal. Dated as of __________ ___, _____.
ATTEST: SUMMIT BANKCORP.
By ___________________
[Assistant] Secretary Title:
Countersigned:
___________________________
By ___________________________
Authorized Signature
3
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Right Certificates.)
FOR VALUE RECEIVED ___________________________________________
hereby sells, assigns and transfers unto _____________________________________
- -----------------------------------------------------------------------------
(Please print name and address of transferee)
- -----------------------------------------------------------------------------
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
________________________ Attorney to transfer the within Right Certificate on
the books of the within-named Corporation, with full power of substitution.
Dated: ____________ ___, _____
___________________________
Signature
Signature Guaranteed:
4
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person
or an Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
Dated: __________ ___, _____ ___________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
5
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to exercise the Right Certificate.)
TO _____________________:
The undersigned hereby irrevocably elects to exercise ________________ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of such Rights and requests that certificates for
such share(s) be issued in the following name:
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 Right
Certificate, a new Right Certificate for the balance remaining 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 must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
6
<PAGE>
EXHIBIT C
FORM OF
CERTIFICATE OF AMENDMENT
OF
THE RESTATED CERTIFICATE OF INCORPORATION
OF
SUMMIT BANCORP.
TO: THE SECRETARY OF STATE
STATE OF NEW JERSEY
Pursuant to the provisions of Section 14A:7-2 of the New
Jersey Business Corporation Act, the undersigned corporation executes the
following Certificate of Amendment to its Restated Certificate of Incorporation,
dated August 19, 1998 (the "Certificate of Incorporation"):
1. The name of the corporation is Summit Bancorp. (the
"Corporation").
2. The following resolution was duly adopted by the Board of
Directors of the Corporation at a meeting thereof duly convened and held on June
16, 1999 for the purpose of (i) decreasing the number of authorized Series R
Preferred Shares of the Corporation to zero, and thereby eliminating the
designation of any of the Preferred Shares as Series R Preferred Shares but
continuing such shares as authorized Preferred Shares without designation, and
eliminating those provisions of the Restated Certificate of Incorporation which
designate 1,500,000 Preferred Shares as Series R Preferred Shares and determine
the relative rights, preferences and limitations of such series of Preferred
Shares and (ii) designating 2,000,000 Preferred Shares as Series S Preferred
Shares and determining the relative rights, preferences and limitations of such
series of Preferred Shares:
RESOLVED, that, pursuant to the authority conferred upon the
Board of Directors of the Corporation by the New Jersey Business Corporation Act
and the Restated Certificate of Incorporation of the Corporation, the Board of
Directors hereby acts to amend Article 3 of the Restated Certificate of
Incorporation, such amendment to be effective as of 5:00 p.m., New Jersey time,
on August 16, 1999, by (i) deleting the current Subarticle A thereof in its
entirety, and thereby eliminating the designation of any Preferred Shares as
Series R Preferred Shares, and (ii) adding to said Article 3 a new Subarticle A
designating a series of Preferred Shares of the Corporation to consist of
2,000,000 shares as Series S Preferred Shares and determining the relative
voting, dividend, liquidation and other rights and preferences, and the
limitations thereon, of the shares of such series
<PAGE>
(in addition to those of Preferred Shares set forth in the Restated Certificate
of Incorporation), as follows:
"A. Creation of Series S Preferred Shares. A series of Preferred Shares of the
Corporation, consisting of 2,000,000 shares, be, and hereby is, created and
designated as "Series S Preferred Shares" (the "Series S Preferred Stock"),
which shall have a stated value of $16,400 per share and shall have the powers,
preferences and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, as follows:
(1) Dividends and Distributions.
(a) Subject to the provisions for adjustment hereinafter set
forth, and subject to the rights of the holders of any shares of any series of
Preferred Shares ranking prior and superior to the Series S Preferred Stock with
respect to dividends, the holders of shares of Series S Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, (i) cash dividends in an amount per
share (rounded to the nearest cent) equal to 100 times the aggregate per share
amount of all cash dividends declared or paid on the Common Shares, $0.80 par
value per share, of the Corporation (the "Common Stock") and (ii) a preferential
cash dividend (the "Preferential Dividends"), if any, in preference to the
holders of Common Stock, on the first business day of February, May, August and
November of each year (each 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 S Preferred Stock, payable in an amount (except in
the case of the first Quarterly Dividend Payment if the date of the first
issuance of Series S Preferred Stock is a date other than a Quarterly Dividend
Payment date, in which case such payment shall be a prorated portion of such
amount) equal to $25.00 per share of Series S Preferred Stock less the per share
amount of all cash dividends declared on the Series S Preferred Stock pursuant
to clause (i) of this sentence since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series S
Preferred Stock. In the event the Corporation shall, at any time after the
issuance of any share or fraction of a share of Series S Preferred Stock, make
any distribution on the shares of Common Stock of the Corporation, whether by
way of a dividend or a reclassification of stock, a recapitalization,
reorganization or partial liquidation of the Corporation or otherwise, which is
payable in cash or any debt security, debt instrument, real or personal property
or any other property (other than cash dividends subject to the immediately
preceding sentence, a distribution of shares of Common Stock or other capital
stock of the Corporation or a distribution of options, rights or warrants to
acquire any such share, including any debt security convertible into or
exchangeable for any such share, at a price less than the Fair Market Value (as
hereinafter defined) of such share of Common Stock), then, and in each such
event, the Corporation shall simultaneously pay on each then outstanding share
of Series S Preferred Stock of the Corporation a distribution, in like kind, of
100 times such distribution paid on a share of Common Stock (subject to the
provisions for adjustment hereinafter set forth). The dividends and
distributions on the Series S Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter referred to as
"Dividends" and the multiple of such cash and non-cash dividends on the Common
Stock applicable to the determination
2
<PAGE>
of the Dividends, which shall be 100 initially but shall be adjusted from time
to time as hereinafter provided, is hereinafter referred to as the "Dividend
Multiple". In the event the Corporation shall at any time after August 16, 1999
declare or pay any dividend or make any distribution on Common Stock payable in
shares of Common Stock, or effect a subdivision or split or a combination,
consolidation or reverse split of the outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, then in each such case the
Dividend Multiple thereafter applicable to the determination of the amount of
Dividends which holders of shares of Series A Preferred Stock shall be entitled
to receive shall be the Dividend Multiple applicable immediately prior to such
event multiplied 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 each Dividend at the same
time it declares any cash or non-cash dividend or distribution on the Common
Stock in respect of which a Dividend is required to be paid. No cash or non-cash
dividend or distribution on the Common Stock in respect of which a Dividend is
required to be paid shall be paid or set aside for payment on the Common Stock
unless a Dividend in respect of such dividend or distribution on the Common
Stock shall be simultaneously paid, or set aside for payment, on the Series S
Preferred Stock.
(c) Preferential Dividends shall begin to accrue on
outstanding shares of Series S Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of any shares of Series S
Preferred Stock. Accrued but unpaid Preferential Dividends shall cumulate but
shall not bear interest. Preferential Dividends paid on the shares of Series S
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
(2) Voting Rights. The holders of shares of Series S Preferred Stock
shall have the following voting rights:
(a) Subject to the provisions for adjustment hereinafter set
forth, each share of Series S Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the holders of the Common
Stock. The number of votes which a holder of Series S Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Vote Multiple". In the event the
Corporation shall at any time after August 16, 1999 declare or pay any dividend
on Common Stock payable in shares of Common Stock, or effect a subdivision or
split or a combination, consolidation or reverse split of the outstanding shares
of Common Stock into a greater or lesser number of shares of Common Stock, then
in each such case the Vote Multiple thereafter applicable to the determination
of the number of votes per share to which holders of shares of Series S
Preferred Stock shall be entitled after such event shall be the Vote Multiple
immediately prior to such event multiplied 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.
3
<PAGE>
(b) Except as otherwise provided in this Restated Certificate
of Incorporation or by law, the holders of shares of Series S Preferred Stock
and the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(c) In the event that the Preferential Dividends accrued on
the Series S Preferred Stock for four or more quarterly dividend periods,
whether consecutive or not, shall not have been declared and paid or irrevocably
set aside for payment, the holders of record of Preferred Stock of the
Corporation of all series (including the Series S Preferred Stock), other than
any series in respect of which such right is expressly withheld by this Restated
Certificate of Incorporation, shall have the right, at the next meeting of
stockholders called for the election of directors, to elect two members to the
Board of Directors, which directors shall be in addition to the number required
prior to such event, to serve until the next Annual Meeting and until their
successors are elected and qualified or their earlier resignation, removal or
incapacity or until such earlier time as all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series S Preferred Stock shall have
been paid (or irrevocably set aside for payment) in full. The holders of shares
of Series S Preferred Stock shall continue to have the right to elect directors
as provided by the immediately preceding sentence until all accrued and unpaid
Preferential Dividends upon the outstanding shares of Series S Preferred Stock
shall have been paid (or set aside for payment) in full. Such directors may be
removed and replaced by such stockholders, and vacancies in such directorships
may be filled only by such stockholders (or by the remaining director elected by
such stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.
(d) Except as otherwise required by this Restated Certificate
of Incorporation or by law or set forth herein, holders of Series S Preferred
Stock shall have no other special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for the taking of any corporate action.
(3) Certain Restrictions.
(a) Whenever Preferential Dividends or Dividends are in
arrears or the Corporation shall be in default of payment thereof, thereafter
and until all accrued and unpaid Preferential Dividends and Dividends, whether
or not declared, on shares of Series S Preferred Stock outstanding shall have
been paid or set irrevocably aside for payment in full, and in addition to any
and all other rights which any holder of shares of Series S Preferred Stock may
have in such circumstances, 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 S Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series S Preferred Stock, unless dividends
are paid ratably on the Series S Preferred Stock and all such
parity stock
4
<PAGE>
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 if the full dividends accrued thereon were to be
paid;
(iii) except as permitted by subparagraph (iv) of
this paragraph 3(a), 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 S 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 (both as to
dividends and upon liquidation, dissolution or winding up) to
the Series S Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series S Preferred Stock, or any shares of stock
ranking on a parity with the Series S Preferred Stock (either
as to dividends or upon liquidation, dissolution or winding
up), except in accordance with a purchase offer made to all
holders of such shares upon such terms as the Board of
Directors, 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 (as
hereinafter defined) 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 3, purchase or otherwise acquire such
shares at such time and in such manner. A "Subsidiary" of the Corporation shall
mean any corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority of the
board of directors of such corporation or other entity or other persons
performing similar functions are beneficially owned, directly or indirectly, by
the Corporation or by any corporation or other entity that is otherwise
controlled by the Corporation.
(c) The Corporation shall not issue any shares of Series S
Preferred Stock except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of June 16, 1999 between the Corporation and First
Chicago Trust Company of New York, as Rights Agent, as it may be amended from
time to time, a copy of which is on file with the Secretary of the Corporation
at its principal executive office and shall be made available to stockholders of
record without charge upon written request therefor addressed to said Secretary.
Notwithstanding the foregoing sentence, nothing contained in the provisions of
this Subarticle A shall prohibit or restrict the Corporation from issuing for
any purpose any series of Preferred Stock with rights and privileges similar to,
different from, or greater than, those of the Series S Preferred Stock.
(4) Reacquired Shares. Any shares of Series S Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares
5
<PAGE>
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
(5) Liquidation, Dissolution or Winding Up. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series S Preferred Stock unless the holders of shares of Series S Preferred
Stock shall have received for each share of Series S Preferred Stock, subject to
adjustment as hereinafter provided, (A) $16,400 plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment or, (B) if greater than the amount specified in clause
(i)(A) of this sentence, an amount equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock, as the same may be adjusted as
hereinafter provided and (ii) to the holders of stock ranking on a parity upon
liquidation, dissolution or winding up with the Series S Preferred Stock, unless
simultaneously therewith distributions are made ratably on the Series S
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series A Preferred Stock are
entitled under clause (i)(A) of this sentence and to which the holders of such
parity shares are entitled, in each case upon such liquidation, dissolution or
winding up. The amount to which holders of Series S Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Corporation pursuant
to clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"Participating Liquidation Amount" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Corporation applicable pursuant to said clause
to the determination of the Participating Liquidation Amount, as said multiple
may be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Liquidation Multiple". In the event the Corporation shall at
any time after August 16, 1999 declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, then, in each
such case, the Liquidation Multiple thereafter applicable to the determination
of the Participating Liquidation Amount to which holders of Series S Preferred
Stock shall be entitled after such event shall be the Liquidation Multiple
applicable immediately prior to such event multiplied 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.
(6) Certain Reclassifications and Other Events.
(a) In the event that holders of shares of Common Stock of the
Corporation receive after August 16, 1999, in respect of their shares of Common
Stock any share of capital stock of the Corporation (other than any share of
Common Stock of the Corporation), whether by way of reclassification,
recapitalization, reorganization, dividend or other distribution or otherwise (a
"Transaction"), then, and in each such event, the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the Corporation of
the shares of Series S Preferred Stock shall be adjusted so that after such
event the holders of Series S Preferred Stock shall be entitled, in respect of
each share of Series S Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately prior to such
adjustment, to (i) such additional
6
<PAGE>
dividends as equal the Dividend Multiple in effect immediately prior to such
Transaction multiplied by the additional dividends which the holder of a share
of Common Stock shall be entitled to receive by virtue of the receipt in the
Transaction of such capital stock, (ii) such additional voting rights as equal
the Vote Multiple in effect immediately prior to such Transaction multiplied by
the additional voting rights which the holder of a share of Common Stock shall
be entitled to receive by virtue of the receipt in the Transaction of such
capital stock and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Corporation as equal the Liquidation Multiple
in effect immediately prior to such Transaction multiplied by the additional
amount which the holder of a share of Common Stock shall be entitled to receive
upon liquidation, dissolution or winding up of the Corporation by virtue of the
receipt in the Transaction of such capital stock, as the case may be, all as
provided by the terms of such capital stock.
(b) In the event that holders of shares of Common Stock of the
Corporation receive after August 16, 1999, in respect of their shares of Common
Stock any right or warrant to purchase Common Stock (including as such a right,
for all purposes of this paragraph, any security convertible into or
exchangeable for Common Stock) at a purchase price per share less than the Fair
Market Value of a share of Common Stock on the date of issuance of such right or
warrant, then and in each such event the dividend rights, voting rights and
rights upon the liquidation, dissolution or winding up of the Corporation of the
shares of Series S Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
(c) In the event that holders of shares of Common Stock of the
Corporation receive after August 16, 1999, in respect of their shares of Common
Stock any right or warrant to purchase capital stock of the Corporation (other
than shares of Common Stock), including as such a right, for all purposes of
this paragraph, any security convertible into or exchangeable for capital stock
of the Corporation (other than Common Stock), at a purchase price per share less
than the Fair Market Value of such shares of capital stock on the date of
issuance of such right or warrant, then and in each such event the dividend
rights, voting rights and rights upon liquidation, dissolution or winding up of
the Corporation of the shares of Series S Preferred Stock shall each be adjusted
so that after such event each holder of a share of Series A Preferred Stock
shall be entitled, in respect of each share of Series S Preferred Stock held, in
addition to such rights in respect thereof to which such holder was entitled
immediately prior to such event, to receive (i) such additional dividends as
equal the Dividend Multiple in effect immediately prior to such event
multiplied, first, by the additional dividends to which the holder of a share of
Common Stock shall be entitled upon exercise of such right or warrant by virtue
of the capital stock which could be acquired upon such exercise and multiplied
again by the Discount Fraction (as hereinafter defined) and (ii) such additional
voting rights
7
<PAGE>
as equal the Vote Multiple in effect immediately prior to such event multiplied,
first, by the additional voting rights to which the holder of a share of Common
Stock shall be entitled upon exercise of such right or warrant by virtue of the
capital stock which could be acquired upon such exercise and multiplied again by
the Discount Fraction and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Corporation as equal the Liquidation Multiple
in effect immediately prior to such event multiplied, first, by the additional
amount which the holder of a share of Common Stock shall be entitled to receive
upon liquidation, dissolution or winding up of the Corporation upon exercise of
such right or warrant by virtue of the capital stock which could be acquired
upon such exercise and multiplied again by the Discount Fraction. For purposes
of this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock of the Corporation as contemplated by this paragraph immediately
after the distribution thereof and the purchase price per share for such share
of capital stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock immediately
after the distribution of such right or warrant.
(d) For purposes of this Subarticle A, the "Fair Market Value"
of a share of capital stock of the Corporation (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing price
per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that, in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and
in each such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Corporation to take into account ex-dividend or
post-effective date trading. The closing price for any 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 applicable transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange), or, if
the shares are not listed or admitted to trading on the New York Stock Exchange,
as reported in the applicable transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares are listed or admitted to trading or, if the shares 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 National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in
use, or if on any such date the shares 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 shares selected by the Board of Directors of
the Corporation. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares are listed or admitted to
trading is open for the transaction of business or, if the shares are not listed
or admitted to trading on any national securities exchange, on which the New
York Stock Exchange or such other national securities exchange as may be
selected by the Board of Directors of the Corporation is open. If the shares are
not publicly held or not so listed or traded on any day within the period of 30
Trading Days applicable to the determination of Fair Market Value thereof as
8
<PAGE>
aforesaid, "Fair Market Value" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors of the Corporation.
In either case referred to in the foregoing sentence, the determination of Fair
Market Value shall be described in a statement filed with the Secretary of the
Corporation.
(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 each
outstanding share of Series S Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
(8) Effective Time of Adjustments.
(a) Adjustments to the Series S Preferred Stock required by
the provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(b) The Corporation shall give prompt written notice to each
holder of a share of Series S Preferred Stock of the effect of any adjustment to
the voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Corporation of such shares required by the provisions of this
Subarticle A. Notwithstanding the foregoing sentence, the failure of the
Corporation to give such notice shall not affect the validity of or the force or
effect of or the requirement for such adjustment.
(9) No Redemption. The shares of Series S Preferred Stock shall not be
redeemable at the option of the Corporation or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Corporation may
acquire shares of Series S Preferred Stock in any other manner permitted by law
and the provisions of the Restated Certificate of Incorporation of the
Corporation.
(10) Ranking. Unless otherwise provided in this Restated Certificate of
Incorporation of the Corporation, as amended from time to time, the Series S
Preferred Stock shall rank junior to all other series of the Corporation's
preferred stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up and senior to the Common Stock.
(11) Amendment. The provisions by this Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series S Preferred
Stock without, in addition to any other vote of stockholders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series S Preferred Stock, voting together as a single class."
3. The Restated Certificate of Incorporation of the Corporation
is hereby amended, effective at 5:00 p.m., New Jersey time, on August 16, 1999,
to remove the designation of 1,500,000 Preferred Shares as Series R Preferred
Shares and to designate 2,000,000 Preferred
9
<PAGE>
Shares as Series S Preferred Shares, all as stated in the foregoing resolution
of the Board of Directors of the Corporation.
IN WITNESS WHEREOF, said Summit Bancorp. has caused its corporate seal to be
hereunto affixed and this certificate to be signed by the __________,
___________, and attested by its Secretary, _________, this ___ day of ________,
1999.
-----------------------------------
Name:
Title:
ATTEST:
- -------------------------
10
For Immediate Release Contact: Barbara Horn, VP
Corporate Communications
(609) 514-7872
SUMMIT BANCORP RENEWS SHAREHOLDER RIGHTS PLAN
PRINCETON, N.J., June 16, 1999 -- The Board of Directors of Summit Bancorp
(NYSE: SUB) today voted to renew the Shareholder Rights Plan originally adopted
in 1989 and due to expire August 16, 1999. The new plan takes effect on that
date.
The terms of the plan as renewed provide for a distribution of one "right" for
each share of Summit Bancorp common stock to shareholders of record at the close
of business on August 16, 1999. The terms of the new Shareholder Rights Plan
will be outlined in a letter to be mailed to shareholders following the August
16, 1999 record date. Because the rights are not exercisable except under
certain specific circumstances, separate certificates representing the rights
will not be issued unless and until the rights become exercisable.
Each right will entitle the holder to buy one one-hundredth of a share of a new
series of preferred stock of the corporation at a price of $164. In the event
any party accumulates 15 percent or more of the company's voting stock, the
rights will become exercisable ten days thereafter by all other shareholders and
such party's rights will terminate. At that time, the exercise price will be
adjusted to approximately one-half of the recent trading price of the common
stock. In the event any party announces or commences a tender or exchange offer
which would result in its owning 15 percent or more of the voting stock, the
rights will also become exercisable ten days thereafter.
The rights will expire August 31, 2009.
Summit Bancorp is a regional bank holding company headquartered in Princeton,
New Jersey, with $33.5 billion in assets and $23.2 billion in deposits. Through
its banking subsidiaries, Summit operates 460 traditional and in-store branches
in New Jersey, eastern Pennsylvania and Connecticut and an extensive network of
automated teller machines. The company provides financial services to
individuals, businesses, not-for-profit organizations, government entities and
other financial institutions through its commercial and retail banking,
investment management and private banking lines of business. For more
information about Summit, please visit the company's website at
www.summitbank.com.
###
